Stremo Pty Ltd v Opal Collections Pty Ltd - [2010] QCAT 707

CITATION:		Stremo Pty Ltd v Opal Collections Pty Ltd [2010] QCAT 707
PARTIES:	Stremo Pty Ltd
v
Opal Collections Pty Ltd

APPLICATION NUMBER:

RSL046-10

MATTER TYPE:

Retail shop leases matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Peta Stilgoe, Member

DELIVERED ON:

5 November 2010

DELIVERED AT:

Brisbane

ORDERS MADE:

The proceeding is dismissed.

CATCHWORDS:

RENT REVIEW – where lease has expired – whether rent review clause is valid – whether rent review clause can still be exercised – whether lessor has waived right to rent review – whether lessor estopped from exercising rent review

APPEARANCES and REPRESENTATION (if any):

This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.

REASONS FOR DECISION

On 8 September 2005, the parties entered into a five year lease of premises. The tenant, Opal Collections Pty Ltd (“Opal”) vacated the premises at the expiration of the term.
The lease provided for a rent review to market in the fourth year of the term. During 2003 and 2004, Stremo Pty Ltd (“Stremo”), by its lawyer, wrote to Opal advising of Stremo’s progress in actioning the rent review. By letter of 26 September 2005, after the lease had expired, Stremo’s lawyers advised Opal that Stremo had calculated the market rent and that it was claiming an additional $56,933.69 rent.
Correspondence between the parties in late 2005 shows that Opal disputed the review to market. There was discussion about the appointment of a specialist valuer but no agreement was reached.
Opal now says that Stremo has no right to exercise the rent review provision because:
a) The rent review provision does not comply with section 27 of the Retail Shop Leases Act 1994 (“RSL Act”) because the lease does not state the timing of the reviews.
b) Section 27 of the RSL Act requires the review to occur during the term of the lease.
c) The rights enlivened by section 28 of the RSL Act occur only if the parties cannot agree on the current market rental in one month after the review date.
d) Stremo’s delay in making a claim for rent review involves prejudice to Opal because its sub-tenant has been wound up, preventing it from recouping any additional rent.
e) Stremo has waived its right to a review to market.

Does the rent review clause comply with section 27 of the RSL Act?

Section 27(1) of the RSL Act says:
“If, under a retail shop lease, the rent payable under the lease or any renewal or extension of the lease is to be reviewed during the term of the lease or under an option to renew or extend the lease, the lease must state the timing of the reviews and the basis on which each review is to be made.”
Clause 1.2 of the lease says: “That the rental hereinbefore reserved and payable shall be increased annually in accordance with item one of the Appendix.”
Relevantly, the Appendix…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Stremo Pty Ltd v Opal Collections Pty Ltd

Details

AGLC: Stremo Pty Ltd v Opal Collections Pty Ltd [2010] QCAT 707
Case: [2010] QCAT 707
Decision Date: 5 November 2010

CaseChat Overview and Summary

Stremo Pty Ltd, the lessor, brought an action against Opal Collections Pty Ltd, the former lessee, seeking to exercise a rent review clause that had been incorporated into a lease that had expired. The primary dispute centred on whether the rent review clause remained valid and enforceable despite the expiration of the lease, and whether the lessor had waived their right to exercise the clause or was estopped from doing so. The case was heard in the Supreme Court of Queensland.

The legal issues before the court involved interpreting the rent review clause and determining its applicability post-lease expiry. The court had to consider whether the clause survived the termination of the lease and if the lessor's actions or conduct amounted to a waiver or estoppel preventing them from enforcing the clause. The court examined the wording of the lease, the conduct of both parties, and relevant case law to address these issues.

In its judgment, the court held that the rent review clause was not exercisable after the lease had expired. It found that the clause was contingent upon the continuation of the lease and, as such, it ceased to have effect once the lease terminated. The court also concluded that there was no evidence of the lessor waiving their right to exercise the rent review clause, nor was the lessor estopped from enforcing it. The court found that the lessor's conduct did not indicate an intention to relinquish their rights under the clause.

The court dismissed the proceeding, ruling that the rent review clause could not be exercised after the lease had expired. The court found that the clause was tied to the existence of the lease and, therefore, it no longer applied once the lease had ended.

Orders

Orders of the court

The proceeding is dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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