White v Downes

CITATION:

White v Downes [2012] QCAT 450

PARTIES:	Sheree White (trading as Bizarre Hair) (Applicant)
v
Shane Downes Tanya Downes (Respondents)

APPLICATION NUMBER:

RSL047-12

MATTER TYPE:

Retail shop leases matters

HEARING DATE:

17 September 2012

HEARD AT:

Brisbane

DECISION OF:

Dr J R Forbes, Member
N Judge, Member
D McBryde, Member

DELIVERED ON:

20 September 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

1. It is declared that the tenure of the Applicant is extended, by virtue of the Retail Shop Leases Act 1994, to 3 October 2012.

2. The counterclaim is dismissed.

CATCHWORDS:

LANDLORD AND TENANT – RETAIL AND COMMERICAL TENANCIES LEGISLATION – OBLIGATIONS, PROHIBITED TERMS AND PROTECTION FOR LESSEES – MINIMUM TERM OF LEASE AND RENEWAL OF TERM – where applicant leased property with option to renew – where lessor gave notice to quit after lease expired – whether notice to quit valid – whether landlord entitled to mesne profits

Retail Shop Leases Act 1994, ss 46AA, 83

Coronis v Jilt Pty Ltd & Anor [2012] QCA 66
Hampton v BHP Billiton Minerals Pty Ltd (No 2) [2012] WASC 285
Landers v Schmidt [1983] 1 Qd R 188
Lollis v Loulatzis & Anor [2007] VSC 547
Wilson v Kelly [1957] VR 147

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Ms S White in person

RESPONDENT:

Mr S Downes in person, on behalf of himself and Ms T Downes

REASONS FOR DECISION

Section 46AA

This dispute turns upon s 46AA of the Retail Shop Leases Act 1994 (‘the RSLA’). The area of factual disagreement is limited. The Applicant, Ms White, leased premises in Charters Towers, now owned by the Downes, from 1 November 2005 to 31 October 2007 with an option to renew for another 3 years. She exercised the option, thus extending her tenancy to 31 October 2010. No further option was granted.
Subsection 46AA(2) of the RLSA provides, with respect to leases including no option, that the lessor, within a specified “notice period”[1], must either offer the lessee an extension or make it plain that none will be offered. The apparent intention of the provision is that a lessee should have a reasonable opportunity to make other arrangements, if necessary.
[1] In this case, between 6 and 12 months before the lease will end: RSLA, s 46AA(6)(b).
It is common ground that the lessor did not give any such notice until April 2012, some 19 months after the lease expired.
Subject to s 46AA(4A), considered below, a landlord’s non-compliance with s 46AA(2) results, by operation of law, in an extension of the lease until notice is given.
However, in the light of s 46AA(4A) neglect of the landlord’s duty to give the statutory notice does not attract a sanction unless the lessee seeks an extension before the lease is due to expire.
Ms White states that she posted a letter to her then landlords on 1 August 2010, some three months before the expiry date, and that she received a verbal acknowledgement of receipt. Mr Downes disputes that evidence but adduces nothing to discredit it. We are satisfied, on the balance of probabilities, that that letter was sent and duly received. It refers, inartificially, to the exercise of a non-existent “option”, but in our view it conveys, adequately, a desire to continue the tenancy. For that purpose the Act does not prescribe any particular form.
On or about 15 June 2012 the Downes served a notice to quit, but in the light of s 46AA we do not see that as a lawful termination of the tenancy. If it were, the clear intention of the Act might easily be defeated by a landlord who simply omits to serve a s 46AA(2) notice and seeks to escape the consequences of s 46AA(4) by purporting to end the tenure of a lessee holding over as a monthly tenant. Indeed, the Downes concede that:
Should the Tribunal hold that the letter dated 1/8/2010 from Ms White to [our predecessors in title] was a valid notice under section 46AA(4A) ... then we agree that the Retail Shop Leases Act applies to the original lease ... [so that] it expires on 3 October 2012.
They proceed to argue that the abovementioned notice to quit was valid, but only upon the premises (both of which we reject) that the lessee’s letter of 1 August 2010 was not communicated to the lessors, and was not a valid notice.
Ms White, in a late[2] amendment to her claim, contends that she is entitled to retain the premises until 1 November 2012. The basis of this new submission is that a draft lease sent to her on or about 4 April 2012 is not compatible with the RSLA. Be that as it may, we consider that the Downes are entitled to the same practical and substantive approach that we have taken to Ms White’s letter of 1 August 2012. Whatever its value as a lease instrument, the draft sent on 4 April 2012 shows a willingness to extend or renew the tenancy. And so we reject the submission that the lease, as extended by the Act, ends on 1 November 2012. We find that the documents tendered by the lessors on 4 April 2012 are effectively an offer of renewal or extension, within the meaning of section 46AA(2)(a).
[2] 1 November 2012.
Accordingly we find that Ms White’s lease extends, by operation of law, to 3 October 2012.

Counterclaim

The Downes have counterclaimed for mesne profits.[3] It is unnecessary to consider the calculation of the amount, because, on our view of this case, there is no basis for such an award. Mesne profits are essentially damages for trespass[4], and provided that Ms White vacates the premises on or before 3 October 2012, she cannot properly be described as a trespasser. No alternative case has been made for arrears of rent[5], and there is no contractual or other lawful basis upon which such an award could be made.
[3] Statement 20 August 2012, paragraph 1(b).
[4]Lollis v Loulatzis & Anor [2007] VSC 547 at [228]; Hampton v BHP Billiton Minerals Pty Ltd (No 2) [2012] WASC 285 at [271], [279]; Wilson v Kelly [1957] VR 147 at 152; Landers v Schmidt [1983] 1 Qd R 188 at 197-198; Coronis v Jilt Pty Ltd & Anor [2012] QCA 66.
[5]See letter lessors’ agent to lessee’s solicitors 10 May 2012, at page 2: “At no point has your client agreed to any rent rise”.
We shall make the declaration[6] originally sought by the tenant. The counterclaim for mesne profits will be dismissed.
[6] Retail Shop Leases Act 1994, s 83(1).

ORDERS

It is declared that the tenure of the Applicant is extended, by virtue of the Retail Shop Leases Act 1994, to 3 October 2012.
The counterclaim is dismissed.

The matter before the court involved a dispute between White, the tenant, and Downes, the landlord, regarding the validity of a notice to quit and the entitlement of the landlord to mesne profits. The case was heard in the Supreme Court of New South Wales. The central issue was whether the landlord was entitled to terminate the tenancy and claim mesne profits after the tenant's lease had expired. The tenant argued that the lease should be extended under the provisions of the Retail Shop Leases Act 1994, while the landlord contended that the notice to quit was valid and that they were entitled to mesne profits.

The court was required to determine whether the notice to quit was valid and whether the landlord had the right to claim mesne profits. The primary legal issues included the interpretation of the Retail Shop Leases Act 1994, the validity of the notice to quit, and the consequences of the expiration of the lease term. The court had to consider whether the lease had effectively been extended under the Act and if the landlord's notice to quit was valid. Additionally, the court had to assess whether the landlord was entitled to claim mesne profits after the expiration of the lease term.

The court found that the Retail Shop Leases Act 1994 applied to the lease, extending the tenure of the tenant to 3 October 2012. The court held that the notice to quit was invalid as it was given after the lease had been extended under the Act. Consequently, the landlord was not entitled to claim mesne profits. The court dismissed the landlord's counterclaim, ruling that the notice to quit was invalid and that the tenant's tenure was extended as per the Act. As a result, the landlord was not entitled to mesne profits, and the counterclaim was dismissed.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established