Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal
[2006] QSC 172
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- Unreported Judgment
- Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal[2006] QSC 172
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Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal[2006] QSC 172
Reported at [2007] 1 Qd R 246
Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal[2006] QSC 172
Reported at [2007] 1 Qd R 246
SUPREME COURT OF QUEENSLAND
CITATION: | Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal & Anor [2006] QSC 172 |
PARTIES: | LOGAN CITY SHOPPING CENTRE PTY LTD |
FILE NO/S: | BS 1089 of 2006 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court of Queensland |
DELIVERED ON: | 23 June 2006 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 6 April 2006 |
JUDGE: | McMurdo J |
ORDER: |
|
CATCHWORDS: | LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – JURISDICTION GENERALLY – where the applicant leases a shop to the respondent – where the respondent became the lessee with the applicant’s consent pursuant to an assignment in 2005 – where the respondent claimed compensation for damage allegedly suffered by it due to false or misleading statements by the applicant or someone acting under the applicant’s authority – where the Retail Shop Leases Tribunal allowed the respondent’s claim– whether the Retail Shop Leases Tribunal has jurisdiction to award a compensation claim under s 43(2) of the Retail Shop Leases Act 1994 (Qld) (the Act) – whether s 43(2) of the Act allows a claim to be made against the landlord not only by the tenant to whom the lease was originally granted but also by a permitted assignee of that lease ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – JURISDICTIONAL MATTERS – where the Retail Shop Leases Tribunal allowed the respondent’s claim – where the applicant applies for a review of the Tribunal’s decision pursuant to s 43 of the Judicial Review Act 1991 (Qld) – where the applicant argues that the Tribunal does not have jurisdiction to award compensation under s 43(2) of the Retail Shop Leases Act 1994 (Qld) (the Act) – whether the Tribunal has jurisdiction to award a claim for compensation under s 43(2) of the Act to a permitted assignee of a lease STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – STATUTORY POWERS AND DUTIES – EXERCISE – GENERAL MATTERS – whether the expression “entered into the lease” in s 43(2)(a) of the Retail Shop Leases Act 1994 (Qld) includes a subsequent assignment of the lease Judicial Review Act 1991 (Qld), s 43 Retail Shop Leases Act 1984 (Qld) Retail Shop Leases Act 1994 (Qld), s 5, s 11, s 13, s 13(2), s 13(3), s 21, s 22, s 22A, s 22B, s 22C, s 22E, s 22E(3), s 27, s 42, s 43, s 43A, s 44, s 50A, s 43(2), s 88, s 129 Retail Shop Leases Amendment Act 1999 (Qld) Retail Shop Leases Amendment Act 2006 (Qld), s 45 Retail Tenancy Act 1986 (Vic) Allina Pty Ltd v FCT (1991) 99 ALR 295, applied Bradbun Pty Ltd v Bobo Nominees Pty Ltd (1994) V ConvR 54-501, cited DFCT (SA) v Elder’s Trustee and Executor Co Ltd (1936) 57 CLR 610, applied Dileum Pty Ltd v J K Corporation Pty Ltd (1988) 1 WAR 244, discussed Grain Elevators Board (Vic) v Dunmunkle Corporation (1946) 73 CLR 70, considered Re Malsons Pty Ltd [1991] 2 Qd R 61, discussed Taylor Farms (Aust) Pty Ltd v A Calkos Pty Ltd & Ors [1999] NSWSC 186, considered |
COUNSEL: | S P Fynes-Clinton for the applicant R J Oliver for the respondent |
SOLICITORS: | Canning Weil MacGillivray Halligan for the applicant Jon Kent Lawyers for the respondent |
- McMURDO J: The applicant leases a shop to the respondent Hamsa Pty Ltd. They are in dispute in a number of respects in relation to that lease and Hamsa has claimed compensation in the Retail Shop Leases Tribunal. In particular it has claimed compensation because it became the lessee because of what it says were false or misleading statements by or on behalf of the applicant. The legal basis advanced for that cause of action, and for the Tribunal’s jurisdiction to award compensation for it, is s 43(2) of the Retail Shop Leases Act 1994 (Qld) (“the Act”). The question for determination in this application is whether, upon its proper interpretation, s 43(2) applies to the facts as alleged in that claim. More specifically, it is whether s 43(2) permits a claim to be made against a lessor, not only by the lessee to whom the lease was originally granted, but also by its permitted assignee.
- The lease was granted in March 1999. Hamsa became the lessee pursuant to an assignment in February 2005, to which the applicant consented. The applicant applied to the Tribunal to strike out (part of) Hamsa’s claim, arguing that s 43(2) could not apply because Hamsa was a lessee through an assignment. By a written decision given on 12 January 2006, the Tribunal ruled that s 43(2) did apply, so that Hamsa’s claim should stand.
- The applicant applies for a review of the Tribunal’s decision pursuant to s 43 of the Judicial Review Act 1991 (Qld). It seeks an order setting aside that decision and a declaration that s 43(2) does not give Hamsa a right to compensation. Section 88 of the Act restricts the bases for review of the Tribunal’s hearing of a dispute, and of its orders, to those of want or excess of jurisdiction and a denial of natural justice. But the applicant’s case is that in this dispute, the Tribunal has no jurisdiction to award compensation under s 43, so that as Hamsa concedes, s 88 does not preclude a review of this decision.
- The Act has been amended recently by the Retail Shop Leases Amendment Act 2006. By the transitional provision to that Act,[1] it is provided that the Act, as in force immediately before the 2006 amendments, continues to apply to a lease entered into before that commencement as if the amendments had not been made. Accordingly, the present question involves an interpretation of the Act, and specifically s 43 within the Act, as it was before the 2006 amendments. I will therefore discuss the Act in those (pre-amendment) terms. There is a distinct question of whether the interpretation of the Act in those terms is nevertheless affected by the 2006 Act, to which I will return.
- Section 42 provides that a retail shop lease “is taken to include sections 43 and 44”. Section 43 provides that the lessor is liable to pay to the lessee compensation in certain circumstances. Subsection 43(2) provides, in part, as follows:
“(2) The lessor is liable to pay to the lessee reasonable compensation for loss or damage suffered by the lessee because -
(a) the lessee entered into the lease, or a renewal of it, on the basis of a false or misleading statement or misrepresentation made by the lessor or any person acting under the lessor's authority; …”
Section 44 provides for the assessment of that compensation by the Tribunal.
- Hamsa’s argument, which was accepted by the Tribunal, was that on the facts alleged by it, it “entered into the lease” when it became the lessee by the assignment to it of the lessee’s interest. The lessor’s argument is that a lessee enters into the lease, in the sense used in s 43, only upon the original creation of the lease. It says that the lease was entered into upon its grant (in 1999).
- Within many of its provisions, the Act distinguishes between what it calls an entry into the lease and what it calls an entry into an assignment of a lease. That distinction is employed particularly within Part 5, which is headed “Preliminary Disclosures About Leases”. Part 5 commences with s 21 in these terms:
“21 Application of part
(1)This part does not apply to–
(a) a retail shop lease for a periodic tenancy or tenancy at will; or
(b) a retail shop lease entered into or renewed under an option under a retail shop lease.
(2)Sections 22, 22A and 23 do not apply to an assignment of a retail shop lease.”
Section 22 requires the lessor to give a draft of the lease and a disclosure statement “before a prospective lessee of a retail shop enters into a retail shop lease”. Section 22A provides that “the prospective lessee must give the lessor a disclosure statement” in certain circumstances “before entering into a retail shop lease”. Then follow s 22B and s 22C which prescribe disclosure obligations in the context of an assignment of the lessee’s interest. Section 22B requires the assignor/lessee to give a disclosure statement to a prospective assignee and s 22C requires the lessor to give to the prospective assignee “a disclosure statement and a copy of the lease … at least 7 days before an assignment of a retail shop lease is entered into”. It further provides that if asked by the lessor, the prospective assignee is to give a disclosure statement to the lessor “before the assignment is entered into”.
- Section 22D employs this distinction, between its subsections (1) and (2), in these terms:
“22D Financial, and legal advice certificates
(1)If a prospective lessee of a retail shop is the lessee of less than 5 retail shops in Australia, and uses each shop wholly or predominantly for carrying on 1 or more retail businesses, the prospective lessee, before entering into the lease, must give the lessor
(a) a financial advice certificate; and
(b) a legal advice certificate.
(2)If a prospective assignee of a retail shop lease is the lessee of less than 5 retail shops in Australia, and uses each shop wholly or predominantly for carrying on 1 or more retail businesses, the prospective assignee, before entering into the assignment of the lease, must give the lessor -
(a) a financial advice certificate; and
(b) a legal advice certificate.”
The distinction is also clearly made within s 22E, which provides that the Tribunal may be asked to order the provision of a disclosure statement within a period defined by s 22E(3) as follows:
“relevant period” means –
“(a)for section 22A or 22D(1)--within 2 months after the lease is entered into; or
(b)for section 22B, 22C or 22D(2)--within 2 months after the assignment is entered into.”
- And that same distinction is also employed within s 43 itself, which provides in s 43(1) as follows:
“(1)The lessor is liable to pay to the lessee reasonable compensation for loss or damage suffered by the lessee because the lessor, or a person acting under the lessor's authority—
…
(e)does not have rectified as soon as is practicable—
…
(ii)any defect in the retail shopping centre or leased building containing the leased shop, other than a defect due to a condition that would have been reasonably apparent to the lessee when the lessee entered into the lease or, for a lessee by way of assignment of the lease, when the lessee accepted the assignment;”.
- So by these many provisions, the Act appears to consistently distinguish between an entry into the lease and an entry into an assignment of the lease, such that they are mutually exclusive. This strongly indicates that the use of the expression “entered into the lease” in s 43(2) is intended to refer only to the original creation of the lease and not to the occasion of an assignment of the lessee’s interest.
- But Hamsa’s argument then refers to s 11 which provides:
“11 Application of Act – when lease entered into
A retail shop lease is entered into on whichever is the earlier of the following dates—
(a)the date the lease becomes binding on the lessor and lessee;
(b) the date the lessee enters into possession of the leased shop.”
Hamsa argues that s 11 can be applied in the context of an assignment by reading “lessee” as including an assignee of the lessee’s interest and by identifying the dates upon which the lease becomes binding upon the assignee and the assignee enters into possession.
- The intended purpose of s 11 is to define, when read with other sections, the scope of the operation of this Act. Section 13 provides that the Act does or does not apply in certain respects according to when the lease was entered into or renewed, and by s 13(2), Parts 5 and Part 6 (which includes s 42 to s 44) do not apply to “existing retail shop leases”. The term “existing retail shop lease” is defined by s 5 to mean:
“(a)a retail shop lease entered into or renewed before the commencement of this section; or
- a retail shop lease entered into, or renewed, under an option under an agreement that was entered into before the commencement of this section; or
- a retail shop lease entered into under an agreement for lease that was entered into before the commencement of this section; or
- an assignment of a retail shop lease mentioned in paragraph (a), (b) or (c).”
In the present case the lease was originally granted in 1999 so that it is in no sense an “existing retail shop lease” as defined. However, the terms of that definition are relevant, because they are another instance of the employed distinction between the entry into a lease and the occasion of an assignment.
- The operation of s 13 would be problematical if Hamsa’s argument about s 11 were accepted. For example, s 13(3) provides that s 27 (which deals with rent reviews) as in force immediately before the commencement of the Retail Shop Leases Amendment Act 1999 continues to apply to a retail shop lease “entered into before the commencement, and any extension or renewal of the lease”, as if that Act had not commenced. Take the case then of a lease which had been granted before that commencement. According to s 13(3), the former s 27 would continue to apply to that lease, or to any extension or renewal of it. Yet upon Hamsa’s argument, an assignment after the relevant date would result in the lease being treated as having been entered into as and from the assignment. In that situation, which version of s 27 would apply?
- Section 11 does not provide any significant support for Hamsa’s argument. It does not blur the distinction between an entry into a lease and an entry into an assignment. Its terms do not provide or suggest that the former includes the latter.
- Hamsa’s argument heavily relies upon the judgment of Thomas J (as he then was) in Re Malsons Pty Ltd,[2] which substantially influenced the Tribunal. That case involved the interpretation of the predecessor to this Act, which was the Retail Shop Leases Act 1984. Thomas J had to decide whether certain amendments of that Act applied to the lease in question, having regard to a complicated set of transitional provisions. In 1987 that lease was granted on terms which permitted the landlord to determine the lease, with no compensation payable to the lessee, if it required the premises for redevelopment. In 1988 the lease was assigned by the lessee and in 1989 the assignee exercised an option to renew. In 1990 the landlord gave a notice determining the lease, because of its proposed redevelopment. The lessee claimed that it was entitled to compensation upon the basis of a section which by an amendment which had come into force after the original grant but before the assignment. The question was whether that provision applied to the then lease. One reason why Thomas J held that it did was that the then lease was that arising from the exercise of the option to renew (which post dated the commencement of the amendment).[3] But his Honour held that it applied also because the amendment commenced prior to the assignment. That involved a consideration of a transitional provision which said that the amendment would not affect rights or obligations provided for by a “lease entered into” before the amendment.[4] Thomas J held that the application of that provision had to be by reference to the parties whose rights or obligations were under consideration, who were in that case the lessor and the assignee from the original lessee. There were no rights or obligations between those parties until the assignment, and in that way, their lease was ‘entered into’ at that point. The judgment is of limited relevance to the present question. Thomas J was concerned with the specific question of whether the legislation had a retrospective operation by interference with existing rights.[5] His Honour was not interpreting the expression in a provision equivalent to the present s 43.
- Similarly, there is a limited relevance in certain judgments relied upon by the applicant, again because they involve an interpretation of a similar expression but in a different statutory context. The applicant relies upon a judgment of the Full Court of the Supreme Court of Western Australia in Dileum Pty Ltd v J K Corporation Pty Ltd.[6] In that case, particularly in the judgment of Kennedy J,[7] the distinction between the creation of a lease and the assignment of the lessee’s interest, is discussed in considering whether an amendment to a statute governing retail shop leases availed a lessee whose lease was created before the amendment but who took by an assignment subsequent to it. The Court rejected the assignee’s argument that the assignment itself constituted a lease for that statute. The applicant also relies upon Taylor Farms (Aust) Pty Ltd v A Calkos Pty Ltd & Ors,[8] which bears yet a closer resemblance to the present case. The question there was whether the retail shop leases legislation of New South Wales applied to a lease which was created before but assigned after the commencement of the operation of the statute, when it provided that it did not apply to “leases entered into before the commencement of this section”. That statute contained a provision, somewhat similar to s 11 of the present Queensland statute, that a lease was to be considered as having been entered into “when a person enters into possession of the retail shop as lessee under the lease”. It was held that the statute did not apply because the lease was “entered into” when the original lessee went into possession, not when the assignee did so. Kirby J discussed Dileum Pty Ltd, Re Malsons Pty Ltd and a decision of the Supreme Court of Victoria, Bradbun Pty Ltd v Bobo Nominees Pty Ltd,[9] where O'Bryan J had held that under the Retail Tenancy Act 1986 (Vic) a retail lease was “entered into” when the assignee went into possession. Kirby J said he preferred the reasoning in Dileum Pty Ltd[10] to that in Re Malsons Pty Ltd and Bradbun Pty Ltd, and concluded that the New South Wales Act did not apply to that lease. As he acknowledged however,[11] the question was one of the interpretation of the particular statute, as it is here.
- It is unproductive to attempt some fine comparison of the various statutes under consideration in these cases with the present one. It may not be possible to reconcile satisfactorily these decisions. Ultimately the present question must be answered by reference to the terms of this statute. The judgment in Re Malsons Pty Ltd indicates but does not require a particular interpretation of the critical words within s 43(2).
- In my view s 43(2)(a), in its reference to the entry into a lease, refers to but one event which is the creation of the lease, and not also to any subsequent assignment. That conclusion is required by the distinction, which is clearly and consistently employed within this statute, between the notion of an entry into the lease and that of the acquisition of an existing leasehold interest by what is described as an entry into the assignment of a lease. And as already mentioned, that distinction is employed within s 43 itself.[12] It follows that the section does not provide Hamsa with a right to compensation, because its alleged loss was not suffered by its entering into the lease. Instead its loss was by its acquisition of the lessee’s interest.
- It is argued for Hamsa that there is no obvious reason why a right to compensation would be conferred upon the original lessee but not upon a subsequent lessee to whom the landlord has made a false or misleading statement or misrepresentation. And it is pointed out that s 22C requires the lessor to give a prospective assignee a disclosure statement. But until the 2006 amendments, there was no right to compensation for a false or misleading disclosure statement given by the prospective lessee to the lessor.
- That leaves for consideration the 2006 amendments. As I have said, they do not apply in the sense of changing the terms of the statute as it must be applied to this particular case. The question is whether the amendments affect the interpretation of s 43 in those (unamended) terms. In some circumstances a court is entitled to examine a later statute to interpret an earlier version of it: Grain Elevators Board (Vic) v Dunmunkle Corporation.[13] But those circumstances are limited, so that if the words of the earlier statute or version of the statute are clear, little assistance is to be gained from the later statute, as the Full Federal Court said in Allina Pty Ltd v FCT.[14] There was no significant amendment to s 42 and s 43 by the 2006 Act. But it has inserted a s 43A, which provides for the payment of compensation for a false or misleading statement or misrepresentation in a disclosure statement given to someone else by the lessee or “the assignor or assignee of a retail shop lease”. So the Act now provides for a liability of an assignee to the lessor, raising the question of why there would not be a corresponding liability of the lessor to the assignee, for which the source could only be s 43(2). Possibly the legislature has assumed an interpretation of s 43 contrary to my conclusion. In DFCT (SA) v Elder’s Trustee and Executor Co Ltd,[15] Dixon, Evatt and McTiernan JJ adopted these propositions:
“An Act of Parliament does not alter the law by merely betraying an erroneous opinion of it … where the interpretation of a statute is obscure or ambiguous or readily capable of more than one interpretation light may be thrown on the true view to be taken of it by the aim and provisions of a subsequent statute.”
- For present purposes it may be accepted that some regard can be had to the 2006 amendments as an aid in the interpretation of the unamended terms of s 43(2). But it is not clear that the legislature has adopted a certain interpretation of s 43 in its amendment of other provisions. The amendments which provide a lessor with a right to compensation for statements made to it by an assignor or assignee, have to be considered with another amendment, the insertion of s 50A, by which an assignor is released from any liability under the lease once the assignment takes effect, as long as disclosure statements have been given. The (new) liabilities for compensation upon the assignor and the assignee could be seen as an intended trade-off for that alteration to the common law. A further consequence of the new s 43A is to make the assignor potentially liable also to its assignee for statutory compensation. The intention may have been that the assignee would be able to look to its assignor for compensation, as distinct from the context of the creation of the lease, where the transaction would have been the subject of negotiations between the lessor and lessee and for which there would be a clearer purpose for a right of statutory compensation. Of course this is speculative, but the relevant point is that it is not so clear that the legislature has assumed, in the 2006 amendments, that s 43 should be interpreted as the Tribunal in this case determined. In my conclusion, the proper interpretation of s 43 is therefore not displaced by the content of the 2006 amendments.
- In the present case the Tribunal erred in holding that it had jurisdiction to award compensation to Hamsa under s 43. It will be ordered that the Tribunal’s decision of 12 January 2006 be set aside and it will be declared that upon its proper construction, s 43(2)(a) of the Retail Shop Leases Act 1994 does not confer upon the respondent, Hamsa Pty Ltd, the right to claim compensation against the applicant.
- I will hear the parties as to costs.
Footnotes
[1] Section 45 inserting s 129 into Retail Shop Leases Act 1994
[2] [1991] 2 Qd R 61
[3] [1991] 2 Qd R 61 at 66
[4] The terms of the transitional provision being set out at [1991] 2 Qd R 61 at 63
[5] [1991] 2 Qd R 61 at 65
[6] (1988) 1 WAR 244
[7] (1988) 1 WAR 244 at 256
[8] [1999] NSWSC 186
[9] (1994) V ConvR 54-501
[10] And another judgment, being a decision of the County Court of Victoria
[11] [1999] NSWSC 186 at para 55
[12] Section 43(1)(a)(ii)
[13] (1946) 73 CLR 70 at 86
[14] (1991) 99 ALR 295 at 303, in a passage set out in Pearce & Geddes Statutory Interpretation in Australia (5th ed) at [3.31]
[15] (1936) 57 CLR 610 at 625-6 in a passage set out in Pearce & Geddes at [3.32]