3 Keys Global Pty Ltd v Brisbane Logistics Group Pty Ltd [2021] QCAT 280

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: 3 Keys Global Pty Ltd v Brisbane Logistics Group Pty Ltd [2021] QCAT 280 PARTIES: 3 KEYS GLOBAL PTY LTD (applicant) v BRISBANE LOGISTICS GROUP PTY LTD (respondent) APPLICATION NO/S: RSL001-21 MATTER TYPE: Retail shop leases matter DELIVERED ON: 19 August 2021 HEARING DATE: 25 February 2021 HEARD AT: Brisbane DECISION OF: Member Deane ORDERS: The Application for interim order is dismissed. The Application for miscellaneous matters filed 24 March 2021 is dismissed. CATCHWORDS: LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – OTHER MATTERS – whether interim orders restraining the sub-lessor from requiring vacant possession should be made where the parties to a commercial tenancy dispute that an option was validly exercised and dispute whether sub-lease should be extended by operation of s 18 of the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) - whether damages an adequate remedy – factors to be considered in the exercise of discretion – whether applicant has ‘clean hands’ - where sub-lessee has not paid any amount for rent for the period from 1 January 2021 to at least 27 May 2021 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28, s 32, s 58, s 59 Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld), s 12, s 18, s 44 -- 1 of 13 -- 2 Airlie Beach Real Estate Pty Ltd v Body Corporate for Delor Vue Apartments [2018] QCAT 317 Kirk & Anor v Sunshine Developments (Vic) Pty Ltd [2020] QCAT 493 Parkview Management Pty Ltd v Body Corporate for Boca Raton Community Titles Scheme 22486 [2018] QCAT 6 APPEARANCES & REPRESENTATION: Applicant: W. A. Morgan, Morgan Mac Lawyers Respondent: R. G. Fryberg instructed by JHK Legal REASONS FOR DECISION [1] 3 Keys Global Pty Ltd (‘3 Keys’) or businesses associated with 3 Keys’ directors have occupied the business premises the subject of this dispute since early 2016 (‘the Premises’). Its right to occupy the Premises was documented in a sub-lease dated 27 February 2019 (‘the Sub-lease’).1 The Sub-lease commenced 1 January 2019. 3 Keys contends the Sub-lease provided for two one-year options and that it exercised the first option by written notice on 9 October 2019, extending the end date to 31 December 2020. [2] 3 Keys claims that: (a) the Sub-lease contains a second option for it to extend the Sub-lease to 31 December 2021 and that it validly exercised that option on 30 October 2020.2 (b) it is entitled to an extension of the Sub-lease for a maximum of nine months by virtue of the Sub-lease being an affected lease for the purposes of the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) (‘the Regulations’) for the period equal to the period rent was waived or deferred or ought to have been.3 (c) it was entitled to rent relief during the period 9 October to 31 December 2020. [3] BLG disputes these claims. [4] The sub-lessor’s business including its interest in the lease and Sub-lease has been sold twice,4 causing the identity of the sub-lessor to change since the Sub-lease was signed and since 3 Keys gave notice that it exercised the first option. Brisbane Logistics Group Pty Ltd (‘BLG’) is the most recent sub-lessor. BLG operates its business on the land and in part of the building in which the Premises are located. [5] BLG sought 3 Keys to vacate the premises on the basis that it was a month to month tenancy. This request was withdrawn, however, BLG disputed that there was a second 1 Exhibit 5, YC1. 2 Ibid, YC5. 3 Regulations, s 18(2). 4 February 2020 and 9 October 2020. -- 2 of 13 -- 3 one-year option in the Sub-lease and if there was such an option, that it was validly exercised.5 BLG gave evidence that during the pre-purchase due diligence the vendor of the business informed it that the Sub-lease had expired. [6] On or about 19 November 2020 BLG issued: (a) a notice to remedy breach of covenant claiming that 3 Keys was in breach of the Sub-lease by failing to pay rent and GST on rent for the period 9 October 2020 to 30 November 2020 and which asserted that it would be entitled to re-enter or forfeit the lease in the event 3 Keys did not comply with the notice within a reasonable time.6 (b) a notice pursuant to section 128 of the Property Law Act 1974 (Qld) (‘PLA’) that 3 Keys was in breach of the Sub-lease by failing to pay rent and GST on rent for the period 9 October 2020 to 30 November 2020 and which asserted that such breach would preclude 3 Keys from exercising an option contained in the Sub-lease.7 [7] The evidence is that 3 Keys remedied that alleged breach.8 [8] 3 Keys sought an interim order restraining BLG from taking any steps to recover possession of the premises pending determination of the disputes between them.9 The restraining order sought is expressed in very broad terms. [9] The Notice of dispute10 seeks the following orders: (a) restraining BLG from taking any step to recover possession of the premises prior to 1 January 2022; (b) that BLG make an offer to extend the Sub-lease for the period for which rent was waived or deferred; (c) for compensation;11 (d) under section 44 of the Regulations the Tribunal considers just; (e) costs; (f) interest. [10] At the oral hearing I was informed that BLG had provided an undertaking to 3 Keys pending the determination of the Application for interim order such that no interim order pending determination of the Application for interim order was required to be made. A copy of the undertaking given by BLG was not in evidence before me at the time of the oral hearing. 5 Exhibit 12, [19], AKA8 6 Ibid, AKA12. 7 Ibid, AKA 11. 8 Ibid, AKA5. 9 Exhibit 4. 10 Exhibit 3. 11 This appears to relate to a claim that BLG failed to give or negotiate rent relief in the period 9 October to 31 December 2020. -- 3 of 13 -- 4 [11] At the conclusion of the oral hearing, I reserved my decision. [12] Prior to finalising my decision in the Application for interim order BLG filed an Application for miscellaneous matters.12 [13] BLG sought orders that its undertaking to not evict 3 Keys be revoked and an order made that 3 Keys vacate. A copy of the undertaking given was not provided to the Tribunal. [14] In the alternative, BLG sought orders that: (a) 3 Keys, their employees, agents and/or guests must not park in the carpark; (b) 3 Keys, their employees, agents and/or guests cannot bring animals onto the premises with the exception of service animals; and (c) 3 Keys and their employees must wear PPE13 ‘(high visibility work wear and safety cap or steel cap boots)’ at all times when on the premises. [15] BLG relies upon an ‘affidavit’ of Lisa Jankowski, General Manager of BLG.14 The document is signed by Ms Jankowski but is not witnessed so it is a statement rather than an affidavit. 3 Keys contends that it should be disregarded. I am not satisfied that it should be. The Tribunal is not bound by the rules of evidence applying to courts of record and may inform itself in any way considered appropriate.15 [16] Directions were made for submissions to be filed and for this application to be determined on the papers.16 I now determine both applications. [17] The delay in finalising these applications is regrettable and is in part due to resourcing issues, the filing of the Application for miscellaneous matters and the requirement to make the Tribunal file available so that copies of 3 Keys’ documents filed in relation to the Application for miscellaneous matters could be provided to BLG because BLG says not all of 3 Keys’ material was given to it. [18] Ms Jankowski’s evidence is that: (a) 3 Keys have been parking seven cars in the BLG carpark, 3 Keys has no rights to park in the carpark, have been advised on multiple occasions not to park there, that due to the nature of the BLG’s business traversing the carpark through the loading zone, which is required on ingress and egress, is quite dangerous, BLG’s owners and employees do not park in the car park due to the hazards and that users of the carpark generally have a Licence to Perform High Risk Work. (b) despite 3 Keys being requested to follow any work health safety (WHS) directions17 3 Keys and its employees continue to not wear PPE or comply with 12 24 March 2021. 13 Personal protective equipment. 14 Signed and filed 24 March 2021. 15 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(3) (‘QCAT Act’). 16 8 April 2021; QCAT Act, s 32. 17 11 November 2020. -- 4 of 13 -- 5 rules signed throughout the property and 3 Keys or its employees are bringing a dog to work, which is contrary to WHS advice.18 (c) in view of these matters, 3 Keys ought to vacate the premises within seven days, which she submits is enough time as 3 Keys’ tenancy is ‘only four offices’. She is of the view that 3 Keys is likely to ignore any order of the Tribunal not to bring pets to work, wear PPE at all times and not park in the carpark. (d) 3 Keys has never paid outgoings, had not paid rent for December 2020 despite demand by letter dated 14 December 202019 nor any rent in 2021 but continues to use BLG’s electricity and waste services, benefit from the security services and to store their goods. [19] 3 Keys filed quite lengthy submissions in response, including four affidavits.20 [20] 3 Keys submits that: (a) the JHK letter of 11 November 202021 did not request it to refrain from using the car park. It is difficult to reconcile this submission with the express words “Save for access to and from the premises, any additional use of the car park does not appear intended, required or permitted by the sublease. This extends to clients and guests of 3 Keys. Please advise your client accordingly as there is presently a company car parked in the car park that must be removed immediately”; (b) the Sub-lease does not exclude 3 Keys from using the carpark. It says that it is silent on whether use of the carpark is permitted and says that during its time of occupation it has used a number of areas, which are not expressly included such as “the kitchen, the backroom, the partitioned-off area and the toilets” and that the use of those amenities and, until BLG took ownership in late 2020, the carpark had been implied into the lease. It says 3 Keys instructed its employees not to park in the carpark due to the safety hazards caused by BLG’s operations and this has caused other safety risks and has affected its use and enjoyment of the Premises. (c) BLG’s director, Scott Logan, advised an employee of 3 Keys in late January/early February that 3 Keys could use some of the carpark spaces and that 3 Keys’ director, Mr Cohen, later confirmed this with Mr Logan prior to advising 3 Keys’ staff that they could recommence using the carpark and that Mr Yadin, another director, also confirmed this with Mr Logan . (d) at no time has 3 Keys used more than 3 or 4 of the 16 spaces at a time. (e) the JHK letter of 11 November 2020 did not ask 3 Keys’ staff to wear PPE but acknowledged it asked 3 Keys to adhere to signage and paths. It says the signage outside the premises is contradictory and confusing.22 It acknowledges that one of the signs says that safety vests and boots must be worn. It essentially says 3 Keys’ staff have abided by the most relevant signage to it in accessing the Premises. The JHK letter of 11 November 2020 states “our Client will 18 Statement Lisa Jankowski, LJ1. 19 Exhibit 12, Affidavit Alicia Auden filed 8 February 2021, AKA13. 20 16 April 2021. 21 Appendix 1.11 22 A photograph of signage appears at Appendix 1.31. -- 5 of 13 -- 6 continue to allow the legal right of ingress and egress, however please advise your client that all signage and paths must be strictly adhered to by your client, its staff, agents, clients and guests effective immediately.” (f) There is no need for its staff to wear such PPE as they work in an office environment, do not access the warehouse or loading zone and use the “new outdoor pedestrian safety path installed” after it raised WHS concerns. It points to instances of BLG employees and customers failing to wear PPE and not following the WHS advice relied upon in Ms Jankowski’s statement (‘the WHS advice’). (g) a 3 Keys’ employee discussed her intention to purchase a puppy to be trained as a therapy service dog to assist with her health issues and to bring it to work until it was older with BLG’s director, Mr Logan, who agreed that the dog could be brought to work provided the dog was carried through the shared area in an animal crate. It says these conditions have been observed. (h) It denies that the WHS advice applies to the Premises as it is an office rather than warehouse environment and its staff and the staff member’s dog do not come into contact with or have access to the warehouse and loading dock and the “multiple pieces or plant and equipment” located there. (i) no invoices have been received for moneys claimed to be owing. The JHK letter of 14 December 202023 states “we understand that our client will shortly be issuing you with tax invoices relating to the above amounts and request that payment be made in accordance with the payment terms outlined.” (j) says BLG owes 3 Keys amounts invoiced. Reference is made to Invoice 9462 dated 19 August 2020 in the amount of $18,150. The invoice clearly relates to a period prior to settlement of the sale to BLG. 3 Keys does not explain how it contends BLG is liable for the invoice. The JHK letter of 11 November 2020 informs 3 Keys that BLG disputes any liability as BLG assumed responsibility to creditors arising on and from the date of settlement of the sale, being 9 October 2020. (k) 3 Keys is heavily affected by the Covid-19 related public health directives, facing financial losses and received job-keeper payment for the January – March 2021 quarter. [21] BLG filed a further Application for miscellaneous matters24 seeking orders that it be allowed to evict 3 Keys ‘forthwith’ on the grounds that 3 Keys’ submissions in response contain what it asserts are factually incorrect information. BLG have also filed an Affidavit of Scott Logan, director of BLG.25 Mr Logan’s evidence is that 3 Keys failed to give it a complete copy of the submissions in response and it was required to obtain missing documents from the Tribunal so that it could respond to incorrect information. Mr Logan’s evidence is that the various claims that he agreed to 3 Keys using the carpark and permitting a dog on the premises made in 3 Keys’ response are untrue. Further his evidence is that a letter of demand for December 2020 23 Appendix 4.10. 24 8 June 2021. By direction dated 8 July 2021 I directed that this would be regarded as submissions in reply in the Application for miscellaneous matters filed 24 March 2021. 25 Made 27 May 2021. -- 6 of 13 -- 7 rent was sent on 14 December 2020 and the amount remains unpaid. He confirms that as at the date of making his affidavit no monies had been paid in respect of 2021. [22] The parties were legally represented at the oral hearing but subsequently both parties were self-represented. BLG does not refer the Tribunal to any power the Tribunal may have to make the orders sought. The alternative orders are in the nature of final declaratory relief as to the terms of the Sub-lease between the parties (or pursuant to other rights to use and occupy the Premises). Such orders would not usually be made without a final hearing. [23] As I understand BLG’s claim, 3 Keys who asserts that the second yearly option was validly exercised such that the current sub-lease term is now to 31 December 2021 or that it is entitled to an extension of the sub-lease term by virtue of the Regulations are breaching the terms of the sub-lease, which 3 Keys asserts is in place. [24] It is clear from the submissions received that there are disputes between the parties about the extent of the rights of 3 Keys in relation to use of the carpark and obligations as to compliance with WHS requirements and whether 3 Keys are in breach of such obligations. There are disputes as to whether oral consent has been provided. It is not appropriate to attempt to resolve such matters without a final hearing. [25] BLG’s material does not address whether invoices have been delivered subsequent to the 14 December 2020 letter, which foreshadowed they would be delivered or for amounts for use and occupation in 2021. BLG is in an unusual position in relation to invoicing for rent and other amounts in 2021 as it asserts that there was no second option provided or that if there was, that it was not validly exercised. BLG also asserts that 3 Keys has not complied with the Regulations entitling it to an extension on the same terms and conditions except that the rent payable during the extension must be adjusted for the waiver or deferral.26 BLG also says that because it intends to use the premises for its own commercial use it is not under the obligation to offer the extension.27 [26] The terms of the Sub-lease provide that if the option is exercised the ‘New Tenancy’ is on the same terms and conditions except that the rent will be the amount agreed or failing agreement by the date the term expires the market rent determined by an independent valuer.28 This option term rent review mechanism is, on the face of the agreement, in addition to the index review, which was to occur on 1 November 2019.29 The evidence is that the rent payable as at March 2020 was $1890.50 (incl GST) per month, the same amount as set out in the Schedule such that the 1 November 2019 index review appears not to have been conducted.30 Neither party made submissions as to the option term rent review mechanism as distinct from the 1 November 2019 review date mechanism. [27] There is no evidence before me that 3 Keys has sought the appointment of a valuer, which perhaps given the dispute is understandable. The Sub-lease further provides that if the rent is not determined by the date the term expires then until the valuer 26 Regulations, s 18(2). 27 Ibid, s 18(4)(b). 28 Clause 15.3. 29 Sub-lease, Schedule, item 6 and item 8, clause 3.3. 30 Ibid, Schedule, item 7. -- 7 of 13 -- 8 determines the rent for the new tenancy, the tenant must continue to pay the existing rent.31 The tenant must pay the rent by equal monthly instalments in advance on the first day of each month. The obligation to pay rent is not conditional upon the delivery of an invoice. The Sub-lease provides that the tenant is in default if rent or any moneys payable under it by the tenant is unpaid for fourteen days.32 Despite 3 Keys asserting an entitlement to use and occupy the Premises under the Sub-lease as extended either pursuant to the exercise of an option or under the Regulations, on essentially the same terms as the Sub-lease, on the evidence before me, it has not attempted to comply with one of the most basic obligations of a sub-lessee, which is to pay rent as and when it is due. [28] 3 Keys claims that this is an affected lease. The statutory prohibition on a lessor taking a prescribed action in the Regulations is only in respect of the failure of a lessee to pay rent or outgoings for a period occurring wholly or partly during the response and extension periods.33 Those periods expired on 31 December 2020. [29] If BLG had not provided an undertaking, the terms of which are not before me, it is likely that I would have made an interim order restraining BLG from requiring vacant possession upon the grounds in dispute in the proceedings pending determination of the Application for interim order to preserve the status quo.34 Such an interim order would not have prevented BLG from taking action on another basis if it was lawfully entitled to take such action. [30] It appears that the undertaking given by BLG was broader than necessary or BLG is cautious about the extent of the undertaking it gave and has sought to be relieved of it. Should BLG be restrained? [31] I am not satisfied that BLG should be restrained from taking steps to recover possession of the Premises for the reasons set out below. To the extent BLG undertook not to take any such steps pending determination of the Application for interim order BLG is now relieved of its undertaking. I am not persuaded, because BLG has not directed me to any power to make such an order, that I should order that 3 Keys vacate. [32] 3 Keys says that an interim order is necessary to preserve the status quo and not render the application for final relief nugatory.35 [33] For the purposes of the Application for interim order, but not necessarily the final hearing, BLG is content not to dispute certain facts or contentions, including that 3 Keys had exercised the first option. BLG contends it was not aware of the exercise of the first option at the time of completion of the contract purchasing the business. [34] The principles about whether a restraining order should be made are that: (a) 3 Keys has an arguable case that may entitle it to final relief; 31 Clause 15.4(3). 32 Clause 9.1(1). 33 Regulations, s 12. 34 QCAT Act, s 58. 35 Ibid. -- 8 of 13 -- 9 (b) the balance of convenience favours the making of the order. [35] In relation to the first principle, 3 Keys must show, as observed by SM Brown: that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.36 [36] In relation to the second principle, SM Brown observed: The court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial.37 [37] In weighing the balance of convenience, a significant factor is whether damages would be an adequate remedy for the applicant.38 [38] In making such an order the Tribunal may require that 3 Keys give an undertaking as to costs and damages.39 [39] A restraining order may provide for the lifting of the order if stated conditions are met.40 [40] I consider each of the claims. Did any sub-lease expire on 31 December 2020 or was the exercise of the option until 31 December 2021 valid? [41] I am not satisfied that BLG ought to be restrained pending determination of the dispute in relation to this issue. Even if I accept there is an arguable case about which there is some doubt and that the balance of convenience otherwise favours an order, about which there is also some doubt, I am not satisfied that damages are not an adequate remedy. Is there an arguable case? [42] The Sub-lease option provision is not well drafted. It states, ‘1 year or yearly’ and only provides one date for the exercise of the option, being 1 November 2019. I accept that the note in the Schedule at item 6 provides that the term of the lease should not exceed three years. As the initial term of the lease was one year the maximum number of yearly options was two. [43] 3 Keys has given evidence of conversations with the representative of Brisbane Logistics Pty Ltd, the original sub-lessor, and contends that in view of the ambiguity of the terms of the Sub-lease in relation to the option(s) and in particular to give meaning to ‘yearly’, which it says cannot be ignored, it intends to lead further evidence as to the circumstances to aid construction and that a term ought to be 36 Parkview Management Pty Ltd v Body Corporate for Boca Raton Community Titles Scheme 22486 [2018] QCAT 6, [23]. 37 Ibid, [24]. 38 Airlie Beach Real Estate Pty Ltd v Body Corporate for Delor Vue Apartments CTS 39788 [2018] QCAT 317, [70]. 39 QCAT Act, s 58(3), s 59(6). 40 Ibid, s 58(3)(b), s 59(6)(b). -- 9 of 13 -- 10 implied into the Sub-lease that the second option should be exercised by 1 November 2020. [44] BLG contends that 3 Keys does not have an arguable case. [45] It says that as a matter of law, on a proper construction, the Sub-lease only provided for one option or if it provided for two options that the final date for exercise of any option was before 1 November 2019 such that the option was not exercised within time. It says that the notice was required to be given strictly in accordance with the timeframes in item 6 of the Schedule. It also says that it would be prejudicial to BLG if the purported exercise of the option was permitted as the only rent review date in item 8 of the Schedule was 1 November 2019. This submission fails to address the option term rent review mechanism in clause 15.3 of the Sub-lease referred to earlier in these reasons, which appears to be in addition to the item 8 review. I therefore do not accept that a second option exercisable after 1 November 2019 is necessarily prejudicial. [46] In correspondence, BLG also contended that the option was not validly exercised as 3 Keys was in breach of the Sub-lease at the time of purported exercise.41 This ground was not relied upon at the oral hearing. I do not consider it further. [47] BLG says that what 3 Keys seeks is rectification of the Sub-lease and the Tribunal does not have jurisdiction as BLG does not consent to such jurisdiction.42 Whilst not deciding whether such a term could be implied because 3 Keys says it wishes the opportunity to lead further evidence, on the evidence currently before the Tribunal it seems more likely that the appropriate remedy is rectification, which is not within the Tribunal’s jurisdiction. Does the balance of convenience favour the making of the order? Is the undertaking as to costs and damages worthwhile? Are damages an adequate remedy? [48] I am not satisfied that damages are not an adequate remedy even if the balance of convenience otherwise favours the making of an order. [49] 3 Keys contends that the evidence of detriment to BLG is outweighed by the benefit of the rental payable by 3 Keys. The evidence suggests that if 3 Keys vacates the Premises the space would be utilised by BLG for its own purposes, which would avoid it incurring a portion of external storage costs. 3 Keys submits that the monthly rental under the Sub-lease is greater than the proportionate storage costs, which would be saved, such that there is no financial detriment to BLG. In circumstances where the evidence is that 3 Keys has failed to pay any rent in 2021, or at least for a considerable period in 2021,43 it is difficult to place weight on this submission. [50] BLG contends that the balance of convenience does not favour making the order. [51] BLG submits that given the likely time frames for determination of the Notice of dispute the interim relief would have final effect. This is a matter to be considered in weighing the balance of convenience. [52] If BLG is not restrained and it is ultimately determined that it invalidly terminated the Sub-lease as extended by requiring vacant possession, then 3 Keys would have a right 41 Clause 15.2(3). 42 Regulations, s 44(3)(j). 43 As of 27 May 2021. -- 10 of 13 -- 11 to damages for breach. There is little evidence as to why damages are not an adequate remedy. There is evidence that it will cause disruption to 3 Keys’ strategic plan to recover from the disruption to its business caused by the pandemic, it has had difficulty sourcing other suitable premises in a similar location and at a similar rent. [53] I am not satisfied that just because it may cause disruption to 3 Keys’ business that 3 Keys cannot be compensated by damages even though quantification of loss may be difficult. It is not as though the balance of the term, even on 3 Keys’ case, is overly long. This is not a case of a long-term contract such as a caretaking contract with a body corporate. There is no suggestion that 3 Keys will lose the opportunity to sell its business operated from the Premises, which given the short-term nature of the sub- letting arrangements is not surprising. Although 3 Keys gave evidence of conversations with the representative of the original sub-lessor of 3 Keys’ intention to operate from the Premises long term, it is clear, because the sub-leases in evidence are for one-year terms subject to option term(s) of one year44and not longer than three years that the sub-lessor did not intend to commit or require a commitment long term. The loss of the benefit of a favourable rent clearly sounds in damages. [54] 3 Keys offered an undertaking as to damages. BLG contends that 3 Keys’ undertaking is of no or limited value. The Tribunal has previously accepted that the risk that the undertaking may be inadequate is a factor to be weighed in considering the balance of convenience.45 [55] The evidence before me is that 3 Keys: (a) has an issued share capital of $10;46 (b) owns no real property.47 [56] There is evidence that 3 Keys’ income for the year ended 30 June 2020 was in the order of $6 million despite being affected by the pandemic. I infer that 3 Keys contends that its business is likely to continue to generate cashflow from which any damages could be satisfied. There is limited information as to the expenses of the business and the profit derived. [57] I am not persuaded that the undertaking is necessarily inadequate. In the event the Sub-lease has expired, is 3 Keys entitled to an extension of the Sub-lease under the Regulations? [58] I am not satisfied that BLG ought to be restrained pending determination of the dispute in relation to this issue. Even if I accept there is an arguable case about which there is some doubt and that the balance of convenience otherwise favours an order, about which there is also some doubt, I am not satisfied that I should exercise my discretion to restrain BLG in circumstances where 3 Keys has failed to pay rent in 2021 or at least failed to pay rent in 2021 from 1 January 2021 to 27 May 2021. 44 Exhibit 5, YC1 and YC2. 45 Airlie Beach Real Estate Pty Ltd v Body Corporate [2018] QCAT 317, [76]. 46 Exhibit 13, [6], AKA1. 47 Ibid, [9], AKA2 -- 11 of 13 -- 12 Is there an arguable case? [59] At least for the purposes of this Application for interim order BLG does not seek to dispute that it is arguable that: (a) this was an affected lease under the Regulations; and (b) 3 Keys was entitled to be offered an extension to the term of the Sub-lease equivalent to the period for which rent was waived or deferred. [60] There is evidence before me that the entity from whom BLG purchased the business waived or deferred 3 Keys’ rent prior to the sale to BLG completing and there is some evidence about 3 Keys’ entitlement to jobkeeper.48 [61] BLG contends that it has demonstrated that the Sub-lease cannot be extended because the Sub-lessor intends to use the premises for a commercial purpose of its own and therefore BLG is not required to offer an extension.49 Ms Janowski has given evidence of this intention.50 Her evidence is that a portion of BLG’s stock currently in paid storage would be better stored in the Premises and this would reduce external storage expenses.51 [62] 3 Keys contends this evidence is not credible as it is contrary to prior indications, is uncommercial and was only raised after 3 Keys raised its entitlement to an extension under the Regulations. It wishes the opportunity to cross examine Ms Janowski at a final hearing and the opportunity to lead other evidence to show that the right does not apply. 3 Keys claim may be arguable but, on the evidence currently before me, is not particularly strong. Does the balance of convenience favour the making of the order? Are damages an adequate remedy? [63] In addition to the matters set out earlier in these reasons, I observe that, the Tribunal has previously found that the Regulations do not clearly confer a power on the Tribunal to award damages for contravention of the statutory prohibition on a lessor taking a prescribed action.52 There is doubt as to whether there is entitlement to damages for breach of obligations under the Regulations. This is a factor in favour of granting a restraining order in respect of this claim, although the Tribunal has power to make an order requiring a party to pay an amount including an amount of compensation.53 [64] BLG contends that the Tribunal should also consider general discretionary factors such as delays by 3 Keys in complying with directions made. I am not satisfied that the delays prior to the oral hearing were extensive. [65] The granting of restraining orders as sought is essentially equitable relief. It is a well- established principle that a party seeking equitable relief must ‘have clean hands’. The evidence is that 3 Keys has paid no rent during 2021 or at least no rent to 27 May 2021. As stated earlier in these reasons, despite 3 Keys asserting an entitlement to 48 Exhibit 5, [19], [23], [28], [29], [30], YC6, YC8, YC9, YC10; Exhibit 6, [6], [21], YC1, YC2, YC4. 49 Regulations, s 18(4)(b). 50 Exhibit 11, [14], [31]. 51 Ibid, [27] – [30], [32] 52 Kirk & Anor v Sunshine Developments (Vic) Pty Ltd [2020] QCAT 493. 53 Regulations, s 44(3)(b). -- 12 of 13 -- 13 use and occupy the Premises, it has not attempted to comply with one of the most basic obligations of a sub-lessee, which is to pay or make arrangements to pay rent as and when it is due. To the extent 3 Keys claims some form of set-off it has failed to clearly outline the basis upon which such a set-off might relieve it of the obligation to pay for the use of the Premises to BLG. In these circumstances, I am not persuaded that I should exercise my discretion to restrain BLG. -- 13 of 13 --