Tabaro v Ratakhin[2023] QCATA 143

REASONS FOR DECISION

What is this application about?

1. [1]
   Ms Tubaro^[1] owns a commercial property at Albion, Queensland from which “Fix My Laptop” (the business) traded. Mr Ratakhin purchased the business from its former proprietors on 16 December 2022 and became Ms Tubaro’s lessee by assignment from that time until he was locked out on 22 January 2023 for non-payment of rent. 
2. [2]
   By a decision made 12 September 2023 the Tribunal ordered that Ms Tubaro pay Mr Ratakhin $5,000.00 as compensation for business disturbance (namely, failure to remove an abandoned vehicle from the shared carpark and failing to replace broken down air-conditioning equipment that was not capable of repair). The Tribunal also ordered that Ms Tubaro refund Mr Ratakhin’s bond held in the sum of $2,600.00 (the decision).
3. [3]
   Ms Tubaro has applied to appeal the decision^[2] and to stay it pending the outcome of the appeal. She says, among other things, that the Tribunal did not have jurisdiction to decide the dispute because the dispute is not a retail tenancy dispute.

4. [4]
   By a decision made 31 October 2023 I granted the stay application for the following reasons.

Stays and appeals under the QCAT Act

5. [5]
   Under section 145(2) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) the Appeal Tribunal may make an order staying the operation of a decision of the Tribunal below until the appeal is finally decided.
6. [6]
   To succeed on a conventional application for a stay, the party applying for the stay must satisfy the Appeal Tribunal that there is a good reason for the stay, including:^[3]

   1. that the applicant has a good arguable case on appeal;
   2. that the applicant will be disadvantaged if a stay is not ordered; and
   3. that competing disadvantage to the respondent, should the stay be granted, does not outweigh the disadvantage suffered by the application if the stay is not granted.

A good arguable case on appeal

7. [7]
   Although there are other grounds of appeal raised, the jurisdictional point is the pertinent one for the purpose of the application to stay. As the Appeal Tribunal has observed “there is a fundamental obligation on any court or tribunal to satisfy itself as to jurisdiction when being asked to quell controversies that come before it.”^[4] 

8. [8]
   The Retail Shop Leases Act 1994 (Qld) (RSLA) governs retail tenancy disputes and vests the tribunal with jurisdiction, subject to exceptions, to hear them.^[5]
9. [9]
   Relevant definitions include:

   1. A retail tenancy dispute is “any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into”.^[6]
   2. A retail shop lease is a lease of a retail shop, with identified exclusions.^[7] 
   3. A retail shop describes premises situated in a retail shopping centre or that are used wholly or predominantly for the carrying on of one or more retail businesses.^[8]
   4. A retail shopping centre is a cluster of premises having all of the following attributes (relevantly):
      1. five or more of the premises are used wholly or predominantly for carrying on retail businesses;
      2. all the premises—
         1. are owned by the 1 person;…or
         2. all the premises are located in:
            9. 1 building;…
      3. the cluster of premises is promoted, or generally regarded, as constituting a shopping centre, shopping mall, shopping court or shopping arcade.^[9]
   5. Retail businesses are those whose whole or predominant activity is, or is a combination of, the sale, hire or supply of goods or services mentioned in the Schedule to the Retail Shop Leases Regulation 1994 (Qld).^[10] The Schedule refers to “Business, goods and services” and under the heading “Domestic Appliance Retailing” there is reference to “computer” and “computer accessories”.
10. [10]
    Ms Tubaro had previously attempted to strike out Mr Ratakhin’s claim on jurisdictional grounds, but her application was not successful.  At that instance, the Tribunal considered it “unclear on the material” whether the dispute fell within jurisdiction but observed that there was at least a “prima facie case” and deferred the final determination of the issue to the final hearing, observing that:^[11]

[13]…it is unclear on the material the actual mix of the business carried on by Mr Ratakhin. It certainly involved the repair of computers as the business names suggest but in his email correspondence with Ms Dapontes the (sic) Mr Ratakhin signs of (sic) as “Your Computer Guy – Service Repair and Sales”. It is the “sales” part of the business which might satisfy the definition. 

11. [11]
    The final decision made 12 September 2023 addressed the point, in its entirety, as follows (emphasis added):

[11] The landlord maintained her earlier submissions to Member Oliver that the lease in question was not a retail shop lease as defined in the Retail Shop Leases Act 1994 (Qld) (RSL Act). Member Oliver found as a preliminary point, but only for the purpose of the interlocutory applications, that it was a retail shop lease. His reason for doing so was that his research revealed that the Applicant in addition to carrying out computer repairs and servicing also sold computers and accessories from the premises. He reserved a final finding on the issue to the hearing.

[12] It became abundantly clear in the course of the evidence that the tenant’s business did include such sales and that it was a retail shop lease. Ms Dapontes maintained her objection but was unable to provide any evidence to rebut Mr Ratakhin’s evidence on the issue save to say that his advertising did not include the word “sales”. I accept Mr Ratakhin’s evidence in preference to Ms Dapontes, not only on this point, but essentially on every other matter. 

12. [12]
    Ms Tubaro says:

    1. The permitted use of the premises according to the lease is “office”. If computers were being sold from the premises this was not a permitted use.
    2. The type of business operated from the premises is described as “computer/laptop repairs”, according to the Business Sale Contract pursuant to which Mr Ratakhin purchased the business.
    3. The business was sold “walk in walk out” and the contract did not make provision for stock to be added to the purchase price and did not list sales stock in the plant and equipment list.
    4. The business is not located in a retail shopping centre for reasons that don’t appear to be disputed on Mr Ratakhin’s response submissions. 
13. [13]
    Whilst I appreciate there was some oral evidence before the Tribunal that the business “did include” the sale of computers and accessories, there is no finding that the business carried on these activities “wholly or predominantly”, or, if such a finding was made, the learned Member’s reasons are inadequate to explain on what evidence such a finding was based.
14. [14]
    No sales evidence, floor plans or other documentary evidence appears to have been tendered that would establish, on a balance of probabilities that Fix My Laptop was wholly or predominantly carried on for the sale of computers and accessories.
15. [15]
    Mr Ratakhin’s stay submissions in fact state that he did not tender Business Activity Statement or bank statements in evidence because “QCAT didn’t ask me”.
16. [16]
    There is an obligation on the Tribunal to give reasons for its final decision in a proceeding that are adequate and that address the issues that were put before the Tribunal for determination, per Muir JA in Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219 at [58]:

The rationale for the requirement that Courts give reasons for their decisions provides some guidance as to the extent of the reasons required. The requirement has been explained, variously, as necessary: to avoid leaving the losing party with “a justifiable sense of grievance” through not knowing or understanding why the party lost; to facilitate or not frustrate a right of appeal; as an attribute or incident of the judicial process; to afford natural justice with procedural fairness; to provide “the foundation for the acceptability of the decision by the parties and the public” and further “judicial accountability”.

17. [17]
    It remains to be seen whether such evidence will be put properly before the Appeal Tribunal, as the appeal application is in its infancy, but, notably, simultaneous with Ms Tubaro’s application for leave to appeal or appeal, Mr Ratakhin has filed an application to reopen the decision in RSL023-23 (REO15-23 – yet to be determined).  He refers to this in his stay response submissions. 
18. [18]
    Mr Ratakhin seeks to increase the compensation he sought and was awarded to a figure of $193,600.  Included in his evidence are emails he exchanged with the prior business owners when negotiating the sale price, including one in which he “adds back” the cost of replacing the then current owners who worked in the business.  The salaries added back were, according to Mr Ratakhin, $80,000 per annum being the “average salary of a computer repair technician in Australia” and $25,000 per annum being one-half the cost of a receptionist (given this role had only been performed by the retiring owner’s wife and their granddaughter for approximately twenty hours per week). This supports a conclusion that the business was predominantly one of computer repairs and not one of sales as no allowance is made based on the average salary of a salesperson or for commissions that may have been earned. 
19. [19]
    Put simply, jurisdiction appears not to have been established on the evidence before the Tribunal, and if it was, respectfully, the reasons given by the learned Member for determining that the matter was a retail tenancy dispute might ultimately be found to be inadequate to explain their decision on point.
20. [20]
    It is an error of law to make an order in the absence of jurisdiction to do so.
21. [21]
    Failure to give adequate reasons is also an error of law.^[12]
22. [22]
    In my view, there is a good arguable case that the Tribunal made orders in circumstances where it lacked jurisdiction to do so. Alternatively, if it did, it is not clear on what evidence the Tribunal relied in making that finding as its reasons given in this respect appear to be inadequate. 

Disadvantage to the applicant if a stay is not ordered

23. [23]
    Mr Ratakhin is  entitled to enjoy the fruits of his litigation, and the first instance orders made by the Tribunal below should not be considered merely provision subject to an appeal.^[13]
24. [24]
    Mr Ratakhin is attempting to re-establish his business trading from home following the lock-out and resulting lease dispute. As mentioned, he is seeking to reopen the proceeding to increase the compensation amount he claimed.
25. [25]
    Mr Ratakhin will continue to be out of pocket if the ordered payment of $7,600 is stayed pending the outcome of the appeal and this is a disadvantage to him.

Competing disadvantage to the respondent if a stay is granted

26. [26]
    Ms Tubaro submits that she will suffer disadvantage if the stay is not granted because:

Mr Ratakhin is not an Australian citizen, owns no property in Australia and is a flight risk as a consequence.

1. Mr Ratakhin concedes that he is working from home because his financial circumstances prevent him from relocating to commercial premises.  Nothing in his conduct however indicates that he is a flight risk.

There is no evidence before the Appeal Tribunal that Mr Ratakhin would be in funds to repay the sums paid to him if the appeal is successful. 

2. Mr Ratakhin’s submissions concede that he is “still paying off debt and incurred huge losses following the dispute” and refer elsewhere to his financial distress. This is a genuine risk that Mr Ratakhin would not be able to repay the ordered sum of the appeal succeeds.

Ms Tubaro is owed unpaid rent by Mr Ratakhin in a sum that well exceeds the bond amount.

3. In fact, together with other damages claims asserted by Ms Tubaro, her claims exceed the sum she has been ordered to pay Mr Ratakhin.  

27. [27]
    On balance, I find the disadvantage to Ms Tubaro of not granting the stay outweighs the disadvantage to Mr Ratakhin of granting the stay.

Decision

28. [28]
    Due to the errors discussed above, I consider that Ms Tubaro has a strongly arguable case on the appeal and further that the balance of convenience weighs in her favour.

29. [29]
    Accordingly, unless otherwise ordered, the decision made on 12 September 2023 in RSL023-23 is stayed pending the outcome of the application for leave to appeal or appeal.