Sparway Pty Ltd v Ross River Road Mechanical Pty Ltd
[2016] QCAT 470
•9 December 2016
| CITATION: | Sparway Pty Ltd v Ross River Road Mechanical Pty Ltd [2016] QCAT 470 |
| PARTIES: | Sparway Pty Ltd (Applicant) |
| v | |
| Ross River Road Mechanical Pty Ltd (Respondent) |
| APPLICATION NUMBER: | RSL010-16 |
| MATTER TYPE: | Retail shop leases matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Deane |
| DELIVERED ON: | 9 December 2016 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application is transferred to the minor civil dispute list under MCDO2415/16. 2. Sparway Pty Ltd and Ross River Road Mechanical Pty Ltd may file in the Tribunal one (1) copy and give to the other party one (1) copy of any further submissions upon which it wishes to rely in MCDO2415/16, by 4:00pm 13 January 2017. 3. The application for a minor civil dispute MCDO2415/16 will be determined on the papers without an oral hearing unless any party requests an oral hearing not before 4:00pm 13 January 2017. |
| CATCHWORDS: | STATE AND TERRITORY COURTS: Retail Shop Leases Act 1994 (Qld), s 83, s 103, Schedule |
APPEARANCES:
| APPLICANT: | Sparway Pty Ltd |
| RESPONDENT: | No appearance |
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).
REPRESENTATIVES:
| APPLICANT: | represented by Mr D.A. Hopwood in house solicitor |
| RESPONDENT: | Nil |
REASONS FOR DECISION
Sparway Pty Ltd leases property at Ross River Road, Townsville. It subleased part of the property to Ross River Road Mechanical Pty Ltd (RRRM). By Notice of Dispute filed 1 December 2015, Sparway claimed various amounts payable by RRRM under the terms of the lease. Sparway contends that RRRM:
a) vacated the premises prior to the lease term expiring;
b) owed rent at the time it vacated the premises against which it applied a bank guarantee;
c) was liable for damages for breach of the lease:
i)in the nature of rent, which would have been paid for the balance of the term;
ii)pursuant to its obligation to leave the premises clean, make good and to paint the premises prior to the expiration of the lease.
d) was required to pay interest on amounts owing and costs.
I am satisfied that RRRM has notice of the proceedings and the claims being made. There is evidence on the Tribunal file that on 23 December 2015, the Tribunal served a copy of the Notice of Dispute on RRRM at its registered office. RRRM has not filed a Response to the Notice of Dispute despite a number of directions being made allowing it the opportunity to do so. It has not participated in these proceedings. In response to directions sent to RRRM, a director of RRRM advised the Tribunal Registry by email on 14 March 2016 that RRRM would not be ‘attending’.
Although RRRM has not disputed the relief sought the Tribunal must be satisfied that it has power to make the orders sought and be satisfied that the orders are appropriate in the circumstances.
Does QCAT have jurisdiction to determine this dispute under the Retail Shop Leases Act?
Sparway contends that the Tribunal has jurisdiction under the Retail Shop Leases Act 1994 (Qld) (the RSL Act) to order payment of the amounts claimed.[1]
[1]RSL Act, s83(2)(b).
I find that the Tribunal does not have jurisdiction under the RSL Act to determine this dispute. I am not satisfied that it is a ‘retail tenancy dispute’ as I am not satisfied RRRM carried on a ‘retail business’, as defined.
The Tribunal has no inherent jurisdiction. The Tribunal’s original jurisdiction is the jurisdiction conferred by an enabling Act, such as the RSL Act, to decide a matter in the first instance and the minor civil disputes jurisdiction.[2]
[2]QCAT Act, s 10.
The Tribunal has power to make orders it considers to be just to resolve a retail tenancy dispute.[3] The RSL Act definition of ‘retail tenancy dispute’ relevantly includes ‘any dispute under or about a retail shop lease’. [4]
[3]RSL Act, s83(1).
[4]RSL Act, Schedule.
The RSL Act definition of:
a) ‘retail shop lease’ means a ‘lease of a retail shop’.[5]
b) ‘retail shop’ means ‘premises that are used wholly or predominantly for the carrying on of 1 or more retail businesses.’[6]
c) ‘retail business’ means ‘a business prescribed by regulation as a retail business’.[7]
[5]Ibid.
[6]Ibid.
[7]Ibid.
Regulation 9 of the Retail Shop Leases Regulations 2006 (Qld) provides
(1) A business is a retail business if—
(a) it is a business mentioned in the schedule; or
(b) its whole or predominant activity is, or is a combination
of, the sale, hire or supply of goods or services mentioned in the schedule.
(2) The wholesale sale of goods is not a retail business.
Sparway contends that the business conducted by RRRM is prescribed in the Schedule i.e. ‘Miscellaneous Retailing – motor vehicle accessories’.
Sparway contends that the lease permitted RRRM to operate a mechanical workshop and that it also retailed motor vehicle accessories. The permitted use under the lease was stated as ‘workshop’.[8] The lease Schedule at item 1 also describes the premises as
The Workshop (being related to the service station) being part of the Land as described in item 2 and as hatched on the attached plan.
[8]Lease, clause 19.1 and Schedule: Item 16.
On the evidence available, I am not satisfied that RRRM operated a business of retailing motor vehicle accessories so as to fall within regulation 9(1)(a) as distinct from a business as a mechanical workshop, which as an ancillary offering sold motor vehicle accessories.
Sparway does not point to any other relevant business prescribed in the Schedule. In view of the permitted use, I am not satisfied that the retailing of motor vehicle accessories was the predominant activity so as to fall within regulation 9(1)(b). Mechanical workshop is not listed in the Schedule.
I am therefore not satisfied that the premises were a retail shop and therefore I am not satisfied that the dispute is a retail tenancy dispute.
Does QCAT have jurisdiction to determine this dispute as a minor civil dispute?
In the alternative, Sparway contend that the Tribunal has jurisdiction to hear and determine this claim as a minor civil dispute.[9]
[9]QCAT Act, s11.
I find that the dispute is a minor civil dispute and should be transferred to the relevant list within the Tribunal for determination.
Sparway points to the definition of a minor civil dispute as a dispute that consists of a claim to recover a debt or liquidated demand of money with or without interest up to the prescribed amount.[10] ‘Prescribed amount’ is defined to mean $25,000.[11] Sparway agrees, to the extent necessary, to limit its claim to the prescribed amount.
[10]Ibid, Schedule 3, definition 1(a).
[11]Ibid, Schedule 3
On the information before me, not all the claims made are for debts or liquidated amounts. Sparway has claimed for damages for failure to paint the premises one month before expiry of the lease,[12] damages for failing to keep the premises clean and tidy[13] and damages for failing to give the premises back in the same condition as they were in at the start of the lease and make good any damage.[14] Those claims are for unliquidated damages as it is necessary for the Tribunal to have regard to the evidence provided in support of the claim and are to be calculated by reference to invoices or quotes.[15]
[12]Lease, clause 21.4.
[13]Lease, clause 21.1.
[14]Lease, clause 23.1.
[15]Practice Direction 9 of 2010.
The primary claim has been expressed in terms of a damages claim in respect of rent, that would have been payable after RRRM vacated the premises until the end of the term. At the time of commencement of these proceedings, the Tribunal did not have jurisdiction to hear a claim for arrears of rent under a retail shop lease and this has apparently affected the characterisation of the claim.[16]
[16]RSL Act, s103(1)(b)(i).
There is no evidence or submissions about whether Sparway accepted RRRM’s breach and terminated the lease and there is no evidence of any attempt to mitigate Sparway’s damages by seeking another tenant. The proceedings were not commenced until after the lease term expired. In these circumstances, it seems more likely that the claim is in fact for arrears of rent. I note that this is consistent with the claim made for interest on rental payments as they fell due.[17]
[17]Submissions filed 25 August 2016 at [19].
The definition of minor civil dispute also includes a claim arising out of a contract between two or more traders for payment of money of a value of not more than the prescribed amount.[18] A ‘trader’ means a person who in trade or commerce carries on a business of supplying goods or providing services.[19] Although there is limited evidence before me, I am satisfied, on the balance of probabilities, that Sparway carries on a business of supplying goods or providing services. There is evidence that Sparway leased property and then sub-leased part of it. Having regard to the description of the premises in the lease, it is likely that Sparway either carries on the business of a service station on part of the land or sub-leases that part of the land to another entity. As set out earlier in these reasons, RRRM carried on the business of a mechanical workshop from leased premises.
[18]QCAT Act, Schedule 3, definition 1(b)(i).
[19]Ibid, Schedule 3, definition 1(a)(i).
A dispute between traders is not restricted to a dispute for a debt or liquidated demand[20] and may be between corporations.[21]
[20]Behan v Wechsels Auto Services [2010] QCATA 67.
[21]Acts Interpretation Act 1954 (Qld), s32D.
The Tribunal is obliged to afford the parties procedural fairness.[22] In view of my finding, that the claim falls within the minor civil disputes jurisdiction of the Tribunal but for reasons other than as claimed by Sparway and notified to RRRM, it is appropriate to allow the parties an opportunity to make submissions prior to me proceeding to determine the claim as a minor civil dispute.
[22]QCAT Act, s28.
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