Church of God World Mission Society Inc v Angie Developments Pty Ltd [2025] QCAT 18

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Church of God World Mission Society Inc v Angie Developments Pty Ltd [2025] QCAT 18 PARTIES: CHURCH OF GOD WORLD MISSION SOCIETY INC (applicant) v ANGIE DEVELOPMENTS PTY LTD (respondent) APPLICATION NO/S: RSL058-23 MATTER TYPE: Retail shop leases matter DELIVERED ON: 7 January 2025 HEARING DATE: On Papers Hearing HEARD AT: Brisbane DECISION OF: Member D Brown ORDERS: The application is dismissed CATCHWORDS: LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES – OTHER MATTERS – dispute in relation to return of security bond – where party fails to make good – whether damage is fair wear and tear – whether rent payable for time to make good – where applicant fails to comply with tribunal directions to file material. Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9(1), s 92, s 93 Retail Shop Leases Act 1994 (Qld), s 5A, s 5B, s 5C, s 103(1) Retail Shop Leases Regulation 2016 (Qld), s 8, Sch 1 APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). REASONS FOR DECISION [1] The matter was referred by a mediator on 27 October 2023 after the retail tenancy dispute was unable to be resolved at mediation. The issues in dispute relate to the return of a security bond and whether deductions should be made for make good requirements at the end of the lease in relation to damage to the vinyl flooring. -- 1 of 7 -- 2 Background [2] The applicant, the Church of God World Mission Society Inc, as lessees/tenants entered into a lease agreement for the lease of shop 61, corner of Alfred and Koch Street, Manunda, Qld, for a term of three years commencing 18 April 2018, with options of extensions. Two further options of 1 year leases were signed by the lessor and lessee taking the lease to 17 April 2023 at which time it was held over to a month to month lease, due to the Church of God World Mission Society Inc seeking to end the lease but having been unable to secure a new premise prior to April 2023. [3] A security bond, by way of a bank guarantee, in the amount of $19,447.99 was required to be paid at the commencement of the lease. [4] On 7 June 2023 the Church of God World Mission Society Inc gave one months’ notice of their intention to terminate the lease. [5] On 9 June 2023 the lessor, Angie Developments Pty Ltd, provided the Church of God World Mission Society Inc a letter to confirm the make good obligations of the lessee prior to ending the tenancy.1 On 14 June 2023 the centre manager who was acting as the property management on behalf of Angie Developments Pty Ltd meet with the Church of God World Mission Society Inc to discuss the extent of the make good required and provided them with an email detailing the specifics of the make good requirements within the premise which included the replacement of any damaged floor covering including the section of flooring the Church’s bookshelves had left indentations/gouges in the vinyl.2 [6] There was ongoing discussion between the parties as to the make good requirements and the return of the bond throughout July 2023 and August 2023 and the keys to the premise were returned to Angie Developments Pty Ltd on 28 July 2023.3 The vinyl flooring remained damaged and had not been replaced by the Church of God World Mission Society Inc prior to the return of the keys. Jurisdiction [7] The Tribunal has jurisdiction to determine matters it is empowered to deal with under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) or an enabling Act.4 The enabling Act here is the Retail Shop Leases Act 1994 (Qld) (‘RSLA’). Under the RSLA, the Tribunal has jurisdiction to hear ‘retail tenancy disputes’.5 [8] The phrase ‘retail tenancy dispute’ is defined in the RSLA 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. [9] ‘Retail shop lease’ is defined in the RSLA at section 5A to mean “a lease of a retail shop”. 1 Statement of Sheila Neil dated 16 November 2023, Appendix 1, p 18-21. 2 Ibid, Appendix 1, p 12. 3 Ibid, pages 1-2. 4 QCAT Act, s 9(1). 5 RSLA, s 103(1). -- 2 of 7 -- 3 [10] ‘Retail shop’ is defined in the RSLA at section 5B which provides: Retail shop means premises that are — (a) situated in a retail shopping centre; or (b) used wholly or predominantly for the carrying on of a retail business. [11] ‘Retail business’ is defined in the RSLA at section 5C of the RSLA to mean “a business prescribed by regulation as a retail business”. The regulation referred to in section 5C is the Retail Shop Leases Regulation 2016 (Qld) (‘the Regulation’). [12] Section 8 of the Regulation provides: (1) For section 5C of the Act, a business is a retail business if — (a) it is a business mentioned in schedule 1; or (b) its whole or predominant activity is, or is a combination of, the sale, hire or supply of goods or services mentioned in schedule 1. [13] The predominant activity of the Church of God World Mission Society Inc as stated in the permitted use in the lease is: Church congregation meetings, children’s congregational meetings, deeper level youth programs, band practice and music tutoring and leadership training, women’s and men’s groups meeting areas, multicultural nights, community celebrations and feasts, community church programs.6 [14] This use is clearly not within the definition of a retail business, as it is not a business mentioned within the regulations and is not the combination of, the sale, hire or supply of goods or services mentioned in schedule 1. [15] The location of the business at the corner of Alfred and Koch Street Manunda is, however, in the Raintree Shopping Centre, which means it would therefore meet the definition of a retail shop. [16] A number of exceptions as to what constitutes a ‘retail shop lease’ are contained in subsections 5A(2) and (3). However, neither party has raised any objection to jurisdiction or provided any evidence as to the retail area of the building to evidence that any of these exemptions apply in this matter. [17] The dispute in this matter about the return of the bond and the cost of any make good at the end of the lease does not fail within any of the restrictions on jurisdiction under s 103(1) of the RSLA. Accordingly there is jurisdiction for the Tribunal to determine this matter. Material filed and Procedural Issues [18] The only material before the Tribunal, in addition to the initial referral from the mediator, is material provided by the respondent, Angie Developments Pty Ltd. [19] Directions were made on 7 November 2023 that the Church of God World Mission Society Inc was to file all material they wish to rely upon by 2 January 2024 and Angie Developments Pty Ltd was to file all material they intend to rely upon by 30 January 2024. Only Angie Developments Pty Ltd complied with the directions. 6 Item 12, Reference Schedule of the Lease. -- 3 of 7 -- 4 [20] Further directions were made on 16 July 2024 for the Church of God World Mission Society Inc to file statements of evidence by 5 August 2024 and Angie Developments Pty Ltd to file statements of evidence by 2 September 2024. Directions were again issued on 27 September 2024 for the Church of God World Mission Society Inc to file any further evidence or submission by 1 November 2024 and Angie Developments Pty Ltd to file any further evidence and submissions in response by 29 November 2024. Neither party complied with either of these two directions and no further material has been filed since the response material and statement filed by Angie Developments Pty Ltd in November 2023. [21] The parties were put on notice that regardless of whether the directions were complied with the retail lease dispute would be decided on the papers based on the written material filed, without an oral hearing, on a date to be set after 29 November 2024. This is that decision. [22] As the Church of God World Mission Society Inc has filed no material, the Tribunal has considered s 92 and s 93 of the QCAT Act. [23] The Tribunal has sent all notices of hearing and directions to the Church of God World Mission Society Inc by email to the email address they provided in their request for mediation. There has been no automatic or error responses to suggest that this email address is incorrect or is no longer active. In addition, the Church of God World Mission Society Inc has responded to emails on 2 October 2024 to advise the directions were not correctly attached and on 2 July 2024 when requesting to participate in the compulsory conference by teams. [24] The Tribunal is satisfied that the Church of God World Mission Society Inc is aware of the proceedings and has been given opportunity to provide their evidence to support the application, but has failed to do so, and has been given notice of the hearing as required by section 92 of the QCAT Act. Accordingly the Tribunal is able to deal with the matter in the absence of any material provided by the Church of God World Mission Society Inc.7 [25] It is undisputed by the parties that there were some holes/marks to the vinyl floor and the Church of God World Mission Society Inc did not repair the vinyl flooring before the end of the lease and the returning of the keys to Angie Developments Pty Ltd. [26] The position of the Church of God World Mission Society Inc (as derived from the referral for mediation, noting they have not filed any material) is that they should not be required to pay for the vinyl flooring as it was reasonable wear and tear. They also appear to be suggesting that if they are liable, the full amount should not be paid as Angie Developments Pty Ltd have sought unjust enrichment or betterment, by requiring the entire vinyl floor area to be replaced, and not just the small section which was damaged, and when it was an old floor which would have needed replacing in any case. [27] The Church of God World Mission Society Inc also asserts that they should not have been charged rent until 31 July 2023, but only until 7 July 2023 when their one month notice period ended as they had wanted to return the keys on 7 July 2023, but management would not take them until they finished making good the premise. 7 QCAT Act, s 93. -- 4 of 7 -- 5 Accordingly the Church of God World Mission Society Inc are seeking the full return of their security bond, which was $19,447.99. [28] The position of Angie Developments Pty Ltd is that the Church of God World Mission Society Inc is required to replace the damaged vinyl floor pursuant to clause 31.2.8 of the lease and as the Church of God World Mission Society Inc had not done so, they were entitled to deduct the cost of the repairs from the security bond. Angie Developments Pty Ltd state they attempted to negotiate with the Church of God World Mission Society Inc about the repair to the vinyl flooring to mitigate the loss but were unable to reach a resolution. [29] Angie Developments Pty Ltd states that the none of the make good requirements for the premise were completed on 7 July 2023 when the property manager met with the Church of God World Mission Society Inc to inspect the property and the Church kept the keys to carry out electrical, plumbing, painting and flooring repairs and cleaning. On 14 July 2023 when the property was reinspected by the property manager the other make good was largely completed but the damaged vinyl flooring had not been replaced. [30] It is the respondent’s position that the Church of God World Mission Society Inc as the tenant has an obligation to return the keys at the end of the lease and as the keys were only returned on 28 July 2023, the tenancy did not end until after that day and they were entitled to charged rent up until 31 July 2024 (being the next business day after the keys were returned). As the rent was not paid by the Church of God World Mission Society Inc, Angie Developments Pty Ltd were entitled to deduct the outstanding amount from the bond. [31] A bond amount of $9,083.11 was returned to the Church of God World Mission Society Inc by cheque in October 2023.8 The amount is the bond less the additional rent until 31 July 2023 and less the cost of the repair of the vinyl flooring. The amount deducted for the vinyl flooring was $4,307.27 + GST, which is based on a quote obtained by the Church of God World Mission Society Inc. Findings [32] There is clear provision in the lease, signed by both parties, which requires the Church of God World Mission Society Inc to return the premises to the bare, undamaged shell they were provided in and to give the landlord all keys to the premises, and should the Church of God World Mission Society Inc as the tenant fail to do so, then Angie Developments Pty Ltd as the landlord may conduct the repairs at the Church of God World Mission Society Inc’s cost.9 [33] There are also clear provisions in the lease, signed by both parties, which require the Church of God World Mission Society Inc to replace floor coverings which Angie Developments Pty Ltd reasonably considers are worn or deteriorated or which have been excessively worn, deteriorated or damaged on account of the tenant’s failure to attend to its obligations to keep the premise in good condition and repair.10 [34] The failure by Church of God World Mission Society Inc to comply with the directions and provide any material in support of their application means there is no 8 Respondent’s position statement filed 23 November 2023. 9 Clauses 5.4.1.2 and 5.4.3 of the Lease. 10 Ibid, clauses 31.2.7 and 31.2.8. -- 5 of 7 -- 6 evidence to support their position that the provisions in the lease in relation to their obligation should not apply due to the damage being wear and tear and/or that excessive costs are sought resulting in unjust enrichment or betterment. No evidence, in terms of pictures or specific details of the condition of the flooring either before the lease commenced or at the end of the lease, was ever provided for the Tribunal to consider these issues. [35] There is also no evidence provided to support the Church of God World Mission Society Inc’s position that they tried to return the keys on 7 July 2023 but that Angie Developments Pty Ltd or the property manager as their agent refused to take them. In the initial referral by the mediator and the evidence provided by Angie Developments Pty Ltd there is evidence of the email chain communication between the parties. It is clear there were attempts to negotiate about the repair of the flooring, including Angie Developments Pty Ltd offering to take the repair costs from the bond and end the lease, but there is no discussion about the Church of God World Mission Society Inc’s intention or desire to return the keys. The only mention of keys in the email chains is on 9 June 2023 when the property manager was trying to arrange an earlier date to view the property to discuss the make good requirements. In that email the property manager advised that the Church of God World Mission Society Inc would need to allow time to carry out the make good works prior to returning the keys unless they agreed to pay a settlement sum in lieu of doing the works.11 [36] As vacant possession of the property was not returned to Angie Developments Pty Ltd until 28 July 2023, when the keys were returned to them, it is reasonable for them to charge rent up until the time they received the property back, and given the lack of evidence provided to support the applicant’s position, there is no basis upon which the Tribunal can make an order as requested by Church of God World Mission Society Inc that rent is no longer payable from 7 July 2023. [37] Accordingly there is no basis upon which the tribunal can find that the Church of God World Mission Society Inc is entitled to the return of their full security bond of $19,447.99. [38] Further, given the evidence of Angie Developments Pty Ltd is that they have returned the bond, less the cost for the rent and repair of the flooring to the Church of God World Mission Society Inc, by cheque, sent by mail on 19 October 2023 which tracking records state was received on 25 October 2023, there is no need for any order of the Tribunal in relation to the bond. While it is noted that the information from Angie Developments Pty Ltd was that the cheque had not been banked as of 19 November 2023, the Church of God World Mission Society Inc has not filed any material to dispute this evidence or suggest that the tracking information is wrong and that they have not received the cheque. Therefore on the balance of evidence the Tribunal is satisfied that the return of the security bond (less the outstanding rent and the cost of repairs) has been received by the Church of God World Mission Society Inc. [39] Accordingly the only appropriate order in this matter is that the application is dismissed. 11 Statement of Sheila Neil dated 16 November 2023, Appendix p 14. -- 6 of 7 -- 7 Orders [40] The application is dismissed. -- 7 of 7 --