Mornwood Pty Ltd v Halrobe Pty Ltd
[2012] QCAT 513
•24 October 2012
| CITATION: | Mornwood Pty Ltd v Halrobe Pty Ltd [2012] QCAT 513 |
| PARTIES: | Mornwood Pty Ltd (trading as Kaos Adult Koncept) (Applicant) |
| v | |
| Halrobe Pty Ltd (Respondent) |
| APPLICATION NUMBER: | RSL015-12 |
| MATTER TYPE: | Retail shop leases matters |
| HEARING DATE: | 17 October 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr J R Forbes. Member N Judge, Member D McBryde, Member |
| DELIVERED ON: | 24 October 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Proceedings dismissed for want of jurisdiction. 2. No order as to costs. |
| CATCHWORDS: | LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – DEFINITIONS – RETAIL SHOP LEASE OR LEASE – where Notice of Dispute under Retail Shop Leases Act 1994 – where objection to jurisdiction – whether subject lease a retail shop lease – whether waiver or acquiescence converts commercial lease to retail shop lease – jurisdiction not shown Retail Shop Leases Act 1994, ss 15, 103, Schedule M & J Gray Investments Pty Ltd v AMP Pacific Fair Pty Ltd & Ors [2010] QCAT 454 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mornwood Pty Ltd (trading as Kaos Adult Koncept) represented by Mr A Colavitti, Colavitti Lawyers |
| RESPONDENT: | Halrobe Pty Ltd represented by Mr L Stephens instructed by Steven Watkinson, solicitors |
REASONS FOR DECISION
Mornwood Pty Ltd (‘Mornwood’) commenced these proceedings by a Notice of Dispute filed on 17 February 2012. Mornwood claimed compensation, damages and interest for unlawful termination of a lease, and invoked the jurisdiction conferred on the Tribunal by s 103 of the Retail Shop Leases Act 1994 (‘the RLSA’) to hear and determine retail tenancy disputes.
The landlord Halrobe Pty Ltd (‘Halrobe’) submits[1] that the subject lease is not a retail shop lease, that these proceedings are not a retail tenancy dispute[2], and therefore not within the Tribunal’s jurisdiction.
[1] Application for Miscellaneous Matters filed 9 July 2012.
[2]See definitions of those expressions in the Schedule to the Retail Shop Leases Act 1994.
Notice of hearing of the jurisdictional issue was sent to the parties on 10 September 2012. On the eve of the hearing, the solicitor for Mornwood lodged a request for an adjournment; it was opposed by Halrobe’s representatives. The Tribunal refused to adjourn.
An adjournment of this interlocutory application, if granted, would have resulted in an inordinate delay – until at least February 2013, so congested is the Tribunal’s list of matters awaiting trial. Moreover, for reasons set out below, a last-minute adjournment would have served no useful purpose.
Mornwood attended the hearing without the presence of Peter Groessler, the only one of its deponents required for cross-examination. There was no indication that Groessler would become available in the event of an adjournment. No affidavit was forthcoming from Mornwood’s principal, Theo Armenis.
Central to the jurisdictional issue is the following extract from Clause 7.1 of the subject lease (Permitted Use):
Notwithstanding other provisions, [Mornwood] shall not use the premises wholly or predominantly for the carrying on of one or more retail businesses. For the purposes of this clause the expression “retail business” shall have the meaning set out in the Retail Shop Leases Act 1994.[3]
[3]“Retail business” means a business prescribed by regulation as a retail business: RSLA Schedule. The list in the regulation includes the euphemism “adult merchandise”: Retail Shop Leases Regulation 2006, Schedule.
Mornwood submits, and Halrobe denies, that Clause 7.1, as quoted, was negated by Halrobe’s waiver or implied consent, in that Mornwood made retail sales of “adult merchandise” on the subject premises, as Halrobe well knew, and to which it did not object.
Evidence to that effect was given by the deponents Christopher Orr and Peter Groessler, a former employee of Mornwood. In the second of two statutory declarations, each filed on 11 April 2012, Groessler states:
I fail to see how the landlord could not be aware this was a retail business as I have had to excuse myself to serve customers during our conversations and the landlord was standing just away slightly from the counter.
The remaining eighteen paragraphs of that declaration are not now material. As already noted, Groessler did not attend for cross-examination.
Christopher Orr, in the first of two affidavits, refers to the retail activities of a previous tenant, and describes Halrobe’s principal, Gino Palatella, as a “hands on manager” who visited and inspected the premises from time to time. He does not expressly state that Mr Palatella was aware that Mornwood was conducting retail trade, or gave any indication that he approved such activities. In a second affidavit[4] Orr resiled considerably from his first deposition. In particular he admitted that:
My recollection of this conversation [8 years ago] could not reliably be taken to mean that that I knew that what Gino [Palatella] said was a reference to knowledge of the tenant using the premises as a retail shop or `store’ for the public.
[4] Filed on 13 July 2012.
Gino Palatella, for Halrobe, denies that he ever saw Groessler serving customers. On one occasion he did see a man inspecting goods on the premises, but assumed that he was a potential wholesale buyer. Indeed, one of the grounds for termination of the lease was that Mornwood told a retail valuer (Malcolm Macrae) in September 2011 that it was “operating a retail business”.[5]
[5] Affidavit of Gino Palatella sworn 17 August 2012, paragraphs 16 and 6 respectively.
It is undisputed that, at all material times, the subject land at Archerfield was zoned by the local authority as “General Industry Area” and not as a “Centre” where retail business may lawfully be conducted[6]. According to Palatella, he told Mornwood’s principal, before the agreement to lease was signed, that the “building was zoned General Industry and could not be used as a retail shop.”[7] A letter of agreement to lease, signed by Mornwood and Halrobe on 22 and 29 July 2004 respectively, specifies the proposed use as “storage and showroom” and records an agreement “to execute ... a lease on the basis set out above”.
[6]Letter Brisbane City Council to solicitor for Halrobe 3 July 2012; Affidavit of Conrad Russell Taylor, town planning consultant, filed 24 July 2012.
[7] Affidavit of Gino Palatella sworn 6 July 2012, paragraph 8.
In essence Mornwood submits that, if its evidence were accepted, a tacit acceptance of unlawful retail trading, contrary to an explicitly non-retail lease, is capable of transmuting, and did transmute that lease into a retail shop lease, so as to attract the Tribunal’s jurisdiction under the RSLA. For reasons we shall now endeavour to explain, it is unnecessary for us to explore this courageous proposition.
In our view Mornwood’s case, so far as jurisdiction is concerned, faces a legislative hurdle that no adjournment, and no evidence of acquiescence, be it ever more persuasive than Mornwood’s meagre evidence on that point, can overcome.
Materially, s 15(1) of the RSLA provides that a lease that begins life as non-retail shop lease cannot acquire the character of a retail shop lease after its commencement, assignment or renewal.[8] It is incontrovertible that this lease began as a non-retail lease. It is clear, both from the Letter of Agreement and the lease instrument itself that whatever description may be applied to this tenancy at some later stage of its existence, it was originally an ordinary commercial lease for non-retail purposes. Accordingly we hold that these proceedings are without the jurisdiction of this Tribunal, and, indeed, should never have been instituted here.
[8] Roseburn Pty Ltd v Eastride Pty Ltd [2009] QSC 159 at [11]-[12].
Section 47 of the Queensland Civil and Administrative Tribunal Act 2009 (‘QCAT Act’) enables the Tribunal to dismiss or strike out a proceeding that is “misconceived” or “lacking in substance”. Those epithets are apt to apply to Mornwood’s present claims. Accordingly, they must either be dismissed or transferred to an appropriate court of law.[9]
[9] Queensland Civil and Administrative Tribunal Act 2009, s 52.
On reflection, we do not consider that an order for transfer should be made. That option was not canvassed in oral argument, although it is considered in the written submissions of counsel for Halrobe. As in M & J Gray Investments Pty Ltd v AMP Pacific Fair Pty Ltd & Ors[10], the existing documentation is hardly suitable for proceedings in the District or Supreme Court. As his Honour Wilson J found in M & J Gray[11] we do not have the assistance of a draft order that might aid an efficient transfer. If Mornwood decides to pursue its cause in either venue it should recast its pleadings in accordance with the Uniform Civil Procedure Rules 1999. The substance of the claim remains res integra, and as the events complained of occurred in 2011, the Limitation of Actions Act 1974 is no obstacle to fresh proceedings.
[10] [2010] QCAT 454.
[11] M & J Gray Investments Pty Ltd v AMP Pacific Fair Pty Ltd & Ors [2010] QCAT 454.
Halrobe has fairly declined to seek an order for costs, although it might have done so.
ORDERS
The proceedings, Application RSL015-12, are dismissed for want of jurisdiction.
No order as to costs.
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