BP Foods Pty Ltd v Aventus Sunshine Coast Pty Ltd [2024] QCAT 104

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: BP Foods Pty Ltd v Aventus Sunshine Coast Pty Ltd [2024] QCAT 104 PARTIES: BP FOODS PTY LTD (IN LIQUIDATION) (applicant) V AVENTUS SUNSHINE COAST PTY LTD (respondent) V RUDI SNYMAN (cross-respondent) APPLICATION NO/S: RSL083-20 MATTER TYPE: Retail shop leases matter DELIVERED ON: 26 February 2024 HEARD AT: Brisbane DECISION OF: Member Lember (Presiding) Member Judge Member Kairl ORDERS: 1. The counterapplication filed 29 March 2021 is dismissed. CATCHWORDS: LANDLORD AND TENANT - RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – OTHER MATTERS – where application by tenant previously struck out - where counterapplication brought against applicant and its guarantor as cross-respondent – where applicant and cross- respondent are non-responsive to counterapplication – whether to award compensation, interest and costs sought – where compensation claims have merit but are not supported by evidence Corporations Act 2001 (Cth) s 465A, s 471B Property Law Act 1974 (Qld) s 124 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 28, s 32, s 100, s 102, Retail Shop Leases Act 1994 (Qld) s 83, s 103, Schedule Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Briginshaw v Briginshaw ((1938) 60 CLR 336 -- 1 of 6 -- 2 Robinson v Harman [1848] Eng R 135; 1 Exch 850 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 What is the application about? [1] Under a lease dated 26 February 2019 (the lease), BP Foods Pty Ltd (in liquidation) (BP) was to operate a supermarket/café trading as “Foodlovers Fresh” from premises at Shop 8A, 100 Maroochydore Rd, Maroochydore (the premises). Rudi Snyman (Snyman) and Adele Snyman guaranteed BP’s obligations under the lease to the lessor, Aventus Sunshine Coast Pty Ltd (Aventus). [2] By a Notice of Dispute filed 23 March 2020, BP initiated a retail shop lease dispute against Aventus, to which Aventus filed a counterapplication on 29 March 2021. [3] Adele Snyman entered bankruptcy on 20 August 2020. [4] BP’s claim against Aventus was struck out by the tribunal on 14 March 2023. [5] BP was wound up in liquidation on 30 October 2023 pursuant to section 465A(2) of the Corporations Act 2001 (Cth) and accordingly leave of the Federal or Supreme Court is required under section 471B for the claim against it to proceed. No such leave has been tendered. [6] Accordingly, this decision finalises the counterapplication against Snyman only, as the remaining guarantor to BP’s obligations to Aventus under the lease. Background to the dispute [7] On 26 February 2019, the parties entered a lease of the premises for a fixed term of seven years commencing 18 March 2019 (the lease). [8] Relevant terms of the lease included the following: (a) Clause 1.1 required BP to pay its proportion of centre expenses.1 (b) Clause 2.3 obliged BP to deliver the premises back to Aventus upon the expiry or termination of the lease “in a neat and tidy state and in good and substantial repair” and to “reinstate the premises…to a base building or bare shell standard” and, if they failed to so, Aventus could undertake the necessary works at BP’s cost, plus delay damages representing a daily rate of rent, increased by 10% on the last base rent payable under the lease. (c) Clause 3 required BP to pay the base rent without set off, commencing at $200,000 per annum plus GST,2 and increased by 4% on each anniversary of the commencement date;3 1 Item 11, Reference Schedule to the Lease. 2 Item 6, Reference Schedule to the Lease. 3 Item 8, Reference Schedule to the Lease. -- 2 of 6 -- 3 (d) Clause 5.3 obliged BP to pay Aventus the marketing levy, calculated at 3% of the Base Rent. (e) Clause 5.8(b)(v) & (vi) obliged BP to pay any legal costs incurred by Aventus for any breach by BP, and any exercise by Aventus of any right or remedy it has against BP. (f) Clause 12.4 entitled Aventus to recover, as damages, compensation for the loss of the benefits which Aventus could reasonably expect to receive had the lease continued for the term, subject to Aventus’ duty to mitigate. (g) Clause 14 required BP to provide Aventus with a bank guarantee in an amount to be kept equal at all times to4 six (6) months’ rent, marketing levy, centre expenses and GST, subject to Special Provision 7 (which allowed for a future reduction of the amount if the after the first year of the term if an essential term of the lease had not been breached). (h) Clause 18.2 required GST to pay paid on all taxable supplies under the lease. [9] By clause 17 of the Lease, Snyman agreed with Aventus: (a) to join in the lease to provide the guarantee an indemnity; (b) unconditionally and irrevocably guaranteed to Aventus punctual payment of all sums of rent, centre expenses, other money, costs, interest and damages now or in the future owing by BP to Aventus, and punctual performance of all other obligations under the lease; (c) unconditionally and irrevocably agreed to keep Aventus indemnified at all times against any loss Aventus may suffer if the guaranteed obligations are not recoverable from or performed by BP for any reason whatsoever; and (d) that his obligations under the guarantee were expressly not to be abrogated, prejudiced or affected, by among other things, the insolvency of BP or the other guarantor. [10] A separate Deed of Agreement was signed with the Lease on 26 February 2019. By a variation made by letter dated 5 December 2019, the incentives to be provided under the Deed were delivered by way of a $250,000.00 cash contribution from Aventus to BP applied as: (a) $66,516.80 cash to BP; (b) $114,059.38 to then outstanding rent and outgoings up to December 2019; (c) $20,000.00 retention for completion of illuminated signage; (d) $20,000.00 retention for repairs to external signage; (e) $20,000.00 retention for rectification of extraction fan; and (f) $9,343.82 retention for unpaid painter’s and plasterer’s invoices. 4 Item 20, Reference Schedule to the Lease. -- 3 of 6 -- 4 [11] On 20 February 2020, a Notice pursuant to section 124 of the Property Law Act 1974 (Qld) was issued by Aventus to BP in respect of outstanding rent then owing under the lease, as follows: (a) Rent for December 2019, January 2020 and February 2020 - $38,574.86; (b) Centre expenses for January 2020 and February 2020 - $4,877.90; (c) Marketing levy for December 2019, January 2020 and February 2020 - $1,500.00; (d) GST on those sums - $4,495.30. [12] Legal costs in the sum of $660.00 were claimed in respect of the breach notice.5 [13] On 10 March 2020, Aventus re-entered the premises and determined the lease upon BP failing to remedy the breaches stipulated in the notice. [14] On 11 March 2020 Aventus wholly claimed BP’s bank guarantee in the sum of $128,205.00 and applied it to outstanding monies payable under the lease, with a balance left over that has been applied to the damages claimed by Aventus. Legislative framework [15] The Retail Shop Leases Act 1994 (Qld) (‘RSLA’) governs retail tenancy disputes and vests the tribunal with jurisdiction, subject to exceptions, to hear them.6 [16] The tribunal can make orders, including declaratory orders, that it considers to be just to resolve a retail tenancy dispute, including any one or more of the following:7 (a) an order requiring a party to the dispute to pay an amount (including an amount of compensation) to a specified person; and (b) an order that a party to the dispute is not required to pay an amount to a specified person. [17] It is not contested that the lease is one to which the RSLA applies, nor that the tribunal has jurisdiction to hear the dispute. [18] We have considered whether the COVID-19 Emergency Response Act 2020 (Qld) (‘the COVID Act’) had relevant application and have decided that it did not; the retail lease regulations introduced pursuant to the COVID Act provided for a response period that commenced on 29 March 2020 and the action taken and dispute notice filed herein occurred prior to that date. Aventus’ counterapplication [19] The counterapplication filed on 29 March 2021 seeks orders against BP and Snyman for losses arising from BP’s breach of its obligations under the lease as follows: (a) $172,529.00 for lost rent from April 2020 to 24 November 2020 (from when the lease ended to when it was able to be relet); (b) $152,070.00 for make good costs to reinstate the premises; 5 Aventus letter dated 20 February 2020. 6 Section 103 of the RSLA. 7 Section 83, ibid. -- 4 of 6 -- 5 (c) $8,811.00 legal costs resulting from the breach of obligations; and (d) interest. [20] Applying the balance of the bank guarantee to the damages and costs claimed, the net figure claimed by Aventus is $277,101.35, plus interest plus tribunal costs. [21] Neither BP nor Mr Snyman filed a response to the counterapplication despite at least three directed opportunities to do so.8 [22] Evidence tendered in support of the counterapplication comprises: (a) a reconciliation spreadsheet showing sums outstanding and credits applied to them; (b) invoices for rent, centre expenses and marketing levy for the period 1 April 2020 to 30 November 2020; and (c) a detailed quote dated 19 November 2020 for works to de-fit and make good the premises. [23] Aventus submits that: (a) BP never made any payments under the lease and any credits in the reconciliation spreadsheet relate to the landlords’ fit out incentives, adjustments, and the application of the bank guarantee. (b) Its claim represents its losses resulting from BP’s breach of its obligations under the lease. (c) It has taken reasonable steps to mitigate its losses by reletting the premises. (d) It should be awarded compensation for the loss or damage it suffered following its termination of the loss due to BP’s unremedied breach of its terms. [24] What is not before the tribunal is: (a) evidence of the efforts made by Aventus to mitigate its loss; for example, advertisements placed, the advertising campaign launched, inquiries received or reports from leasing agents appointed to relet the site; (b) evidence as to when the site was relet and at what cost or loss to Aventus; it is not known, for example, when the new lease commenced, whether rent-free periods or other incentives were incurred in the relet and what the relet expenses such as agent’s commission might have been; and (c) invoices or receipts evidencing that the de-fit and make good works were undertaken and that those costs were incurred by Aventus; it is not known, for example, why the de-fit quote is dated 19 November 2020 when the lease ended by termination in March 2020, whether a subsequent tenant retained or used the fit out prior to the planned de-fit and whether the de-fit occurred and, if so, at what cost. 8 Directions made 14 May 2021, 22 July 2021 and 14 March 2023. -- 5 of 6 -- 6 [25] The basic purpose of any award of damages is to restore an injured party to the position they would have been in had the wrongful act not occurred: Robinson v Harman [1848] Eng R 135; 1 Exch 850, 855: The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. [26] It follows that the rent, marketing levy and centre outgoings lost to Aventus for the period between when the lease was terminated and when it was able to be relet, and the cost of the de-fit and make good works not done by BP, together with legal costs incurred in relation to the enforcement of the lease are moneys that, if paid, would restore Aventus to the position it would have been in, had BP performed its obligations under the lease. [27] However, whilst the rules of evidence are relaxed in the tribunal,9 it cannot make its decisions on conjecture10 and an applicant (or counter-applicant in this case) must establish its case with proof on the balance of probabilities, albeit to a sliding scale, and in respect of which, according to Justice Dixon in Briginshaw v Briginshaw:11 … “reasonable satisfaction” should not be provided by inexact proofs, indefinite testimony, or indirect references. [28] Although Aventus is, contractually, entitled to compensation from Snyman for BP’s breach of the lease, it has not filed evidence sufficient to satisfy the tribunal, on balance, that the amount it now claims over and above the bank guarantee credits represents the loss it has suffered. Decision and order [29] For the reason that the claim the subject of the counterapplication, whilst having merit, is not supported by evidence as to quantum, the counterapplication is dismissed. 9 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28. 10 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1, 5. 11 (1938) 60 CLR 336 at 362. -- 6 of 6 --