Rhee v Surfrider Investments Pty Ltd

[2012] QCAT 431

CITATION: Rhee and Anor v Surfrider Investments Pty Ltd [2012] QCAT 431

PARTIES:	Jing Wan Rhee and Konklai Rhee trading as Thai Ruby Restaurant (Applicant/Appellant)
v
Surfrider Investments Pty Ltd (Respondent)

APPLICATION NUMBER: RSL105-11

MATTER TYPE: Retail shop leases matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Michelle Howard, Acting Senior Member

DELIVERED ON: 10 September 2012

DELIVERED AT: Brisbane

ORDERS MADE:

1.    The application of Surfrider Investments Pty Ltd to dismiss the notice of dispute is refused.

2.    That Jing Wan Rhee and Konklai Rhee trading as Thai Ruby Restaurant must pay costs fixed in the sum of $500 to Surfrider Investments Pty Ltd within 14 days of this order.

3.    Jing Wan Rhee and Konklai Rhee trading as Thai Ruby Restaurant must file in the Tribunal four (4) copies and give to Surfrider Investments Pty Ltd one (1) copy if its amended notice of dispute by 4:00 pm on 28 September 2012.

4.    Directions numbered 1, 5, 6, 7 and 8 of 24 May 2012 are cancelled.

5.    Surfrider Investments Pty Ltd must file in the Tribunal four (4) copies and give to Mr Jong Wan Rhee and Mrs Konklai Rhee t/as Thai Ruby Restaurant one (1) copy of any response to the application by 4:00 pm on 19 October 2012.

6.    Mr Jong Wan Rhee & Mrs Konklai Rhee t/as Thai Ruby Restaurant must file in the Tribunal four (4) copies and give to Surfrider Investments Pty Ltd one (1) copy of all material upon which they intend to rely by 4:00 pm on 16 November 2012.  That material must:

(a)     Set out the exact terms of the order which the Tribunal has asked to make;

(b)    Contains statements of all witnesses upon whom Mr Jong Wan Rhee & Mrs Konklai Rhee t/as Thai Ruby Restaurant 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;

(d)   If monetary compensation is sought, the material must also set out:

(i)     The amount sought;

(ii)    The basis on which is claimed; and

(iii)   Details as to how the amount claimed is calculated.

6.     Surfrider Investments Pty Ltd must file in the Tribunal four (4) copies and give to Mr Jong Wan Rhee & Mrs Konklai Rhee t/as Thai Ruby Restaurant one (1) copy of all material upon which it intends to rely by 4:00 pm on 14 December 2012.  That material must:

(a)     Contains statements of all witnesses upon whom Surfrider Investments 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.

7.     The directions hearing listed for 11 September 2012 in Brisbane is cancelled.

8.     The Compulsory conference listed for 24 September 2012 at the Gold Coast is cancelled.

9.    The application is listed for a directions hearing at Brisbane at 11.00 am on 5 February 2013.

10.     The application is listed for a Compulsory conference at Gold Coast at 10:00 am on 28 February 2013.

CATCHWORDS:

APPLICATION FOR DISMISSAL – EARLY END TO PROCEEDINGS – where proceedings filed on same day in Supreme Court and QCAT – where Supreme Court proceedings regarding whether termination of lease valid only – where compensation sought by lessee – where lessee claim proposed to be amended

Queensland Civil and Administrative Tribunal Act 2009, s 47

APPEARANCES and REPRESENTATION (if any):

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

REASONS FOR DECISION

1. A notice of dispute under the Retail Shop Leases Act 1994 (the RSL Act) was lodged with the chief executive by Mr Jong Wan Rhee and Ms Konklai Rhee trading as Thai Ruby Restaurant on 26 October 2011. It was referred to the Tribunal in May 2012 by a mediator under section 63 of the RSL Act. Both parties were granted leave for legal representation on 2 July 2012.

2. The lessor, Surfrider Investments Pty Ltd, has filed an application seeking orders dismissing the notice of dispute and costs totalling $6,050 under section 47 of the QCAT Act. Costs are sought not only for all steps taken in the Tribunal, but for the period that the parties attended mediation, before the dispute was referred to the Tribunal. Of this amount $1,200 is claimed in respect of preparation of the application for dismissal, and $800 for subsequent attendances in respect of the application relating to it.

3. Section 47 provides for the Tribunal to dismiss or strike out a proceeding or part of it when a proceeding or part of it is frivolous, vexatious or misconceived; lacking in substance or otherwise an abuse of process. As an alternative, the Tribunal may also make an order for costs against the party who brought the proceeding to compensate another party for any reasonable costs, expenses, loss and inconvenience and embarrassment.

4. Surfrider says that it successfully brought proceedings in the Supreme Court of Queensland on 26 October 2011 seeking a declaration that it had validly terminated the lease with Mr and Ms Rhee. It seems to argue in part that because of this, the Tribunal has no jurisdiction to entertain the application because it has been determined by the Supreme Court. Surfrider also argues that Mr and Mrs Rhee cannot succeed on any claim for breach of lease because the lease was terminated validly. It further argues that the amount claimed by Mr and Ms Rhee under the RSL Act exceeds the Tribunal’s monetary limit of $750,000 and that it is not within QCAT’s jurisdiction to award relief under the Competition and Consumer Act 2010 which is also claimed by Mr and Ms Rhee.

5. Mr and Ms Rhee propose to amend their application to clarify that the various amounts they claim as damages and compensation are expressly limited to the Tribunal’s monetary jurisdiction, and to remove the claim under the Competition and Consumer Act 2010.  The notice initially filed also sought an injunction restraining Surfrider from taking possession of the premises.  However, in view of subsequent events and the Supreme Court proceedings, they propose to delete reference to this claim.  In respect of the merits of their claim for compensation for breach of lease which relate to loss of an option for renewal, they submit that this issue requires determination by the Tribunal on its merits, and is not so manifestly untenable that it could not succeed so as to warrant summary dismissal.  They refer to Osman v Juniper Property Holdings No 15 Pty Ltd[1] where, they say, it seems to have been accepted that compensation may be payable in these circumstances.

   [1]        [2008] QRSLT 16.

6. To summarise, they propose to amend their notice of dispute so that the only claims for determination by the Tribunal relate to compensation under the RSL Act, including compensation relating to termination of the lease. They submit that the issues determined by the Supreme Court did not extend to compensation, only whether the lease was validly terminated.

7. As I understand the material, there are no ongoing proceedings before the Supreme Court.  Surfrider has provided a copy of the transcript of the oral reasons for decision of the Supreme Court regarding the application for a declaration.  It is apparent that compensation was not a matter before the Court, which specifically noted that making the declaration did not affect the position regarding compensation for termination of the lease.[2]

   [2]Transcript, Supreme Court of Queensland, McMurdo J, 9696/2011, 9 November 2011, 1-17, lines 20-30.

8. At this stage, the application is misconceived to the extent that the claim under the Competition and Consumer Act 2010 is clearly not within the Tribunal’s jurisdiction.  Further, it is at least unclear on the present application whether the monetary amounts claimed are cumulative, or specified on some other basis, and whether they exceed the Tribunal’s jurisdictional limit. 

9. In my view, in relation to the claim regarding the breach of lease, it is not so clear and obvious that the claim can not succeed, that it should be struck out.[3]  There are no matters which the Tribunal is asked to address which have already been determined by the Supreme Court.

   [3]A case must be very clear to warrant striking out of the claim: see for example, Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Hubbuck& Sons Ltd v Wilkinson, Heywood & Clark Ltd [1899] 1 QB 86.

[10]If the amendments proposed by Mr and Mrs Rhee are allowed and the application amended as indicated, those parts of the proceeding which are currently outside of the Tribunal’s jurisdiction would be excised.  All applications would be within the Tribunal’s jurisdiction.  In my view, Mr and Mrs Rhee should be allowed to amend their application.

[11]Should there be an order for costs under section 47 in recognition that some parts of the current application are misconceived? Section 107(1) of the QCAT Act provides for costs to be fixed if possible when an order is made.

[12]Directions were made on 24 May 2012 for Surfrider to file a response to the notice of dispute.  However, Surfrider has not done so at this stage.  Also, directions were made on that same date for both parties to subsequently file and serve their witness statements to be relied upon at hearing.  However, those directions have not been complied with by either party.

[13]Also, I make the observation that it was inevitable that the claim before the Tribunal would require amendment in view of proceedings being brought in Supreme Court on the same day as the notice of dispute was filed.  On the material before me, neither party could reasonably be considered responsible for the costs associated with this co-incidence.

[14]Therefore, it appears that the only costs incurred by Surfrider as a result of the identified deficiencies in the notice of dispute which fall within those categories specified in s 47 relate to bringing the application for miscellaneous matters itself. The application itself was brought on 20 June 2012, that is, before leave was granted for legal representation on 2 July 2012. Since then both have each filed their submissions in respect of this strike out application. The amount of $1,200 is claimed in respect of the dismissal application and a further $800 for costs incurred since the application for attendances relating to it and providing written submissions. However, some of those additional costs for attendances were, it is clear from the attachments to Surfrider’s submissions, incurred before 2 July 2012.

[15]I do not consider it in the interests of justice to make an order for legal costs which were incurred prior to the granting of leave for legal representation.  I am prepared to make an award for costs incurred after the order granting leave was made.  The costs claimed include other attendances some which occurred prior to 2 July 2012.  In the circumstances, I consider that an award of $500 in costs is appropriate in the interests of justice.

[16]I make orders for the amendment of the notice of dispute and for Mr and Mrs Rhee to pay costs fixed in the amount of $500 to Surfrider within 14 days of these orders.  As the Tribunal’s previous directions for the filing of material in the substantive application have not been complied with pending determination of this application, I will also make fresh directions in this regard.