Norman Freehold Pty Ltd ATF the N Trust v Norman Power Pty Ltd ATF the Norman Power Trust
[2025] QCATA 88
•2 October 2025
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Norman Freehold Pty Ltd ATF the N Trust v Norman Power Pty Ltd ATF the Norman Power Trust [2025] QCATA 88
PARTIES:
NORMAN FREEHOLD PTY LTD ATF THE N TRUST (applicant/appellant)
v
NORMAN POWER PTY LTD ATF THE NORMAN POWER TRUST (respondent)
APPLICATION NO/S:
APL285-23
ORIGINATING APPLICATION NO/S:
RSL023-21
MATTER TYPE:
Appeals
DELIVERED ON:
2 October 2025
HEARING DATE:
17 September 2025, further written submissions closed 29 September 2025
HEARD AT:
Brisbane
DECISION OF:
Judicial Member Stilgoe OAM
ORDERS:
1. Leave to appeal allowed.
2. Appeal dismissed.
CATCHWORDS:
APPEAL – GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF TRIBUNAL BELOW – IN GENERAL – where parties were lessor and tenant in a lease for a hotel and restaurant – where the effects of COVID-19 meant the tenant struggled to meet obligations under the lease – where specialty delegated legislation was brought in to resolve lease disputes when a tenant is unable to meet its lease obligations – where the parties were unable to negotiate an appropriate rent reduction in accordance with the Regulation and applied to the Tribunal for determination – where the Tribunal found the rent and outgoings ordinarily payable should be ‘shouldered equally’ by giving the tenant a 50% waiver and 50% rent reduction – whether Tribunal erred in its exercise of discretion in awarding the rent relief – whether Tribunal ought to have found a lower percentage of rent relief based on the tenant’s turnover
Queensland Civil and Administrative Tribunal Act 2009 s 142
Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 s 5, s 11, s 13, s 14, s 15, s 16, s 41, s 44, s 45
Alamdo Holdings Pty Ltd v Croc’s Franchising Pty Ltd (No 2) [2023] NSWSC 60, followed
Holman v Campbell [2024] QCA 176, cited
House v The King (1936) 55 CLR 499, applied
Knocker v Esteller [2011] QCATA 89, cited
Lovell v Lovell (1950) 81 CLR 513, applied
Lukac v Bennett [2015] QCATA 134, citedPickering v McArthur [2005] QCA 294, followed
APPEARANCES & REPRESENTATION:
Applicant:
P E O’Brien (instructed by Morgan Conley Solicitors)
Respondent:
D De Jersey KC (instructed by Mullins)
REASONS FOR DECISION
Like many in the hospitality industry, the operator and lessee of the Norman Hotel, Noman Power Pty Ltd atf the Norman Power Trust (the tenant), was adversely affected by the mandatory closures during the COVID-19 pandemic.
In late March 2020, the tenant started negotiating with the lessor, Norman Freehold Pty Ltd atf the N Trust (the lessor), to secure rent relief.
On 9 April 2020, the Commonwealth Government published the National Cabinet Mandatory Code of Conduct to respond to the effect of COVID-19 on small and medium enterprises (the National Code).
On 28 May 2020, the Queensland Government gave effect to the National Code through the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (the Regulation).
The purpose of the National Code, and the Regulation, was to mitigate the effects of COVID-19 on lessors and tenants for the period 29 March 2020 to 30 September 2020 (the response period) by giving effect to the good faith leasing principles set out in the National Code and to establish a process for resolving lease disputes.
Parties were required to cooperate and act reasonably and in good faith.[1] They were required to renegotiate the rent payable.[2] The lessor was required to make an offer that provided for no less than 50% of the rent reduction offered to be in the form of a waiver.[3] The lessor was also required to have regard to:[4]
(a)All the circumstances of the lessee including the reduction in turnover;
(b)The extent to which a failure to reduce rent would compromise the tenant’s ability to comply with its obligations under the lease;
(c)The lessor’s financial position; and
(d)If a portion of the rent includes an amount for land tax, rates or other statutory charges, any deductions in, or waiver of, the amount payable.
[1]Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020s 11.
[2]Ibid s 14.
[3]Ibid s 15(2)(b).
[4]Ibid s 15(2)(c).
The Regulation provided that unresolved disputes could be referred to the Tribunal for determination.[5] The Tribunal could make the orders it considered to be just to resolve the dispute.[6]
[5]Ibid s 41.
[6]Ibid s 44(1).
The parties could not negotiate a rent reduction, so the lessor applied to the Tribunal for a determination.
The Tribunal found that the rent and outgoings ordinarily payable to the lessor should be ‘shouldered equally’ by giving the tenant a 50% rent waiver and a 50% rent deferral[7] (Reasons).
[7]Norman Freehold Pty Ltd ATF the N Trust v Norman Power Pty Ltd ATF the Norman Power Trust [2022] QCAT (unpublished decision) [47].
The lessor wants to appeal that decision. It says the Tribunal below erred in:
(a)Finding that the tenant had ceased trading, which resulted in an inability to generate income;
(b)Concluding that the tenant had “an inability to generate income from its source of revenue” and, as a result, was unable to service its obligations under the lease;
(c)Finding that the lessor contravened s 11 of the Regulation by not acting in good faith;
(d)Finding there was almost a 50% reduction in the tenant’s revenue during the response period;
(e)Allowing an aggregate of a 50% waiver and a 50% deferral, contrary to the terms of the National Code; and
(f)Not correctly applying s 44 of the Regulation.
Under s 142(3)(b) of the Queensland Civil and Tribunal Act 2009, an appeal on a question of fact, or a mixed question of law and fact, requires leave to appeal. Leave is usually granted where it appears that there is a reasonable argument that an error was made such that an appeal would be required to correct a substantial injustice to the applicant that was caused by the error.[8]
[8]Pickering v McArthur [2005] QCA 294 [3], as followed in Holman v Campbell [2024] QCA 176 [39]. See also Lukac v Bennett [2015] QCATA 134 [22]-[24]; Knocker v Esteller [2011] QCAT 89 [12].
The crux of the lessor’s submissions is that the Tribunal did not correctly apply the Regulation or the National Code because, in allowing an aggregate of a 50% waiver and a 50% deferral, the Tribunal gave the tenant 100% rent relief. I will consider that submission first.
Did the Tribunal correctly apply the National Code and/or the Regulation?
The lessor says that the principles of proportionality in the National Code and the Regulation, particularly the example in the National Code, required the Tribunal to give accommodation (rent relief and deferral) that was no greater than the total loss of turnover. On this basis, and using the tenant’s best case, the lessor says that the Tribunal should have given 20.5% rent relief and 20.5% deferral, a total of 41%. The lessor submits that the Tribunal’s order, wrongly, gives the tenant 100% rent relief.
The National Code states, and the parties agree, that the objective of National Code is to have the lessor and tenant share the financial risk of COVID in a ‘proportionate, measured manner’. The lessor submits that this is achieved by applying the example in Appendix 1 of the National Code (the Example). The tenant submits that the Example is a guide only and that the Tribunal retains a discretion to depart from it.
I agree with the tenant that the Example is a guide only and that the Tribunal retains a discretion to depart from it. That view is confirmed by Appendix 1 stating ‘Examples of practical variations reflecting the application of the principle of proportionality may include, but are not limited to: …’ and ‘The parties would be free to make an alternative commercial arrangement to this formula if that is their wish.’
However, the Example is a useful place to start in examining the Tribunal’s reasoning. It starts with this statement: ‘Qualifying tenants would be provided with cash flow relief in proportion to the loss of turnover they have experienced …’.
By [45] of the Reasons, the Tribunal ordered calculation of the rent payable is to be determined by a comparison of turnover with the previous year. The Tribunal did not explain what that meant but it is safe to conclude that this statement reflects the statement in the Example.
The Example goes on the explain the application of the first statement: ‘i.e. a 60% loss of turnover would result in a guaranteed 60% cash flow relief’. Despite both parties submitting a calculation to the Tribunal, its orders do not descend to that level of detail. The only clue to the loss of turnover applicable appears at [39]: ‘a variance of almost 50%’.
The Example continues: ‘At a minimum, half is provided as rent free/rent waiver for the proportion of which the revenue has fallen. Up to half could be through a deferral of rent …’. The use of the word ‘minimum’ suggests that the Tribunal could order an accommodation of more than half of the proportion of which the revenue fell if it considered it was just to do so.
In [47] of the Reasons, the Tribunal ordered: ‘the rent and outgoings ordinarily paid by the lessee is to be shouldered equally by the parties – 50/50.’ That paragraph appears to conform with the example save in one respect – the use of the word ‘ordinarily’.
The example states that the deferred rent could be recouped over at least 24 months. In [48] of the Reasons, the Tribunal ordered that the deferred rent is to be amortised into equal monthly instalments over a two-year period. Again, that statement reflects the Example.
What did the Tribunal intend by the use of the word, ‘ordinarily’?
Clearly, the Tribunal’s choice of words was deliberate:
(a)At [25(a)] of the Reasons, the Tribunal noted the tenant’s proposal that the lessor ‘waive one half of the rent and outgoings ordinarily (my emphasis) payable for the response period (being $538,285.30 inc GST)’.
(b)At [44] of the Reasons, the Tribunal accepted that the relief sought by the tenant was a just outcome which sees the parties shouldering the burdens in a measured and proportionate way, which appropriately balanced the interest of the tenant and lessor.
The Tribunal referenced the Example but found reasons to depart from it because it did not consider a blanket application of the Example to be just and fair. It found that it was just and fair for the tenant to receive more accommodation that was set out in the Example. Because the National Code does not mandate compliance with the Example, and I am satisfied that the Tribunal had proper regard to the National Code and/or the Regulation.
Did the Tribunal err by finding that the tenant had ceased trading?
At [15] of the Reasons, the Tribunal below stated:
As a direct result of the Covid 19 pandemic, Norman Power ceased trading on 23 March 2020 to 12 June 2020 which resulted in an inability to generate income from its source of revenue, namely, food, beverage, and gaming.
The tenant did cease trading on 23 March 2020, as was required. It resumed limited trading in the week ending 13 June 2020.
The tenant’s accounts show that it was able to generate some income in late April/early May 2020 through a takeaway promotion operated from the hotel.
Technically, therefore, the Tribunal’s statement was incorrect. The tenant did cease trading although it did not cease trading for the entire period 23 March to 12 June.
The error did not create a substantial injustice which the Appeal Tribunal should correct.
Did the Tribunal err by concluding the tenant had “an inability to generate income from its source of revenue and, as a result, was unable to service its obligations under the lease”?
The evidence supports a finding that the tenant’s ability to generate income from its traditional sources of revenue was affected but it is not true to say that it had an inability (i.e. no ability) to generate income for that period.
At [16] of the Reasons the Tribunal stated:
(the lessee) was unable to service its obligations under the lease.
It is clear from the tenant’s trading figures, with which the lessor takes no issue, that it could not service the lease obligations from its revenue for any of April, May or June. I can find no error in this statement.
Even if there is an error in the Tribunal’s finding that the tenant had an inability to generate income, it is not an error that created a substantial injustice.
Did the Tribunal err by finding the lessor had not negotiated in good faith?
The failure to negotiate in good faith is one of the matters the Tribunal can take into account when deciding a fair rent relief regime.[9]
[9]Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020s 45.
The National Code’s overarching principles commence with the observation that landlords and tenants share a common interest in working together. It requires the parties to provide ‘sufficient and accurate information within the context of negotiations’. It requires the parties to assist each other.
Section 11 of the Regulation requires the parties to cooperate. Section 14(2) requires the parties to give each other information that is true, accurate, correct and not misleading and sufficient to enable the parties to negotiate in a fair and transparent way.
The lessor submits that, consistent with that interpretation of ‘good faith’, its behaviour was reasonable in the circumstances and not obstructionist. It referred me to the decision of Alamdo Holdings Pty Ltd v Croc’s Franchising Pty Ltd (No 2) in which the Court held that:
In the context of an obligation to negotiate in good faith, the requirement to act honestly or subjectively in good faith in effect requires an absence of bad faith, including not negotiating in an arbitrary or capricious manner.[10]
[10][2023] NSWSC 60 at [229].
The lessor says that its decision to negotiate through lawyers was reasonable, that the notices of breach of covenant were issued before the Regulation was made and that, once the Regulation came into force, it acted appropriately. In particular, the lessor takes issue with the Tribunal’s finding that the dispute could have settled but for the lessor’s actions.
The tenant submits that the Tribunal’s findings are supported by the evidence. It points to the fact that it started negotiations in March 2020 but it was not until June 2020 that the lessor accepted it had sufficient information to engage in negotiations. It noted that the impact of the forced closure should not have been a surprise to the lessor and yet it issued notices to remedy breach and a notice to paint the hotel.
As Counsel for both parties acknowledged, Mr Tabet and Mr Power engaged in ‘robust’ negotiations. That is to be expected from operators of their experience and business acumen. It was also a difficult time for both parties; neither knew when, or if, the restrictions would be lifted.
However, there is some force in the tenant’s submission to the Tribunal below that the lessor was being obstructive or, in the language of Alamdo, ‘arbitrary’. At [35] of the Reasons, the Tribunal listed nine ways in which it found the lessor had not negotiated in good faith. In summary, the Tribunal found that the lessor’s behaviour was obstructionist. Mr Tabet, the controlling mind of the lessor, refused to communicate directly with Mr Power, the controlling mind of the tenant. It issued two notices to remedy breach and one requirement to paint the hotel by 30 October 2020 pursuant to the terms of the lease despite knowing of the difficult trading conditions the tenant was experiencing. It held off negotiating with the tenant until the last possible moment and sought documentary support for the tenant’s assertion.
Under cross examination, Mr Tabet justified his approach to negotiations as necessary to ‘protect his interests’. However, the National Code required parties to:
‘… take into account the fact that the risk of default on commercial leases is ultimately (and already) borne by the landlord. The landlord must not seek to permanently mitigate this risk…’.
The Tribunal was required to consider the extent to which each party had complied with Part 2 of the Regulation – the obligations of lessor and lessees.[11] Clearly, it did so in the exercise of its discretion.
[11]Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 s 44(2).
The Tribunal was also entitled to compensate a party if there was a contravention of s 11 of the Regulation.[12] It did not do so.
[12]Ibid s 44(4).
Given the requirements of the National Code and the Regulation, the Tribunal’s findings were open on the evidence. A differently constituted Tribunal might have come to a different view, but that is not the test on an appeal. I can find no good reason to overturn the Tribunal’s findings.
Did the Tribunal err by finding there was a 50% reduction in Norman Power’s revenue during the response period?
At [39] of the Reasons, the Tribunal found that the tenant’s income in the response period varied by almost 50% compared with the same period in 2019 and that the variance was a direct result of the COVID closures.
The parties agree that, at best, the variance was 41.55%. If the tenant’s receipt of Jobkeeper is included, the difference drops to 26.53%.
The lessor submits that, when a Tribunal is tasked with calculating rent relief, close enough is not good enough, and the Tribunal should have applied accurate figures.
I agree that this is the preferred course, but the Tribunal’s task was not to calculate an entitlement with precision; it was asked to decide what was fair and just in the circumstances.
A close examination of the Reasons reveals that the reference to 50% in [39] of the reasons and the reference to 50% in the [47] of the Reasons are not connected. At [39], the Tribunal was discussing the reduction in turnover. At [47], the Tribunal was assessing what proportion of the rent should be waived and what proportion should be deferred. The apportionment of 50/50 is in line with the Example. That it appears to mirror the reduction in turnover is coincidental.
In fact, the Tribunal’s finding as to turnover was not reflected in its orders. As I have already observed, [45] of the Reasons simply adopts the formula set out in the Example and, as I have already noted, [47] of the Reasons dispenses with the requirement to calculate the drop in turnover altogether.
Should the Tribunal have included the tenant’s receipt of Jobkeeper in its calculation of turnover?
The lessor submits that the Jobkeeper payment should be included in the calculation of ‘turnover’ because of the language of the National Code. It submits that it was a cash injection into the business which offset the tenant’s requirement to meet obligations from its own resources. It submits that, when sharing the effects proportionally and in a measured way, consistently with the National Code, Jobkeeper ought to be included.
The Example is based on loss of turnover. Turnover is not defined in the National Code but it is defined in the Regulation. Section 5(5) states that ‘in this section’ (section 5) turnover ‘does not include a grant or assistance given by the Commonwealth, State or local government to mitigate the effects of the COVID-19 emergency.’
Section 5 is directed to the meaning of ‘affected lease’.
The lessor submits that this definition of turnover is restricted to the operation of s 5 and does not apply to ‘turnover’ where it otherwise appears in the Regulation. I agree but that doesn’t help. I must still give ‘turnover’ a meaning. That meaning should be determined by its ordinary meaning and/or the context in which it appears in the National Code and Regulation.
Section 13(3) – which deals with the lessor’s ability to increase rent during the response period – states that the ‘rent increase is worked out by reference to the turnover of the business carried on…’.
Section 14(2), in giving an example of ‘sufficient information’ refers to ‘accurate information … about the turnover of the lessee’s business’.
Section 15(2)(c)(i) states that the lessor’s offer must have regard to all the circumstances of the lessee including the reduction in turnover of the business carried on at the leased premises during the response period.
Section 16(1), dealing with further negotiations, gives an example of material change as ‘the lessee’s turnover has not increased as significantly as anticipated’.
Each of these sections refer to the tenant’s actual turnover from the business. That use of the term is in keeping with the ordinary, accounting sense of the word as set out in s 328.120 of the Income Tax Assessment Act 1997 (Cth) - the total ordinary income that the entity derives in the income year in the ordinary course of carrying on a business.
Jobkeeper payments were not income generated from the business. The Tribunal correctly identified that the Jobkeeper payments were not trading income.[13]
[13]Reasons at [40].
However, the Jobkeeper payments might be factored into the Tribunal’s deliberation in another way. The National Code’s overarching principles state that any agreed arrangements will take into account the tenant’s revenue, expenses and profitability.
The Tribunal did, in fact, undertake that exercise. At [41] of the Reasons, the Tribunal noted the tenant received Jobkeeper payments. It noted Mr Power’s evidence about the need to retain senior employees if the hotel was to reopen and trade successfully at the end of the response period and that the Jobkeeper payments did not fully cover employee costs. The Tribunal took those factors in consideration when exercising its discretion.[14]
[14]Reasons at [42].
I can find no error in the Tribunal excluding the Jobkeeper payments when considering the tenant’s turnover.
The Tribunal’s exercise of its discretion
I should not interfere with the Tribunal’s exercise of discretion unless it can be shown that the Tribunal acted upon a wrong principle, or made mistakes of fact which affected the decision, or was influenced by irrelevant matters.[15] That I might have exercised the discretion differently, is not a basis for changing the decision: it must be shown that the decision is plainly unjust or unreasonable, and involved a clear misapplication of the discretion.[16]
[15]House v The King (1936) 55 CLR 499, 504.
[16]Lovell v Lovell (1950) 81 CLR 513.
I have already found that the Tribunal’s errors of fact did not affect it decision. I have also found that, in having regard to, but departing from, the Example, the Tribunal did not act upon a wrong principle.
Regardless, was the Tribunal’s decision plainly unjust or unreasonable or did it involve a clear misapplication of its discretion?
At [35(i)] of the Reasons, the Tribunal found the lessor contravened s 11 and that this justified the granting of further relief. The lessor says that the finding necessarily infected the Tribunal’s exercise of its discretion. I have found that the evidence supported the Tribunal’s finding. The Regulation provides that it is a matter that can be considered. The Tribunal did not misapply its discretion.
The Tribunal did not accept the lessor’s submission that the tenant’s financial information was unreliable or misleading.[17] It did not accept the lessor’s submission that the tenant’s loss of turnover was inherently subject to the vicissitudes of trade in the hotel industry.[18]
[17]At [36].
[18]At [37].
The evidence also showed the lessor to be in a superior financial position,[19] in that it had not passed on any land tax relief as required by the Regulation[20] and the tenant continued to suffer financial pain after the response period. The evidence shows that the tenant, although suffering this financial pain, attempted to meet its obligations under the Lease the best it could and by 2 November 2020 (albeit after the response period) had paid a substantial part of its lease obligations.[21] Indeed, the parties agreed that as at the date of the hearing , the tenant had paid the lessor close to half of what would have been ordinarily payable under the lease ($476,050.48). These are all factors the Tribunal could, and did, consider in coming to its decision.
[19]Appeal Record Book, p 227 – Statement of Mazen Tabet dated 7 July 2021 [25]; Appeal Record Book, p 258 – Statement of James Gerard Power dated 30 July 2021 [24].
[20]Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 s 15(2)(c)(iv). See Appeal Record Book, pp 144, 258, 315, 488.
[21]Appeal Record Book, p 503.
Conclusion
I understand that the lessor considers the Tribunal’s decision is unjust and/or unreasonable because the tenant was favoured with a 100% rent accommodation for the response period.
That is a generous result and, given the same facts, I probably would not have come to the same result.
But that is not the test. The National Code and the Regulation gave the Tribunal a wide discretion. The Tribunal’s findings are open on the evidence and it has explained its reasons for coming to its decision which show that it applied the discretion objectively.
Orders
1. Leave to appeal allowed.
2. Appeal dismissed.
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