A.C.N. 649 487 089 Pty Ltd v Chin Hong Investments Corporation Pty Ltd A.C.N. 087 841 647 as trustee [2025] QCAT 136

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: A.C.N. 649 487 089 Pty Ltd v Chin Hong Investments Corporation Pty Ltd A.C.N. 087 841 647 as trustee [2025] QCAT 136 PARTIES: A.C.N. 649 487 089 PTY LTD (applicant) V CHIN HONG INVESTMENTS CORPORATION PTY LTD A.C.N. 087 841 647 AS TRUSTEE (respondent) APPLICATION NO/S: RSL033-24 MATTER TYPE: Retail shop leases matter DELIVERED ON: 2 April 2025 HEARING DATE: 15 January 2025 HEARD AT: Brisbane DECISION OF: Acting Member Jensen presiding, Member Norling and Member Judge ORDERS: The respondent is required to pay the applicant the amount of $5,500 within 28 days of the date of this order. The applicant’s name in these proceedings be shown as A.C.N. 649 487 089 Pty Ltd instead of Taneisha Beckton Only Deals. CATCHWORDS: LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – OTHER MATTERS – lease – retail shop lease dispute – lessor liable for false or misleading representations – whether compensation payable Retail Shop Leases Act 1994 (Qld), s 42AA, s 83 APPEARANCES & REPRESENTATION: Applicant: Mr S Beckton Respondent: Mr P Wen -- 1 of 8 -- 2 REASONS FOR DECISION Background and issues [1] It is not disputed that: (a) The Springwood Mall shopping centre underwent development from about April 2021 until 20 December 2022; (b) On 24 January 2022, the applicant’s representative, Mr Beckton, met on site with the respondent’s leasing agent, Mr Harvey. What was said at this meeting is a large part of this dispute; (c) On or about 2 February 2022, the applicant executed a letter of offer in respect of shop MMAJ2 in the Springwood Mall, Corner Fitzgerald Ave and Rochedale Road, Springwood, Queensland (the “leased premises”); (d) On or about 30 March 2022, the applicant as lessee and the respondent as lessor subsequently entered into a three year lease (the “lease”) in respect of the leased premises. The lease relevantly provides: (i) The lessor is Chin Hong Investments Corporation Pty Ltd A.C.N. 087 841 647 as trustee; (ii) The lessee is A.C.N. 649 487 089 Pty Ltd; (iii) The lessor would carry out landlord works before handing the site over to the lessee, subject to certain conditions being met by the lessee. After handover, the lessee would carry out the lessee’s fit out works for a period of up to 60 days; (iv) The lease started on 8 April 2022 and was due to end on 7 April 2027; (v) The annual base rental is $133,600 plus GST in year one. Turnover rent is also payable; (vi) The lettable area of the leased premises is 668 square meters. The total number of shops in the Springwood Mall is 49 and the gross lettable area of the Mall is 14,983 square meters; (vii) The permitted use under the lease is retail of discounted clothes, underwear and homeware; and (e) Differences subsequently arose between the parties in relation to the lease which resulted in the applicant lodging a notice of dispute with the Small Business Commissioner and mediation ensued. The parties did not resolve their differences at mediation held on 14 June 2024 and the mediator then referred the dispute to the tribunal. [2] The applicant submits it would not have entered into the lease if it had known the representations made on 24 January 2022 were false. The applicant submits that, contrary to the representations, what eventuated reduced foot traffic in a material way to the wider shopping centre and led to reduced turnover for their retail shop, for which they claim compensation: (a) Woolworths entry representation - the respondent represented that the new Woolworths entry would serve only as an after-hours entry and a direct to boot -- 2 of 8 -- 3 drop off for the store, whereas the new entry became a permanent entry directly to Woolworths. The applicant submits that this facilitated direct entry to Woolworths without the need to use the main or “Target” entrances to the shopping centre; (b) Tenant mix representation - the respondent represented a certain (attractive) tenant mix regarding future tenants, which did not eventuate; (c) Completion of works representation - the respondent represented that the shopping centre development works would be completed by mid-2022, whereas they were not completed until 20 December 2022; (d) Fail to advertise reopening - the respondent failed to advertise the reopening of the shopping centre; and (e) Incomplete lessor works to shop - the applicant also submits that the lessor’s works to the shop were incomplete which adversely impacted its fit out. [3] The applicant seeks the following relief under the Retail Shop Leases Act 1994 (the “RSL”): (a) Public disclosure to all tenants within the shopping centre acknowledging its misleading and deceptive conduct with respect to the material change in foot traffic; (b) A refund of the first six months rental payments plus further rental reductions after that to September 2024; (c) Compensation for transport costs; (d) Payment of move out costs; and (e) Reimbursement of the tribunal filing fee of $379.50. Jurisdiction [4] The tribunal has jurisdiction to hear and determine this dispute which is a retail tenancy dispute. First, the leased premises are a retail shop lease. They are situated within a retail shopping centre and are being used wholly or predominantly for the carrying out of a retail business as listed in schedule 1 of the Regulations to the RSL. Second, a “retail tenancy dispute” is defined in the schedule to the RSL to mean: any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into. [5] Furthermore, this dispute is specifically in reference to false or misleading statements under s 43AA of the RSL. Consideration Woolworths entry representation [6] The applicant submits that during the onsite visit of 24 January 2022, James Harvey, the respondent’s agent, represented to Mr Beckton, a representative of the applicant, that the new entry near Woolworths (depicted in the Springwood Mall Brochure and the Master Lease Plan) would serve as an after-hours entry, similar to an existing fire door. It is further submitted that this entry was also represented by Mr Harvey as the -- 3 of 8 -- 4 access point for the upstairs space, which was expected to be a gymnasium. The respondent denies the representation but accepts that there was an onsite meeting on 24 January 2022. [7] In contrast, the new entry is a permanent and direct door entry to Woolworths for customers rather than their passing through the centre after entering via the main entrance or the Target entrance. [8] When we weigh the evidence of the applicant and Mr Beckton on the one hand and the evidence of the respondent and Mr Harvey on the other, we place more weight on the latter for the following reasons: (a) Mr Harvey emphatically denied making the representation. He gave evidence in cross-examination to the effect that he had no details of the tenancies and that this was his first introduction of a prospective tenant to the centre. He said he had no in-depth knowledge or understanding of any structural changes to the centre or the development plans. The applicant, on the other hand, refers to various drawings and plans in the statement filed in the tribunal on 4 September 2024 which depict proposed access and pedestrian flows to the centre. However, the existence of these drawings and plans is separate from the applicant proving that Mr Harvey made the representation. Moreover, Mr Harvey said in evidence that the purpose of the onsite meeting on 24 January 2022 was only to introduce the applicant to the shopping centre. We find Mr Harvey to be a credible and reliable witness. He gave his evidence under oath and in an honest and direct way. We accept his evidence as to what occurred at the onsite meeting on 24 January 2022. (b) Subsequent to the onsite meeting of 24 January 2022, the applicant lessee agreed in writing that no representations had been made to the tenant. The letter of offer signed by Taneisha Beckton on behalf of the applicant on 2 February 2022 relevantly provides that: The Tenant acknowledges that no promises, representations, warranties or undertakings have been made in relation to the potential use of the premises to be leased or otherwise in relation to the lease unless such representations are in writing and contained in this Offer to Leases …. (c) We place significant weight on this acknowledgment of no representations in the letter of offer because it is given after the on-site meeting on 24 January 2022; (d) There is no such representation contained in the letter of offer or elsewhere in writing; (e) Despite being given every opportunity to do so during the hearing, the applicant was unable to provide any written evidence of this representation having been made until March 2024, just prior to the applicant lodging its application to the Small Business Commissioner, and despite there being extensive emails listing a variety of complaints from the applicant to the respondent during the lease period; and (f) An email dated 17 October 2023 from the applicant’s representative to the respondent’s representative stating that the “new entry at Woolworths … is killing foot traffic … I feel in fairness that the entry should be limited to after hours as it previously was only used after hours or alternately allow -- 4 of 8 -- 5 promotional signage for tenants on the dead end to be able to hopefully drive people into the lower part.” [9] We therefore find that there was no representation regarding the Woolworths entry as claimed by the applicant. Tenant mix representation [10] The applicant claims that at the onsite meeting on 24 January 2022, Mr Harvey represented the shopping centre was to have a certain tenancy mix including: (a) Zaraffas Coffee shop to be built in the lower car park; (b) Boost Juice kiosk would be operating directly opposite the leased premises; (c) The medical centre opposite the leased premises would be a ladies fashion store; (d) The new dining precinct had rental offers from various tenants including Tex Burgers. [11] However, we find that Mr Harvey did not make these representations at the onsite meeting on 24 January 2022 for the following reasons: (a) In evidence, Mr Harvey, whose evidence we accept, emphatically denied the above representations and added in any event that: (i) He had never heard of Tex Burgers; (ii) Had no details on Zaraffas; (iii) Boost Juice would not have been a suitable tenant; (iv) Had no knowledge of a ladies fashion store proposal. (b) Mr Harvey also denies any knowledge of what was going on at the shopping centre in terms of leasing deals regarding Domino’s Pizza and Rockmans, which were named in the leasing brochure given to Mr Harvey for distribution. (c) Mr Wen gave undisputed evidence that Domino’s Pizza and Rockmans were tenants of Springwood Mall at the time the leasing brochure was prepared, but subsequently left the centre. (d) There is also the signed letter of offer mentioned above (signed after the on-site meeting where it is alleged the representations were made) wherein the applicant acknowledges that no representations had been made to the lessee as of 2 February 2022 and no representations are made in the letter of offer itself. Completion of works representation [12] The applicant relies on an email from Mr Harvey dated 18 January 2022 which relevantly provides: Please see attached leasing brochure and master plan for redevelopment of Springwood Mall which will be completed in mid - 2022. [13] It is not disputed that the certificate of occupancy was issued on 20 December 2022. [14] The applicant submits that the delay in reaching completion of the works significantly impacted its tenancy as the ongoing construction works had the effect of reducing foot traffic to the centre. The applicant further submits that had he known about the delay, -- 5 of 8 -- 6 it would have requested a rent-free period until the end of construction or walked away from the lease. [15] In our view, Mr Harvey’s email contains a representation. A representation is a statement that is intended to be true. In this case, we find that Mr Harvey’s statement to the lessee about the completion of the landlord’s works by mid-2022 was intended to be true at the time it was made as it was information being provided by the lessor’s agent to a prospective lessee. The works were not completed as represented and accordingly, the representation is false and or misleading. [16] Under s 43AA of the RSL, the lessor is liable to pay reasonable compensation for loss or damage suffered by the lessee because the lessee entered into the lease on the basis of a false or misleading statement or misrepresentation made by the lessor or any person acting under the lessor’s authority. [17] The applicant claims refund of the first six months rent. It submits that it paid the rent of $8,035.55 per month for the first six months of the lease term plus GST of $803.55. It claims a refund of those payments in the amount of $48,213.30 plus GST of $4,821.33 (total of $53,034.63 inclusive of GST). [18] The respondent has submitted that it has already compensated the applicant for the late completion of the redevelopment by way of abatement of the rent over the period May 2022 to November 2022. (a) The evidence of abatement for May and June 2022 was $22,266.66 plus GST in total. The applicant does not dispute this evidence. (b) In addition, the respondent submits that it applied a 30% monthly abatement for the months of July 2022 to November 2022, (both months inclusive). The total rent abatement is $16,699.99 plus GST for these months. The applicant does not dispute this evidence. [19] In our view, the abatement of the rent provided by the respondent constitutes reasonable compensation by the lessor to the lessee for the false or misleading representation regarding the timing of the completion of the development works, as follows: (a) When compared to the total rent payable for six months of 2022 of $48,213.30 plus GST, the rent abatement for seven months from May to November 2022 of 38,966.65 plus GST constitutes a significant reduction; (b) Sales figures provided by the applicant show an average decline of 8.37% in sales during the months July to November 2022 compared to the same period in 2023. The percentage of rent that was abated over the period was greater than 8.37%. (c) Furthermore, there is evidence that figures were better in the months of August and November 2022 when compared to the same months in 2023;1 This provides a degree of ambiguity as to whether the delay in completing the works affected sales. 1 August 2022 - $48,476 November 2022 - $43,194 August 2023 - $45,362 November 2023 - $42,859 -- 6 of 8 -- 7 [20] We therefore find that no further compensation is payable by the lessor to the lessee for this false or misleading representation. Fail to advertise reopening [21] The applicant submits that the respondent did not advertise the completion of the redevelopment until August 2023 and that the official opening did not occur for a further nine months. These delays in promoting the shopping centre reopening, it is submitted, impacted customer flow to the centre. [22] By contrast, the respondent disputes that there was ever to be a centre reopening because the strategy was to advertise the shopping centre as always open and trading during the construction period. [23] When we weigh the evidence, we are not satisfied that the lessor is liable to the lessee for compensation for what the lessee claims is a failure to advertise the reopening of the centre for the following reasons: (a) There is persuasive evidence from Mr Wen on behalf of the respondent that the respondent kept the retailers and customers informed via meetings, development signage and local newspaper promotions during the construction period in 2021 and 2022;2 (b) There is evidence that as part of the ongoing marketing campaign, the respondent held celebrations: (i) on 25 June 2022 for Woolworths refurbishment; (ii) on 14 December 2022 for Santa Arrival and Christmas; (iii) in April 2023 for Easter; and (iv) on 26 and 27 August 2023 for two days of Spin and Win. (c) During the construction period, there is evidence from Mr Wen that the centre was advertised as open and trading. We place a lot of weight on this evidence; (d) There is no evidence that the shopping centre was closed for any periods of time due to the redevelopment; (e) We find the evidence of Mr Wen reliable and credible. He has provided a document in support of his evidence of the ongoing marketing campaign. (f) The applicant has put its case in a broad way without providing evidence or an independent report that links the claim being made to a reduction in foot traffic to the shopping centre and or turnover for the applicant. [24] We find the lessor has no liability to the lessee for this claim. [25] The applicant also claims a rent reduction of 30% plus GST for the period December 2022 to September 2024. However, there is no persuasive evidence before the tribunal that reasonable compensation should be paid by the lessor over this period (in the form of rental abatement) as a result of a false or misleading statement by the lessor. This 2 Statement of Mr Wen dated 7 October 2024 at paragraph 20 and exhibit PW 20 to the statement of Mr Wen. -- 7 of 8 -- 8 is particularly so in circumstances where the shopping centre was continually open and trading at all times notwithstanding its redevelopment. Incomplete lessor works to tenancy [26] The applicant submits that the landlord’s works were not completed as of 8 March 2022, as represented, and that as a result the applicant was forced to ship stock and fixtures to its Bundaberg location as an interim measure. [27] The applicant has provided evidence of the incomplete works. There are photographs of the leased premises without a ceiling, lighting, air conditioning fire system or electrical outlets. The applicant has also provided invoices from SpeedX Transport for deliveries on 14, 16, 17 and 21 March to Bundaberg totalling $5,500 inclusive of GST. The respondent does not dispute this evidence. [28] We are satisfied on the evidence that the landlord’s works to the tenancy had not been completed by the time represented by Ms Dunn and that as a result, the applicant incurred costs in transporting its stock and fixtures to Bundaberg. [29] We find the respondent liable to the applicant for the amount of $5,500 inclusive of GST. [30] The applicant has only been partly successful with its claim. The tribunal therefore finds it inappropriate to make any of the other orders sought by the applicant. Applicant’s name in the proceedings [31] The applicant’s name in these proceedings is currently shown as Taneisha Beckton Only Deals. However, this is a retail tenancy dispute between a lessee and lessor and the name of the lessee in the lease is A.C.N 649 487 089 Pty Ltd. [32] In our view, the parties to the dispute should be the same as the parties to the lease. [33] The referral to the tribunal showed the applicant as “Only Deals C/- Taneisha Beckton”. [34] The lessee A.C.N 649 487 089 Pty Ltd carries on business under the name of “Only Deals”. [35] In our view, the applicant’s name should appear as A.C.N 649 487 089 Pty Ltd in these proceedings. This is not a change of party because the referral showed Only Deals as the applicant. This is simply a correct recording of the name of the applicant. Orders [36] The respondent is required to pay the applicant the amount of $5,500 within 28 days of the date of this order. [37] The applicant’s name in these proceedings be shown as A.C.N. 649 487 089 Pty Ltd instead of Taneisha Beckton Only Deals -- 8 of 8 --