Reelaw Pty Ltd as trustee v Freeman
[2013] QCAT 518
| CITATION: | Reelaw Pty Ltd as trustee v Freeman [2013] QCAT 518 |
| PARTIES: | Reelaw Pty Ltd as trustee (Applicant) |
| v | |
| Janice Elizabeth Freeman (Respondent) |
| APPLICATION NUMBER: | RSL020-13; RSL021-13 |
| MATTER TYPE: | Retail shop lease matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr J R Forbes, Member |
| DELIVERED ON: | 30 September 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The applicant Reelaw Pty Ltd shall pay to the respondent Janice Elizabeth Freeman, or her solicitors, by way of costs in the matters RSL020-13 and RSL021-13 the total sum of seven thousand eight hundred dollars ($7,800) by 4 pm on Monday 14 October 2013. 2. Leave is granted to the applicant Reelaw Pty Ltd to withdraw applications RSL020-13 and RSL021-13, such leave to take effect upon payment in full of the costs aforesaid. |
| CATCHWORDS: | RETAIL SHOP LEASES ACT 1994 – claims by landlord for arrears of rent and outlays – whether QCAT has jurisdiction to hear and determine those matters – whether proceedings unduly disadvantage respondent tenant - whether proceedings amount to non-compliance with enabling Act – whether proceedings vexatious – whether order for indemnity costs in the interests of justice – whether applicant should have leave to withdraw – order for costs – leave to withdraw effective on payment of costs Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss 32, 46, 47, 48, 102 Queensland Civil and Administrative Tribunal (Jurisdiction Provisions) Amendment Act 2009 (Qld), s 1588 Property Law Act 1974 (Qld), s 131 Henry v Henry (1996) 185 CLR 571 Mellstrom v Garner [1970] 2 All ER 9 |
APPEARANCES and REPRESENTATION (if any):
These matters were jointly heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Notice of Dispute Number 020-13
By an instrument dated 29 September 2011 the applicant, (“the Landlord”), leased to the respondent (“the Tenant”) shops 1 and 2 in premises at 390 Flinders Street, Townsville, for a term of 2 years and 9 months, commencing on 15 April 2011 and due to expire on 14 January 2014.
On 2 October 2012, pursuant to the Property Law Act 1974[1] the Landlord served the Tenant with a notice of termination, alleging inter alia that she was in breach by vacating the premises prior to expiry of that lease, and by failing to pay rent.
[1] Section 131.
On 28 February 2013 the Landlord, in purported pursuance of the Retail Shop Leases Act 1994 (“the RSLA”), issued Notice of Dispute RSL020-13 against the Tenant, claiming payment of an unspecified sum for rent and outgoings allegedly due under the lease.
On 13 June 2013 the Tenant filed a Response and Counter-Application contending, so far as is now material, that, in view of section 103(1)(b) of the RSLA, the Tribunal has no jurisdiction to hear and determine the dispute, and seeking indemnity costs of and incidental to these proceedings.[2]
[2] Response and Counter-Application RSL020-13, 13 June 2013, Annexure “A”, page 1,
Part E.
On 4 July 2013 the Landlord applied for leave to withdraw[3] the application initiated by Notice of Dispute RSL020-13.
[3] QCAT Act s 46(1); QCAT Rules rr 58, 59.
On 15 July 2013 the Landlord commenced proceedings against the Tenant in the Magistrates Court at Townsville, claiming substantially the same relief sought in this Tribunal by Notice of Dispute RSL020-13.
Notice of Dispute 021-13
By an instrument dated 18 January 2011 the applicant, (“the Landlord”), leased to the respondent (“the Tenant”) shop 14 in premises at 390 Flinders Street, Townsville, for a term of 5 years, commencing on 1 August 2010 and due to expire on 31 July 2015.
On 2 October 2012, pursuant to the Property Law Act 1974[4] the Landlord served the Tenant with a notice of termination, alleging inter alia that she was in breach by vacating the premises prior to expiry of the said lease, and by failing to pay rent.
[4] Section 131.
On 28 February 2013 the Landlord, in purported pursuance of the RSLA, issued Notice of Dispute RSL021-13 against the Tenant, claiming payment of an unspecified sum for rent and outgoings alleged to be due under that lease.
On 13 June 2013 the Tenant filed a Response and Counter-Application contending, so far as is now material, that, in view of section 103(1)(b) of the RSLA[5], the Tribunal has no jurisdiction to hear and determine the dispute, and seeking indemnity costs of and incidental to these proceedings.[6]
[5] See paragraph [5], above.
[6] Response and Counter-Application RSL 021-13, 13 June 2013, Annexure “A”, page 1,
Part E.
On 4 July 2013 the Landlord applied for leave to withdraw the application initiated by Notice of Dispute RSL021-13.
On 15 July 2013 the Landlord commenced proceedings against the Tenant in the Magistrates Court at Townsville, claiming substantially the same relief sought in this Tribunal by Notice of Dispute RSL021-13. That action (and the action mentioned in paragraph [6], above) may amount to an abuse of Magistrates Court process:
It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country, if an action is already pending with respect to the matter in issue.[7]
[7] Henry v Henry (1996) 185 CLR 571 at 591 per Dawson, Gaudron, McHugh and
Gummow JJ.
Joint hearing and determination: RSL020-13 and 021-13
The object of this decision is to determine the Tenant’s objection to jurisdiction, and her application for costs in applications numbered RSL020-13 and RSL021-13, as well as the Landlord’s application for leave to withdraw those proceedings.
On the record it is clear that the Landlord’s claim in each proceeding is for arrears of rent and outgoings. It is equally clear, on the face of the RSLA, that such claims are beyond the jurisdiction conferred on the Tribunal by section 103 of that Act, in which subsection 103(1)(b) relevantly provides:
QCAT has jurisdiction to hear retail tenancy disputes, other than a retail tenancy dispute ... (b) about – (i) arrears of rent under a retail shop lease; or ... (ii) the amount of rent payable under a retail shop lease; or (iii) the amount of a lessor’s outgoings under a retail shop lease ...
In 2009 the Act was amended to enable a landlord to counterclaim for rent in compensation proceedings initiated by a tenant[8] but the exclusions mandated by subsection 103(1)(b) still obtain. It follows, unarguably, that QCAT lacks jurisdiction to deal with the applications in question. Subject to the costs issue, it is appropriate to grant leave to withdraw them.
[8] Queensland Civil and Administrative Tribunal (Jurisdiction Provisions) Amendment Act
2009 s 1588, inserting s 103(2)(d) of the RSLA.
The Tenant’s Claim for Costs
In response to directions issued on 11 September 2013 the Tenant filed and served particulars of her costs, claiming $8,800. The Landlord denies liability.
In its submissions of 25 July 2013 the Landlord does not admit the Tenant’s objection to jurisdiction. Curiously, it adopted that stance three weeks after applying for leave to withdraw. The explanation offered is that the Landlord was awaiting the Tribunal’s “advice” on the question of jurisdiction – an inappropriate request to which the Tribunal, quite properly, did not respond.[9]
[9] Draper v British Optical Association [1938] 1 All ER 115; Mellstrom v Garner [1970] 2
All ER 9; Luna Park Ltd v The Commonwealth (1923) 32 CLR 596 at 600 per Knox CJ.
The Landlord says that as early as 9 August 2012, when it first tried to persuade the Tenant to commence proceedings in the Tribunal, the Tenant should then have raised the jurisdictional issue. This is not a tenable argument. It is not “A’s” responsibility to advise “B” how best to sue “A”, save, perhaps, in the most extravagant orders for discovery. The Landlord’s choice of jurisdiction was a matter for it alone. If the choice was made without proper professional advice, or contrary to such advice, then that, too, is its affair.
It can hardly be suggested that the Landlord lacked financial or other means of obtaining competent advice about the proper forum. On the contrary, documents in evidence show that the Landlord engaged solicitors months before it issued the Notices of Dispute. Notices to remedy breach of covenant, dated 10 September 2012 were prepared by one legal firm[10] and subsequent notices of termination by another.[11] I infer that the Landlord knew, or should have known in February 2013 that it could not lawfully pursue its present claims in this Tribunal.
[10] Roberts Nehmer McKee Lawyers Townsville; see also letter from that firm to Tenant,
10 September 2012.
[11] Results Legal Solutions, 2 October 2012.
There is uncontradicted evidence[12] that in an email to the Tenant’s lawyers on 20 June 2013 the Landlord’s property manager stated:
Rather than pursue a suit for its losses the Landlord chose on 25/2/13 to lodge a notice of dispute with QCAT in the hope that a settlement might be reached in the mediation process. ... Your client attended the mediation without representation.
[12] Affidavit of Evangelos Constantinos Sarinas sworn 5 July 2013, paragraph 22,
annexure ECS 6.
Presumably the word “suit” refers to an action in a court of competent common law jurisdiction. This statement may suggest that the Landlord was aware, after all, of the provisions of section 103 of the Act, but nevertheless chose the Tribunal in the hope that mediation might induce a speedy settlement. At all events it is clear from correspondence that the Landlord repeatedly tried to persuade the Tenant to initiate proceedings in the Tribunal.[13] The Tenant’s acceptance of those urgings would have given the Landlord access to the Tribunal by way of counterclaim. This is another circumstance suggesting that, at all material times, the Landlord was well aware of section 103, particularly subsection 103(2)(d).
[13] Letter Landlord to a Member 25 July 2012 page 2; emails from Landlord to
Tenant’s solicitors 9 and 20 August 2012.
Is a costs order warranted?
Do the present circumstances warrant a departure from the general rule[14] to make a costs order in the interests of justice?[15]
[14] QCAT Act s 100.
[15] QCAT Act s 102(1).
In deciding whether to award costs under subsection 102(1) of the QCAT Act, the Tribunal may have regard to several considerations.[16] Relevantly, has the Landlord acted in a way that unnecessarily disadvantages the Tenant? Guidelines for deciding that question include failing to comply with the QCAT Act or an enabling Act[17], and vexatiously conducting a proceeding.[18]
[16] QCAT Act s 102(3).
[17] QCAT Act s 48(1)(b).
[18] QCAT Act s 48(1)(f).
I find that the Landlord failed to comply with an enabling Act, namely the RSLA[19], by instituting matters RSL020-13 and RSL021-13 when it knew or should have known that the Tribunal clearly lacked jurisdiction to entertain them.
[19] RSLA s 103(1)(b).
I also find that the Landlord, in so doing, acted vexatiously. That expression is commonly used interchangeably with the epithets “frivolous or an abuse of process”.[20] Specifically, proceedings are vexatious if they are “brought for collateral purposes” or if, for lack of jurisdiction or other reasons, “they are obviously untenable or so manifestly groundless ... as to be utterly hopeless”[21] – a description perfectly apt to describe these proceedings. It is vexatious to commence an action in a forum that is clearly inappropriate.[22]
[20] Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; Spencer v
Commonwealth of Australia (2010) 241 CLR 118 at 131.
[21] Attorney-General (Vic) v Wentworth (1988) 14 NSWLR 481 at 491; J and C Cabot &
Anor v City of Keilor & Anor [1994] 1 VR 220 at 224.
[22] Laccona v Beyer [2013] VSC 403 at [17], [31].
I am satisfied that this is a proper case for an award of indemnity costs. However, with respect to items 16 and 17 of the Tenant’s particulars,[23] I consider that it would have been simpler and less time-consuming to prepare an application to strike out or dismiss the Landlord’s proceedings under subsection 47(1) of the QCAT Act. Therefore I shall disallow those items in part, and order the Landlord to pay to the Tenant, by way of costs, the sum of $7,800.
[23] Drawing responses and counterclaims.
The Applications for leave to withdraw
I propose to grant the Landlord leave to withdraw, to take effect immediately following payment of $7,800 to the Tenant or her solicitors.
ORDERS
1. The applicant Reelaw Pty Ltd shall pay to the respondent Janice Elizabeth Freeman, or her solicitors, by way of costs in the matters RSL020-13 and RSL021-13 the total sum of seven thousand eight hundred dollars ($7,800) by 4 pm on Monday 14 October 2013.
2.Leave is granted to the applicant Reelaw Pty Ltd to withdraw applications RSL020-13 and RSL021-13, such leave to take effect upon payment in full of the costs aforesaid.
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