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  4. AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd - [2024] QCAT 218

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AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd[2024] QCAT 218

AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd[2024] QCAT 218

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd [2024] QCAT 218

PARTIES:

AJH PROPERTY NO. 2 PTY LTD

(applicant)

v

WILD EARTH AUSTRALIA PTY LTD

(respondent)

APPLICATION NO:

Q543-23

MATTER TYPE:

Other minor civil dispute matters

DELIVERED ON:

20 May 2024

HEARING DATE:

7 March 2024

HEARD AT:

Southport

DECISION OF:

Member Scott-Mackenzie

ORDERS:

The respondent pay to the applicant $14,456.65 within 21 days of this order

CATCHWORDS:

REAL PROPERTY – TORRENS TITLE – LEASES – GENERALLY – Application for minor civil dispute – minor debt – claim for outgoings under lease of warehouse – dispute about lettable area of premises and building – whether lettable area that in sketch plan in schedule to lease or survey plan – building sold – whether right to sue lost by reason of section 62 of the Land Title Act 1994 (Qld)

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 14, s 102

Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 84(1)

Land Title Act 1994 (Qld), s 62

Bank of Queensland Ltd v Y & L Promising Pty Ltd [2022] QSC 217

Southport Memorial Club Inc v Returned and Services League of Australia (Queensland) Southport Sub-Branch Inc [2023] QCA 146

APPEARANCES & REPRESENTATION:

Applicant:

Mr Hudson

Respondent:

Mr Black

REASONS FOR DECISION

Application

  1. [1]
    On 9 November 2023 the applicant made application to the Tribunal for a minor civil dispute – minor debt (application). It claims against the respondent $14,875.75, calculated as follows:

Amount owing

$14,077.15

Interest (at the rate of 9% to per annum

from 1 July 2023 – 31 October 2023)

$ 319.10

Filing fee

$ 379.50

Service fee

$ 100.00

 

$14,875.75

  1. [2]
    The reasons why the applicant seeks payment of the amounts claimed, set out in the application, are:

We owned 27 Central Central [sic.] Drive Burleigh Heads. There are two tenancies in that building. Unit 1 is occupied by another business. We signed a lease with Wild Earth Australia Pty Ltd (unit 2) in April 2021 that stipulated 62.3% of the outgoings were theirs on the basis that they would be leasing 607m2 from us and that Foamworld (the other tenant) was leasing 355m. 607m + 355m = 962m2. 607m2 = 63%. In the lease, there is a survey plan that shows an unapproved mezzanine area built by the other tenant AFTER they signed their lease. That space was not on their lease nor has ever been charged for. 2 years later, Wild Earth is disputing their 63% liability saying that this unapproved mezzanine space in the other unit should offset their outgoing liability.

Response

  1. [3]
    On 8 December 2023 the respondent filed a response (response). It disputes owing the amount claimed by the applicant on the following grounds:

The Respondent does not owe any amount whatsoever.

Under the Lease the proportion of outgoings is defined as the percentage that the Lettable Area of the Premises bears to the Lettable Area of the Building.

Schedule 2 of the Lease provided by the Applicant shows Combined Total of 1,122sqm.

The Information Memorandum for the sale of the building describes a 1,122sqm building and lists tenancies as 515sqm.

Therefore Respondent’s area is 607/1,122 – 54.1% of Lettable Area.

Applicant incorrectly paid outgoings on mistaken basis of owing 62.3%

As set out in letter dated 8 March 2023 the Respondent overpaid the Applicant $19,921.45 and consequently does not owe Applicant any money whatsoever.

In the alternative, upon registration all of the Applicant’s rights vested in the transferee under s 62 Land Title Act 1994 (Qld). Any outstanding outgoings should have been reconciled between owners at settlement.

Lease of warehouse 1

  1. [4]
    On 28 April 2021 the parties entered a lease of warehouse 1, 27 Central Drive, Burleigh Heads (lease of warehouse 1). In the application, warehouse 1 is described as unit 2. To avoid confusion, these reasons for decision adopt the description of the warehouse in the lease, warehouse 1.
  1. [5]
    Warehouse 1 is one of two warehouses shown on the sketch plan in schedule 2 to the lease. Relevantly, in the margin of the sketch plan, the internal area of warehouse 1 is described as having an area of 607m2 while the other warehouse, warehouse 2, is described as having an area of 515m2 (internal 355m2 and mezzanine 160m2).
  2. [6]
    The sketch plan is reproduced below:

AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd [2024] QCAT 218

  1. [7]
    The respondent’s proportion of outgoings is spelt out in item 3 of the schedule to the lease of warehouse 1. It reads:

Not yet determined – will be the percentage that the Lettable Area of the Premises bears to the Lettable Area of the Building, as varied under this Lease. Note: Lessor estimates outgoings will be approximately $30,795.68 per annum (exc GST)

  1. [8]
    Several terms and words used in item 3 are defined in clause 1 of the schedule to the lease of warehouse 1. First, Lettable Area means, “… the lettable area calculated by the Lessor’s surveyor using the PCA’s “Net Lettable Area” method of measurement applicable on the date of measurement …”
  1. [9]
    Secondly, PCA means, “... the QUEENSLAND DIVISION OF THE PROPERTY COUNCIL OF AUSTRALIA LIMITED ACN 008 474 422 …”
  2. [10]
    Thirdly, Premises is defined as, “… the part of the Building described in Item 5 of the Form 7 …”, extending to the parts described in the definition. In Item 5 of the Form 7, the description of the premises being leased is in the following terms:

Warehouse 1 on part of the ground floor of a building erected on the Land as shown hatched or edged in black on the sketch plan annexed to Schedule 2 of this document.

  1. [11]
    It is to be observed the plan is described as a ‘sketch plan’.
  2. [12]
    Fourthly, Building is defined as:
  1. (a)
    the Land;
  2. (b)
    any other land which the Lessor owns, controls or uses in connection with the Land; and
  3. (c)
    all improvements on the Land and any other land described in paragraph (b), including the Lessor’s Property, but excluding the Lessee’s Property.

Lease of the warehouse 2

  1. [13]
    On 26 February 2019 Semaj Super Pty Ltd as trustee for G & J James Superannuation Fund and Foamworld Gold Coast entered a commercial lease agreement for warehouse 2. The lease commenced on 1 July 2019 and ended on 30 June 2023.
  2. [14]
    The area of the premises leased described in the lease is approximately 355m2.
  3. [15]
    The lessor was the owner of the building at the time.

Evidence

Applicant

  1. [16]
    Mr Hudson, who appeared on behalf of the applicant, described the tenancy. The dispute, Mr Hudson continued, concerns the inclusion of the area of the mezzanine storage in warehouse 2 in the calculation of the lettable area of the building for the purpose of calculating the respondent’s proportion of outgoings. If the mezzanine storage is excluded, the respondent’s proportion is 62.3%. If included, it is 54.1%.
  2. [17]
    The lessee of warehouse 2 does not pay rent for the mezzanine storage. Rent cannot be charged for the storage because it is not Council approved, Mr Hudson asserted.
  3. [18]
    The property was sold by the applicant in March 2023.

Respondent

  1. [19]
    Mr Black, who appeared on behalf of the respondent, referred to item 3 of the schedule to the lease of warehouse 1. The respondent, he said, assumed outgoings were calculated correctly. It was only when they were reviewed it was found the respondent had been overcharged.
  1. [20]
    When asked, Mr Black conceded the respondent still occupies warehouse 1 and continues to pay about 62% of outgoings, the percentage paid when the applicant owned the building.

Directions

  1. [21]
    At the conclusion of the hearing, the applicant was directed to file and serve particulars of the claim made by it in the proceeding and any submissions in closing. The respondent was directed to file and serve any submissions in closing, with the applicant directed to file and serve any submissions in reply to the respondent’s submissions.
  2. [22]
    The parties complied with those directions.

Applicant’s submissions in closing

  1. [23]
    The applicant, in its submissions in closing, particularises its claim as follows:

Outgoings

$14,077.15

Interest

$ 319.10

Filing fee

$ 379.50

Service fee

$ 100.00

 

$14,875.75

  1. [24]
    The submissions then address the assertion the applicant’s rights vested in the transferee on registration of the instrument of transfer for the property under section 62 of the Land Title Act 1994 (Qld) (LT Act). Then, the submissions address the apportionment of outgoings, drawing attention to an email sent at the time discussing the apportionment and payment of outgoings by the respondent at the higher rate until shortly prior to the property being sold.

Respondent’s submissions in closing

  1. [25]
    The respondent, in its submissions in closing, identifies the issues to be decided by the Tribunal as follows:
  1. (a)
    the proportion of outgoings payable by the respondent to the applicant under the lease of warehouse 1; and
  2. (b)
    whether the applicant’s right to sue for the outgoings was lost on registration of the instrument of transfer for the property by reason of section 62 of the LT Act.
  1. [26]
    The respondent asserts the tenant of warehouse 2 did not pay outgoings and concedes between May 2021 and February 2023 it paid outgoings at the higher rate.
  2. [27]
    It draws attention to various definitions in the schedule to the lease of warehouse 1 and asserts the plan in schedule 2 to the lease is the only survey plan. The respondent’s proportion of outgoings is at the lower rate if calculated by adopting the areas in the margin of the plan.
  3. [28]
    The respondent then addresses the assertion the applicant is not entitled to sue for the outgoings, the right having vested in the transferee on registration of the instrument of transfer, and responds to the applicant’s submissions in closing.

Applicant’s submissions in reply

  1. [29]
    The applicant filed submissions in reply to the respondent’s submissions. They respond to the respondent’s submissions the plan in schedule 2 to the lease of warehouse 1 is the only survey plan and the absence of material evidencing the applicant’s claim. The submissions include an email sent by Mr Hudson to Stewart McIntyre & Associates on 28 April 2021 requesting a quotation for a survey plan of the premises required by the respondent to register the lease, an email in response from Stewart McIntyre & Associates sent 25 May 2021 attaching a quotation and an email from Mr Black to Mr Hudson and others accepting the quotation.
  2. [30]
    Also included with the submissions is a copy of the survey plan prepared by Stewart McIntyre & Associates showing the area of warehouse 1 to be 618m2 and the area of warehouse 2 to be 364m2. The plan certifies the leases are measured in accordance with the definition of the Gross Lettable Area Complexes by The Property Council of Australia. The plan is dated 11 April 2024.
  3. [31]
    The survey plan is reproduced below: 

AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd [2024] QCAT 218

  1. [32]
    Included with the submissions is a copy of the account transactions for the property setting out the outgoings and copies of the source documents.
  2. [33]
    The respondent was charged, and paid, 62.6% of outgoings. Adopting the lettable area calculated by Stewart McIntyre & Associates, the applicant asserts, the respondent should have paid 62.9% of outgoings (618m2 ÷ 982m2 × 100% = 62.9%).

Respondent’s submissions in reply to the applicant’s submissions in reply

  1. [34]
    The respondent, in reply to the applicant’s submissions in reply, draws attention to the date of the survey plan.
  2. [35]
    It concedes it accepted the quotation for the survey plan and asserts the plan was not prepared at the time the parties entered the lease of warehouse 2.

Applicant’s further submissions

  1. [36]
    The applicant filed further submissions, asserting the survey plan is dated 11 April 2024 because that was the date on which it asked Stewart McIntyre & Associates to provide it with a copy of the plan. The plan was prepared at the time.

Consideration

Calculation of outgoings

  1. [37]
    The respondent’s proportion of outgoings, item 3 of the schedule to the lease of warehouse 1 makes clear, is yet to be determined. It will be the percentage that the Lettable Area of warehouse 1 bears to the Lettable Area of the Building, as varied under the lease. The outgoings are estimated at $30,795.68. The terms Lettable Area and PCA are defined in the lease as set out in paragraphs [8] and [9] of these reasons for decision.
  2. [38]
    The plan in schedule 2 to the lease of warehouse 1 is a sketch plan. It is referred to in item 5 of the Form 7, the description of the premises, as such.
  3. [39]
    I accept the survey plan prepared by the Stewart McIntyre & Associates meets the requirements of the definitions of the terms Lettable Area and PCA in clause 1.1 of the schedule to the lease of warehouse 1. The plan, I find, was prepared at the time following a quotation being provided by Stewart McIntyre & Associates at the request of the applicant and accepted by the respondent. The plan having been prepared after the parties entered the lease is irrelevant.
  4. [40]
    The conclusion reached is supported by, and consistent with, the wording of item 3 of the schedule to the lease of warehouse 1 and the description of the plan in schedule 2 to the lease in item 5 of the Form 7, and the correspondence between the parties at the time.
  5. [41]
    It follows the Lettable Area of the Premises, for the purpose of calculating the respondent’s proportion of outgoings, is 618m2 whilst the Lettable Area of the Building is 982m2. The respondent’s proportion of outgoings, expressed as a percentage, is 62.9%.
  6. [42]
    I accept the total outgoings are as set out in the account transactions for the property and the source documents submitted by the applicant. The calculation was not challenged by the respondent.
  7. [43]
    The applicant charged, and the respondent paid, a lesser percentage of the outgoings. It’s claim in the proceeding is for the lesser percentage.

Right to sue for the outgoings

  1. [44]
    Section 62 of the LT Act, to the extent relevant, provides:
  1. (1)
    On registration of an instrument of transfer for a lot or an interest in a lot, all the rights, powers, privileges and liabilities of the transferor in relation to the lot vest in the transferee.
  2. (2)
    ...
  3. (3)
    Without limiting subsection (1), the registered transferee of a registered lease is bound by and liable under the lease to the same extent as the original lessee.
  4. (4)
    In this section:

“rights”, in relation to a mortgage or lease, includes the right to sue on the terms of the mortgage or lease and to recover a debt or enforce a liability under the mortgage or lease.

  1. [45]
    The respondent, in effect, submits the applicant’s right to sue for the outgoings, by virtue of section 62(1) of the LT Act, vested in the new owner of the property on registration of the instrument of transfer for the property.
  2. [46]
    The operation of the section, in relation to the liability of a transferor as opposed to the rights of a transferor, was considered by the Court of Appeal in Bank of Queensland Ltd v Y & L Promising Pty Ltd[1]. The points made by Cooper J (with whom Morrison JA and Williams J agreed) are conveniently summarised by Bond JA (with whom McMurdo and Dalton JJA agreed) in Southport Memorial Club Inc v Returned and Services League of Australia (Queensland) Southport Sub-Branch Inc[2] in the following terms:
  1. (a)
    A consideration of the text of s 62(1) reveals the provision is concerned with the effect of transfers of land, or interests in land, within the context of the Torrens system of land registration.[3]
  2. (b)
    By its terms s 62(1) operates when an instrument of transfer is registered to vest certain rights, powers, privileges, and liabilities held by the transferor in the transferee.  The description of the rights, powers, privileges, and liabilities so vested as being “in relation to the lot” makes it clear that, for vesting to occur under the provision, there must be some connection between the rights, powers, privileges and liabilities and the transferor’s interest in the lot.[4]
  3. (c)
    The relevant enquiry before the Court for the purpose of construing s 62(1) involved identifying the degree or character of connection required to characterise a liability as one “in relation to the lot” for the purposes of the provision.[5]
  4. (d)
    The first relevant enquiry concerned whether a consideration of the history and understanding of the legislative predecessors to s 62 revealed a judicially settled meaning as to the degree or character of the connection required to characterise a liability as one “in relation to the lot” for the purposes of the provision.  The second relevant enquiry, if such a settled meaning could be discerned, was whether there was some judicially cognisable indication that some different meaning was legislatively intended when s 62 was enacted.[6]
  5. (e)
    As to the first enquiry, an analysis of the High Court decisions of Measures v McFadyen[7] and Premier Mines Pty Ltd v French[8] confirms that personal obligations or liabilities of the transferor of an interest in land can be vested in the transferee by operation of s 62 or similar provisions, but that will only occur when the personal obligation or liability is intimately connected with the rights of property arising out of the transfer or normally incident to the interest in land which is transferred.[9]  An accrued personal liability of a transferor of land for damages consequent upon a completed breach of a lease covenant could not be so regarded.[10]
  6. (f)
    As to the second enquiry, nothing in the Queensland Law Reform Commission report which led to the introduction of s 62 suggested that, in enacting s 62, the legislature intended to depart from the previously understood construction of the legislative predecessors of s 62.[11]
  7. (g)
    On the proper construction of s 62(1), an accrued personal liability of a transferor of land for damages consequent upon a completed breach of a lease covenant is not a liability “in relation to the lot”.
  1. [47]
    His Honour observes that, whilst Cooper J’s textual and contextual analysis was carried out in relation to the liabilities of a transferor and not the rights of a transferor, there is no reason that it should not apply to rights. He then continues:

... Thus, one can advance the general proposition that the degree or character of connection required to characterise a right or liability of a transferor as one “in relation to the lot” for the purpose of s 62(1) is that it must be intimately connected with the rights of property arising out of the transfer or normally incident to the interest in land which is transferred.

Because the interest in land which was transferred was the fee simple itself, the RSL’s rights under cl 29 of the lease do not have that type of connection and cannot be so characterised.  Rights which touch and concern the land could be regarded as normally incident to the transfer of a fee simple interest in land.  But, for reasons already expressed, the transferor’s rights under cl 29 were personal rights owed by the registered lessee to the transferor personally and because of the particular identity of the transferor.  They did not touch and concern the land.  And it is the personal nature of those rights which suggests they cannot be regarded as intimately connected with the fee simple interest in land which was the subject of the transfer.

  1. [48]
    Here, based on the same reasoning, the applicant’s rights under the lease were personal rights owed by the respondent to the applicant. They did not touch or concern the property.
  2. [49]
    The applicant is entitled to an order for the outstanding outgoings.

Interest

  1. [50]
    The applicant claims interest on the unpaid outgoing. The amount claimed is $319.10. It is claimed at the rate of 9% per annum from 1 July 2023 to 31 October 2023.
  2. [51]
    Awarding interest for minor civil disputes is provided for in section 14 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). Relevantly, the section provides:
  1. (1)
    This section applies in relation to a minor civil dispute involving a claim to recover a debt or liquidated demand of money.
  2. (2)
    However, this section does not apply in relation to a minor civil dispute involving a claim to recover a debt or liquidated demand of money on which interest is payable as of right whether because of an agreement or otherwise.
  3. (3)
    The tribunal may order that there be included in the amount payable under the tribunal’s order under section 13 for the dispute interest at the rate the tribunal considers appropriate:
  1. (a)
    for all or part of the amount; and
  2. (b)
    for all or part of the period between the date when the dispute arose and the date the tribunal made its order under section 13.
  1. (4)
    ...
  1. [52]
    Here, the lease of warehouse 1 provides for the payment of interest. Clause 5.3 of the schedule to the lease, to the extent relevant, is in the following terms:
  1. (a)
    The Lessee and the Guarantor must pay interest on each amount that is not paid when due, from (and including) the day on which it falls due to (but excluding) the day on which it is paid in full, at the rate calculated in accordance with Clause 5.3(b). This interest must be paid on demand.
  2. (b)
    Interest on an unpaid amount accrues each day calculated at a rate of 2% above rate that would be charged to the Lessor by the Lessor’s bank for borrowing same amount, and is capitalised (if not paid) every thirty days.
  3. (c)
    …
  1. [53]
    The Tribunal is without evidence of the rate that would be charged to the applicant by the applicant’s bank for borrowing the unpaid outgoing. In the circumstances, the claim is disallowed.

Filing and service fees.

  1. [54]
    The Tribunal, for section 102 of the QCAT Act, may award the prescribed fee for filing an application and service fee at the rate of the prescribed bailiff fee.[12] In my opinion, it is appropriate the applicant be awarded the filing fee on the application. The claim for the fee will be allowed.
  2. [55]
    The service fee claimed is the bailiff fee for service of the application and accompanying documents. The Tribunal is without evidence of payment of the fee.
  3. [56]
    Further, and in any case, it appears from the affidavit of service filed in the Tribunal on 9 November 2023 the application and accompanying documents were served on the respondent by Mr Hudson, not a bailiff. The respondent being a company, they could have been served by mail.
  4. [57]
    The service fee will not be allowed.

Decision

  1. [58]
    The decision of the Tribunal is that the respondent pay to the applicant $14,456.65 within 21 days of this order. The sum awarded is the total of the claim for outgoings, $14,077.15, and the fee on filing the application, $379.50.

Footnotes

[1] [2022] QSC 217.

[2] [2023] QCA 146.

[3] [2022] QCA 217, at [39].

[4] [2022] QCA 217, at [42].

[5] [2022] QCA 217, at [45].

[6] [2022] QCA 217, at [48].

[7] (1910) 11 CLR 723.

[8] (2007) 235 CLR 81.

[9] [2022] QCA 217, at [60].

[10] [2022] QCA 217, at [62].

[11] [2022] QCA 217, at [71].

[12] Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 84(1).

Close

Editorial Notes

  • Published Case Name:

    AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd

  • Shortened Case Name:

    AJH Property No. 2 Pty Ltd v Wild Earth Australia Pty Ltd

  • MNC:

    [2024] QCAT 218

  • Court:

    QCAT

  • Judge(s):

    Member Scott-Mackenzie

  • Date:

    20 May 2024

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
Bank of Queensland Limited v Y & L Promising Pty Ltd(2022) 12 QR 326; [2022] QCA 217
7 citations
Jump To
Cite 1 - [2022] QCA 217
Cite 2 - [2022] QCA 217
Cite 3 - [2022] QCA 217
Cite 4 - [2022] QCA 217
Cite 5 - [2022] QCA 217
Cite 6 - [2022] QCA 217
Cite 7 - [2022] QCA 217
Measures v McFadyen (1910) 11 CLR 723
1 citation
Jump To
Cite 1 - (1910) 11 CLR 723
Queensland Premier Mines Pty Ltd v French (2007) 235 CLR 81
1 citation
Jump To
Cite 1 - (2007) 235 CLR 81
Southport Memorial Club Inc v Returned and Services League of Australia (Queensland) Southport Sub-Branch Inc(2023) 16 QR 90; [2023] QCA 146
2 citations
Jump To
Cite 1 - [2023] QCA 146
Cite 2 - [2023] QCA 146
Thorne Developments Pty Ltd v Laird [2022] QSC 217
2 citations
Jump To
Cite 1 - [2022] QSC 217
Cite 2 - [2022] QSC 217

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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