Sticky Fingers Pty Ltd v Klooster - [2012] QCAT 256

CITATION:

Sticky Fingers Pty Ltd v Klooster [2012] QCAT 256

PARTIES:	Sticky Fingers Pty Ltd (Applicant)
v
Frank Klooster (Respondent)

APPLICATION NUMBER:

RSL009-10

MATTER TYPE:

Retail shop leases matters

HEARING DATE:

16 December 2011

HEARD AT:

Brisbane

DECISION OF:

Dr P McDermott, Member
Mr N Judge, Member
Mr D McBryde, Member

DELIVERED ON:

18 June 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

The Queensland Civil and Administrative Tribunal dismisses the claim of Sticky Fingers (Qld) Pty Ltd (the applicant) against Frank Klooster (the respondent) for compensation.

CATCHWORDS:

Compensation where the lessor substantially restricted the lessee’s access to the leased shop – unconscionable conduct – no proof of damage – application dismissed

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Mr A Netherwood

RESPONDENT:

Mr F Klooster

REASONS FOR DECISION

Introduction

This application concerns a retail tenancy dispute under the Retail Shop Leasing Act 1994 (RSL Act) which relates to a claim by Sticky Fingers Pty Ltd (the applicant) against Mr Frank Klooster (the respondent).
This is the rehearing of an application for compensation brought by the applicant against the respondent. The application was originally heard by a differently constituted Tribunal which held that the respondent was liable to pay compensation for a wrongful refusal of consent to the assignment of a lease where a refusal was purportedly made on 15 December 2009 in circumstances where there was evidence that the respondent had tendered a deed of assignment to the assignee. On appeal it has been held that compensation is not an available remedy in these circumstances.
A direction has been made that this Tribunal should hear and determine whether a claim for compensation is available for loss or damage suffered by the lessee because the lessor substantially restricted the lessee’s access to the leased shop RSL Act, s 43(1)(a). A direction has also been made that this Tribunal should hear and determine whether compensation is available for unconscionable conduct: RSL Act, s 46A(1).

Leased Premises

The property which is subject to the lease is a café at Montville known as Poppys, being Shop 15 at Montville Village Square situated on land described as Lot 15 on BUP104141, County of March, Parish of Maleny, Title Reference 50120057 (“the shop”).
The applicant and respondent are parties to a deed of variation of a lease of property dated 20 June 2007. The original lessee under the lease, which was executed on 14 April 1999, assigned all her rights under the lease to the applicant on 12 February 2004. On 18 February 2004 the term of the lease was renewed for a term of 3 years commencing on 14 April 2004. The applicant exercised an option of renewal to renew the lease for a term of three years commencing on 14 April 2007.

History of the Matter

On 2 December 2009 the applicant entered into a contract to assign the lease for the shop to Mr Ross Taylor for $32,500. Mr Taylor was to have paid cash for the café business. The settlement date under the contract was 16 December 2009.
On 7 December 2009 the solicitors for the applicant requested the consent of the respondent to the assignment of the lease.
On 8 December 2009 the solicitors for the respondent wrote to the solicitors for the applicant and requested a number of documents so that their client could consider granting his consent to the assignment. The documents requested by the applicant included a statement of assets and liabilities of the assignee that was certified by a qualified accountant; the history of past business dealings of the assignee; details of borrowings necessary to complete the purchase and evidence of the provision of the purchase monies; two written trade references for the assignee and two written character references for the assignee.
In response to that letter various documents were provided to the solicitors for the respondent. The documents included a letter from Ross Taylor outlining his experience, a resume of Ross Taylor, a resume of Evelyn Taylor who would be involved in the business but would not be a party to the lease, character references as well as certificates from Evelyn Taylor. The respondent did not make any enquiries of those who wrote the character references. As well as those documents, a statement of assets of Ross Taylor was provided but that statement was not verified by a qualified accountant as requested.
On 11 December 2009 the solicitors for the respondent wrote to the respondent to ascertain whether “you will accept the statement or insist on it being certified by an accountant”. The respondent did not instruct his solicitors to insist that the statement be verified by an accountant.
In that letter of 11 December 2009, the solicitors for the respondent also remarked that apart from vehicles and furniture the only real asset that was owned by the assignee was cash of $25,000. The solicitors advised the respondent in the following terms: “If you are prepared to consent to the assignment, you may wish to consider asking the assignee to pay a bond of say, 3 to 6 months rent so that you hold some security in the event the tenant defaults. We note that the current lease does not require a bond to be paid by the tenant”. This recommendation was not acted upon by the respondent.
In that letter of 11 December 2009 the solicitors for the respondent also advised the respondent as follows: “the assignee does not propose to obtain financial advice or legal advice on the terms of the lease and therefore the [legal advice and financial advice] reports will not be provided”. The solicitors sought instructions from the respondent as follows: “Would you please advise whether you require these reports to be provided by the assignee or whether you will waive this requirement”. The respondent did not request Mr Taylor, the proposed assignee, to provide those reports.
The respondent in his email to his solicitor on 14 December 2009 (3:52pm) remarked:
“The current tenant seems to be parting with his business at a bargain price, so I am sure that a more suitable tenant may be found, even at the risk of the current tenant not extending”.
On 15 December 2010 the solicitors for the respondent wrote to the solicitors for the applicant in the following terms:
“I refer to your request to assign the lease received on 7 December 2009.
My client has considered the information provided by the assignee.
My client has instructed that it is not satisfied with the information provided by the assignee and consent to the assignment of the lease is refused on the basis that clause 4.2 of the lease has not been satisfied.”
On 15 December 2009 the applicant sent an email to his solicitors after having discussions with the respondent. In that email the applicant remarked: “Frank has been asked to assign a lease to a guy with little to no experience, few assets and a distinct cash flow shortfall. I wouldn’t assign either”. In giving evidence before us the applicant remarked that he had written that email only after having had discussions with the respondent and without having seen what actual material that had been provided to the respondent by Mr Taylor, the proposed assignee.

On 16 December 2009 (1:38pm) the applicant wrote an email to the respondent in which the respondent was advised that the applicant would not be exercising the option to renew the lease for a further term. In that email he also remarked:
“If it’s any reassurance then I will personally guarantee the rent for 6 months – you can have that drawn as an official lawyer document or accept my Gentlemen’s agreement – I will not default, but then nor do I suspect there will be a need to.
If a new buyer is not found then I shall have the hassle of having to remove all my fixtures & fittings, all my plant and equipment and trying to sell them separately.
In addition I would probably have to decorate before I hand over”.
The respondent replied to that email on 16 December 2009 (2:32pm) in the following terms: “Though I sympathise with your concerns, my position remains unchanged”.

The applicant soon after replied on 16 December 2009 (3:15pm) in the following terms: “Even with a 6 months guarantee, that’s quite a reasonable guarantee what do you need from me to make this happen?” The respondent did not respond to that email.

On 4 January 2010 the solicitors for the respondent wrote to Mr and Mrs Netherwood, directors of the applicant, claiming that the applicant was in breach of lease. Enclosed with that letter was a “Notice to Remedy Breach of Covenant” under s 124 of the Property Law Act1974. That letter contained a demand for the payment of $563.96 for legal costs incurred by the respondent in providing the notice. The letter also advised the applicant that it had fourteen days in which to remedy the breach.

The “Notice to Remedy Breach of Covenant” referred to a “covenant by the lessee to keep the premises open for trade or business, and the breach by you of that covenant”. The notice also contained the statement: “I give you notice and require you to remedy that breach by opening the Premises for trade or business”. There is no evidence that the respondent had ever raised the issue of the alleged breach of covenant with Mr Netherwood prior to issuing the notice.

On 11 January 2010 the applicant wrote to the respondent in the following terms:
“I need to make arrangements to strip out the fixtures and fittings or of course you may wish to let the unit in a state of readiness for trade – as an ongoing concern – in which case you may be interested in purchasing the fixtures and fittings. To prepare the bare shell for trade would be a significant outlay for a new tenant, I conservatively estimate around $60,000 – the purchase and fitting of the exhaust fan and s/s canopy alone would be in excess of $7,000. Currently there are a couple of interested parties in buying Poppy’s and that surely would be the best solution all round – a new tenant saves us both significant inconvenience. I do hope that we can come to some agreement over the matter. After 6 years we have had few disagreements so it is a shame it has to end so sourly”.
On 12 January 2010 the respondent wrote to the applicant in the following terms:
“I have no problems in you re-assigning the lease and I agree it to be your best solution. However, it is up to you to qualify the buyer as I will not let the lease to anyone who cannot show that they are capable of serving and supporting the terms of the lease”.
Mr Alan Netherwood, a director of the applicant, gave evidence that on the evening of 27 January 2010 he had received a telephone call from the respondent in which the respondent advised that he had changed the locks at the shop. Mr Netherwood, in giving evidence, remarked that the respondent had declined to wait at the shop to enable him to remove equipment. The respondent in giving evidence remarked that it would not have been “safe” for him to remain at the shop as he had just changed the locks. We infer from those remarks that the respondent was concerned for his personal safety.

Mr Netherwood in his evidence remarked that when he arrived at the shop he noticed that some of the trading stock of the applicant had been deposited in the courtyard. He remarked that the respondent had taken frozen chickens from the shop and left them in the courtyard. Mr Netherwood said that his being locked out of the shop left him with no access to equipment, such as tables, chairs, an oven and a microwave, that he needed to use in his other nearby business, the Coffee Pot.

At this time when the respondent had purported to exercise the right of re-entry the applicant had not been in arrears of rent for the lease. In fact the applicant continued to pay rent and outgoings to the respondent until the end of the lease. Mr Netherwood had also not received any prior warning from the respondent that he would change the locks on the shop or remove trading stock from the premises. Mr Netherwood reiterated in his evidence that he required access to the shop to obtain equipment so that he could trade at the Coffee Pot.

On 28 January 2010 Mr Netherwood wrote a letter to his solicitor which detailed a conversation that he had with the respondent:
“Urgently need to speak to you early today.
At 8pm last night (Thursday) I received a phone call from Frank Klosster he has changed the locks in Poppy’s and taken possession.
He removed some (but not all) of my trading stock the majority of which belonged to the Coffee Pot and placed this in the courtyard for me – highly dodgy with frozen chicken etc defrosting everywhere.
He has removed 4 out of 6 tables and 9 out of 24 chairs that belonged to the Coffee Pot and placed these in the courtyard – I have no access to the other chairs and tables I need to open the Coffee Pot correctly.
There is also an oven, microwave and other Coffee Pot stuff stored in Poppy’s that I cannot access.
He refused me access to remove this, he has also refused me access to remove Poppy’s fixtures and fittings.
He would not wait for 15 minutes till Karen returned home, so I could not get down to see him at Poppy’s (small children at home).
He states that he will be reasonable and allow me to negotiate with a new tenant with regard to purchase of my fixtures and fittings.
He states that if a new tenant does not want them he will sell them at auction and I will get the proceeds.
Other than the letter of breach, which we have discussed I have had no intention that this was to happen – no notice served”.
Only after receiving advice from the police, Mr Netherwood then proceeded to remove some equipment from the shop. The fact that Mr Netherwood had acted on the advice of the police is evident from an email that was sent to him on 29 January 2010 by the respondent:
“Alan,
I received a phone call from the police this morning who felt it okay for you to re-enter the premises. He was wrong and was told this. On checking with my lawyers it had been verified that you were “Breaking and Entering”. This will not be tolerated, any further attempt to enter the premises for ANY reason will be swiftly dealt with. Meanwhile, formal complaints against the policeman’s comments are being made. I offered you the courtesy of possible negotiations with an incoming tenant, this has now been revoked and all fittings shall be removed from the premises and the building made good. Please advise in the next 24 hours as to which fittings you want on removal, failure to advise shall see them disposed of.
Please also note that 50% of the courtyard belongs with Poppy’s Lease and is not to be used for trade from your other shops.
Regards
Frank Klooster”

Notice of Dispute

The dispute between the parties is set out in a Notice of Dispute dated 4 February 2010 and filed on 5 February 2010.
In the Notice of Dispute the applicant claimed the following remedies:
[i]     Compensation – $27,350 ($32,500 lost sale less 25% of value of removed fixtures rrp $20,596).
[ii]    Compensation – $7,365 ($6023 rent, $494 rates, $284 body corporate, $564 breach of lease) for costs since 16th December 2009 that would not have been incurred had the sale been completed.
[iii]   Compensation – $3,180 (equivalent to 25% of rrp value of $12,735) for fixtures in the shop to which the applicant had no access and could not remove namely an exhaust fan and stainless steel canopy, a hot food display unit and a fridge and deli display. The applicant has now withdrawn this claim for fixtures.
Later, the applicant, by letter dated 25 February 2010, added to his dispute a claim that he had received from the respondent on 24 February 2010 for $7,370 “for the de-fit and making good of Lot 15”.

Consideration

Compensation for loss or damage suffered by the lessee because the lessor substantially restricted the lessee’s access to the leased shop RSL Act, s 43(1)(a)

We now proceed to consider whether we should award compensation to the applicant for substantially restricting access to the shop. Under s 43(1) of the RSL Act a lessor is liable to pay to the lessee reasonable compensation for loss or damage suffered by the lessee because the lessor, or a person acting under the lessor's authority substantially restricts the lessee's access to the leased shop.
There is no issue that Mr Klooster had substantially restricted access to the shop. The fact that he had changed the locks meant that he had denied Mr Netherwood access to the shop. The terms of his email of 29 January 2010 make it clear that Mr Klooster had informed Mr Netherwood that he was not allowed to re-enter the premises. Mr Netherwood had been effectively threated by criminal prosecution if he entered the shop.
The “Notice to Remedy Breach of Covenant” referred to a “covenant by the lessee to keep the premises open for trade or business, and the breach by you of that covenant”. However, the lease does not contain a covenant in those actual terms. Rather, the covenant in question, in clause 4.6 of the lease, is a “covenant by the lessee to keep the premises open for trade or business during ordinary business hours as is customary”. The respondent has submitted: “At worst it is a mistake in not setting out the specific clause and not allowing some further time to rectify the breach”: submissions 30 November 2011, [31]. We are firmly of the view that the “Notice to Remedy Breach of Covenant” was defective in not fairly stating the actual terms of the covenant in clause 4.6 of the lease. For that reason we consider that the “Notice to Remedy Breach of Covenant” was void.
Quite apart from this it still remained necessary to consider what the customary hours of opening the shop were. Mr Netherwood has given unchallenged evidence of the custom that related to the opening of the shop. The tenor of the evidence of the applicant was that he opened the shop during tourist demand, but that it would not be opened in quiet periods. Having regard to the fact that the shop is located in a location visited by tourists, it can be expected that there would be different fluctuations of tourist traffic at different times of the year. In submissions, the applicant remarked that the previous lessee would close the shop during February. The applicant submitted that the shop was closed most Februarys due to lack of trade. This is evidence of the fact that as a matter of custom the shop opened to meet the needs of tourist demand. There is no evidence that the applicant had not opened the shop when there was tourist demand. Indeed, the tenor of the evidence of Mr Netherwood was that he would open both shops if there was sufficient demand.
In his final reply, the respondent made the submission: “It is a fundamental term of the lease that the premises be open for trade at the times nominated in the Lease”. However, the lease does not contain any specified times or hours of operation.
We do not consider that the applicant was in breach of the lease as alleged in the “Notice of Remedy Breach of Covenant”. We therefore do not consider that there is any lawful justification for the lockout and restriction on the applicant from entering the shop. In any event we consider that the fact that the notice only gave the applicant 14 days to correct what was regarded as a breach was unreasonable considering that the applicant would have to recruit staff. We have earlier referred to the fact that the applicant had stated that there was a “a mistake in not … allowing some further time to rectify the breach”.
We have been directed to consider “that claim, as made” ([2011] QCATA at [32]). The claim of the applicant relates to the lost sale to Mr Taylor. The claim does not relate to any loss sustained by the applicant following the lockout. In the circumstances we have reservations as to whether we can award compensation for loss which is not articulated in the claim. In any event we have concluded that there is no evidence of any loss which has been sustained by the applicant because it had been prevented from entering the shop. Before this reconstituted Tribunal we were told that the applicant stated that it did not intend to trade at the shop following the refusal of the respondent to consent to an assignment. We therefore do not consider that any compensation can be properly awarded for any future loss of profits which are not claimed in any event. The Tribunal does not have any evidence of any loss sustained by the applicant following the lockout of the premises.

In the circumstances we consider that an award of compensation cannot be properly made under s 43(1)(a). We reiterate that the claim in the Notice of Dispute relates to the loss claimed by the applicant before and not after the lockout.

Unconscionable conduct, RSL Act, s 46A(1)

Subsection 46A(1) of the RS Act provides that a lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable.
The applicant has raised a number of matters as constituting unconscionable conduct by the respondent. We have considered each of these matters.
The applicant submits that it was unconscionable for the respondent to issue a notice of breach of covenant for failure to keep the premises open for trade or business when there was no definition of customary business hours. We do not consider the mere issue by the respondent of an invalid notice would be unconscionable conduct.
The applicant also submitted that the respondent engaged in unconscionable conduct in demanding an unreasonable degree of documentation from the proposed assignee and failing to disclose the depth of information he had received during a telephone call on 15 December 2009 with a representative of the applicant as well as failing to disclose during that call that he had already instructed his solicitors to refuse to assign the lease. We consider that such conduct would not itself constitute unconscionable conduct particularly as the proposed assignee had not provided any legal advice and financial advice reports. We particularly note that the applicant in an email dated 15 December 2009 to his solicitors indicated that in light of the shortfall of information that he would not assign either. We also refer to clause 4.2 of the Lease which provides for the Lessee to provide “the onus of proof thereof to the satisfaction of the Lessor” in respect of the information to be supplied by the proposed Assignee.
The applicant has submitted that the unwillingness of the respondent to negotiate the terms and conditions of the assignment of the lease as being unconscionable. Again, we do not consider that there is no basis for regarding this of itself as unconscionable conduct particularly as the proposed assignee had not provided any legal advice and financial advice reports.
The applicant has submitted that the respondent was unconscionable in commencing proceedings in the Magistrates Court when the same issues were before the Tribunal and obtaining default judgment. We point out that the respondent was able to obtain default judgement only because the applicant had failed to take steps to protect its own interests by filing a defence. This conduct in commencing proceedings in the Magistrates Court would not in our view be unconscionable conduct.
The applicant has alleged another basis upon which to make a finding of unconscionability. This is “Mr Klooster’s actions were calculated to prevent Sticky Fingers from any future opportunity of selling the business and exercising its rights under the lease to remove its fixtures from the shop”. There are a number of matters that QCAT can have regard to in deciding whether a party to a retail tenancy dispute has engaged in unconscionable conduct in connection with the retail shop lease: RSL Act, s 46(2). In particular we have considered whether the actions of the respondent which were calculated to prevent Sticky Fingers from any future opportunity of selling the business these matters. This particular submission fairly raises for consideration whether the respondent has “acted in good faith”: s 46(2)(k).
At the rehearing one of the Tribunal members asked the respondent about the terms of an email that he wrote to his solicitor on 14 December 2009 (3:52pm): in that email he remarked:
“The current tenant seems to be parting with his business at a bargain price, so I am sure that a more suitable tenant may be found, even at the risk of the current tenant not extending”.
The only explanation that was given by the respondent was that the email to his solicitor was a privileged document. In considering this explanation we recognise that there is no evidence of any express waiver of privilege by the respondent. However, we have considered whether there is any evidence of any implied waiver of legal professional privilege. In Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 Aboriginal people claimed that they were the traditional owners of certain land in the Northern Territory. The claimants had lodged a claim book with the Aboriginal Land Commissioner who was to hear the application. The claim book was given to other parties to that claim. When the inquiry commenced counsel for the claimants tendered the claim book. Certain documents referred to in the claim book were certainly protected by legal professional privilege. The question that arose was whether the publication of the claim book was in itself a waiver of legal professional privilege in respect of the privileged documents referred to in that claim book. We are guided by the relevant principles which were outlined by Gibbs CJ (at 481):
‘There was of course no express waiver in the present case and there is nothing to suggest that the claimants had any actual intention to waive privilege in the source documents. The principle applicable in these circumstances seems to me to be well stated in Wigmore, op. cit., par. 2327:
"In deciding it, regard must be had to the double elements that are predicated in every waiver, i.e., not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final."
The decisions in which this question has been considered seem to me to be particular applications of the rule that in a case where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production. Thus it has been held that the privilege in respect of a document is not waived by the mere reference to that document in pleadings (Roberts v. Oppenhemi; Buttes Oil Co. v. Hammer [No. 3]) or in an affidavit (Lyell v. Kennedy; Infields, Ltd. v. P. Rosen & Son; Tate & Lyle "International Co. Ltd. v. Government Trading Corporation", The Times, 24 October 1984), although the position will be different if the document is reproduced in full in the pleading or affidavit: Buttes Oil Co. v. Hammer [No 3]. These cases may be explained by saying that it is not unfair or misleading to refer to a document in a pleading or affidavit which is not put into evidence but that if the document is set out in full the privilege is waived. A fortiori, of course, privilege in respect of materials used in drawing a pleading or an affidavit and not referred to therein, would not lose their privilege because they had been used in that way.’
This is not a case where the email that the applicant had written to his solicitor on 14 December 2009 was merely referred to in some other document that is in evidence. The email was put in evidence before the Tribunal. Having regard to the considerations set out by Gibbs CJ in Attorney-General for the Northern Territory v Maurice we consider that it would not be unfair to have regard to the fact that the document was disclosed by the respondent. What is clear is that on that date the respondent expressed concern about the price that could be obtained for the sale of the business. The price in the contract of sale of the business is not really a matter that the respondent would have an interest in unless the respondent was himself hoping to sell the business.
The email that the respondent wrote to his solicitor on 14 December 2009 should be contrasted with an email that the applicant later received from the respondent. We have earlier mentioned that on 12 January 2010 the respondent wrote to the applicant in the following terms:
“I have no problems in you re-assigning the lease and I agree it to be your best solution. However, it is up to you to qualify the buyer as I will not let the lease to anyone who cannot show that they are capable of serving and supporting the terms of the lease”.
That email was sent to the applicant only after the applicant had notified the respondent of its intention to remove fixtures.
We do not accept that on 12 January 2010 the respondent had written that email to the applicant in good faith. This is because in the month prior to him writing that letter he had expressed his concern to his solicitor at business being sold at a “bargain price”. We make the inference that the respondent was himself hoping to sell the business rather than facilitate the applicant selling the business. However, to sell the business he first had to gain possession of the shop and to also have the shop fittings intact. This is why on 4 January 2010 the solicitors for the respondent wrote to Mr and Mrs Netherwood, as directors of the applicant, claiming that it was then in breach of lease. Enclosed with that letter was a “Notice to Remedy Breach of Covenant” under s 124 of the Property Law Act1974.
If the respondent was concerned about the shop not being open for trade he could certainly have raised this issue with the applicant. We infer that the respondent had issued the “Notice to Remedy Breach of Covenant” so that he could himself sell the business. In the proceedings the applicant claimed that he had an interest in protecting his investment by ensuring that the café was open for business. However, at no time prior to the notice had the respondent raised this issue with the applicant. The respondent had changed the locks to prevent the applicant from removing the fixtures and fittings. Before this occurred the applicant had notified the respondent of its intention to remove fixtures.
We have given some consideration to the circumstances in which the respondent purported to exercise his rights of re-entry. The circumstances in which the respondent so acted was, in our view, calculated to prevent the applicant from exercising the right under the lease to remove the fixtures from the shop.
At one point in giving evidence at a previous hearing the respondent made the observation that the applicant had left “abandoned” property at the shop. This remark was presumably made in the context of clause 8.5 of the lease which provides that should the lessee fail to remove its fixtures and fittings within seven days of the expiry of the lease or sooner determination, the fixtures and fittings of the applicant shall be deemed abandoned and shall become the property of the landlord. This suggestion of abandonment is also reflected in the final submissions of the respondent who has contended:
“Essentially, the Applicant and Guarantor under the Lease breached the Lease by abandoning the premises and by removing fixtures and fittings and I was put to cost and expense as a result of their actions”.
There could not, in our view, be any basis for a finding that the applicant had left “abandoned” property. The applicant had, in his email of 11 January 2010, given the respondent clear notice of its intention to remove its fixtures and fittings. The applicant certainly could not retrieve the fixtures and fittings after the locks were changed at the shop. There is certainly no evidence that Mr or Mrs Netherwood, as directors of the applicant, had indicated they abandoned possession of the shop upon which they ensured that rent was paid for the duration of the lease.
There is also no evidence upon which we would be prepared to make an inference that the applicant abandoned possession of the shop. The fact that the applicant was proposing to assign the lease to Mr Taylor, was endeavouring to find another purchaser of the business and was proposing to remove fixtures is, in our view, inconsistent with the notion of abandonment: cf Tehidy Minerals Ltd v Norman [1972] 2 QB 528 at 553; Grill v Hockey (1991) 5 BPR 11,421; Bookville Pty Ltd v O’Loghlen [1998] VSCA 27 at [14].
In our view the proper operation of clause 8.5 of the lease required that the lessee should have been given an opportunity of removing any fixtures and fittings. That the respondent wanted to prevent the applicant from exercising the right under the lease to remove the fixtures from the shop is apparent from the following written submissions of the respondent:
“Mr Netherwood was in breach of his lease, failed to remedy the breach and was subsequently locked out of the premises. He took it upon himself to break into the premises and removed 80% of the fixtures, an action totally uncalled for. He was advised prior to and after the break in that I had no interest in the fixtures and fittings and would work with him in finding a buyer for them. He was later given all the remaining fittings that were of interest to him. No fittings remain in the shop or in my possession”.
We appreciate that it was in the interests of the respondent for there to be fixtures in the shop, such a shop would be far easier for the respondent to let than a vacant shop. However, the applicant certainly had a right under the lease to take its fixtures and fittings; this right was conferred by clause 8.5 of the lease. Whilst the respondent regards this as “an action totally uncalled for”, the right to remove the fittings was a contractual right that could be exercised by the applicant under the lease.
We accept the submission of the applicant that the conduct of the respondent in restricting the access of the applicant was certainly opportunistic. The conduct of the respondent was also in our view unconscionable conduct as the respondent did not act in good faith. The respondent told the applicant that he could still reassign the lease but then changed the locks. The applicant would face difficulties in selling a business that it has been locked out of. The fact that the respondent after changing the locks placed frozen chickens and furniture in the courtyard is also indicative of the lack of good faith of the respondent.
The RSL Act provides that if the Tribunal finds a party to the dispute engaged in unconscionable conduct certain orders can be made: s 83(3)(a). However, we do not consider that the applicant should be awarded compensation for this unconscionable conduct. This is because following the refusal of assignment the applicant had advised the respondent that it did not intend to trade from the shop. We therefore do not consider that the applicant can claim compensation for unconscionable conduct.

Magistrates Court

At the rehearing of the application the respondent took exception to the declaratory order that was made by the Tribunal that the applicant is not liable to pay to the respondent the sum of $7,370.00 for payment for the “de-fit” to Troy Ware Constructions as well as cost of $564 paid to Sykes Pearson Miller Lawyers for the Notice to Remedy Breach of Lease. This declaratory order was affirmed on appeal. The respondent claims that the declaratory order should be set aside because a notice under s 124 of the Property Law Act 1974 was served upon the applicant before the lodgement of a dispute notice. Reliance was placed upon s 94(3)(a) of the RSL Act which had not been previously relied upon by the respondent either at the original hearing or on appeal.
At the original hearing Mr Netherwood in giving evidence remarked that he had been sued by the respondent in the Magistrates Court for some $10,000.00. The statement of claim was filed in the Noosa Registry of the Magistrates Court on 4 June 2010 after the lodgement of the dispute notice. The statement of claim is a claim by the respondent against the applicant and Mr and Mrs Netherwood as guarantors for the sum of $10,008.64, and is a claim for breach of lease and for breach of the guarantee.
The claim for a breach of the lease is based upon the following allegation: "Continuously from and on or before November 2008 and through to 4 January 2010 the First Defendant did not keep the café/takeaway shop open for trade or business during ordinary working hours as it was required to do by clause 4.3 of the lease" (para 5). This allegation does not refer to clause 4.6 of the lease which requires the Lessee to keep the shop open "during ordinary business hours as is customary". Clause 4.3 of the lease does not contain a clause that relates to the hours of opening of the shop.
The substantial part of the Magistrates Court claim relates to the "de-fit" of the shop. The statement of claim contains the following allegation: "By clause 8.5 of the lease and if at the expiration of the lease, the First Defendant failed to remove all trade fixtures the Plaintiff would be entitled to remove all trade fixtures and to recover from the First Defendant its costs incurred of doing so" (para 3, particular (i)(F)". We consider that this allegation does not fairly reflect the terms of clause 8.5 which only enables "the Lessor to make goods (sic) all such damage" and to recover the cost of the damage from the Lessee where that damage was caused by the removal of fixtures by the Lessee. The clause provides for "abandoned" fixtures to become the property of the Lessor, but does not entitle the Lessor to recover the cost of removal of abandoned fixtures.
The particulars of the Magistrates Court claim lists a number of items of expenditure that are alleged to be caused by the breach of lease by the applicant. These are $220 for payment to North Coast Locks; $357 for payment to APN Newspapers; $99 for payment to O'Dea Signs and $1,962.14 for legal fees payable to Sykes Pearson Miller Lawyers. We note that $705.85 which is claimed for the Notice to Remedy Breach of Covenant is greater than the sum of $564 that was previously claimed by the respondent for this item of expenditure. We particularly note that the claim of legal fees does not include any costs in relation to the assignment to the Taylors. The respondent did not before this Tribunal claim those particular expenses from the applicant.
This Tribunal has previously made a declaratory order to refer to those items of expenditure which have previously before this Tribunal for consideration. This Tribunal has previously concluded that there is no basis for the claim against the applicant of $7,370 for payment to Troy Ware Constructions as well as the claimed legal costs of $564 paid to Sykes Pearson Miller Lawyers for the Notice to Remedy Breach of Lease.
We do not consider we should revoke the declaratory order for a number of reasons. First, we do not have jurisdiction to set aside the declaratory order which was affirmed on appeal. Secondly, we are not satisfied that the notice to remedy breach was properly served so as to exclude the jurisdiction of QCAT. Under s 347(1)(d) of the Property Law Act1974 a notice may be served on a corporation by leaving it or by posting it as a letter addressed in either case to the corporation at its registered office or principal place of business in the State. There is no evidence that the notice was properly served upon the applicant, which is a corporation, as required by s 347(1)(d). The notice was addressed to the applicant at Poppys which was then closed. It is doubtful whether those premises could then be regarded as the “principal place of business in the State”: see s 347(1)(d). Thirdly, to set aside the declaratory order would be an exercise in futility as the judgment in the Magistrates Court to which the declaratory order relates has been set aside. If we made a decision to revoke the declaratory order that decision would not operate to reinstate the judgement. We also comment that the declaratory order did not apply to all of the items of claim before the Magistrates Court.

ORDER

The application of Sticky Fingers (Qld) Pty Ltd (the applicant) for compensation is dismissed.