Kang & Hong Pty Ltd v Liquid Investment & Development Pty Ltd

[2024] QCAT 140

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Kang & Hong Pty Ltd v Liquid Investment & Development Pty Ltd [2024] QCAT 140

PARTIES:

KANG & HONG PTY LTD

(applicant)

v

LIQUID INVESTMANT & DEVELOPMENT PTY LTD

(respondent)

APPLICATION NO/S:

RSL097-22

MATTER TYPE:

Retail shop leases matter

DELIVERED ON:

4 April 2024

HEARING DATE:

12 December 2023

HEARD AT:

Brisbane

DECISION OF:

Presiding Member King-Scott with Member Judge and Member McBryde

ORDERS:

The Respondent pay the Applicant the sum of $63,500.00 by 4:00 pm on 2 May 2024.

CATCHWORDS:

LANDLORD AND TENANT – RETAIL AND
COMMERCIAL TENANCIES LEGISLATION – OTHER
MATTERS – retail shop lease – assignment – security bond
Held – owner’s consent to assignment – assignment effected – liability to return security bond on assignment

Retail Shop Leases Act 1994 (Qld) Part 5 Division 3

APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

REASONS FOR DECISION

1. The Applicant, Kang & Hong Pty Ltd, seeks return of bank guarantees given to its landlord the Respondent, Liquid Investment & Development Pty Ltd under a lease that commenced on 30 March 2015. The lease was transferred to the Applicant on 22 February 2016. The Applicant assigned the lease to Australian Bulk Meats Pty Ltd which was registered on 23 March 2022.

2. The Applicant’s bond of $63,500.00 was secured by bank guarantees for $47,000 and $16,500.

3. The Applicant’s conducted its business from shops 1 & 4 in the premises owned by the Respondent.

4. Consent to the assignment of the lease, initially, was resisted by the Respondent on the following grounds:

   (a)Concern that the new tenant would use an adjacent tenancy’s cool rooms;

   (b)The financial standing of the new tenant;

   (c)The requirement to make good refrigeration equipment.

5. The Applicant commenced proceedings in the Supreme Court for a declaration that the consent was being unreasonably withheld. Those proceedings were settled on 18 February 2022 with the Respondent agreeing to the assignment on certain conditions including that the new tenant provide bank guarantees to replace the Applicant’s bank guarantees.

6. The requirement that the Applicant replace the refrigeration equipment was not a condition of the settlement.

7. The applicant claims that its obligations under the lease in relation to the landlord’s fixtures was according to the clause 10.1 of the Lease to keep the premises in good repair subject to fair wear and tear. The Applicant states that it regularly serviced all of the refrigeration equipment.

8. A report from Bears Refrigeration and Air Conditioning Services Pty Ltd did not report any faults which were not the result of fair wear and tear. The Applicant submits it had no obligation to replace items that were no longer serviceable due to age.

9. The Applicant first sought return of the guarantee from Respondent on 1 April 2022 and made a number of requests thereafter. There has been no response to those requests.

10. A number of directions have been made by the Tribunal for the Respondent to provide a response to the claim. The Respondent has failed to file any response.

11. There appears to be no basis for the Respondent to retain the bank guarantees.

12. We are satisfied that the lease is a retail shop lease. Section 83 of the Retail Shop Leases Act 1994 (Qld) empowers the Tribunal to make a wide range of orders including the making of a declaratory order.

13. We are of the opinion that the bond should be returned to the Applicant. 

14. The order of the Tribunal is that the Respondent pay the Applicant the sum of $63,500.00 by 4:00 pm on 2 May 2024.