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  4. Nijalu Pty Ltd v DW Investments (QLD) Pty Ltd - [2022] QCAT 345

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Nijalu Pty Ltd v DW Investments (QLD) Pty Ltd[2022] QCAT 345

Nijalu Pty Ltd v DW Investments (QLD) Pty Ltd[2022] QCAT 345

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Nijalu Pty Ltd v DW Investments (QLD) Pty Ltd [2022] QCAT 345

PARTIES:

NIJALU PTY LTD T/A BOATSHED TAKEAWAY

(applicant)

V

DW INVESTMENTS (QLD) PTY LTD

(respondent)

APPLICATION NO/S:

RSL066-21

MATTER TYPE:

Retail shop leases matter

DELIVERED ON:

26 September 2022

HEARD AT:

Brisbane

DECISION OF:

Member Lember

ORDERS:

  1. The application for an interim order filed by the applicant on 30 November 2021 is dismissed.  
  2. The application for an interim order filed by the applicant on 4 August 2022 is dismissed.
  3. The question of costs is reserved pending a final outcome in the proceedings and submissions from the parties.

CATCHWORDS:

LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS  AND TRIBUNALS – OTHER MATTERS – where dispute as to amounts payable under lease for outgoings or services – whether tenant protected by prior interim order against enforcement action for subsequent breaches – whether to grant an interim order for subsequent breach – whether caretaker residence collateral to retail shop lease

Property Law Act 1974 (Qld) s 124

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 4, s 7, s 10, s 28, s 58, s 59, s 61, s 62, s 100, s 102, s 213, s 218

Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 414A

Retail Shop Leases Act 1994 (Qld) s 5A, s 5B, s 5C, s 43AA, s 83, s 115, Schedule

Retail Shop Leases Regulation 1994 (Qld) r 2, Schedule

Airlie Beach Real Estate Pty Ltd v Body Corporate for Delor Vue Apartments CTS 39788 [2018] QCAT 317

Blue Angel Investments Pty Ltd t/as Salt Seafood Bar and Grill v Beach Plaza Pty Ltd [2015] QCAT 230

Fu Manchu Dining Pty Ltd v SP (Qld) Pty Ltd [2019] QCAT 394

Gillam v Wheatley [2021] QCAT 274

Gospell v Linehurst Pty Ltd

Parkview Management Pty Ltd v Body Corporate for Boca Raton Community Titles Scheme 22486 [2018] QCAT 6

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).

REASONS FOR DECISION

What is the application about?

  1. [1]
    The tribunal is being asked to grant an interim order restraining termination action by the lessor of both a retail café lease and a caretaker’s residential tenancy. 
  2. [2]
    This dispute involves quite the tangled web.[1] As best I can summarise from the material filed:
    1. (a)
      The respondent lessor owns a small commercial property comprising five lots used as a restaurant, hairdresser, café, a bait and tackle shop and a caretaker residence.
    2. (b)
      The applicant, and its director Ms McDowall are, respectively, the tenants of the café and the residence.
    3. (c)
      The applicant or its related entities were, but are no longer, tenants of the bait and tackle shop and the restaurant. The shop was sold, and a litigated dispute over the restaurant appears to have resulted in its sale too. Each business sale led to the ending (whether by assignment or termination) of the tenancy relationship between the applicant (or her related entity) as tenant, and the respondent as lessor for the premises from which the sold businesses traded.  
    4. (d)
      These proceedings concern the café lease, however the items in dispute cross-reference other tenancies (for example, how outgoings should be calculated or apportioned across all of them). The applicant also says its right to occupy the caretaker residence is inextricably linked to, and forms part of, the café lease, but this is disputed by the respondent.
    5. (e)
      Proprietorship of the respondent entity changed hands in or about 2015/6 upon a marital breakdown between its directors Mr Walden and Ms Walden, after which Ms Walden appears to have taken over management of the tenancies.
    6. (f)
      The respondent self-managed the tenancies with the effect that payment records appear to have been manually kept and filed material includes handwritten ledgers and records of the respondent. 
  3. [3]
    On 26 February 2021 the applicant filed a Notice of Dispute under the Retail Shop Leases Act 1994 (Qld) (“RSLA”), identifying eighteen issues of concern regarding the café tenancy and seeking various orders in relation to them, summarised as claims for (my emphasis added):

the wrong amount for arrears of rent, rent relief for the tree root damaged part of the Premises, the valid exercise of the option to a further 5 year Lease with an 5 year option (new Option Lease), legitimate extensions or adjustment to the Premises, the wrongful contribution percentage for outgoings, an entitlement to the continued and uninterrupted use of alleged licence areas relating to the toilet and awning, unconscionable conduct by the Respondent Lessor, failure to keep proper records and a set off in respect of overpayments of rent and outgoings.[2]

  1. [4]
    The respondent seeks, in summary:

dismissal of all claims, plus declaratory orders that the option was not validly exercised, termination of the lease, arrears of rent, monies for unpaid legal costs, unpaid licence fees, indemnification in respect of a guarantee in connection to other premises that are beside the premises and costs.[3]

  1. [5]
    Interlocutory steps taken in the proceedings to date include (without limitation, my emphasis added);
    1. (a)
      An application for interim orders filed on 7 July 2021, which was dealt with by directions made 9 July 2021 that relevantly included the following (Direction 2b):

2.b. DW Investments (QLD) Pty Ltd, by itself, it’s agents or employees are restricted from issuing any further notice to remedy breach specifying a breach which concerns matters the subject of the Tribunal proceedings pending determination of the Notice of dispute…

  1. (b)
    An application for interim orders filed 30 November 2021 seeking orders to declare a Notice to Leave dated 19 October 2021 issued for the caretaker residence “invalid and void” and restraining the issuing of any further notices “except for rent in arrears” (“the Caretaker Residence Application”). This application had not been decided before the respondent brought a termination application in the tribunal’s minor civil dispute – residential tenancy jurisdiction for termination of the lease for the caretaker residence. 
  2. (c)
    On 1 February 2022 a tribunal adjudicator adjourned the residential tenancy hearing pending an outcome in these proceedings on the question of whether the caretaker residence formed part of the retail lease. 
  3. (d)
    Directions made on 20 July 2022 which included the following declaration (my emphasis added):

The Caretaker residence is a lease properly characterised under the Residential Tenancies and Rooming Accommodation Act 2008.  Matters regarding the ongoing caretaker residence are separate to the retail shop lease, until there is a determination of whether or not there is an inclusion of the caretaker residence into the retail shop lease. Any matters regarding rent, notice periods and general occupation of the caretaker residence are to be undertaken in accordance with the Residential Tenancies and Rooming Accommodation Act 2008.

  1. (e)
    Although, apparently responsive to the Caretaker Residence Application, the 20 July 2022 declaration did not finally resolve it: it was neither granted nor dismissed, no decision was made in relation to the orders sought in it and the “until there is a determination” caveat suggests the declaration was temporary pending a decision on the Caretaker Residence Application.
  2. (f)
    On 4 August 2022 the applicant filed an application for interim orders in response to enforcement action by the respondent in relation to café rent payable in July 2022 (“the July 2022 Rent Application”). The following orders are sought:
    1. a declaration that the respondent’s notice to remedy breach dated 14 July 2022 and the respondent’s notice of determination of lease and re-entry of premises dated 2 August 2022 and related claims for legal fees totalling $1,699.50 are invalid and void;
    2. a $3,000 costs order against the respondent to compensate the applicant for costs, expenses, loss, inconvenience and embarrassment resulting from the respondent breach and re-entry action;
    3. a penalty against the respondent for the contravention of the non-monetary direction 2(b) dated 9 July 2021 made by Member Deane;
    4. an injunction restraining the respondent for the duration of these proceedings from:
      1. re-entering the premises the subject of QCAT Proceedings RSL066-21; and
      2. issuing any further notice to remedy breach or notice of determination of lease and re-entry of premises which concerns the premises the subject of QCAT Proceedings RSL066-21; and
    5. a direction for an account or reconciliation of the Outgoings for the premises in accordance with the proportion that the area of the premises bears to the total area of all premises in the building (that is owned by the respondent) and the rent since 17 December 2015.
  1. [6]
    The substantive issues in dispute will be determined at a final hearing listed in November 2022. 
  2. [7]
    Decisions on the Caretaker Residence Application and the July 2022 Rent Application, and the reasons for them, follow.

Factual background to the dispute

  1. [8]
    Ms McDowall says she and her family have occupied the caretaker residence since December 2013 “pursuant to an agreement”.[4] She also says that “the tenancy agreement has not been renewed since December 2015 and I continue to pay rent weekly”.[5]
  2. [9]
    For present purposes, the café lease commenced in 2012, for a three-year term with two three-year options, but in 2015 amended terms were negotiated and a lease entered into for 5 years commencing 17 December 2015, with a renewal option of five years commencing 17 December 2020, such option to be exercised six months prior to the end of the initial term, should the tenant wish to take it up.[6]
  3. [10]
    Under clause 2.2 of the 2015 lease, upon the option being exercised, the lessor was required to grant the lessee a lease for a further period “on the same terms” except for rent, bond, guarantors, removing an option period and any other amendments the lessor considered necessary to reflect changes in the premises or its management.  Importantly, upon exercise of the renewal option, the applicant tenant did not have the ability to include new or amended terms unless agreed to by the lessor. 
  4. [11]
    The lease describes the leased premises as part of the ground floor of the building defined as “Shop 4/2 Thrower Drive, Currumbin”.
  5. [12]
    The permitted use of the premises was hiring out boat/paddle/bike/pontoon and other leisure and watercraft and equipment, storage of the same, and conducting a café selling food and beverages “subject to compliance with local authority regulations”.[7]  

The caretaker residence

  1. [13]
    Rent for the residence and the café was invoiced and paid separately, each in a weekly amount according to statements and records attached to the respondent’s statement of evidence.[8]
  2. [14]
    The 2012 lease appears not to reference the caretaker residence,[9] and the 2015 lease appears only to mention it in passing, in clause 20 which requires the tenant to “ensure at all times that the caretakers car space adjacent to the stairs is always accessible and left free of any objects whatsoever”. This seems an unusual term to include if the tenant of the café and the residence were, for all intents and purposes, one and the same.
  3. [15]
    The 2015 lease appears to have been prepared by solicitors for the applicant, based on the terms of the 2012 lease. Neither party therefore, with an opportunity to do so, linked or made the caretaker tenancy collateral to or dependent upon the café lease by the express terms of the café lease, despite negotiating other amendments at the time.
  4. [16]
    By letter dated 15 June 2020 the applicant sought to exercise its option and requested amendments to the lease:

Caretaker’s Accommodation

I request a provision be included in the lease for the caretakers accommodation which is situated directly above by(sic) business. My solicitor would draft the provision and forward it to your solicitor for approval. This provision would attach the caretakers accommodation to the lease for the premises Shop 4 2-4 Thrower Dr, Currumbin.[10]

  1. [17]
    This communication was not responded to until 10 December 2020 when the respondent noted that rent and outgoings were outstanding and said that “any concerns relating to clauses and conditions will only be addressed by my solicitor once rentals and outgoings are both paid up to date”.[11]
  2. [18]
    On 9 February 2021 Ms Walden sent an email[12] to Ms McDowall noting that rent was in arrears for the caretaker residence in which she also says “I was thinking of moving back to the upstairs unit. Are you busy today or are you going anywhere?”. If this proposal was replied to by the applicant, it’s not in evidence. 
  3. [19]
    On 12 May 2021 the parties mediated the retail lease dispute and, having not reached agreement on all issues, the dispute was referred to the tribunal. 
  1. [20]
    In the days following, the parties continued their attempts to negotiate a new lease, at the applicant’s request, rather than proceed on the same terms of the expired lease, something the mediator refers to specifically in communication to the parties sent on 12 May 2021.  They did not reach agreement.
  2. [21]
    On 19 October 2021 the respondent served Ms McDowall with Notice to Leave the caretaker residence and a termination application in the tribunal’s minor civil dispute (MCD) jurisdiction ensued.

July 2022 lockout

  1. [22]
    On 1 July 2022 rent and outgoings under the café lease fell due for the month of July. 
  2. [23]
    The applicant short-paid the sum due by $4,913.65.
  3. [24]
    On 14 July 2022 the respondents wrote to the applicant serving a Notice to Remedy Breach of lease under section 124 of the Property Law Act 1974 (Qld) (the Breach Notice), requiring the shortfall payment to be remedied within 14 days of the date of the notice, which, allowing for service time, expired on 31 July 2022.  The lessor also sought payment of $792.00 as compensation for the breach, comprising the professional fees for the respondent’s solicitor to issue the notice.
  4. [25]
    The applicant by email dated 27 July 2022 objected to Breach Notice, relying upon Direction 2b and referring to the credits sought in these proceedings for previously overpaid outgoings. 
  5. [26]
    The applicant did not pay the sums demanded by 31 July 2022 and on 2 August 2022 the respondent served a Notice of Determination upon the applicant directly and by affixing copies to the premises with glue.  The respondent also had locks changed and caused security to exercise control over the premises.
  6. [27]
    The applicant subsequently resumed occupation of the premises without the consent of the respondent and is said to be still in possession. The respondent therefore seeks orders that the application remove its property from the premises withing three days and that the respondent is at liberty to re-cover possession of the premises.

Legislative framework

  1. [28]
    The Retail Shop Leases Act 1994 (Qld) (“the RSLA”) governs retail tenancy disputes and vests the tribunal with jurisdiction, subject to exceptions, to hear them.[13]
  2. [29]
    Relevant definitions include:
    1. (a)
      A retail tenancy dispute is “any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into”.[14]
    2. (b)
      A retail shop lease is a lease of a retail shop, with identified exclusions.[15] 
    3. (c)
      A lease is an agreement under which a person gives to someone else for valuable consideration a right to occupy premises whether:
      1. an exclusive right to occupy the premises; or
      2. for a term or by way of a periodic tenancy or tenancy at will.[16]
    4. (d)
      A retail shop describes premises situated in a retail shopping centre or that are used wholly or predominantly for the carrying on of one or more retail businesses.[17]
    5. (e)
      Retail businesses are those whose whole or predominant activity is, or is a combination of, the sale, hire or supply of goods or services mentioned in the Schedule to the Retail Shop Leases Regulation 1994 (Qld).[18]  The Schedule includes “Restaurant, cafeteria, coffee lounge or other eating place services” and “Takeaway food” as prescribed goods or services for retail businesses.
  3. [30]
    Parties are required to attempt to mediate a retail tenancy dispute before the dispute can be referred to the tribunal for determination.[19]
  4. [31]
    Under section 115 of the RSLA anything said in a mediation conference for a retail tenancy dispute is not admissible in any proceeding before the tribunal.
  5. [32]
    The tribunal  can make orders, including declaratory orders, that it considers to be just to resolve a retail tenancy dispute, including any one or more of the following:[20]
    1. (a)
      an order for a party to the dispute to do, or not to do, anything;
    2. (b)
      an order requiring a party to the dispute to pay an amount (including an amount of compensation) to a specified person;
    3. (c)
      an order that a party to the dispute is not required to pay an amount to a specified person;
    4. (d)
      an order that an item, or part of an item, of the lessor’s outgoings for the retail shopping centre or leased building in which the leased shop is situated was or was not reasonably incurred in, or directly attributable to, the operations, maintenance or repair of the centre or building; and
    5. (e)
      if the dispute is about the payment of compensation by the lessor to the lessee and the lease contains provision for compensation payable or a formula to calculate the amount of compensation payable - an order about the compensation payable.
  6. [33]
    It is not contested that the café lease is one to which the RSLA applies, nor that the tribunal has jurisdiction over the dispute. The question is whether the caretaker tenancy forms part of that dispute or of the premises the subject of the dispute.
  7. [34]
    The tribunal has separate jurisdiction over residential tenancy disputes in its MCD jurisdiction.[21]
  8. [35]
    A residential tenancy is the right to occupy residential premises under a residential tenancy agreement.[22]
  9. [36]
    A residential tenancy agreement is an agreement under which a person gives to someone else a right to occupy residential premises as a residence, whether: 
    1. (a)
      the right is a right of exclusive occupation; and
    2. (b)
      the agreement is wholly in writing, wholly oral or wholly implied or partially in those forms.[23]
  10. [37]
    In all proceedings the tribunal must deal with matters in a way that is accessible, fair, just, economical, informal and quick[24] and, to that end, section 4 of the Act requires the tribunal, among other things, to:
    1. (a)
      encourage the early and economical resolution of disputes before the tribunal;[25] and
    2. (b)
      ensure proceedings are conducted in an informal way that minimises costs to the parties and is as quick as is consistent with achieving justice.[26]
  1. [38]
    Section 62(1) of the QCAT Act permits the tribunal to give a direction at any time in a proceeding and do whatever is necessary for the speedy and fair conduct of the proceeding.  To that end, interlocutory applications can be decided upon the written submissions of the parties without those parties or their representatives appearing at a hearing.[27] 
  2. [39]
    Section 28 requires the tribunal to act fairly and according to the substantial merits of the case in proceedings before it.
  1. [40]
    Section 58 of the QCAT Act permits the tribunal to make an interim order 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.
  1. [41]
    The issue is whether the applicant has a good arguable case, and if so, whether on the balance of convenience the order should be made. Further, that it is not for the tribunal to reach any final conclusions about the issues raised, as that will be a matter for the final hearing.[28]
  2. [42]
    The applicant for interim orders bears the onus of satisfying the tribunal that it is appropriate to make the orders sought, including establishing that the applicant has an arguable case that may entitle it to final relief by showing:
  1. [43]
    a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.[29]
  1. [44]
    In relation to the balance of convenience the tribunal should act with a view to taking “whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong”.[30] 
  2. [45]
    In weighing the balance of convenience, a significant factor is whether damages would be an adequate remedy for the applicant.[31]  The tribunal may also require that that the applicant give an undertaking as to costs and damages.[32]
  3. [46]
    As to costs, the starting point in the tribunal is that each party to a proceeding must bear its own costs[33] although the interests of justice may require an as to costs at the tribunal’s discretion.[34]  
  4. [47]
    Punitive orders can be made under sections 213 and 218 of the QCAT Act in the event of noncompliance with tribunal orders but not by the presiding member in a proceeding.

The Caretaker Residence Application

Applicant’s Submissions

  1. [48]
    Item 18 of the Notice of Dispute filed 26 February 2021 addresses the caretaker residence, and that is in the context of complaining that the lessor’s director, Ms Walden asked the applicant’s director, Ms McDowall to sign a false declaration that Ms Walden had “always lived” at the caretaker residence above the leased premises. Item 18 states: “This residence was and is the subject of a separate lease to Ms McDowall”.
  2. [49]
    According to the applicant, the false declaration was intended by Ms Walden to be used to avoid or minimise her land tax liability. Ms McDowall refused to sign the statement because she says she had lived at the caretaker residence since 2013 and Ms Walden never lived there with her.
  3. [50]
    Ms McDowall’s statement filed 1 September 2021 describes the caretaker residence as “Shop 5” throughout her material, but never in the context of it being linked to or included in the café lease.
  4. [51]
    The application for interim orders filed 30 November 2021 lists the reasons for the application as follows:

The interim orders are necessary to secure the effectiveness of the exercise of the tribunal's jurisdiction for the preceding and to protect the applicants position as lessee under a collateral lease, provided for by the lease in dispute in these proceedings.

The respondents by their conduct are attempting to avoid the tribunal's jurisdiction by issuing a Notice to Leave dated 19 October 2021 in respect of matters which are in issue in these proceedings, which conduct amounts to an abuse of process. The interim orders are in all the circumstances in the interests of justice.

  1. [52]
    The transcript of the MCD proceeding, the Notice to Leave and the Form 2 Application are all in evidence before the tribunal.  In the MCD proceeding, Ms McDowall argued that the draft leases exchanged in May 2021 bring the caretaker residence into the retail shop lease or at least makes it collateral to it.  As stated, the applicant’s ability to use this evidence is disputed by the respondent on the basis that it offends section 115 of the RSLA and, in any event, no final lease was signed to reflect the parties’ agreement to it. 
  2. [53]
    Finally, the submissions filed 12 August 2022 contribute the following:
    1. (a)
      the caretaker’s unit is “undoubtably a residential dwelling”, relevantly described as a caretaker’s unit in accordance with Part 7 Division 2 Chapter 10 of the Gold Coast planning scheme and has been lived in as a dwelling since December 2013; and
    2. (b)
      its occupation is collateral to the lease and for the term of the lease of the premises and, historically, occupation of the residence has been aligned to the café lease.

Respondent’s Submissions

  1. [54]
    Ms Walden, director of the respondent says the caretaker’s unit has never been used as or included as a “shop” in the building.[35]
  2. [55]
    The respondent also argues that:
    1. (a)
      The residential tenancy agreement is not between the lessor and lessee of the retail shop lease the subject of these proceedings, but between the lessor and Ms McDowall;
    2. (b)
      The tribunal’s jurisdiction in relation to a “matter” arises under section 10(1)(b) of the QCAT Act and a residential tenancy dispute cannot be one under or about a retail shop lease, or about the use or occupation of a leased shop according to the definition of a retail tenancy dispute in the schedule to the RSLA, so as to be within the tribunal’s jurisdiction in respect of such a matter;
    3. (c)
      Section 414A of the RTRAA provides that an application to the tribunal under the RTRAA must be made in the way provided under the QCAT Act, which, in turn (and read with the Rules) provides that an application in respect of a tenancy matter must be made using a Form 2 Application for a minor civil dispute - residential tenancy dispute; and
    4. (d)
      Under sections 6 and 7 of the QCAT Act, provisions in enabling acts about applications and the tribunal functions prevail over the provisions of the QCAT Act, particularly where the RTRAA clearly prescribes the procedures to be followed.

Discussion and Findings

i. Is the order required to protect a party’s position for the duration of the proceeding or to secure the effectiveness of a final decision?

  1. [56]
    The applicant is not a party to the caretaker residence tenancy agreement.  It is difficult to see therefore how a decision concerning that agreement can protect the applicant’s position in these proceedings.
  2. [57]
    Further, the applicant does not seek relief, orders or a remedy in relation to the caretaker residence where it is mentioned in item 18 of the Notice of Dispute.  Item 18 seeks to be simply an allegation against Ms Walden that that ought more appropriately be directed to the Office of State Revenue if genuine concerns exist.  This complaint is unrelated to the retail lease dispute.
  3. [58]
    Whilst the caretaker tenancy and the retail lease appear to have co-existed since at least 2013, this happened under separate agreements that were kept separate by the parties.  The caretaker tenancy is not collateral to the retail lease because:
    1. (a)
      The tenant of one is a different (albeit related) entity to the other. 
    2. (b)
      The Notice of Dispute does not seek remedies or orders in relation to the caretaker residence, even if the applicant establishes that she validly exercised an option to renew the café lease.
    3. (c)
      The parties, with legal representation and an opportunity to do so in 2015 did not draft any terms of the retail lease that made the residential tenancy subject or collateral to the retail lease (or vice versa).
    4. (d)
      The applicant’s mind seemed to first turn to the idea of inter-twining the two tenancies in June 2020 when she first made a request to do so, which the respondent did not respond to (as the respondent said the applicant was then in arrears under the retail lease).
    5. (e)
      Whist the applicant says that in May 2021 “the respondent was prepared to incorporate in the draft option lease… a reference to tenure of the Caretaker’s Unit”, the respondent says these exchanges took place directly from the mediation on a “without prejudice” basis and that regard should not be had to them.  Either way, the applicant has no contractual right to a new lease upon the exercise of her option, even if she establishes that her option was exercised validly.  The respondent’s willingness to consider changes is of no consequence.  The status quo is yet to change, no new lease has been signed to give effect to any negotiations, without prejudice or otherwise and the caretaker tenancy does not form part of the express terms of the café lease.
    6. (f)
      Rent for the two tenancies is invoiced, payable and paid separately.

ii. Does the applicant have an arguable case that may entitle it to final relief?

  1. [59]
    As stated, the applicant does not seek relief, orders or remedies in relation to the caretaker residence where it is mentioned in item 18 of the Notice of Dispute. Any relief granted to the applicant that the applicant seeks regarding the retail shop lease will not concern Ms McDowall’s occupancy of the café.
  2. [60]
    Further, the residential tenancy dispute must be aired in the tribunal’s MCD jurisdiction, including termination orders (on an urgent basis) and compensation claims (on an non-urgent basis after Residential Tenancies Authority dispute resolution procedures have taken place).  The relief sought by Ms McDowall can only be sought by the residential tenant in the appropriate jurisdiction.
  3. [61]
    The applicant does not have a good and arguable case that it may be entitled to relief regarding the residence in the retail lease dispute.

iii. Does the balance of convenience favour the making of the order (and are damages an adequate remedy, if the respondent is found to have taken action contrary to law)?

  1. [62]
    The balance of convenience does not favour the making of the order because these proceedings are not the forum to air the residential tenancy dispute and the applicant is not a party to the residential tenancy.
  2. [63]
    Ms McDowall, the residential tenant, has an opportunity to dispute the “appropriateness” of the termination of the residential tenancy pursuant to section 341(2) of the RTRAA in the residential tenancy hearing. Termination of the residential tenancy is an exercise of discretion in respect of which, in this case, the tribunal may have regard to issues concerning the café tenancy such as:
    1. (a)
      whether Ms McDowall would suffer hardship if the caretaker tenancy was terminated during the currency of her retail lease of the café;
    2. (b)
      whether the respondent can allow an untreated person to occupy the caretaker tenancy under the applicable town planning laws (which are usually limited to persons employed on-site);[36]
    3. (c)
      if a termination order is made, the period of notice given to Ms McDowall; and
    4. (d)
      any other issues the tribunal considers relevant.  
  3. [64]
    Refusing the interim orders sought by the applicant on the Caretaker Residence Application does not impact Ms McDowall’s rights as a tenant of the caretaker residence.

iv. Has the applicant offered an undertaking as to costs or damages and what is the value of such an undertaking if so?

  1. [65]
    An undertaking has not been offered but can be ordered.

Decision on the Caretaker Residence Application

  1. [66]
    The Caretaker Residence application is dismissed, meaning the interim orders sought to stay the residential tenancy application and to restrain further action in relation to it are not granted.
  2. [67]
    A decision on the question of costs will be reserved until the final outcome of proceedings, and after taking submissions from the parties.

The July 2022 Rent Application

Applicant’s Submissions

  1. [68]
    It is not clear from the applicant’s submissions why the applicant considered it could or should short-pay the July 2022 invoice and the only explanation for this is contained within the respondent’s material.
  2. [69]
    The applicant’s argument seems to rely entirely on Direction 2b as an order of the tribunal that restrains any future enforcement action against the applicant for any breach of the café lease.  They say:
    1. (a)
      the Breach Notice and the Notice of Determination are “frivolous vexatious and misconceived” because they directly contravene Direction 2b;
    2. (b)
      the lessor’s breach and lockout action:
      1. interfered with the occupation rights of the applicant;
      2. disrupted the applicant’s quiet enjoyment of and uninterrupted access to the premises;
      3. embarrassed the applicant through Ms McDowall by way of a security officer physically barring her from entering the premises; and
      4. caused the applicant to incur at least $4000 in legal fees.
  3. [70]
    The applicant says the balance of convenience favours the applicant because:
    1. (a)
      lockout may cause the applicant’s business serious harm from being unable to trade;
    2. (b)
      the prosperity of the applicant’s business is substantially derived from its regular customers and if unable to trade in for even for a short time the applicant’s regular customers are susceptible to boycotting the café and finding a new café to regularly attend;
    3. (c)
      the applicant operates in a highly competitive geographical area for its type of business; and
    4. (d)
      if the respondent were to lock the premises again or cause a security guard to guard the premises “the applicant will be forced to call the police which is inconvenient and embarrassing and could be destructive to the applicant’s reputation”.
  4. [71]
    The applicant seeks interim orders similar to those made in Direction 2b but with further express restriction on the issuance of any notice of determination of lease and re-entry of premises concerning the premises and says the risk of injustice to the applicant if the injunction is withheld greatly exceeds the risk of injustice to the respondent if it were granted, which is nominal and arises in circumstances where “the injunction has only been sought because the respondent first caused the applicant injustice by contravening the tribunal’s directions”.

Respondent’s Submissions

  1. [72]
    The respondent’s submissions address:
    1. (a)
      Direction 2b;
    2. (b)
      jurisdiction; and
    3. (c)
      the impact of determination of the lease and re-entry.
  2. [73]
    The respondent says Direction 2b restrains:
    1. (a)
      the issuing of a notice to remedy breach specifying a breach which concerns matters the subject of the Tribunal proceedings pending determination of the Notice of dispute; and
    2. (b)
      re-entering the premises upon any notice to remedy breach specifying a breach which concerns matters the subject of the Tribunal proceedings.
  3. [74]
    They are correct in saying that the applicant’s submissions do not address how the applicant’s failure to pay rent for the month of July 2022, some 12 months after the directions, and a liability which only accrued on 1 July 2022, is a matter that was “the subject of the Tribunal proceedings”. 
  4. [75]
    The respondent argues that the ongoing payment of rent was not a matter which was the subject of the tribunal proceeding when Direction 2b was made because:
    1. (a)
      the 7 July 2021 application preceding Direction 2b sought restraining orders in respect of matters “except for rent in arrears”, demonstrating that the proceedings did not include the impeachment of the ongoing obligation to pay rent;
    2. (b)
      the material filed, including the orders sought by the applicant, do not put in issue matters related to the ongoing payment of rent or specifically the July 2022 rent, citing, among other things:
      1. the “Orders proposed by the Applicant” that includes an order that the applicant is not required to pay “arrears of rent”, which is a reference to the Applicant’s past failures to pay rent and a dispute about that discrete matter;
      2. paragraph 6 seeks a money order for $30,000 for “refund of overpayment of Outgoings” – it does not seek any set-off against future rent or relief from that obligation; and
      3. Ms McDowall at [40] of her statement filed 1 September 2021 confirms that the ongoing payment of rent was not part of the Tribunal proceeding, and swears that during 2021 she paid her weekly rent.
    3. (c)
      Ms McDowall brought up the issue of an “offset” after the Breach Notice was issued in the following terms:
      1. On 27 July 2022 by stating that:

…I have always paid rent as per the lease agreement, payment has always been made to the bank account or by way of offset for credits raised for over charges by your client...

…There is no breach, and accordingly in the absence of a breach, there is the absence of a remedy.

  1. (ii)
    On 28 July 2022 by saying that:

… Given 42 days has passed since my request that your client provide credit notes, I have raised a credit note for $5,600 in my system based on an estimate of the overpayment for the preceding 7 years. Upon your client providing credit notes supported by documentation I will amend the credit note I have raised accordingly. …

  1. [76]
    The respondent describes the applicant’s failure to pay rent in July 2022 as “a deliberate strategic decision made by the applicant intended to improve the Applicant’s position in these proceedings at the expense of the respondent because of the delay in these proceedings being heard”, pointing to the statement in the application for interim orders at [9] in Part D as confirmation of the same.
  2. [77]
    As a matter of jurisdiction, the respondents submits that the applicant’s purported “set-off” is not a matter which can be the subject of the Tribunal proceedings because of the carve out in section 103(1)(b) of the RSLA of the Tribunal’s jurisdiction in relation to the ‘amount of rent’ and ‘amount of outgoings’. For this reason, the Breach Notice could never have properly concerned a matter which was the subject of the tribunal proceeding in any event.
  3. [78]
    In any event, the respondent says:
    1. (a)
      the Notice of Determination relies on the applicant’s common law repudiation of the lease as an alternative ground for the termination that occurred, which is not a ground of termination in respect of which a notice to remedy breach of lease was required to have been issued under section 124 of the Property Law Act 1974 (Qld) and which “on no view” could have been precluded by Direction 2b;
    2. (b)
      the tribunal does not have jurisdiction to make orders under section 124 of the Property Law Act 1974 (Qld) for relief against forfeiture which is what the application is seeking;[37]
    3. (c)
      under section 103(1) of the RSLA, the tribunal does not have jurisdiction in respect of the amount of rent or of outgoings payable under a retail shop lease; and
    4. (d)
      these exclusionary matters do not preclude the tribunal dealing with disputes about arrears of rent or arrears of outgoings[38] but to determine the validity of the Breach Notice, the tribunal would have to determine:
      1. the amount of rent payable, literally the ‘monthly rental liability’, because of the purported set-off the applicant seeks to apply to rent; and
      2. the amount of the lessor’s outgoings that may be the subject of that purported set-off,

and, for these reasons, the tribunal does not have jurisdiction to determine the validity of the Breach Notice, because that would require the Tribunal to enter upon a field over which it has no jurisdiction.

  1. [79]
    Accordingly, it follows that no injunction or restraining order could aid the ‘effectiveness of the proceedings’, there being no serious question that can be tried about the validity of the Breach Notice. Accordingly, the Applicant’s interim application must therefore be dismissed.
  2. [80]
    Finally, the respondent says that the lease ended in law upon their giving of the notice of termination and re-entry into the premises on 2 August 2022, with the effect of this forfeiture and re-entry event being permanent and irreversible. At that point, there was no longer any lease between the parties such that a restraining order against ‘re-entry’ could issue.

Discussion and Findings

Did the respondent breach Direction 2b?

  1. [81]
    Putting aside the questions raised by the respondent regarding the tribunal’s jurisdiction to even consider the matter, I am not satisfied that the respondent’s actions in issuing the Breach Notice and the Notice of Determination were contrary to Direction 2b.
  2. [82]
    The dispute the subject of the proceedings is as set out in the Notice of Dispute and refers to incorrect amounts for arrears of rent and overpaid rent and outgoings.[39] Items 3 and 14 of the Notice of Dispute relevantly seek orders that:
    1. (a)
      the GST component of rent be removed and overpaid GST refunded;
    2. (b)
      the lessor ceased charging GST and remit any paid GST to the Australian Tax Office;
    3. (c)
      outgoings are recalculated at 17.46% based on lettable areas;
    4. (d)
      overpaid outgoings once “correctly calculated” are refunded to the applicant; and
    5. (e)
      the respondent provides a credit towards future outgoings for tinnies and a pontoon purchased by Mr Walden in or about 2015/16 in exchange for outgoings on the boat hire tenancy then in arrears in the amount of $20,500.
  3. [83]
    There are patent difficulties and contradictions with some of these orders sought, which will be a matter for the final hearing.
  4. [84]
    For present purposes suffice it to say that the retail lease dispute for the café includes a yet untested and unresolved issue over the historical calculation of outgoings, and the application of GST on rent and outgoings and whether a rent credit from 2015/6 existed.
  5. [85]
    Direction 2b protected the applicant’s position as tenant pending an outcome in the proceedings on these untested and unresolved issues, as well as other issues including whether the applicant validly exercised an option to renew the café lease.
  6. [86]
    However, the obligation to pay ongoing rent, and the July 2022 rent in particular, is not an issue the subject of these proceedings and is not covered by Direction 2b. It follows that the action taken by the respondent did not take place in breach of it.
  7. [87]
    In reaching that conclusion, I note, firstly, that the application for an interim order that preceded the making of Direction 2b excluded rent in arrears.  Secondly, the applicant does not dispute its ongoing obligation to pay rent and did pay rent as invoiced by the lessor until July 2022 when it, unilaterally and without notice to the lessor, made the decision to short-pay the invoiced amount. 
  8. [88]
    In Blue Angel Investments Pty Ltd t/as Salt Seafood Bar and Grill v Beach Plaza Pty Ltd[40] the tribunal refused interim relief to a tenant who ceased paying rent and outgoings while the calculation of these amounts was in dispute following a market rent review.  They noted (my emphasis added): 

[11] The payment of rent and outgoings are fundamental terms of any lease and the Tribunal’s jurisdiction about them is limited. That is the Tribunal has jurisdiction to determine procedure for the determination of rent payable under a retail shop lease and the basis upon which the lessor’s outgoings are payable.[41] The Tribunal may only deal with arrears of rent if there is dispute which is also about compensation.[42] There is no application in respect of compensation here. The Tribunal could hardly then make an interim order that it could not perfect as a final order in respect of the payment or non-payment of rent and outgoings.

[12] In terms of how the additional charges or outgoings are calculated, the Tribunal considers that the balance of convenience lays with Beach Plaza. That is for amounts which were considered to be payable by both parties before the market rent review to continue to be calculated the way they were. Beach Plaza will continue to receive the previously agreed amounts unless and until the Tribunal determines that amounts should not be payable or payable on a different basis.

  1. [89]
    For similar reasons in these proceedings, Direction 2b protected the applicant’s position ‘point in time’ and conditional upon future rent continuing to be paid.  Direction 2b was not and could not be taken as relief from, at the tenant’s election, noncompliance with ongoing and future contractual obligations. 

i. Is the order required to protect a party’s position for the duration of the proceeding or to secure the effectiveness of a final decision?

  1. [90]
    The ordinary meaning of the word “protect” is to “preserve”, which in turn means to “maintain (something) in its original or existing state”.[43]  
  2. [91]
    Preservation means the applicant and the respondent had to perform the lease and pay previously agreed amounts until the tribunal – not the applicant – determined otherwise. In that regard, the applicant was and remains protected by Direction 2b. No additional orders are required. 
  3. [92]
    Further, it is simply not permissible for the applicant – once protected by an interim order - to anticipate the outcome in proceedings and to engage in a unilateral exercise of ‘self-help’ before the dispute is properly heard. 
  4. [93]
    Protection does not mean improvement, which is what would happen if the tribunal extended the existing protection offered by Direction 2b to future breaches of payment obligations under the lease pending a final outcome. 
  5. [94]
    Finally, the purpose of Direction 2b was to protect the applicant from unfair, untoward, or unilateral action by the respondent that would alter the status quo. It was not to protect the applicant from its own choices or its own conduct. After previously paying compliantly the applicant short-paid the July 2022 rent and the applicant dismissed the warning contained in the Breach Notice.  It was the applicant, not the respondent who altered the status quo by its conduct and, therefore, the harm that followed was caused by the applicant, not by the respondent.  If the applicant would not protect its own position, it is difficult to see how the interests of justice would compel the tribunal to do it for them.

ii. Does the applicant have an arguable case that may entitle it to final relief?

  1. [95]
    The applicant seeks offsets or credits for overpaid rent, but this would, if granted, apply from the date of the decision.  It is therefore difficult to see how the applicant has any arguable case in relation to the July 2022 rent that would entitle it to interim relief. 

iii. Does the balance of convenience favour the making of the order (and are damages an adequate remedy, if the respondent is found to have taken action contrary to law)?

  1. [96]
    This is something of a vexed question.
  2. [97]
    On the one hand, refusing the order may alter the final outcome of the proceeding, because the nature of the tenancy relationship will have changed between when the Notice of Dispute was filed and when an outcome is reached after the November 2022 hearing.  For example, an outcome finding that the tenant validly exercised its lease option in 2020 would have no utility if that lease had been terminated by subsequent events in August 2022. This should not be entertained lightly.
  3. [98]
    However, it is common over the course of any protracted dispute that intervening circumstances change its trajectory and impact on the utility of the final outcome.
  4. [99]
    Protected by Direction 2b, the applicant enjoyed a status quo in which it was paying rent in the amount invoiced until July 2022 when the applicant stopped paying. The applicant put itself at risk in doing so and has not adequately explained its choice.  There is no argument for protecting the tenant from this or from any other subsequent wilful breach of the lease by the tenant. Adopting the reasoning in Blue Angel, the balance of convenience favours the respondent, who is entitled to receive the previously agreed and paid rent amounts until the tribunal determines otherwise.

iv. Has the applicant offered an undertaking as to costs or damages and what is the value of such an undertaking if so?

  1. [100]
    The applicant has not offered an undertaking, but one can be ordered.

Decision on the July 2022 Rent Application

  1. [101]
    The July 2022 Rent Application is dismissed, meaning the declarations and the injunctions sought in it are not granted on the basis that the respondent has not contravened Direction 2b and on the basis that the dispute concerning the July 2022 rent is not the subject of the dispute currently before the tribunal.
  1. [102]
    A decision on the question of costs is reserved until the final outcome of proceedings, and after taking submissions from the parties.

Decision on the directions sought for an account reconciling outgoings

  1. [103]
    Contained within the application for interim orders is the request for directions that the respondent file an account or reconciliation of the outgoings for the café lease in accordance with the proportion that the premises bears to the total area of the shops and premises within the building, as well as of the rent received by the respondent from the applicant since 17 December 2015.
  2. [104]
    The applicant says this is necessary to ensure the “quality and consistency of the tribunal’s decisions”[44] and that the information will enable the tribunal to determine whether the amounts in outgoings and rent claimed by the respondent are “truly accurate and have not been falsified or misrepresented or claimed in breach of the RSLA”.[45]
  3. [105]
    The respondent says this account cannot be undertaken until the matters in dispute concerning the lettable area of the premises and the license areas are determined by the tribunal and that it is usual practice for a formal account to be taken, if at all, following the final decision.
  4. [106]
    The accounts and financial records are a matter for evidence and the parties are currently the subject of directions to file and serve evidence in the proceedings and the time for the respondent’s compliance with direction has not yet expired.
  5. [107]
    The direction sought also lacks utility given, as the respondent says, there are factual disputes over the method or basis of calculating the outgoings. I refuse the applicant’s request to direct the accounts on that basis. 

Additional orders sought by respondent

  1. [108]
    The respondent’s submissions contain a request for additional orders that the applicant vacate the premises and that the respondent be at liberty to re-enter.   I decline to make those orders.  They have not been requested formally in an application and they have not been responded to by the applicant.  Further, I have just determined that issues relating to the July 2022 rent and lockout are not within the subject matter of these proceedings, and that the action taken by the respondent in relation to them has not breached Direction 2b.  It is a matter for the respondent to do what it will with those orders, bearing in mind the final hearing will commence in less than forty-five days from the date of this decision.

Footnotes

[1]  With apologies to Sir Walter Scott, “Marmion: A Tale of Flodden Field”.

[2]  Applicants Submissions dated 12 August 2022 at paragraph 14.

[3]  Ibid.

[4]  Applicant’s Statement filed 1 September 2021 at paragraph 14.

[5]  Ibid at paragraph 16(e).

[6]  Clause 2.2 of the Lease.

[7]  Lease dated 2 February 2016, Item 13 Items Schedule – permitted use.

[8]  For example, see pages 52-54 and 58-59.

[9]  However, page 29 of 29 is not included in the filed material and it may be mentioned there.

[10]  Respondent’s Statements filed 17 September 2021, page 161.

[11]  Applicant’s statement, page MM110.

[12]  Respondent’s Statements, page 172.

[13]  Section 103 of the RSLA.

[14]  Schedule, ibid.

[15]  Section 5A, ibid.

[16]  Schedule, ibid.

[17]  Section 5B, ibid.

[18]  Section 5C of the RSLA and regulation 2 of the RSLR.

[19]  Section 63, of the RSLA.

[20]  Section 83, ibid.

[21] Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”)

[22]  Section 11 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (“RTRAA”).

[23]  Section 12, ibid.

[24]  Section 3(b) of the QCAT Act.

[25]  Section 4(b), ibid.

[26]  Section 4(c), ibid.

[27]  Section 32(2), ibid.

[28] Gosbell v Linehurst Pty Ltd [2015] QCAT 74 at [9], cited by Member Allen in Blue Angel Investments Pty Ltd t/as Salt Seafood Bar and Grill v Beach Plaza Pty Ltd [2015] QCAT 230 at [9].

[29] Parkview Management Pty Ltd v Body Corporate for Boca Raton Community Titles Scheme 22486 [2018] QCAT 6 at [23].

[30] Parkview Management Pty Ltd v Body Corporate for Boca Raton Community Titles Scheme 22486 [2018] QCAT 6 at [24].

[31] Airlie Beach Real Estate Pty Ltd v Body Corporate for Delor Vue Apartments CTS 39788 [2018] QCAT 317, [70].

[32]  Sections 58(3) and 59(6), QCAT Act.

[33]  Section 100, QCAT Act.

[34]  Section 102, ibid.

[35]  Statement of the Respondent filed 17 September 2021 at [5].

[36]  The applicant has submitted that Part 7 Codes - Division 2 Specific Development Codes - Chapter 10 Caretaker’s Residence of the Gold Coast Planning Scheme applies to these premises.

[37] Gillam v Wheatley [2021] QCAT 274 at [22] to [25].

[38] Fu Manchu Dining Pty Ltd v SP (Qld) Pty Ltd [2019] QCAT 394.

[39]  Referred to as “dodgy invoices”, invoices “contrary to RSLA” and “quote -no work done” in a spreadsheet tendered with the Application for Interim Orders filed 4 August 2022.

[40]  [2015] QCAT 230.

[41] Retail Shop Leases Act 1994 (Qld) ss 103(1).

[42] Retail Shop Leases Act 1994 (Qld) ss 103(2)(d).

[43]  Oxford Languages dictionary, online.

[44]  Citing section 3(c) of the QCAT Act.

[45]  Applicant’s submissions at [51].

Close

Editorial Notes

  • Published Case Name:

    Nijalu Pty Ltd v DW Investments (QLD) Pty Ltd

  • Shortened Case Name:

    Nijalu Pty Ltd v DW Investments (QLD) Pty Ltd

  • MNC:

    [2022] QCAT 345

  • Court:

    QCAT

  • Judge(s):

    Member Lember

  • Date:

    26 Sep 2022

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
Airlie Beach Real Estate Pty Ltd v Body Corporate for Delor Vue Apartments [2018] QCAT 317
2 citations
Jump To
Cite 1 - [2018] QCAT 317
Cite 2 - [2018] QCAT 317
Fu Manchu Dining Pty Ltd v SP (Qld) Pty Ltd [2019] QCAT 394
2 citations
Jump To
Cite 1 - [2019] QCAT 394
Cite 2 - [2019] QCAT 394
Gillam v Wheatley [2021] QCAT 274
2 citations
Jump To
Cite 1 - [2021] QCAT 274
Cite 2 - [2021] QCAT 274
Gosbell v Linehurst Pty Ltd [2015] QCAT 74
1 citation
Jump To
Cite 1 - [2015] QCAT 74
Parkview Management Pty Ltd v Body Corporate for Boca Raton East Community Titles Scheme 22486 [2018] QCAT 6
3 citations
Jump To
Cite 1 - [2018] QCAT 6
Cite 2 - [2018] QCAT 6
Cite 3 - [2018] QCAT 6
Salt Seafood Bar and Grill v Beach Plaza Pty Ltd [2015] QCAT 230
3 citations
Jump To
Cite 1 - [2015] QCAT 230
Cite 2 - [2015] QCAT 230
Cite 3 - [2015] QCAT 230

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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