Kirk & Anor v Sunshine Developments (Vic) Pty Ltd - [2020] QCAT 493

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Kirk & Anor v Sunshine Developments (Vic) Pty Ltd [2020] QCAT 493

PARTIES: GRANT KIRK
AQUARIUS RESOURCE MANAGEMENT PTY LTD

(applicants)

v

SUNSHINE DEVELOPMENTS (VIC) PTY LTD

(respondent)

APPLICATION NO/S:

RSL152-20

MATTER TYPE:

Retail shop leases matter

DELIVERED ON:

14 December 2020

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Deane

ORDERS:
1.   Until otherwise ordered, upon Grant Kirk and Aquarius Resource Management Pty Ltd giving the usual undertaking as to damages and costs, Sunshine Resource Management (Vic) Pty Ltd is restrained from taking a prescribed action as defined by section 9 of the Retail Shop Lease and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) relying upon Form 7 Notices to Remedy Breach of Covenant each dated 30 October 2020 given to Grant Kirk and Aquarius Resource Management Pty Ltd, pending determination of the Application for an order to resolve a retail tenancy dispute filed 9 November 2020.

2.   Sunshine Resource Management (Vic) Pty Ltd must file in the Tribunal four (4) copies and give to Grant Kirk and Aquarius Resource Management Pty Ltd one (1) copy of its response to the Application for an order to resolve a retail tenancy dispute, by 4:00pm on 22 January 2021.

3.   Grant Kirk and Aquarius Resource Management Pty Ltd must file in the Tribunal four (4) copies and give to Sunshine Resource Management (Vic) Pty Ltd one (1) copy of all material upon which they intend to rely by 4:00pm on 5 February 2021.

That material must:

(a)     set out the exact terms of the order which the Tribunal is asked to make;

(b)     include written and signed statements of all witnesses upon whom Grant Kirk and Aquarius Resource Management Pty Ltd relies;

(c)     Each witness statement must have attached to it all relevant documents, with an explanation in the statement as to how they are relevant. All attachments must be page numbered and must be referred to in the statements.

4.   Sunshine Resource Management (Vic) Pty Ltd must file in the Tribunal four (4) copies and give to Grant Kirk and Aquarius Resource Management Pty Ltd one (1) copy of all material upon which it intends to rely by:

4:00pm on 19 February 2021

That material must:

(a)     Include written and signed statements of all witnesses upon whom Sunshine Resource Management (Vic) Pty Ltd relies;

(b)     Each witness statement must have attached to it all relevant documents, with an explanation in the statement as to how they are relevant. All attachments must be page numbered and must be referred to in the statements.

5.   The Application for an order to resolve a retail tenancy dispute is listed for a directions hearing by telephone at a date and time to be advised not before 19 February 2021.

CATCHWORDS:
LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – OTHER MATTERS – whether an interim order should be granted restraining the lessor from taking an alleged prescribed action during the response or extension period – whether damages an adequate remedy

COVID-19 Emergency Response Act 2020 (Qld), s 4A, s 23, s 25,

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 58
Retail Shop Leases Act 1994 (Qld), s 5B
Retail Shop Lease and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld), s 5, s 6, s 9, s 12, s 21, Schedule 1

Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld)

REPRESENTATION:

Applicant:

Grant Kirk

Respondent:

Gerry Saviane

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’)

REASONS FOR DECISION

Mr Kirk and Aquarius Resource Management Pty Ltd (‘Aquarius’) each lease commercial premises in the same complex from Sunshine Resource Management (Vic) Pty Ltd (‘the Landlord’). It appears uncontroversial that Mr Kirk is a director of Aquarius, that he has signed a guarantee in respect of the lease to Aquarius and that the premises are not retail shops.[1]
[1]Retail Shop Leases Act 1994 (Qld), s 5B.
Mr Kirk and Aquarius sought urgent orders from the Tribunal by filing an Application to resolve a retail tenancy dispute[2] and an Application to stay a decision,[3] the latter of which was taken to be an Application for interim order.[4] Those documents contain limited information.
[2]Filed 9 November 2020.
[3]Filed 6 November 2020.
[4]Direction made 12 November 2020.
On 13 November 2020 an urgent directions hearing was held with the parties appearing by telephone and directions were made for the parties to file submissions and evidence in support of the Application for interim order and in response.
The submissions received from Mr Kirk and Aquarius do not clearly set out the legal basis for the order. Those submissions and the submissions received from Mr Saviane on behalf of the Landlord do not clearly address the factors to be considered by the Tribunal in deciding whether or not to restrain the Landlord. The delay in finalising this decision arises at least in part due to the state of the submissions received, which primarily addressed the issue as to the amount of rent payable as from October 2020.
The Application to resolve a retail tenancy dispute essentially states that Mr Kirk and Aquarius want orders:
(a)that the Landlord comply with section 12(1) of the Retail Shop Lease and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) (‘the Regulations’) as provided by section 12(3) of the Regulations; and
(b)as I understand it, to restrain the Landlord from acting in reliance upon two Form 7 Notices to Remedy Breach of Covenant each dated 30 October 2020 given to each of Mr Kirk and to Aquarius (the Notices).
The Application for interim order seeks an order to restrain the Landlord from relying upon the Notices pending a Small Business Commissioner mediation to be held at 9:30 am on 18 November 2020.
The COVID-19 Emergency Response Act 2020 (Qld) (‘the COVID Act’) is part of the State Government’s response to the pandemic. It provides for the making of regulations in respect of relevant leases, including regulations prohibiting certain conduct by lessors and providing for the conferral of jurisdiction to hear and decide disputes.[5]
[5]COVID-19 Emergency Response Act 2020 (Qld), s 23 (COVID Act).
The COVID Act provided that such regulations were to be made before and expire on the COVID-19 legislation expiry day.[6] The COVID Act was initially to expire 31 December 2020.[7] The COVID Act now provides the COVID-19 legislation expiry day means the earlier of 30 April 2021 or another day prescribed by regulation.[8]
[6]Ibid, s 23(6).
[7]Ibid, s 25 (as originally enacted).
[8]Ibid, s4A.
The Regulations initially provided for a response period commencing on 29 March 2020 and ending 30 September 2020.
Effective 29 September 2020, the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld) (the Amendment Regulation) amended the Regulations and introduced the concept of the extension period starting at the beginning of the day on 1 October 2020 ending at the end of the day on 31 December 2020.[9]
[9]Regulations, Schedule 1.
The COVID Act defines:
(a)‘relevant lease’ to mean a retail shop lease under the Retail Shop Leases Act 1994 (Qld) or a lease prescribed by regulation.[10]
(b)‘lease’ to include a lease, sub-lease, licence or other agreement under which a person grants a right to another person to occupy premises, other than as a residence.[11]
[10]COVID Act, s 23(8).
[11]Ibid.
The Regulations prescribe that a relevant lease is a lease, other than a retail shop lease, under which the leased premises are to be wholly or predominantly used for carrying on a business.[12]
[12]Regulations, s 6.
Business means an undertaking, whether or not for profit, including the manufacture, sale or supply of goods or services and a trade or profession.[13]
[13]Ibid, Schedule 1.
There is some evidence that both leased premises are used wholly or predominantly used for carrying on a business.
Mr Kirk and Aquarius contend that their leases are ‘affected leases’ for the purpose of the Regulations. There is evidence before me that the parties entered into a Deed of Settlement after Mr Kirk and Aquarius previously commenced a claim with the Queensland Small Business Commissioner in respect of rent and outgoings payable during the period April to September 2020. A dispute has arisen between the parties as to the rent and outgoings to be paid as from October 2020.
A lessee under an ‘affected lease’[14] may apply to the Tribunal or a court for an order requiring the lessor to comply with section 12(1) of the Regulations.[15] That provision prohibits a lessor under an affected lease from taking a prescribed action on certain grounds including failure to pay rent or outgoings for a period occurring wholly or partly during the response period or the extension period.
[14]Ibid, s 5.
[15]Ibid, s12(3)
A prescribed action is defined to include an action under a lease or the starting of a proceeding for recovery of possession, termination of the lease or exercising a right of re-entry.[16]
[16]Ibid, s 9.
As I understand it, Mr Kirk and Aquarius contend that the giving of the Notices or at least actions that the Landlord may take in reliance on the Notices constitute a prescribed action for the purposes of section 12(1) of the Regulations and that the Tribunal has power to order the Landlord to comply with section 12(1) of the Regulations.[17]
[17]Ibid, s 12(3).
There are exceptions to the requirement that a lessor must not take a prescribed action as set out in section 12(1) of the Regulations.[18]
[18]Ibid, s 12(2).
As I apprehended at the directions hearing the time for the restraint sought has now passed. I am not satisfied that there is any utility in making the order in the terms sought.
However, the Tribunal may make an interim order on its own initiative.[19]
[19]QCAT Act, s 58(2).
The parties, who were self-represented, have not addressed in their submissions the usual factors for the making of an interim restraining order such as:
(a)why a restraining order is required to protect a party’s position for the duration of the proceeding or is required to secure the effectiveness of a final decision;[20]
(b)why damages are not an adequate remedy if the Landlord takes action contrary to law;
(c)whether Mr Kirk and Aquarius offer an undertaking as to costs or damages[21] and the value of any such undertaking.
[20]Ibid, s 58(1).
[21]QCAT Act, s58(3).
These matters were raised during the directions hearing as potentially relevant matters to be addressed in the submissions to be filed.
On the limited material before me it is arguable that each lease is an affected lease as there is some evidence that:
(a)each lease is a prescribed lease; and
(b)each lease is binding on the lessee; and
(c)each lessee is an SME; and
(d)each lessee is eligible for job keeper.[22]
[22]Regulations, s 5.
The Landlord contends:
(a)there is some doubt as to whether each lease is an affected lease or remains an affected lease;
(b)that it relies upon exceptions in section 12(2) of the Regulations that:
(i) the lessees have not complied with their obligations under the Regulations;[23] and
(ii) at least in respect of the lease to Mr Kirk the Notice relies upon a breach of the lease other than those referred to in section 12(1) of the Regulations, being breach of the obligation not to alter the premises or install partitions without written consent.[24]
[23]Regulations, s 12(2)(b).
[24]Ibid, s 12(2)(c).
Mr Kirk and Aquarius dispute that they have not complied with their obligations and contend that the Landlord ought not be able to rely upon the alleged breach as Mr Saviane, a director of the Landlord, verbally agreed to the structure.
Mr Kirk and Aquarius are seeking to enforce a statutory prohibition.
The Regulations provide that in the proceeding for an order requiring the lessor to comply with section 12 (1) of the Regulations, the Tribunal may make any order it considers appropriate and may award costs against the lessor or the lessee.[25] The Regulations do not expressly provide an entitlement to damages for a contravention nor do they expressly exclude such an entitlement.
[25]Ibid, s 12(5).
The making of an interim order restraining the Landlord from relying upon the Notices pending a final determination of Mr Kirk’s and Aquarius’ entitlement to such an order would protect their position for the duration of the proceeding. I am satisfied that, in Mr Kirk’s and Aquarius’ circumstances as I understand them based on the evidence currently before the Tribunal, and given the Regulations do not expressly provide a right to damages for contravention of the statutory prohibition, it is in the interests of justice to make an interim order.
It is appropriate to make directions to assist with the determination of the substantive application as to whether Mr Kirk and Aquarius are entitled to a final order requiring the Landlord to comply with section 12(1) of the Regulations. The right to apply to the Tribunal in section 12 of the Regulations is, in my view upon a proper interpretation of the Regulations, in addition to the right to apply to the Tribunal in section 41 of the Regulations, which is reliant upon the mediation processes provided for by the Regulations.
If Mr Kirk and Aquarius do not wish to pursue such a final order, because the broader issues between the parties have been resolved by mediation or otherwise, they may file a Notice of Withdrawal and provide a copy to the Landlord in which case the interim order will also be dissolved.
If the broader issues between the parties have not been resolved through mediation, then the parties may also have a right to apply to the Tribunal for orders to resolve an eligible lease dispute,[26] being either an affected lease dispute[27] or a small business tenancy dispute[28] by filing a further Application as provided by section 41 of the Regulations and paying the prescribed fee.
[26]Ibid, s 21.
[27]Ibid, Schedule 1.
[28]Ibid.