Alshdaifat Pty Ltd t/as Paradise Convenience Store v Consulting Japan Pty Ltd
[2014] QCAT 507
•16 October 2014
| CITATION: | Alshdaifat Pty Ltd t/as Paradise Convenience Store v Consulting Japan Pty Ltd [2014] QCAT 507 |
| PARTIES: | Alshdaifat Pty Ltd t/as Paradise Convenience Store (Applicant) |
| v | |
| Consulting Japan Pty Ltd (Respondent) |
| APPLICATION NUMBER: | RSL101-13 |
| MATTER TYPE: | Retail shop leases matters |
| HEARING DATE: | 10 October 2014 |
| HEARD AT: | Southport |
| DECISION OF: | Member Browne, Presiding Member Judge Member McBryde |
| DELIVERED ON: | 16 October 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Alshdaifat Pty Ltd t/as Paradise Convenience Store to pay Consulting Japan Pty Ltd the sum of $12,875.00 by 4.00pm on 6 November 2014. |
| CATCHWORDS: | RETAIL SHOP LEASE – claim for compensation by former tenant – whether lease validly terminated – where informal agreement prepared and signed – where counter-claim for damages by former landlord Retail Shop Leases Act 1994 (Qld), s 43, s 83 |
APPEARANCES:
| APPLICANT: | No appearance |
| RESPONDENT: | Erica Russell, Director of Consulting Japan Pty Ltd |
REPRESENTATIVES:
| RESPONDENT: | Mr Jonathan Hitchcock, solicitor, Rudkin Hitchcock Grant Lawyers |
REASONS FOR DECISION
Alshdaifat was the tenant of premises at 3224 Surfers Paradise Boulevarde, Surfers Paradise, Queensland (the premises) and Consulting Japan was the landlord under a lease dated 1 July 2011.
The premises was used by the tenant Alshdaifat as a retail convenience store.
The lease commenced on 1 July 2011 with a term of 3 years. The tenancy did not last and a dispute arose between the tenant and landlord in relation to repairs to the premises and the payment of rent.
An informal ‘without prejudice’ agreement was made on 12 December 2012 (the informal agreement) in relation to the payment of outstanding rent in the amount of $10,000.00 to be paid by 5.00 pm on 21 December 2012 and an adjusted amount (of $6,500.00) for the payment on ongoing monthly rental to commence from 10 January 2013. The informal agreement was signed by Christine Leslie and Erica Russell personally. Christine Leslie is a director of Alshdaifat (the tenant) and Erica Russell is a director of Consulting Japan (the landlord).
The informal agreement also provided that Erica Russell is to attend to repairs to the ‘leak’ to the roof of the leased premises at her own expense by 30 January 2013.
The amount of $10,000.00 was paid by Christine Leslie to Erica Russell as per the informal agreement by 21 December 2012. The next payment of rent in the amount of $6,500.00 that was due on 10 January 2013 was not paid.
The tenant by email dated 28 January 2013 to the landlord’s legal representative at the relevant time gave notice of termination of the lease stating effectively that they would begin to vacate the leased premises. The tenant, in the email dated 28 January 2013 identified issues in relation to water damage resulting from ‘roof issues’.
The landlord subsequently entered into a new lease of the premises commencing on 2 July 2013 with a new tenant.
Alshdaifat as the former tenant filed a notice of dispute in the Queensland Civil and Administrative Tribunal on 3 September 2013.
Alshdaifat has made a claim for compensation and damages on the basis that the lease has been validly terminated by the tenant on 28 January 2013. Alshdaifat claims the amount of $16,000.00 plus the refund of the bond money paid by the tenant in the amount of $26,125.00 and legal costs.
The basis upon which Alshdaifat alleges the lease was validly terminated is that it contends the landlord failed to attend to the roofing works, as agreed and was therefore in breach of the informal agreement dated 12 December 2012.
The landlord disputes that the lease has been validly terminated and has made a counter-claim[1] for damages for breach of contract in the amount of $12,875.00. This includes rent owing under the lease based on the adjusted figure of $6,500.00 per month for the period from 10 January 2013 to 10 June 2013 (a total of $39,000.00) less the bond money paid by the tenant ($26,125.00).[2]
[1]The respondent (landlord) Consulting Japan was granted leave at the hearing to amend the counter-application dated 22 April 2014 in particular Annexure “A”.
[2]The respondent Consulting Japan abandoned its claim for rent for the month of 1 July 2013 on the basis that the new lease commenced on 2 July 2013; and abandoned the claim for interest and costs.
The matter was listed for hearing in Southport on 10 October 2014. There was no appearance for Alshdaifat on the day of the hearing. The landlord Consulting Japan through its legal representative was ready to proceed at the hearing on 10 October 2014.
Both parties have prepared and filed material in the Tribunal relevant to the proceedings.[3]
[3]Material filed in accordance with directions made on 1 November 2013, 25 February 2014, 8 April 2014 and 17 June 2014.
The Tribunal may, as provided under s 93 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), proceed to hear and determine a matter in the absence of one of the parties to the proceedings such as the applicant and tenant, Alshdaifat. The Tribunal must in conducting a proceeding, as required under s 28 of the QCAT Act, ensure that, amongst others, it observe the rules of natural justice and acts with as ‘little formality and technicality and with as much speed as the requirements’ of the Act, an enabling Act and a proper consideration of the matters before it permit.
The Tribunal is satisfied that Alshdaifat has been given notice of the hearing scheduled to take place in Southport on 10 October 2014 and the Tribunal has not received an application for an adjournment of the hearing by the applicant, Alshdaifat.
The Tribunal having been satisfied for the purposes of s 93 and s 28 of the QCAT Act that Alshdaifat had been given notification of the hearing and an opportunity to file material proceeded to hear the matter in the absence of the applicant, Alshdaifat.
Was the lease validly terminated?
The Tribunal has considered the material prepared and filed by Alshdaifat in relation to the claim for compensation arising from the alleged breach by the landlord.
Alshdaifat contends the following in written submissions filed in the Tribunal on 18 March 2014:
The issue with the [landlord] has been ongoing since January 2013 when an agreement dated 21/12/12 was breached by the [landlord] in relation to roof repairs and we had no other choice but to terminate our lease due to safety issues.
Alshdaifat by email dated 28 January 2013 in communicating its intention to terminate the lease refers to the issue of water damage resulting from the roof of the leased premises. The applicant states in the email dated 28 January 2014 to the landlord’s legal representatives at the time:
…we are terminating our lease at the abovementioned property due to negligence on behalf of the landlord for water damage of the ceiling and roof issues as agreed to the previously signed agreement.
As you mentioned a contractor had gone out more than 4 weeks ago to the premises to assess the situation with the roof and ceiling and had provided the landlord with a summary, quote and photos and this had been ignored by the landlord and in turn no action was taken to repair the damage.
Due to the landlord’s negligence we have now excessive stock and property damage and flooding in our shop located at the above address due to excessive rain that has happened over the past few days and the ceiling is moments away from caving in.
We have been left with no other choice but to begin moving out all our remaining stock and property and vacate the premises as we have lost money through damage to our property and lost trade.
…
There is provision under s 43 of the Retail Shop Leases Act 1994 (Qld) for the landlord (as lessor) to pay to the tenant (as lessee) ‘reasonable compensation’ for ‘loss or damage suffered by the lessee’ in circumstances where the landlord has failed to rectify as soon as practicable ‘any defect in the retail shopping centre’. The tenant has an obligation however under the terms of the lease to carry out repair and maintenance; and to obtain and maintain insurance in relation property situated in the leased premises owned by the tenant as lessee under the lease.[4]
[4]Exhibit marked “2”.
The Tribunal is satisfied that the applicant, Alshdaifat has had a sufficient opportunity to file material in support of the claim for compensation including statements and material in support of the alleged damage to stock and property.
There is no evidence before the Tribunal in support of the applicant’s (as a former tenant) claim for damages in the amount of $16,000.00 and whether Alshdaifat had, as required under the lease, a current policy of insurance in respect of the property situated in the leased premises.
In the notice of dispute filed in the Tribunal Alshdaifat refers to damages ‘to the value of $16,000.00’ and refers to photographs and video evidence. The photographs attached to the material filed on 18 March 2014 are undated and not referenced to a statement in support. The photographs filed in the Tribunal by email dated 5 March 2014 identified in the email as ‘photos of water damage at 3224 Surfers Paradise Blvd’ do not depict any damage to stock or property.
Notwithstanding the evidentiary issues in relation to the applicant’s failure to particularise the claim for damages, the Tribunal is not satisfied that the informal agreement dated 21 December 2012 is a binding agreement between the tenant and landlord.[5] The informal agreement is a ‘without prejudice’ document signed by Erica Russell and Christine Leslie personally. There is no reference in the informal agreement to the tenant and landlord – Alshdaifat Pty Ltd and Consulting Japan Pty Ltd respectively.
[5]As required under the Property Law Act 1974 (Qld).
The Tribunal has also considered whether Erica Russell failed to attend to repairs to the roof of the leased premises as agreed (in the informal agreement) by 30 January 2013; or in her capacity as landlord as Director of Consulting Japan in accordance with the landlord’s obligations under the Retail Shop Leases Act 1994 (Qld).
The Tribunal has considered the material filed by Consulting Japan including the evidence of Erica Russell, Director of Consulting Japan. Ms Russell has a medical condition that impacts on her ability to communicate verbally. Ms Russell was however able to give sworn oral evidence at the hearing with the assistance of an interpreter and her legal representative.
The Tribunal accepts the evidence given by Ms Russell about the attempts made by her to attend to the repairs to the roof of the leased premises. Ms Russell gave evidence at the hearing that she had effectively made two attempts to repair the leaking roof. She stated that she engaged a man referred to her at the hearing as a ‘bad man’ in December 2012 and then another man on a date that she could not recall stating that it was before July 2013. Ms Russell also stated at the hearing that there were two amounts of money paid by her by cheque in her capacity as Director of Consulting Japan for the roof repairs. Ms Russell could not recall when the money was paid but stated that the cost of the roof repair work completed in December 2012 was approximately $6,700.00.
The Tribunal accepts the evidence given by Ms Russell that there was an informal agreement signed by her on 21 December 2012 in relation to the payment of outstanding rent and an adjusted amount for ongoing monthly rent. Ms Russell stated that when she signed the agreement she was unwell having spent a period of time in hospital and was ‘bedridden’. Ms Russell states in her statement dated 1 July 2014:
I had been very sick at the time in December 2012, and was bedridden. My Neighbour…had been helping me with many things because of my ill health and communication limitations. The shop was upsetting me, and I was worrying about that. The failure to pay rent was a big financial problem for me. I was very upset about it. I had also sold my car to raise money.[6]
[6]Exhibit marked “1”, para 10.
The Tribunal accepts the evidence given by Ms Russell that the amount of $10,0000.00 was paid by the tenant as per the informal agreement by 21 December 2012 but no further payments of money were received in relation to rent. Ms Russell in her statement dated 1 July 2014 states that the tenants purported to terminate the lease and left some of their belongings inside the leased premises. Ms Russell states:
I am aware that the tenant was making efforts to find a replacement tenant. As far as I am aware the tenant did not move out. They did not hand over the keys. They left their stuff, papers stock and other things in the shop. I’m not aware if they continued to trade from the shop after they defaulted in paying rent. Due to my health limitations I was unable to visit the shop and see for myself.
There is evidence before the Tribunal of the unpaid rental money. Ms Russell was able to produce at the hearing her ‘rent book’ that she states was evidence of rental money received by the tenants from the date of the informal agreement.[7] The rent book shows that there were no monthly rental payments received by Consulting Japan after 21 December 2012.
[7]Exhibit marked “4”.
The Tribunal accepts the submissions made at the hearing by the respondent’s legal representative that the informal agreement is relevant to the respondent’s counter-claim in that it raises an issue of estoppel. The issue raised is relevant to the amount Consulting Japan can claim for outstanding rental monies. The respondent Consulting Japan is therefore only claiming unpaid monthly rental in accordance with the informal agreement from 10 January 2013 to the date the landlord entered into the new lease effective from 1 July 2013. Consulting Japan is claiming unpaid monthly rental at the agreed amount of $6,500.00.
Tribunal findings
The Tribunal has considered the written submissions and material filed by the applicant in relation to the purported termination of the lease that raise issues of the landlord’s alleged failure to attend to roofing repairs.
The Tribunal has made findings in relation to the informal agreement dated 12 December 2012 and about the evidence given by Ms Russell at the hearing as a Director of Consulting Japan. Notwithstanding the findings made by the Tribunal, Alshdaifat has purported to terminate the lease by email dated 28 January 2013 being two days before 30 January 2013 the date agreed between Erica Russell and Christine Leslie that Erica Russell would attend to repair works to the roof of the leased premises. The informal agreement clearly provides that Erica Russell will ‘repair leak to roof at her expense no later than 30 January 2013’. The email purporting to terminate the lease between the parties was sent by Alshdaifat on 28 January 2013 before the agreed date (of 30 January 2013).
The Tribunal has the power under the Retail Shop Leases Act 1994 (Qld) to make an order that it considers to be ‘just’ to resolve a retail tenancy dispute.
The Tribunal is satisfied that Alshdaifat as the former tenant has failed to pay monthly rental money as required by the terms of the lease dated 1 July 2011.[8] Alshdaifat has failed to pay monthly rental throughout the period from 10 January 2013 to 10 June 2013 (inclusive) as claimed by Consulting Japan. The Tribunal is satisfied that an order should be made requiring Alshdaifat to pay the outstanding monthly rental based on the agreed amount of $6,500.00 as per the informal agreement dated 12 December 2012 less the amount paid by Alshdaifat for the bond in the amount of $26,125.00 leaving a balance of $12,875.00.
[8]Exhibit marked “2”.
The order will be that Alshdaifat Pty Ltd t/as Paradise Convenience Store to pay Consulting Japan Pty Ltd the sum of $12,875.00 by 4.00pm on 6 November 2014.
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