Business Intelligent Pty Ltd v Raveside Pty Ltd ATF P & S Thomas Family Trust [2022] QCAT 279

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Business Intelligent Pty Ltd v Raveside Pty Ltd ATF P & S Thomas Family Trust [2022] QCAT 279 PARTIES: BUSINESS INTELLIGENT PTY LTD (applicant) v RAVESIDE PTY LTD ATF P & S THOMAS FAMILY TRUST (respondent) APPLICATION NO/S: RSL061-22 MATTER TYPE: Retail shop leases matter DELIVERED ON: 5 July 2022 HEARING DATE: On the Papers HEARD AT: Brisbane DECISION OF: Member Carrigan ORDERS: Until further order of the Tribunal, Raveside Pty Ltd ATF P & S Thomas Family Trust, by itself or by its servants or agents, is hereby restrained and an injunction is granted; preventing it from re-letting, or otherwise parting with possession of the premises being part of Lot 2 on BUP 105943 at 2/18 Duke Street, Sunshine Beach and being the premises contained in registered lease 719453346; preventing it from disposing of, or otherwise parting with chattels in its possession belonging to or used by Business Intelligent Pty Ltd at Lot 2 pursuant to registered lease 719453346; preventing it from disposing of, or otherwise parting with stock in its possession belonging to or used by Business Intelligent Pty Ltd at Lot 2 pursuant to registered lease 719453346 other than for health and sanitation purposes. CATCHWORDS: LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION - JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS - OTHER MATTERS - where parties entered into a commercial lease - where applicant gave notice of exercise of option - where parties undertook mediation - where parties entered into Deed of -- 1 of 6 -- 2 Settlement - where respondent re-entered and took possession of the leased premises - where applicant disputes the respondent’s entitlement to re-enter and take possession - where applicant sought interlocutory injunction to restrain the respondent from reletting the premises and disposing of chattels and stock Property Law Act 1974 (Qld), s 124 and s 128 Queensland Civil and Administrative Tribunal Act 2009 (QLD), s 58 and s 59 Maxwell & Perandis Pty Ltd ATF v Aztech Australia Pty Ltd (2021) QCAT 234 Gold Coast Jet Boating Pty Ltd v Ridong (Australia) (2022) QCAT 3 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] Raveside Pty Ltd as Trustee for the P and S Thomas Family Trust (Raveside) is the registered proprietor of Lot 2 on BUP 105943 which is commercial premises situated at 2/18 Duke Street, Sunshine Beach. [2] On 8 September 2015 Raveside entered into a lease for part of those premises with Business Intelligent Pty Ltd (BI) for a term of three years. Clause 19 of the lease contained two options to each extend the term for a further three years. The permitted use of the premises was “Café”. [3] Thereafter, BI traded from the premises under the name “Fomo Café”. [4] The first option was exercised and the term of the lease was renewed to 7 September, 2021. [5] During the term of the lease Raveside and BI entered into an agreement on 17 August, 2020 to extend the term of the lease from 7 September, 2021 to 7 December, 2021. [6] During the period from September 2015 to at least July 2021, the parties to the lease were involved in numerous disputes of alleged non-compliance or alleged breach of the lease. It is unnecessary here to recount those disputes. [7] On 6 August, 2020 BI gave written notice to Raveside of the exercise of the second option under the lease. That written notice stated; … as lessee hereby exercise the second option available pursuant to the lease dated 8 September, 2015, for the three year period from 8 December, 2021 to 7 December, 2024. Clause 19 of the lease provided that notice of intention to renew the lease had to be given “not less than three (3) months prior to the expiration of the lease.” [8] The written notice dated 6 August 2021 provoked a continuation of the dispute between the parties. On 19 August 2021 Raveside’s solicitor sent a letter to BI’s solicitor referring to “current outstanding matters, but the long history and well documented history of the non-compliance of your client’s obligations under the -- 2 of 6 -- 3 lease” and advised that Raveside did not accept the exercise of the option. Whether the “prescribed notice” referred to in s 128 of the Property Law Act 1974 (Qld) was given by Raveside to BI is not known from the current evidence before the Tribunal. [9] On 7 September 2021 BI filed an Application in the Tribunal seeking relief against Raveside as Respondent. [10] The parties then attended a mediation on 29 October 2021 during which they came to an agreement and signed a “Deed of Settlement” on 24 November 2021. [11] Clause 3 of The Deed of Settlement provided, in general terms, that BI would place its business of “Fomo Café” on the market for sale, that Raveside would cooperate and not unjustifiably impede the sale of that business and granted to BI a further term of three (three) years pursuant to clause 19.1.3 to 19.1.8 inclusive of the lease which was to expire on 7 December 2024. Clause 3.5 also provided that if the business was not sold on or before 1 May 2022 the Lease will be deemed terminated by mutual consent effective from that date. [12] BI placed the business on the market for sale but says that since 23 December 2021 Raveside has been in breach of its obligations under clause 3.3 of the Deed of Settlement “by failing to co-operate with and by unjustifiably impeding the timely sale of the business.” These matters included disputes about Raveside’s requests for a market review rent increase and a notice to redecorate the premises while BI “had a number of active prospective buyers for the business”. BI submits that Raveside frustrated the sale and engaged in “unconscionable conduct and breach of the Deed of Settlement” which has prevented BI from achieving a sale of the business by 1 May 2022.. [13] Raveside disputes these allegations. It provides its own explanation consistent with the view that it has not impeded the sale of the business, but rather took steps to enhance the prospects of sale of the business. Raveside does not accept that it is in breach of clause 3.3 of the Deed of Settlement nor that it has acted unconscionably. [14] Raveside says that as of 1 May 2022 BI had not completed settlement of the sale of the business and it had not received any application for assignment under the lease. It says; Accordingly, the Respondent lawfully took possession of the premises on 2 May 2022. [15] BI says that Raveside re-entered the leased premises without giving any prior notice and confiscated its property. BI also says that Raveside did not give a notice in accordance with s 124 of the Property Law Act 1974 (Qld prior to re-entry into the premises. It says the re-entry of the premises was unlawful and occurred at a time when there was a current lease on foot and Raveside was on notice that there was an active dispute between the parties as to Raveside’s compliance with clause 3.3 of the Deed of Settlement. [16] Prior to Raveside taking possession by re-entry into the leased premises, BI had already commenced proceedings in the Tribunal on 22 April 2022 seeking an interim order that Raveside acknowledge BI’s notice to renew the lease from 8 December 2021 to 7 December 2024 and other orders in support of that relief. [17] In accordance with directions made by the Tribunal on 4 May 2022 the parties filed written submissions in respect of the Application for interim orders. -- 3 of 6 -- 4 [18] The written submissions filed by BI on 13 May 2024 set out the following Interim Orders sought by it; (a) the mediation agreement and Deed of Settlement dated 24 November 2021 are stayed pending the hearing of the Applicant’s Application for an Order to Resolve a Retail Tenancy Dispute; (b) the Respondent is injuncted from: (i) re-letting the Premises; (ii) disposing of the Applicant’s chattels; (iii) disposing of the Applicant’s stock other than for health and sanitation reasons; (c) the Respondent must take all possible steps to preserve any perishable items of stock; (d) the Applicant’s Application for an Order to Resolve a Retail Tenancy Dispute filed on 03 May 2022 be listed for an urgent hearing at the earliest possible date Should An Interim Orders be Made? [19] The Tribunal has jurisdiction to hear and determine this dispute about the commercial lease of these premises. (Maxwell & Perandis Pty Ltd ATF v Aztech Australia Pty Ltd;1 Gold Coast Jet Boating Pty Ltd v Ridong (Australia).2) [20] The Tribunal has the power to make an interim order it considers appropriate in the interests of justice which includes an order to protect a party’s position for the duration of the proceedings or to require or permit something to be done to secure the effectiveness for the proceedings.3 [21] The Tribunal also has the power to grant an injunction, including an interim injunction if it is just and convenient to do so. An interim injunction has the effect for the duration of the proceeding or such shorter time as provided in the order or further order of the Tribunal.4 [22] The relevant principles for the exercise of the Tribunal’s discretion to grant a restraining order is whether an arguable case has been made out to entitle a party to final relief, whether the balance of convenience favours the making an order and whether damages are an adequate alternative remedy. [23] In these proceedings there is a genuine dispute between the parties. Raveside considers that it has lawfully re-entered the leased premises and taken possession from 2 May 2022. This is disputed by BI. It considers the re-entry to be unlawful and asserts there was a current lease on foot at the time. It says Raveside was on notice that there was an active dispute relating to clause 3.3 of the Deed of Settlement. [24] There is also the issue whether a prescribed notice was issued by Raveside in accordance with s 128 of the Property Law Act 1974 within the stipulated period from 6 August, 2021. There is in addition the issue whether Raveside effected a re-entry of 1 (2021) QCAT 234. 2 (2022) QCAT 3. 3 S 58 of the Queensland Civil and Administrative Tribunal Act 2009. 4 S 59 of the Queensland Civil and Administrative Tribunal Act 2009. -- 4 of 6 -- 5 the premises without prior notice and without compliance with section 124 of the Property Law Act 1974 (Qld). While a determination of all of these issues will depend upon the Tribunal’s decision made in the final hearing of the proceedings, at this interim stage however BI has provided evidence of sufficient facts and matters to demonstrate it does have an arguable case for the final relief it seeks in its Application. Whether it is ultimately successful depends upon the determination made at the final hearing, but for present purposes it has established an arguable case. [25] If the injunction is not granted then, Raveside, at its election, may undertake any number of matters with respect to the premises which is now in its possession. One matter could be to relet the premises to a third party. The effect of a reletting of the premises would impinge, at least, or deprive, BI of a further three (3) year term of those premises from 8 December 2021. [26] If an injunction were granted it would preserve the rights of both parties until the final hearing in the Tribunal. The position of BI is that it would be able to argue that the 6 August, 2021 exercise of the option was valid and enforceable and also its claims that the Deed of Settlement had the effect of granting a further term of three years from 8 December, 2021, would be maintained to the final hearing. If BI was successful at the final hearing it would be in a position to benefit from that success with the further three year term. The position of Raveside would be that the issue of the lawfulness of its re-entry and possession on or about 2 May 2022 could be likewise argued. If Raveside was successful, then it would be entitled to appropriate relief and any other consequential relief. It would be able to deal with the premises in anyway it sought fit without claims from BI. [27] The balance of convenience favours maintaining the status quo until the final hearing in the Tribunal. [28] Damages are not an adequate remedy in the present circumstances of these proceedings. If, for example, BI were to be ultimately successful in its claim for a further three year term to 7 December 2024 an award of damages would not in these circumstances be an adequate remedy in place of its interest in land pursuant to that extended lease. Even if it is assumed for the moment that Raveside is entitled to damages then the quantum of those damages can be more appropriately determined at the final hearing. [29] BI seeks to restrain the mediation agreement and the Deed of Settlement. The Tribunal is not satisfied that that is necessary pending the resolution of this retail tenancy dispute. There is nothing provided in the agreement or the Deed which will in any way impinge upon the parties ,pending the final hearing of the dispute. An injunction for this purpose is refused. [30] BI also seeks an injunction to restrain Raveside from reletting the premises and from disposing of the chattels and stock, other than for health and sanitation reasons. It is appropriate in the circumstances to grant this injunction so as to preserve the subject matter of this dispute until such time as the Tribunal can determine the matter in a final hearing. The Tribunal grants an injunction to restrain Raveside from re-letting the premises whether to a third party or otherwise and also to restrain it from disposing of BI’s chattels and stock from the business of “Fomo Cafe”. [31] BI also seeks an injunction to cause Raveside to take all possible steps to preserve any perishable items of stock. The injunction granted in the preceding paragraph relating to BI’s chattels and stock is an adequate remedy. It is not necessary to grant an -- 5 of 6 -- 6 injunction in the terms sought by B1 for any perishable stock. The injunction sought in respect of perishable stock is refused. [32] B1 also seeks an Order that the application filed on 3 May 2020 to be listed for an urgent hearing at the earliest possible time. There has been no material, or at least there is insufficient material filed, to convince the Tribunal at this stage that there should be an expedited hearing of this dispute. If that is necessary, the parties can file the appropriate application for an expedited hearing or otherwise take these matters up at any future Directions Hearings conducted by the Tribunal. Otherwise, the order sought for an early trial is refused. [33] The Tribunal will make formal orders in accordance with the findings and determinations made above. -- 6 of 6 --