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Mintaka Investments Pty Ltd v Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart[2015] QCATA 176

Mintaka Investments Pty Ltd v Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart[2015] QCATA 176

CITATION:

Mintaka Investments Pty Ltd & Ors v Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart [2015] QCATA 176

PARTIES:

Mintaka Investments Pty Ltd

Ruth Ann Beardsley (nee Bonnett) as Trustee of The Orion Family Trust under Instrument 706 915 816

The Orion Family Trust

Ruth Ann Beardsley (nee Bonnett) as director of Mintaka Investments

Ruth Ann Beardsley

Richard Beardsley as Trustee of the Orion Family Trust

Richard Beardsley as an individual and Representative of the Orion Family Trust under Instrument 706 915 816

The beneficiaries of the Orion Family Trust

(Appellant)

v

Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart

(Respondent)

APPLICATION NUMBER:

APL111-15

MATTER TYPE:

Appeals

HEARING DATE:

23 October 2015

HEARD AT:

Brisbane

DECISION OF:

Member Howard

Member Paratz

DELIVERED ON:

3 December 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. (1)
    Leave to appeal is refused in respect of grounds 3, 4 and 5.
  2. (2)
    Leave to appeal is granted in respect of grounds 1 and 2.
  3. (3)
    The appeal is allowed and the orders of the Tribunal dated 2 March 2015 are set aside.
  4. (4)
    The following decision is substituted:

IT IS DECLARED BY THE TRIBUNAL THAT:

  1. By notice dated 22 March 2013 Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart validly exercised the option in clause 5.2 of the lease between  Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart as lessee and Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust as the lessor of the property described as Lot 2 on RP 54586, Title Reference 12408085 in the County of Stanley and Parish of Bulimba (the property) and premises described on the Lease Plan as Lease C1 and C2 (the Shop), 569 Old Cleveland Road, Camp Hill in the State of Queensland to extend the lease for a further period of 5 years commencing 26 October 2013 (Further Term).
  2. The rent payable by Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart to Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust is due on the 1st of the month.
  3. The amount of $2,000 held by Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust is not key money, but a deposit in lieu of a bank guarantee by Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart lessee, which is returnable on the conclusion of the lease term.
  4. Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust, within seven (7) days of the date of this order, will arrange to have the power to the Flourescent lighting – under awning, Flotec Compac 150/200 Sump Pump, and Air Conditioner – Mitsubishi Electric MSZ-GE80VA metered to common area power.

IT IS THE DECISION OF THE TRIBUNAL THAT:

  1. Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust, within seven (7) days of the date of this order, execute and deliver up to  Rolloyd Pty Ltd as Trustee for the  Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart a lease in registrable form, on the same terms as the lease, with the exception that:
  1. (a)
    The new lease be for a term of five (5) years commencing on 26 October 2013 and expiring on 25 October 2018.
  1. Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust, within seven (7) days of the date of this order, pay Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart damages for breach of lease for failure to supply toilet paper for the common area toilet of the premises for the period of use in the amount of $832.77.
  2. Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust , within seven (7) days of the date of this order, pay Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart damages for breach of lease for the connection of electricity for the common area (being the air-conditioning, lighting and operation of the sump pump) for the period of use in the amount of $10,949.08, comprised as follows:
  1. (a)
    Fluorescent lighting – under awning - $19.55
  2. (b)
    Flotec Compac 150/200 Sump Pump - $3,516.26
  3. (c)
    Air Conditioner – Mitsubishi Electric MSZ-GE80VA - $7,413.27
  1. Damages for breach of lease for expenses incurred by Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart in engaging the services of Esprit Electrical to perform repairs, in the amount of $132.00.
  2. Interest at the rate of 10% on the amounts recovered pursuant to paragraphs 7 and 8 above ($10,949.08 and $132.00) from 4 June 2014 (the date of filing in the Tribunal).
  3. Any application by Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart for legal costs of the proceedings to be filed in the Tribunal and served upon Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust no later than 16 March 2015.
  4. Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust’s counter-application be dismissed.
  5. Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust be permanently restrained from relying upon the notice delivered to Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart dated 1 January 2015 seeking possession of the premises.

CATCHWORDS:

APPEALS – RETAIL SHOP LEASE DISPUTE – Whether electricity costs for running of sump pump and air-conditioning are outgoings under the lease agreement

LEAVE TO APPEAL – whether reasonable argument that decision of Tribunal attended with error – whether a substantial injustice

Electricity Act 1994 (Qld), s 244

Electricity Regulations 1994 (Qld), s 244

Limitation of Actions Act 1974 (Qld), s 10

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142

Retail Shop Leases Act 1994 (Qld), s 7, s 20, Schedule

Australian Broadcasting Commission v Australian Performing Rights Association Ltd (1973) 129 CLR 99

Lovell v Lovell (1950) 81 CLR 513

Pickering v McArthur [2005] QCA 294

APPEARANCES:

 

APPLICANT:

Mr SRC Slasberg, Solicitor, of Bennett and Philp represented the Appellants  

RESPONDENT:

Ms S McNeil, Counsel, represented the Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trusts

REASONS FOR DECISION

  1. [1]
    Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart (‘Rolloyd’ or ‘the Lessee’) entered into a lease with Mintaka Investments Pty Ltd as trustee under an instrument in 2003. An option was exercised by Rolloyd in 2008. Pursuant to a transfer registered with the Registrar of Titles, Ruth Ann Beardsley and Richard Beardsley as Trustee for the Orion Family Trust are now the registered owner of the land on which the leased premises are located.
  2. [2]
    Rolloyd lodged a notice of dispute under the Retail Shop Leases Act 1994 (Qld) (‘RSL Act’) about a variety of issues. The issues included whether the Lessee had validly exercised its option pursuant to the 2008 lease; and who was responsible for the costs of toilet paper in the common area, electricity costs for a sump pump, and electricity costs for air-conditioning for the leased premises.
  3. [3]
    The Tribunal heard the dispute between the parties over three days. It made  declarations including that the option had been validly exercised and that the landlord must have the electricity for the sump pump, the air-conditioner and some florescent lighting under an awning connected to the common area power.  Relevantly, the Tribunal also made orders, amongst others, for damages for breach of the lease payable to Rolloyd by the landlord for reimbursements for the cost of toilet paper in the sum of $1,461.00, for electricity for the running of the sump pump of $6,168.88, for electricity for the running of the air-conditioner in the sum of $13,005.74.
  4. [4]
    The named respondents to the notice of dispute have filed an application for leave to appeal or appeal. The grounds of appeal are specified as follows:
  1. The Tribunal erred in making orders against multiple named Respondents (collectively referred to herein as the Appellants) where the issues (sic) was raised at the hearing and the claim ought reasonably be against a single entity;
  1. The Tribunal erred in ordering damages against the Respondents dating back to 2003, contrary to the provisions of s 10 Limitation of Actions Act 1974;
  1. The Tribunal erred in classifying electricity charges to the Claimant’s premises as outgoings payable by the Appellant lessor, contrary to the provisions of the Lease agreement between the parties;
  1. The Tribunal erred in determining the air-conditioning and sump pump, servicing the Respondents premises, ought be connected to common power;
  1. The Tribunal erred in deciding that the Respondent’s lease option had not been validly rejected by the Appellant.
  1. [5]
    Subsequently, the Appellants have abandoned ground 5.
  2. [6]
    With respect to ground 1, Rolloyd agrees that the Tribunal erred in making orders against multiple respondents. Both parties say that at the commencement of the hearing, it was agreed that only Ruth Beardsley and Richard Beardsley as trustee for the Orion Family Trust were the lessor and should be the respondent.
  3. [7]
    Further, with respect to ground 2, Rolloyd agrees that the Tribunal erred in ordering damages dating back to 2003 contrary to the provisions of the Limitation of Actions Act 1974 (Qld).[1] Rolloyd agrees that accordingly the damages should be reduced with respect to toilet paper to $832.77, and with respect to electricity to $10,949.08 (which includes $3516.26 electricity for the sump pump and $7413.27 for electricity for the air-conditioner). This represents a proportional reduction for the 4.5 years which are outside of the limitation period.
  4. [8]
    As requested at the hearing, the parties have now provided proposed consent orders reflecting their agreement about the errors identified with respect to grounds 1 and 2 (which in respect of the sump pump and the air-conditioner are subject to the Appeal Tribunal’s determination on grounds 3 and 4). Grounds 1 and 2 are respectively errors of fact and mixed law and fact. Accordingly, as discussed below, leave to appeal is required if the Appeal Tribunal is to give effect to the agreement between the parties. 
  5. [9]
    Only grounds 3 and 4 above remain controversial between the parties. These concern the Tribunal’s orders declaring that the air-conditioning and sump pump must be connected to common area power and the payment of damages to reimburse Rolloyd for its past electricity costs for the air-conditioning and sump pump. Both of these arise from the Tribunal’s finding that electricity charges for the sump pump and air-conditioning are outgoings.

Leave to appeal and appeal

  1. [10]
    The role of the Appeal Tribunal in hearing an appeal is essentially to correct errors made by the learned Tribunal in reaching its decision. Here, the grounds of appeal which remain in contention involve questions of fact. Accordingly, leave to appeal is necessary.[2] Leave to appeal will usually only be granted where there is a reasonable argument that the decision of the Tribunal was attended by error, and is necessary to correct a substantial injustice to the Applicant caused by that error.[3]
  2. [11]
    It is not enough that the Appeal Tribunal comes to the view that, had its Members been sitting in the matter originally, they may have reached a different conclusion.  It must be shown that there has been a mistake in assessing the factual evidence, such as a failure to take some material evidence into account, before the Appeal Tribunal can interfere.[4]
  3. [12]
    We are persuaded that the Tribunal erred and that there is a substantial injustice to be corrected in respect of both grounds 1 and 2. In particular, the orders should be made only against the proper respondent, not the other named parties. Further, damages should be awarded only for the amounts claimed within the limitation period.   
  4. [13]
    For the reasons discussed below, we are not satisfied that leave to appeal should be granted for grounds 3 and 4. Further, the lessor does not seek to proceed with ground 5. 

Relevant lease provisions

  1. [14]
    It is useful to set out the lease provisions that are relevant to grounds of appeal 3 and 4. For convenience, where a provision refers to an Item in the Reference Schedule or Attachment to the lease, the details of the relevant Item or Attachment follow the relevant sub-clause of the lease.
  2. [15]
    The lease[5] contains the following paragraphs:

1. Interpretation

1.2 Definitions

1.2.1 “Agreed Proportion” means the percentage in item 4 of the Reference Schedule being the proportion that the area of the Premises bears to the Lettable Area.

[Item 4 Outgoings in the Reference Schedule provides that the Agreed Proportion is 0%].

1.2.4   “Building’ means all buildings and improvements on the Land.

……….

1.2.17 “Outgoings” means the Landlord’s reasonable expenses directly attributable to the operation, maintenance or repair of the Building and charges, levies, premiums, rates or taxes payable by the… [sic: no further words appear thereafter]

1.2.18 Landlord because it is the owner or occupier of the Building or the Land and such expenses include but will not be limited to, all costs associated with:

……….

(d) light and power charges

(e) air-conditioning and ventilation

……….

(j) repairs and maintenance

……….

1.2.22  “Premises” means the premises described in Item 5 of the form 7 and (where appropriate hatched in black on the attached Plan the boundaries of which are the internal finished surface of walls and includes the Landlord’s Property in the Premises

[The plan shows hatched areas on the ground level and the first level]

……….

1.2.26 “Services” means all gas, electricity, telephone, water, sewerage, fire prevention, ventilation, airconditioning, hydraulic, elevator and security services and all other utilities, services or systems provided in the Building.

……….

2. Rent and other payments

2.1 Payments

During the Term the Tenant must pay the Landlord free of any deduction or set-off:

  1. (a)
    the Rent
  2. (b)
    the Agreed Proportion of Outgoings (if any)
  3. (c)
    intentionally deleted
  4. (d)
    charges for Services to the Premises
  5. (e)
    lease duty assessed on the Lease and costs of registering the Lease
  6. (f)
    intentionally deleted
  7. (g)
    all reasonable costs including legal costs on a fully indemnity basis and expenses incurred by the Landlord in relation to any notice given or attempted to be given to the Tenant in accordance with this Lease; lawful determination or attempted determination of this Lease; the lawful re-entry or attempted re-entry by the Landlord into the Premises, the surrender of this Lease, the granting of any consents, proceedings lawfully brought by the Landlord to enforce the Tenants’ performance and obligations under this Lease
  8. (h)
    any reasonable additional or unusual chages and expenses incurred by the Landlord at the request of the Tenant
  9. (i)
    the amount for promotions referred to in Clause 2.2.4.
  10. (j)
    any tax or levy in the nature of a goods and services tax or consumption tax or other tax levied directly on or relating to the receipt of payments including Rent incurred by the Landlord during the Term
  11. (k)
    any other payments arising from the Tenant’s use of the Premises
  12. (l)
    All costs of servicing and maintaining any air conditioning system in the Premises

……….

2.2.3  Agreed Proportion of Outgoings

  1. (a)
    The Tenant must pay the Agreed Proportion of Outgoings for each financial year in the manner notified in writing by the Landlord and in the absence of notification in the same manner as Rent.

……….

2.3 Charges for Electricity

The Tenant acknowledges that if the Landlord supplies electricity to the Tenant as provided in the Electricity Act 1994 and Section 244 of the Electricity Regulations 1994 that the Landlord has elected to recover the cost of it from the Tenant as provided in that Act.

……….

7.2  AirConditioning [sic]

The Landlord must use reasonable endeavours to ensure the airconditioning [sic] services functioni [sic] properly during normal business hours and will use reasonable efforts to ensure any cessation of such services during normal business hours is restricted to the minimum period reasonably possible. Should the airconditioning [sic] unit which services the Premises fail and be rendered beyond repair, the Landlord will as soon as practical cause a licensed air conditioning maintenance mechanic to replace that airconditioning [sic] unit. The Tenant shall at its expense attend to cleaning of the airconditioning [sic] filters at times recommended by the airconditioning [sic] unit’s manufacturer or the licenced air conditioning maintenance mechanic contracted by the Landlord (emphasis in original).

The Tribunal’s reasons for decision

  1. [16]
    The Tribunal gave oral reasons for decision.
  2. [17]
    The reasons for decision include findings that the sump pump is situated in the basement of the premises and its purpose is to prevent water from entering, not only the leased premises, but the building. The Tribunal observes that the sump pump is supplied, and is serviced by, the Landlord. The Tribunal allowed the claim for the sump pump electricity costs because it considered the purpose of the sump pump was to protect the Landlord’s own premises, and that it was coincidental that it also conferred a benefit onto the leased premises.
  3. [18]
    With respect to the air-conditioning, the Tribunal found that clause 1.2.18 subsection (e) of the lease obliged the Landlord to meet all costs associated with air-conditioning and ventilation. It said as follows:

The Tribunal has heard the argument made by the Respondent, through Mrs Beardsley, that her view is that clauses 1.2.26 which defines services and clause 2.1 sub part (d) would require that the Tenant instead be responsible for paying these service charges. However, the Tribunal notes that clause 2.1 sub part (d) refers to paying the Landlord.

It is the Tribunal’s view that these two sections 1.2.26 and clause 2.1(d) are included within the lease for purposes of assisting in the calculation of outgoings. It would ordinarily be the case that the Respondent would be entitled to recover some of the costs of operation of the air-conditioner by outgoings; however, a deal was struck many, many years ago that this particular tenant does not pay outgoings. It is simply the case that the Landlord is obliged to provide for air-conditioning and to pay for the costs associated with that as it clearly states in 1.2.18 of the lease.

It may be that this is a bargain that was struck which is entirely more favourable to the Applicant newsagent in these circumstances. Nevertheless, that is the agreement that was struck, and for that reasons, the Tribunal considers that those costs of electricity should be borne by the Landlord and not by the tenant.

It is also the case that it is the obligation of the Landlord and not the tenant to arrange for any electrical service to the air-conditioner and sump pump and, for those reasons, the Tribunal further considers that it can only be the case under this lease that it is the Landlord’s obligation to pay for those sums.

The Sump Pump

  1. [19]
    The lease does not contain an express requirement about a sump pump.
  2. [20]
    The Landlord submits that the Tribunal erred in finding that the sump pump services the entire building. They submit that the Tribunal’s decision that the associated electricity costs are an outgoing under the lease is predicated upon this erroneous finding. Instead, they submit, that it primarily or solely affects Rolloyd’s leased premises.
  3. [21]
    The Beardsley’s submit that it erred in preferring Mr Lloyd’s uncorroborated evidence,[6] to the effect that, in the absence of an operational pump the basement floods including the middle tenancy, over Mrs Beardsley’s evidence to the contrary. Further, they submit that Mr Lloyd admitted that in the absence of the pump, the leased premises flooded, spilling over into the next tenancy. They submit that the sump pump is primarily for the benefit of Rolloyd’s leased premises.
  4. [22]
    Although Ms Beardsley suggested to Mr Lloyd in her cross-examination of him that his evidence was incorrect, the Landlord was unable to take us to any evidence from her which was in fact contrary to Mr Lloyd’s evidence. It appears that his evidence on this issue was not countered by any evidence relied upon by the Landlord. It is conceded by the Landlord that Mr Lloyd gave the evidence relied upon by the Tribunal. The evidence of Mr Lloyd supports the Tribunal’s finding that the purpose of the sump pump is to protect the Landlord’s property.
  5. [23]
    In any event, Rolloyd submits, even if there was (and it does not appear so) contrary evidence from Ms Beardsley, it was open to the Tribunal to prefer Mr Lloyd’s evidence on this issue and make the finding it did. ‘Premises’ is a defined term in the lease. The boundaries are the ‘internal finished surface of walls’. It argues that by implication, the internal finished surfaces of the floor on the lower level and the ceiling on the upper level are also the boundaries of the premises. We agree.
  6. [24]
    Although the Tribunal, perhaps, did not clearly articulate it in its reasons, the evidence reveals that the sump pump is located under the lower level of the leased premises as identified in the plan of the leased Premises shown in the hatched area.[7] The sump pump is accessed from the leased premises through a manhole cover or lid from the Premises.[8] However, it is not in the hatched area. It is therefore not in the leased Premises because the boundary is the internal finished surface. This tends to add support to the Tribunal’s finding that the purpose of the sump pump is to protect the Landlord’s premises, because it is not in the leased premises.
  7. [25]
    We would not be satisfied that the Tribunal erred in its finding about the purpose of the sump pump.

Outgoings or services?

  1. [26]
    The RSL Act defines a lessor’s ‘outgoings’ in s 7. They include the lessor’s reasonable expenses directly attributable to the operation, maintenance and repair of the centre and areas used in association with it.  An outgoing may be apportionable or specific.[9] Specific outgoings are those attributable to a lessee because of the lessee’s direct use of the services or facilities which incur the outgoing.[10] Provisions in leases that are inconsistent with the RSL Act are void to the extent of the inconsistency.[11]
  2. [27]
    It is uncontroversial in the appeal proceedings that if an item is an outgoing, under this lease, somewhat unusually, the contribution required from Rolloyd towards the cost of outgoings is (as per Item 4), 0%. However, as emerges from perusing the clauses set out earlier, there is a lack of clarity about whether some items are outgoings or services under the lease, including the costs of operating the air-conditioner and the sump pump. ‘Air-conditioning’ and ‘power charges’ are included in ‘outgoings’ in 1.2.18 (e) and (d) respectively. However, ‘services’ are defined in 1.2.26 to include ‘electricity‘ and ‘airconditioning [sic]’. clause 2.1 obliges the tenant to pay for services. However, as discussed, the proportion of the tenant’s agreed proportion of outgoings is nil under Item 4.
  3. [28]
    It is further uncontroversial between the parties, and we agree, that clauses 1.2.17 (which ends mid-sentence) and 1.2.18 follow on, and should be read as one clause.
  4. [29]
    The landlord submits that having regard to the wording of clause 1.2.17, that outgoings are limited to the Landlord’s reasonable expenses for the operation, maintenance or repair ‘of the Building’. They say that this refers to the entire building and tenancies as a whole. They argue that the ordinary dictionary definition of outgoings should be considered. (We, disagree: outgoings are defined for the lease and in a manner which is consistent with the RSL Act. That being so, we do not discuss the dictionary definition further).
  5. [30]
    In contrast, the landlord argues that 1.2.26 refers to services ‘in the Building.’ Services in 1.2.26 include electricity and air-conditioning and other utilities in the Building. While acknowledging that the lease could be clearer, the Landlord submits that the differential use of ‘in’ and ‘of’ the Building, must be of significance. They argue that ‘in’ connotes services specific to the inside of the discrete leased premises, whereas ‘of’ the Building, they argue, refers to the whole of the Building.
  6. [31]
    The Beardsley’s argue that the Tribunal appears to assume that electricity for the air-conditioner fell within 1.2.18 (by linking power and air-conditioning), whereas clause 7.2 does not provide for the Landlord to run the unit. They argue that because there is some uncertainty, regard may be had to the Offer to Lease document to aid interpretation. They submit that it sets out that the landlord will maintain, replace, and keep serviceable and operational, the air-conditioning unit. It further sets out that the lessee will attend to cleaning the air-conditioning filters. In cases of ambiguity, regard may be had to evidence apart from the document embodying the final agreement. However, that will not usually include prior negotiations, because the final document reflects the agreement ultimately reached. In any event, the matters relied upon would not assist the lessor in our view.
  7. [32]
    Further, the Landlord now submits that the Tribunal failed to consider the effect of clause 2.3, which ‘determines’ that the Landlord had elected to recover the costs of electricity supplied to the lessee at the Premises. Rolloyd submits that there was no evidence that the Landlord was supplying electricity to the tenant. Rather, it says that the evidence is that the leased premises was individually metered.[12] In any event, it argues that s 244 of the Electricity Regulations 1994 (Qld) does not exist (and did not at the time of the lease was entered into) and s 244 of the Electricity Act 1994 (Qld) is about offence proceedings.
  8. [33]
    Finally, the Beardsley’s argue, in effect, that the commercial efficacy of the lease rests on Rolloyd being responsible for the electricity costs of running the air-conditioner and sump pump. Rolloyd submits that this is irrelevant to the interpretation of the lease.
  9. [34]
    Rolloyd suggests that the starting point is that the lessee is required to make a 0% contribution to the Landlord’s outgoings. Also, it submits that 1.2.26 does not include an obligation regarding services in the tenancy: by including the word ‘Building’, it is not discrete to the lessee’s Premises. On the face of it, Rolloyd submits, the requirement for the lessee to pay the Landlord for Services in the Building could lead to the absurd requirement for the lessor to pay for all of the Services for the entire Building. Rolloyd submits this is contrary to the clear intention of the parties that the Landlord bear the cost of Outgoings without contribution from the lessee, including for power, air-conditioning and repairs and maintenance.
  10. [35]
    Additionally, Rolloyd points to the lease specifically setting out the tenant’s obligations, (for example, in clause 7.2.) yet, it does not specify in clause 2.1 that the lessor is responsible for the electricity costs of running the air-conditioner. In addition, clause 7.2 specifically provides for air-conditioning. It sets out that the Landlord must use reasonable endeavours to ‘ensure the airconditioning [sic] services functioni [sic] properly during normal business hours...’ and replace it if it cannot be repaired. Rolloyd argues that if the Beardsley’s argument was correct, arguably the cost of servicing and maintaining the air-conditioner would be payable by it under clause 2.1, despite the clear words of clause 7.2.
  11. [36]
    We accept that the lease is, in relevant respects, poorly drafted. clause 2.1 provides for the tenant to pay an agreed portion of Outgoings (if any);[13] charges for Services to the Premises;[14] and all costs for servicing and maintaining any air-conditioning system in the Premises.[15] Outgoings include (in 1.2.18), power charges, air-conditioning, and repairs and maintenance. However, services are defined to include electricity and air-conditioning, in the Building (rather than the Premises). clause 7.2 also sets out specific arrangements regarding airconditioning, which conflict with 2.1. This creates a lack of clarity and inconsistency within the terms of the lease.
  12. [37]
    The meaning of a contract is a question of fact when it turns on the words of the contractual provisions (as opposed to the legal effect, which is a question of law). In construing a contract, such as a lease, the Tribunal must as far as possible give effect to the bargain between the parties. Constructions which lead to consequences that appear to be unreasonable, inconvenient or unjust are generally to be avoided.[16] 
  13. [38]
    The distinction between, ‘in’ and ‘of’ the Building in the definitions of Outgoings and Services, does not assist in our view. Both of these terms are defined as set out above. This argument may have more force if the word ‘Premises’ had been used in 1.2.26 instead of ‘Building.’ Building means all buildings and improvements; whereas, Premises means the leased premises as identified in the lease documents.
  14. [39]
    With respect to the air-conditioner electricity costs, ‘Outgoings’ in 1.2.18 specifically include light and power charges and air-conditioning and ventilation, suggesting a clear intention that these are outgoings and under this lease and the responsibility of the Landlord. As Rolloyd argues, the lease sets out the matters for which the tenant is responsible more specifically, for example, in relation to ‘airconditioning’ in clause 7.2, to replace the air filter. The latter is consistent with 1.2.18. ‘Services’ in 1.2.26, also include electricity and air-conditioning in the Building. As Rolloyd argues, if the Beardley’s were correct, it could lead to absurd results. In context, the ‘in/of’ distinction does not appear to be substantive. That said, clause 2(1)(d) refers to an obligation for the lessee to pay the landlord for services to the Premises, rather than, the Building.
  15. [40]
    The Tribunal was obliged to determine the meaning of the contract between the parties in order to overcome the inconsistencies and lack of clarity and make its decision on the application. It considered relevant provisions and made determinations that were open to it on the lease. That is, it found that the Landlord was obliged to pay for the costs of air-conditioning and associated electricity costs. It could have, perhaps, more fully explained its reasoning in deciding that they fell within outgoings. However, it is sufficiently clear that it started from the position that the parties agreed that the lessee’s contribution to outgoings was nil, and that 1.2.18 included air-conditioning and associated electricity costs. In resolving the inconsistencies in the lease, the finding was open to it and supported by the provisions relied upon by the Tribunal.
  16. [41]
    Regarding the sump pump, the Tribunal found that its purpose was primarily to protect the Landlord’s property. Accordingly, it treated the electricity costs of running it as an outgoing. As discussed earlier, the costs of running the sump pump are not specifically provided for in the lease document. However, if it is an outgoing under clauses 1.2.17 and 1.2.18 as read together, Rolloyd’s contribution to the costs associated with it are nil. We consider that there was no error made by the Tribunal, in light of its purpose as found by it, that the associated electricity costs are an outgoing. Clauses 1.2.17 and 1.2.18 provide that outgoings include all costs associated with the expenses of the Landlord directly attributable to the maintenance of the Building including power charges. It is not named as a service and we consider would not, in any event, appear to fall within ‘utilities, service or systems’ contemplated in clause 1.2.26.
  17. [42]
    In summary, no error of the Tribunal has been demonstrated by the Appellants. The Tribunal was entitled to form the conclusions it did about how the lease should be construed. In the circumstances, there is no basis for disturbing the Tribunal’s conclusions that the electricity costs for running the sump pump and air-conditioner are outgoings, and that the sump pump and the air-conditioner ought be connected to common power.

Conclusions and orders

  1. [43]
    For the reasons explained, we are not satisfied that grounds 3 and 4 identify any error by the Tribunal. Accordingly, we refuse the application for leave to appeal on those grounds. Ground 5 has been abandoned. We refuse leave in respect of it also.
  2. [44]
    As discussed earlier, we accept that the Tribunal erred as set out in grounds 1 and 2. We grant leave to appeal in respect of grounds 1 and 2.
  3. [45]
    We allow the appeal on these grounds and set aside the orders of the Tribunal. We substitute orders which reflect the agreement between the parties as follows:
    1. a)
      By making orders only against Ruth Beardsley and Richard Beardsley as trustee for the Orion Family Trust; and
    2. b)
      By reducing the amounts in Orders 6 and 7 of the decision by 43% to reflect the limitation period, and specifically:
      1. i)
        Order 6 of the Decision (regarding the toilet paper amount) is reduced to $832.77;
      2. ii)
        Order 7(a) of the Decision (regarding the electricity costs for Fluorescent lighting – under awning) is reduced to $19.55; 
      3. iii)
        Order 7(b) (regarding electricity costs paid for the sump pump) is reduced  to $3516.26; and
      4. iv)
        Order 7 (c) (regarding the electricity costs for the air-conditioner is reduced to $7413.27.
  4. [46]
    Some consequential changes to the orders are also necessary, in relation to the amounts on which interest is payable as specified in order 9. Further, order 9 contained a typographical error, in referring to interest payable on the amounts specified in orders 5 and 6. It is apparent from the Tribunal’s orders that it intended to refer to orders 7 and 8. We correct this typographical order.
  5. [47]
    Otherwise, we re-make all other orders in terms of the orders of 2 March 2013. Although dates by which compliance was required have passed, those dates remain the applicable dates under the agreement reached by the parties.

Footnotes

[1] Limitation of Actions Act 1974 (Qld), s 10.

[2] Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 142(3).

[3] Pickering v McArthur [2005] QCA 294, at [3].

[4] Lovell v Lovell (1950) 81 CLR 513.

[5]   Exhibit 1, Annexure 2.

[6]    Transcript I-56.

[7]  Transcript I-56 to I-58.

[8]  Transcript I-56.

[9]  RSL Act, s 7(2).

[10]  Ibid, Schedule, definition of ‘specific outgoings’.

[11]  Ibid, s 20.

[12]  Transcript 3-17.

[13]  Clause 2.1(b).

[14]  Clause 2.1(d).

[15]  Ibid 2.1(l).

[16] Australian Broadcasting Commission v Australian Performing Rights Association Ltd (1973) 129 CLR 99, at 109-110.

Close

Editorial Notes

  • Published Case Name:

    Mintaka Investments Pty Ltd & Ors v Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart

  • Shortened Case Name:

    Mintaka Investments Pty Ltd v Rolloyd Pty Ltd as Trustee for The Peter Lloyd Family Trust trading as Camp Hill News & Camp Hill Officesmart

  • MNC:

    [2015] QCATA 176

  • Court:

    QCATA

  • Judge(s):

    Member Howard, Member Paratz

  • Date:

    03 Dec 2015

Appeal Status

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

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