Future Reflections Fitness Centre and Xamerg Pty Ltd v S Mohindra Pty Ltd
[2014] QCAT 33
•31 January 2014
| CITATION: | Future Reflections Fitness Centre and Xamerg Pty Ltd v S Mohindra Pty Ltd [2014] QCAT 33 |
| PARTIES: | Future Reflections Pty Ltd atf Future Reflections Trust t/as Future Reflections Fitness Centre and Xamerg Pty Ltd (Applicants) |
| v | |
| S Mohindra Pty Ltd atf S Mohindra Pty Ltd Superfund and Body Corporate Calypso Tower Retail CTS 27413 (Respondents) |
| APPLICATION NUMBER: | RSL048-13 |
| MATTER TYPE: | Retail shop leases matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Deane |
| DELIVERED ON: | 31 January 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The Applicants are to file in the Tribunal and provide to the Respondent a copy of any application for transfer to a specific Court and submissions in support by 4.00pm 14 February 2014. 2. The Respondents are to file in the Tribunal and provide to the Applicants any submissions in response by 4.00pm 21 February 2014. 3. Any application for transfer is to be determined on the papers and without an oral hearing not before 4.00pm 21 February 2014. 4. If the Applicants do not file an application for transfer by 4.00pm 14 February 2014 the proceedings are struck out without further notice. |
| CATCHWORDS: | RETAIL SHOP LEASE – STRIKE OUT APPLICATION – whether the lease is a ‘retail shop lease’ – whether the Tribunal has jurisdiction to determine the lease disputes - transfer of proceedings to a court of competent jurisdiction Retail Shop Leases Act 1994 (Qld) ss 8, 15, 27A, 28, 103, Schedule |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Future Reflections Pty Ltd leases premises from S Mohindra Pty Ltd. The leased premises are 2 of 9 lots in a community title scheme. Various disputes have arisen under the lease. In early May 2013 the tenant commenced proceedings in the Tribunal seeking orders under the Retail Shop Leases Act 1994 (Qld) (the RSL Act). The tenant identified the body corporate as a second respondent to these proceedings but it is not clear on what basis the body corporate could be regarded as a party to a retail shop lease dispute and it appears that the body corporate has not taken an active role in this matter. A director of the landlord appears to also be the Chairman of the body corporate.
The tenant also identified another company, Xamerg Pty Ltd, as an additional applicant in the amended Notice of Dispute filed on or about 13 November 2013. Xamerg appears to carry out the business of a registered training organisation from the premises or part of them but it is not clear on what basis it seeks orders against the landlord or body corporate under the RSL Act.
Since the proceedings were commenced the tenant requested the chief executive to nominate a specialist retail valuer under section 28(2) of the RSL Act to determine the current market rent. The parties appear to regard the nomination as having been ordered by the Tribunal. The Tribunal has no power to nominate a specialist valuer, that power is vested in the chief executive under the RSL Act. It is perhaps confusing that the person who has been delegated with and exercises the powers of the chief executive is also the Registrar of the Tribunal. However the Tribunal itself has no role in the nomination.
On the material before the Tribunal:
a) the chief executive nominated a specialist valuer on 7 August 2013.
b) the specialist valuer delivered his determination of the current market rent on 29 October 2013.
On 28 November 2013 the landlord made an application for miscellaneous matters challenging this Tribunal’s jurisdiction on the grounds that the lease is not a ‘retail shop lease’.
On the material before the Tribunal:
a) this contention had not been communicated by the landlord to the tenant prior to the filing of the application so that the tenant had no prior opportunity to consider the contention.
b) until this application was filed both the tenant and the landlord had participated in the dispute as if the Tribunal had jurisdiction and participated in the specialist valuer current market rent determination as if the lease was a ‘retail shop lease’.
On 10 January 2014 the landlord filed a substantial submission and statements of evidence in response to the tenant’s submissions. Later that day the tenant filed a response although there were no directions for a further response by the tenant. The landlord contends that the Tribunal should not consider those submissions because no direction was made for them.
I find that it is appropriate to and have considered the tenant’s further submissions.
The objects of the Tribunal include to have the Tribunal deal with matters in a way that is accessible, fair, just, economical and quick[1] and in conducting the proceeding the Tribunal must observe the rules of natural justice and must act with as little formality and technicality as a proper consideration of the matters before it permit.[2] The landlord’s submissions introduced additional submissions and evidence. It is appropriate that the tenant have an opportunity to respond to afford the tenant natural justice. If the tenant had not volunteered further submission I would have made directions affording the tenant the opportunity given the extent of the submissions and evidence filed by the landlord.
[1]QCAT Act s 3(b).
[2]QCAT Act s 28(a),(c).
The Tribunal is a creature of statute and must derive its powers from the QCAT Act or an enabling Act such as the RSL Act. Unlike some Courts it has no inherent jurisdiction.
The Tribunal’s powers to make orders under the RSL Act[3] are contingent on the proceeding being one of a number of certain types of ‘retail tenancy disputes’ which is defined by reference to the term ‘retail shop lease’. These terms are defined in the Schedule to the Act. Those definitions are all reliant on the definition of ‘retail shop’ which is also defined in the Schedule as:
means premises that are –
(a)situated in a retail shopping centre; or
(b)used wholly or predominantly for the carrying on of 1 or more retail businesses.
[3]RSL Act s 103.
The landlord contends that the lease is not a ‘retail shop lease’ because it does not fall within either limb of the definition.
If the lease is not a ‘retail shop lease’ the proceedings would be misconceived or lacking in substance[4] because the Tribunal has no power to make the orders sought and the proceedings may be dismissed or struck out or transferred.[5] It is a significant step to dismiss or strike out a proceeding prior to a full hearing of a matter. However where it is clear that the Tribunal has no jurisdiction then it is appropriate.
[4]QCAT Act s 47.
[5]QCAT Act s 52.
It is not disputed that the leased premises are used as a gym and for the carrying on of a registered training organisation and that these businesses do not fall within the 2nd limb of the definition because they do not fall within the definition of ‘retail business’.[6]
[6]RSL Act Schedule; Retail Shop Leases Regulation 2006 s 9, Schedule.
The tenant contends that:
a) the premises are situated in a retail shopping centre and therefore it falls within the first limb of the definition.
b) the lease provides ‘for the avoidance of doubt’ the RSL Act is to apply.[7]
c) the original lessor prepared the lease.
d) the building has been advertised as a retail centre and the name of the body corporate includes the word “retail” namely Body Corporate Calypso Retail Tower CTS 27413.
[7]Clause 22.8.
“Retail shopping centre” is defined[8] as a cluster of premises having all of the 4 attributes set out. The first attribute[9] is that 5 or more of the premises are used wholly or predominantly for carrying on retail businesses.
[8]RSL Act s 8.
[9]RSL Act s 8(1)(a).
The Act continues to apply to a lease of premises that cease to be a retail shop after the commencement of the lease.[10] The example set out in the Act is that after a lease is entered into the business ceases to be a retail shop because the cluster of premises ceases to be a retail shopping centre. It states that the Act would continue to apply even though the premises are no longer a retail shop.
[10]RSL Act s 15(2).
The evidence before the Tribunal is that:
a) currently none of the lots are being used to carry on retail businesses. I accept the undisputed evidence that of the other 7 lots, 2 are vacant, 3 are being used as medical centres and 2 as dentists’ practices. These businesses do not fall within the definition of retail businesses;
b) at the time the lease was entered into with the original lessor only one of the other lots was occupied and it was being used as an office or for storage space and the remaining lots in the building were vacant, had been vacant for some time and had previously been used as a hotel. This evidence is not disputed.
I find that the cluster of premises does not satisfy the first attribute of the definition of ‘retail shopping centre’ either currently or at the time the lease was entered into.
Accordingly the cluster of premises cannot satisfy all 4 attributes and is not and was not at the time the lease was entered into a ‘retail shopping centre’. The premises are therefore not a ‘retail shop’ and therefore the lease is not a ‘retail shop lease’.
The tenant has produced documents to the Tribunal which demonstrates that the building has been represented using the term “retail”. Many of those documents also use the term “commercial”. Most of the documents are undated and it is unclear who authorised their publication. These documents may be relevant to one of the other attributes of a ‘retail shopping centre’[11] but if all attributes are not satisfied then the definition is not made out.
[11]RSL Act s 8(1)(d).
The permitted use under the lease was described in broad terms. The lease has the appearance of a standard form lease. Given that the building was largely vacant the then lessor may well have been attempting to maximise the prospects of leasing the vacant lots to retail businesses and as well as to commercial businesses.
The use of the phrase ‘for the avoidance of doubt’ suggests that the position contended for is satisfied through other means in the document or at law but is confirmed by the use of the phrase if there is a doubt. I am not satisfied that where there is no entitlement or obligation established through other means about which there might be doubt that the phrase imposes an independent obligation or entitlement.
I am not satisfied that clause 22.8 or other representations referred to by the tenant can have the affect of overriding the terms of the RSL Act to give the Tribunal jurisdiction when it otherwise would not have jurisdiction.
On 16 December 2013 the tenant brought an application for an interim order in relation to its exercising of an option in accordance with the RSL Act.[12] The tenant gave written notice on 12 November 2013 that it exercised the option. On 4 December 2013 the landlord wrote to the tenant advising that it did not accept that the exercise of the option was within time and required vacant possession by 9 January 2014. In view of my conclusions about the Tribunal’s jurisdiction it is not appropriate to consider the application for interim order.
[12]RSL Act s 27A(6).
In the circumstances the tenant may have remedies available to it for relief against forfeiture or proposed forfeiture of the lease through the Courts or possibly against any legal advisers who failed to identify that the lease was not a ‘retail shop lease’.
Given my conclusions about the Tribunal’s jurisdiction the Applicants should have the opportunity to seek a transfer of the proceedings to a court of competent jurisdiction[13] rather than having the proceedings struck out and having to start again.
[13]QCAT Act s 52.
Accordingly I make directions to facilitate an application to transfer the proceedings to a specific court and failing such an application in accordance with the directions these proceedings will be struck out without further notice.
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