Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QCAT
  3. 2022
  4. Aqualine Pty Ltd v Ponticello Properties Pty Ltd - [2022] QCAT 88

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Aqualine Pty Ltd v Ponticello Properties Pty Ltd[2022] QCAT 88

Aqualine Pty Ltd v Ponticello Properties Pty Ltd[2022] QCAT 88

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Aqualine Pty Ltd v Ponticello Properties Pty Ltd [2022] QCAT 88

PARTIES:

aqualine pty ltd

(applicant)

V

ponticello properties pty ltd

(respondent)

APPLICATION NO/S:

RSL033-18

MATTER TYPE:

Retail shop leases matter

DELIVERED ON:

4 March 2022

HEARING DATES:

13 December 2021 and 14 December 2021

HEARD AT:

Brisbane

DECISION OF:

Member Cranwell (Presiding)

Member Judge

Member Myatt

ORDERS:

  1. The application is dismissed.
  2. Any application on the question of costs is to be made within 28 days of the date of this order.  In the event a costs application is made, the party seeking costs shall file in the Tribunal and serve on the other party written submissions within 14 days of filing and serving the costs application. The other party may file and serve any written submissions in response within 14 days of being served with the written costs submissions. Unless either party requests an oral hearing, the costs application will then be determined on the papers.

CATCHWORDS:

LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – OTHER MATTERS – where claims of disruption made – whether lease breached – whether entitlement to damages

Retail Shop Leases Act 1994 (Qld), s 41, s 43

Aqualine Pty Ltd v Ponticello Pty Ltd [2019] QCAT 393

Briridge Pty Ltd v Charter Hall Real Estate Management Services Pty Ltd [2014] QCAT 469

Hawkesbury Nominees Pty Ltd v Battick Pty Ltd [2000] FCA 185

APPEARANCES & REPRESENTATION:

 

Applicant:

S Fisher

Respondent:

M C Long, instructed by Thynne + Macartney Lawyers

REASONS FOR DECISION

  1. [1]
    Ponticello Properties Pty Ltd (Ponticello) is the owner of a shopping centre in Acacia Ridge, namely the Acacia Marketplace Shopping Centre (the shopping centre).
  2. [2]
    Aqualine Pty Ltd (Aqualine) was the lessee of premises within the shopping centre, and operated a newsagency trading under the name ‘Archerfield News’.  The lease was transferred to Aqualine on 21 October 2005.
  3. [3]
    It is not in dispute that Aqualine had been holding over under a lease as a periodic tenant of the shopping centre from 26 August 2011 to 23 July 2017.
  4. [4]
    Aqualine lodged two notices of dispute with the Tribunal on 27 September 2017, which were given proceeding numbers RSL113-17 and RSL114-17.  The proceedings were subsequently renumbered as RSL033-18 and RSL034-18, before being consolidated as RSL033-18 on 7 August 2018.
  5. [5]
    Aqualine’s complaints arise from alterations to the shopping centre signage, and renovations to expand the centre to include an Aldi store and a K-Mart Tyre and Auto premises.  Aqualine’s complaints have been classified into four categories:
    1. (a)
      the claimed ‘Signage Disruption’;
    2. (b)
      the claimed ‘Aldi Disruption’;
    3. (c)
      the claimed ‘Renovation Disruption’; and
    4. (d)
      the claimed ‘Wasted Outgoings’.
  6. [6]
    We will deal with each of these categories of claims in turn.  However, it is necessary firstly to refer to the Tribunal’s decision on a preliminary question of law which has some significance in relation to the remedies available to Aqualine.

Preliminary question

  1. [7]
    In Aqualine Pty Ltd v Ponticello Pty Ltd,[1] Member Poteri determined:

AQUALINE PTY LTD ACN 010556493 ATF THE HOUGHTON INVESTMENT TRUST is not entitled to claim compensation under section 43 of the RSLA for loss or for loss or damage allegedly suffered by the AQUALINE PTY LTD ACN 010556493 ATF THE HOUGHTON INVESTMENT TRUST because of an alleged action by the PONTICELLO PROPERTIES PTY LTD ACN 010070934 AS TRUSTEE UNDER INSTRUMENT NUMBER 70758827, or an alleged failure by PONTICELLO PROPERTIES PTY LTD ACN 010070934 AS TRUSTEE UNDER INSTRUMENT NUMBER 70758827, or another event of the kind described in section 43 of the RSLA that occurred before 25 November 2016.

  1. [8]
    This decision was not appealed. 
  2. [9]
    Accordingly, it remains the position that Aqualine is unable to claim compensation under s 43 of the Retail Shop Leases Act 1994 (Qld) (the RSL Act) for conduct of Ponticello which occurred prior to 25 November 2016.
  3. [10]
    For conduct prior to 25 November 2016, Aqualine’s claim is limited to damages for breach of the lease.

The signage disruption

  1. [11]
    Aqualine’s complaint is that in mid-2011, Ponticello erected a new pylon sign outside the shopping centre.  The old sign contained the name ‘Archerfield News’ and the Golden Casket graphics.  The new sign contained the single word ‘NEWS’.
  2. [12]
    It is not in dispute that the change in signage came about after the pylon structure was damaged by lightning.
  3. [13]
    Further, Aqualine complains that fascia signage was removed in 2014 and not replaced.  The evidence includes a letter from Chesterton International, on behalf of Ponticello, to Aqualine dated 26 May 2014, which stated:

As per our previous correspondence, with the exciting upcoming addition of ALDI and as part of the Acacia Marketplace commitment to improving the centre, a number of capital works projects have been undertaken … and will be undertaken at the centre …

As a result of these works, aspects of your signage will be impacted as detailed below:

  • ‘Archerfield News’ – Fascia – To be removed and replaced above shop front

Please note that the cost for removal and the new signage will be at the cost of the owners.

  1. [14]
    Mr Phil Rizzo, a director of Ponticello, gave evidence that the signage was never replaced because ‘we never received the appropriate artwork or confirmation of the size of the sign that was wanted’.[2] 
  2. [15]
    Mr Charles Evans, a director of Aqualine, gave evidence that he did not ‘follow up’ the issue of the fascia signage.[3]

Consideration

  1. [16]
    As the conduct in relation to the signage issue occurred prior to 25 November 2016, Aqualine has no claim for compensation under the RSL Act.
  2. [17]
    In terms of the claims for breach of lease, the lease does not contain any right to signage.
  3. [18]
    We note that ‘demised premises’ is defined in clause 1.8 of the lease as follows:

The area extending to the centre of inter-tenancy dividing walls or partitions and to but not including the exterior faces of external walls and includes all internal partitions floor coverings fittings and fixtures therein contained other than those the property of the Lessee.

  1. [19]
    It is clear that the demised premises do not include exterior signage.
  2. [20]
    Aqualine relies on clause 8.5 of the lease, which provides:

The Lessor reserves the right from time to time during the term hereof to erect and remove and re-erect sign seats and other structures in any part of the common areas or the car park and to grant to any person the exclusive use of any such or (sic) structures for such purposes for such periods and upon such terms and conditions as the Lessor in its absolute discretion may think fit provided always that:

…

(b) the visibility of the demised premises shall be no more obscured than it is as at the date of commencement of this Lease.

  1. [21]
    The changes to the pylon sign and fascia sign, which are external to the shopping centre, are not capable of obscuring the demised premises, which are located inside the centre.
  2. [22]
    Aqualine also relies on clause 10.1 of the lease, which provides:

The Lessor acknowledges that the Lessee paying the base rental reserved and observing and performing the covenants conditions and restrictions on its part shall and may peacably hold and enjoy the demised premises during the term without any interruption by the Lessor or by any person rightfully claiming through under or in trust for it.

  1. [23]
    In Hawkesbury Nominees Pty Ltd v Battick Pty Ltd,[4] Hill J stated:

[T]here will be a breach of the covenant for quiet enjoyment where the ordinary and lawful enjoyment of the demised premises is substantially interfered with by the acts of the lessor or those lawfully claiming under him, whether or not the title to the land or the possession of the land is otherwise affected.  Whether what is complained of amounts to a substantial interference will be a question of fact.

  1. [24]
    In these circumstances, we are not satisfied that Ponticello’s conduct substantially interfered with Aqualine’s ordinary and lawful enjoyment of the demised premises.  The new pylon sign continued to contain signage for Aqualine’s newsagency business, albeit in slightly different terms to the old pylon sign.  The failure to replace the fascia sign was due to a failure by Aqualine to follow up on the artwork or other details required.
  2. [25]
    To the extent that there was any policy by the previous owner of the shopping centre in relation to signage, that policy was not contained in the lease and did not run with the land when the shopping centre was acquired by Ponticello.
  3. [26]
    We find that there has been no breach of the lease in relation to the signage issues.
  4. [27]
    In any event, clause 10.7 of the lease:

Notwithstanding anything herein contained or an implication or rule of law to the contrary the Lessor shall not be liable for any damage or loss the Lessee may suffer by reason of the neglect or omission of the Lessor to do any act or thing to or in respect of the demised premises or the Centre and which (as between the Lessor and the Lessee) the Lessor might be legally liable to do unless the Lessee shall have given to the Lessor written notice of such neglect or omission and the Lessor has without reasonable cause failed within a reasonable time to take proper steps to rectify such neglect or omission.

  1. [28]
    The opening words of clause 10.7 expressly indicate that it prevails over other clauses of the lease.  As noted above, Mr Evans never ‘followed up’ on the fascia signage.

The Aldi disruption

  1. [29]
    Aqualine’s complaint is for loss of profits cause by disruption due to:
    1. (a)
      the installation of shade sails between 27 February 2014 and 30 April 2014;
    2. (b)
      the construction of an Aldi supermarket between May 2014 and February 2015;
    3. (c)
      construction of a structure called the ‘Link’, retail tenancy office and storeroom in August 2014; and
    4. (d)
      loss of 45 staff car parks in November 2014.
  2. [30]
    In support of its claims, Aqualine provided evidence of a decrease in the number of customers recorded on the door counters at the shopping centre.
  3. [31]
    There was no evidence put before the Tribunal as to the accuracy of the door counters.  Indeed, Mr Evans gave evidence that he stopped relying on one of the counters when he noticed that ‘the numbers were out of kilter’ and marked the numbers as ‘dodgy’.  As the Tribunal asked at the hearing:[5]

MEMBER CRANWELL: How do we know that any of these figures are accurate?  Do we have evidence of the brand of the counter that was installed?  Do we have evidence of the manner in which they were installed?  Do we have evidence from the manufacturer in relation to the margin of error?

  1. [32]
    Mr Evans answered questions in cross-examination on the reliability of the figures as follows:[6]

I’ll ask it different[ly].  You have not sat there and taken a count of the customers coming into the store and checked that your manual count correlates with the count undertaken by the sensor? – I have stood there at times and waved my hand to make sure that it counted.

So the answer is no.  You have not undertaken a manual count to confirm the readings from the counter? – Of which counter?

This counter that is the numbers that you have recorded? – That is the one that the landlord and their representatives record every day.

You haven’t done a manual check that it is accurate? – It was not my point to do it , but …

So the answer is no, Mr Evans? – No.

  1. [33]
    Mr Rizzo gave evidence that the counters could be disturbed by sunlight:[7]

Did you make any efforts to try and capture historical data relating to the same periods of time that Mr Evans captured? – No.  The reason being that I wasn’t satisfied that the system was accurate enough to give decent figures.

Alright.  So when you say that, did you have the system tested and some engineer or consultant has given you a report about it? – No.  That was just my observation.

And what observation was that? – Well, I could see that the figures were hopping around and also, as Mr Evans, in his own statement, said that after a certain period they just became dodgy.  And I’d read information that suggested that the numbers could, in fact, be affected – because of the way the centre faces, a lot of sunlight comes in and apparently those, because they shoot some sort of infra-red across and that can actually be disturbed by sunlight so it just got to the point where we realised the figures just weren’t worth keeping.

  1. [34]
    For completeness, the door count figures provided by Mr Evans show a decrease of about 5.3% in customers to the shopping centre between 2010 and 2013, compared to a decrease of about 22.6% in customers of the newsagency.[8]
  2. [35]
    Aqualine also provided evidence of a decrease in the number of car parks available at the shopping centre at various times. 
  3. [36]
    Aqualine provided an expert report from Mr Adam Pekol of Traffic and Transport Engineering dated 29 July 2019.  Ponticello provided a report from Mr Andrew Douglas of Cambray Consulting, Traffic Engineering and Transport Planning dated 12 September 2019.  Both engineers provided a joint report dated 4 February 2020.
  4. [37]
    While the expert reports set out the number of car parks available at the shopping centre at various times, that evidence is ultimately of little relevance to Aqualine’s claim for damages.  At the hearing, the experts agreed that there was no evidence that the car park at the shopping centre was ever at capacity:

MEMBER CRANWELL: … So the applicant here is claiming compensation for losses to his business, and we’ve got some evidence here from each of you as to how many carparks there were available at a particular time.  Obviously, during various constructions, the numbers reduce, and we’ve got some different figures there.  But can either of you point to evidence that shows that the carpark was full or overflowing at any particular point?  Because if you had 10 cars there every day, it wouldn’t matter whether you had 158 carparks or 403 carparks.  It would have no impact on the traffic going into the centre.  So, the key issue, I would have thought, is whether or not at particular points of time people were going in, unable to find a park and leaving, which might cause some loss to the applicant’s business.  We’ve obviously got the Austraffic survey.  We’ve got a couple of emails talking about staff parking in particular parks and causing trouble in terms of access.  Do we have anything else, other than that, that suggests at any time the carpark was full and overflowing?

MR DOUGLAS: No.  And that’s the key point here.

MR PEKOL:  I agree with Mr Douglas.  We’ve got some aerial photographs taken at a particular time of the day on different days of the year that show vacant carparking spaces around the site, but I don’t think Mr Douglas or I would suggest that we rely on those aerial photographs as giving the same level of information as the Austraffic survey did, albeit for the one or two days that it was surveyed, because it could very well be that those photographs were taken at a time of day where the centre was not busiest.  So, in short, no.

MEMBER CRANWELL: That is the sixty-four thousand dollar question in relation to the carparking …

  1. [38]
    For completeness, the Austraffic report referred to in the exchange set out above relates to a parking survey undertaken on Thursday, 12 September 2013 and Saturday, 14 September 2013.  The survey showed the carpark had a maximum occupancy of 58% on the Thursday and 48% on the Saturday.
  2. [39]
    The emails referred to in the exchange set out above include:
    1. (a)
      An undated memorandum from Acacia Marketplace in the following terms:

It is in everyone’s best interests that the customer enjoys a convenient, easy and hassle free shopping experience here.  We have many regular customers who have complained about inconvenient parking spaces.

There is a designated staff/proprietor parking on site within easy walking distance to your shop …  This will assist in settling complaints, and keeping the customers that we have.

  1. (b)
    a memorandum from Chesterton International dated 16 February 2015 in the following terms:

Again a number of retailers are complaining about the lack of car parking available for their customers, we understand and appreciate that the developments works have had an impact on this however the number of staff that are parking under the shade sails are not assisting with car parking being available for customers.  Please remind all staff that under no circumstance should anybody working within this centre be parking under the shade sails.

  1. (c)
    an email from Ms Josephine Rizzo dated 8 June 2017 in the following terms:

I have had some very poor feedback suggesting that employees at the centre are angry and are not prepared to park in the designated car park.

I have had consistent complaints from our regular patrons of our shopping centre regarding their lack of access to customer car parking.

  1. [40]
    When asked about these in cross-examination, Mr Rizzo stated that these communications were designed to ‘dramatise the situation … because a simple request to ask our retailers not to park in customer car parks was not being adhered to’.[9]
  2. [41]
    Mr Pekol also provided evidence that:

The site is accessed by two all movements crossovers from Beaudesert Road and three all-movement crossovers from Postle Street.

  1. [42]
    In relation to access, Mr Douglas provided evidence that:

We have reviewed aerial imagery taken during the conduction of the Aldi development … It is understood during this period that the primary Beaudesert Road driveway crossovers remained open.  We note that there was a brief period during construction of the food and drink outlet (south of the service station) where access to/from Postle Street was reduced to single lane operations.  This is unlikely to have had a material impact noting other access opportunities available and the brief period over which single lane operations occurred.

  1. [43]
    Mr Douglas was not cross-examined on this evidence.
  2. [44]
    Aqualine also provided evidence of a decrease in its net profits.  In fairness, the net profits of the business should be set out over a longer period.  The following figures are taken from newsagent’s accounts:

Financial year:

Net profit:

2007

$199,722

2008

$150,608

2009

$134,279

2010

$87,461

2011

$102,430

2012

$100,319

2013

$96,340

2014

$90,194

2015

$92,746

2016

$90,448

2017

$66,397

  1. [45]
    Aqualine’s accounting expert, Mr Ian Otto, gave evidence in cross-examination that the improvement from 2010 to 2011 was mostly due to decreased expenditure in the form of employee costs, rather than improved performance.[10]  That is, Mr Evans and his wife personally took on work previously undertaken by paid employees.
  2. [46]
    Consistent with these figures, Aqualine wrote to Ponticello on 24 February 2011 in the following terms:

[T]he offer of a further lease over Shop 7 Acacia Marketplace, on similar terms to the current lease with a market rental reflecting the severe downturn in the economy, and the substantial decrease of customer traffic through the centre over the last several years, is hereby requested for consideration.

  1. [47]
    We note that this letter was sent prior to the Aldi disruption.

Consideration

  1. [48]
    As the conduct in relation to the Aldi disruption occurred prior to 25 November 2016, Aqualine has no claim for compensation under the RSL Act.
  2. [49]
    In addition to clause 10.1 of the lease (set out above), Aqualine also relies on clauses 8.4 and 9.1 of the lease. 
  3. [50]
    Clause 8.4 provides as follows:

The Lessor may at any time during the term at its absolute discretion build additions to the Centre and for that purpose may (without incurring any liability to the Lessee) interrupt the water gas electrical and other services to the demised premises provided that the Lessor shall carry out such works in such a manner as to minimise so far as may be practical any inconvenience to or interruption to the business of the Lessee and provided always that:

(a) the means of ingress to and egress from the demised premises on foot or by motor vehicles from and to public streets shall be no less adequate than those prevailing at the date of commencement of this Lease; and

(b) the visibility of the demise premises shall be no more obscured than it is at the date of commencement of this Lease.

  1. [51]
    Clause 9.1 provides as follows:

Subject to the limitations and restrictions herein contained and any rules and regulations from time to time in force the Lessor shall permit the Lessee and all persons lawfully authorised by it in common with others having the like rights to exercise and enjoy the following rights:

(a) the right to pass and repass whilst on foot and without animals over and through all vestibules and passages in the building;

(b) the right to use the toilets washrooms and other facilities from time to time provided by the Lessor for the Lessees of the Centre and their employees customers clients and invitees together with adequate means of access thereto and there from;

(c) the right for itself its employees and its bona fide customers and clients to park motor vehicles in the parking areas so far as the limited capacity thereof will permit provided that the use of the parking areas by the Lessee and the employees of the Lessee shall at all times be subservient to the needs of the customers and patrons of the Lessees of the Centre.

  1. [52]
    We are not satisfied that Aqualine has met the burden of proof that there was a reduction in customers attending the shopping centre during the Aldi disruption.  Given the evidence set out above, we do not consider the numbers recorded on the door counter to be reliable.
  2. [53]
    In any event, there appears to be no correlation between the decrease of 22.6% in the number of customers to the newsagency as compared to the alleged decrease of 5.3% in customers to the shopping centre between 2010 and 2013.  The decrease in the number of customers to the newsagency may best be explained by the ongoing decline in the business.  While Aqualine disputes that the business was in long term decline, we consider the decline to be self-evident on the accounts.
  3. [54]
    For completeness, we note that Aqualine has asked us to take judicial notice that the global financial crisis of 2008 led to a decline in customer numbers to newsagents some years later between 2010 and 2013.  We do not consider this assists Aqualine, in light of the steady decline in profits both before and after the global financial crisis which was only partially arrested by decreased expenditure on employee costs.
  4. [55]
    We are also not satisfied that the car park at the shopping centre was ever at capacity so as to interfere with the right of Aqualine and its customers to park their cars for the purposes of clause 9.1(c).  Both traffic experts, Mr Pekol and Mr Douglas, agreed that this was the case.  The Austraffic survey, albeit conducted in 2013, recorded that the car park was barely half-full at peak times on Thursday and Saturday.  As set out in the exchange during the hearing, the precise total number of carparks available at any particular time is irrelevant in these circumstances.
  5. [56]
    In this regard, we reject Aqualine’s submission that the focus should be on supply of car parks rather than demand for car parking spaces.  The supply of car parking spaces, in circumstances where the demand does not exceed supply, seems to us to be irrelevant in circumstances where the lease does not make specific provision in relation to the availability of a particular number of car parks.
  6. [57]
    We note that clause 9.1(c) also provides that parking by staff was subservient to parking by customers.  We accept that there was an ongoing problem of staff not parking in their designated areas, which was likely a cause of frustration to Ponticello.  The emails set out above appear to merely reflect an attempt by Ponticello to enforce this aspect of the clause for the benefit of customers.  To the extent that these emails purported to link these problems to the Aldi disruption, we accept Mr Rizzo’s evidence that this link was made for dramatisation purposes only.
  7. [58]
    Further, based on the unchallenged evidence of Mr Douglas, we are not satisfied that the means of ingress or egress to the shopping centre carpark ever became any less adequate for the purposes of clause 8.4(a).  Mr Douglas noted that the construction was unlikely to have had a material impact on access.
  8. [59]
    We are also not satisfied that Aqualine’s net profit figures show any decrease referable to the Aldi disruption.  It appears to us that the business was in decline from the moment Aqualine acquired it.
  9. [60]
    In these circumstances, we are not satisfied that Ponticello’s conduct substantially interfered with Aqualine’s ordinary and lawful enjoyment of the demised premises for the purposes of clause 10.1. 
  10. [61]
    For completeness, we note that there does not appear to be any inconsistency between clause 8.4 and clause 10.1.  Clause 8.4 placed an obligation on Ponticello to carry out building addition works in a manner which minimised as far as may be practical any inconvenience to or interruption to Aqualine’s newsagency.  This sits comfortably with clause 10.1.
  11. [62]
    We find that there has been no breach of the lease in relation to the Aldi disruption.

The renovation disruption

  1. [63]
    Aqualine’s complaint is for loss of profits caused by disruption due to the renovations to the shopping centre.  It is not entirely clear to us what is the precise delineation between the Aldi disruption and the renovation disruption, although the renovation disruption also includes the construction of a K-Mart Tyre and Auto.
  2. [64]
    In any event, the evidence relied upon to support the renovation issue is in substance the same as that relied upon to support the Aldi disruption.
  3. [65]
    Further, Mr Evans provided evidence that for periods of time:
    1. (a)
      customers were directed to inadequate alternative toilet facilities; and
    2. (b)
      substantial construction noise took place during normal business hours.
  4. [66]
    In response, Mr Rizzo provided evidence that:
    1. (a)
      alternative toilet arrangements were adequate;
    2. (b)
      the noise was contained and not at a level that would have reasonably impeded anyone’s ability to go about their business; and
    3. (c)
      no complaints were received by the tenants at the time, and no other tenant has complained at all.

Consideration

  1. [67]
    As the conduct in relation to the renovation disruption occurred prior to 25 November 2016, Aqualine has no claim for compensation under the RSL Act.
  2. [68]
    We repeat and rely on our findings made in relation to the Aldi disruption, including in relation to clause 10.1.
  3. [69]
    Further, Ponticello was expressly entitled under clause 8.4 of the lease to build additions to the shopping centre.  As Mr Douglas memorably phrased it at the hearing, ‘you’ve got to crack an egg to make omelettes’.[11]  However, the clause required Ponticello to minimise the extent of any disruption as far as practicable.  We are not satisfied that Aqualine has met the burden of proof that Ponticello breached clause 8.4 in relation to the noise issues. Given the lack of complaints from other tenants, and from Aqualine at the time, we prefer the evidence of Mr Rizzo to that of Mr Evans.
  4. [70]
    Similarly, we are not satisfied that Aqualine has met the burden of proof that Ponticello breached clause 9.1 in relation to the toilet issues.  Given the lack of complaints from other tenants, and from Aqualine at the time,  we prefer the evidence of Mr Rizzo to that of Mr Evans.
  5. [71]
    We find that there has been no breach of the lease in relation to the renovation disruption.

The wasted outgoings

  1. [72]
    Aqualine’s complaint is that it paid a monthly contribution to Ponticello for promotions between 1 January 2013 and 30 November 2014, totalling $3,728.02.  Aqualine claims that this amount was not applied to the promotion of the shopping centre.
  2. [73]
    Clause 21.2(a) of the lease provides as follows:

That the Lessee will during each year or portion thereof pay to the Lessor a contribution to a Promotion Fund.  The Lessor hereby convenants (sic) to expend moneys in the Promotion Fund on advertising and other promotion and to provide the Lessee with accounts in relation thereto annually.

  1. [74]
    Aqualine correctly points out that Ponticello did not provide an annual audited statement as required by s 41 of the RSL Act, or annual accounts as required by the lease.
  2. [75]
    Mr Rizzo’s evidence was that the reason for non-compliance with s 41 was that ‘the price to audit the actual funds that were being gained was actually more than the value of the funds and we decided to spend the money on advertising as opposed to an auditing’.[12]
  3. [76]
    Mr Rizzo provided evidence that Ponticello’s promotional expenditure between the 2012 and 2015 financial years was as follows:

Financial year:

Expenditure amount:

2012

$18,008

2013

$12,941

2014

$15,831

2015

$9,316

Consideration

  1. [77]
    We accept that Ponticello breached s 41 of the RSL Act.  However, as the Tribunal observed in Briridge Pty Ltd v Charter Hall Real Estate Management Services Pty Ltd:[13]

Section 41 of the Act relates to promotion and advertising by the lessor. It does not give any rights to the lessee. It provides that if a lessee is required to pay amounts for promotion and advertising (‘promotion amounts’) and under the lease these amounts are not treated as part of the lessor’s outgoings, then the lessor must only apply those promotion amounts for promotion advertising directly attributable to the shopping centre.

  1. [78]
    As the conduct in relation to the Aldi disruption occurred prior to 25 November 2016, Aqualine has no claim for compensation under the RSL Act.
  2. [79]
    We also accept that Ponticello breached clause 21.2(a) of the lease by not providing Aqualine with accounts annually.  However, we are not satisfied that Aqualine suffered any loss as a consequence of this.  It is clear from Mr Rizzo’s evidence that Ponticello applied funds towards promotional expenditure.  We are not satisfied that Aqauline has met the burden of proof that the funds paid by it were not applied by Ponticello.

Conclusion

  1. [80]
    Other than in relation to the wasted outgoings, we are not satisfied that Ponticello breached the terms of the lease to Aqualine.  In relation to the wasted outgoings, this breach was a technical breach and we are not satisfied that Aqualine suffered any loss as a result of this breach.
  2. [81]
    It was known to both parties prior to the hearing that Aqualine was not entitled to compensation under s 43 of the RSL Act for conduct which occurred prior to 25 November 2016.  None of the conduct complained about took place on or after 25 November 2016.
  3. [82]
    While we are sympathetic to the situation that Aqualine finds itself in, having paid a substantial amount of money for a business in decline, it is not a matter for Ponticello to provide compensation for non-viable businesses within its shopping centre.  If anything, we consider that the improvements Ponticello made to the centre offered Aqualine the best prospect of attracting more customers and reversing its fortunes.
  4. [83]
    The claims by Aqualine must fail, and the application will be dismissed.
  5. [84]
    The parties may make written submissions on the question of costs in the event that a costs order is sought within 28 days of the date of these orders.

Footnotes

[1][2019] QCAT 393, [55].

[2]Transcript, 1-52.

[3]Transcript, 1-29.

[4][2000] FCA 185, [37].

[5]Transcript, p 1-33.

[6]Transcript, p 1-35.

[7]

[8]Transcript, p 1-37.

[9]Transcript, p 1-74.

[10]Transcript, p 2-44.

[11]Transcript, p 2-33.

[12]Transcript, p 1-57.

[13][2014] QCAT 469, [28].

Close

Editorial Notes

  • Published Case Name:

    Aqualine Pty Ltd v Ponticello Properties Pty Ltd

  • Shortened Case Name:

    Aqualine Pty Ltd v Ponticello Properties Pty Ltd

  • MNC:

    [2022] QCAT 88

  • Court:

    QCAT

  • Judge(s):

    Member Cranwell, Judge, Myatt

  • Date:

    04 Mar 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
Aqualine Pty Ltd v Ponticello Properties Pty Ltd [2019] QCAT 393
2 citations
Jump To
Cite 1 - [2019] QCAT 393
Cite 2 - [2019] QCAT 393
Briridge Pty Ltd v Charter Hall [2014] QCAT 469
2 citations
Jump To
Cite 1 - [2014] QCAT 469
Cite 2 - [2014] QCAT 469
Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185
2 citations
Jump To
Cite 1 - [2000] FCA 185
Cite 2 - [2000] FCA 185

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.