Amjad Enterprises Pty Ltd v Crux Investments Pty Ltd [2013] QCAT 203

CITATION: Amjad Enterprises Pty Ltd v Crux Investments Pty Ltd [2013] QCAT 203 PARTIES: Amjad Enterprises Pty Ltd (trading as Macquarie Convenience Store) (Applicant) v Crux Investments Pty Ltd (as Trustee for the Banks Family Superannuation Fund) (Respondent) APPLICATION NUMBER: RSL122-12 MATTER TYPE: Retail shop leases matters HEARING DATE: 24 April 2013 HEARD AT: Brisbane DECISION OF: Dr J R Forbes, Member DELIVERED ON: 24 April 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The application of Crux Investments Pty Ltd that whole or part of the amended claim of Amjad Enterprises Pty Ltd be struck out is dismissed. 2. The costs of this application are reserved. CATCHWORDS: RETAIL SHOP LEASE DISPUTE – APPLICATION TO STRIKE OUT OR DISMISS AMENDED CLAIM – disputed question of law – validity of Notice to Remedy Breach – other issues requiring to be tried – proper limits of decision making under QCAT Act section 47 – onus upon applicant to show claim unarguable – onus not discharged Queensland Civil and Administrative Tribunal Act 2009, s 28, s 32, s 47, s 64, s 102 Property Law Act 1974, s 124 Retail Shop Leases Act 1994, s 43 Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 -- 1 of 5 -- 2 Burton v Shire of Bairnsdale (1908) 7 CLR 76 Collie v Edmunds [2006] QSC 343 Dense Medium Separation Powders Pty Limited v Gondwana Chemicals Pty Limited [2011] NSWCA 84 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 Grasso & Anor v CMG Consulting Engineers Pty Ltd [2011] QCATA 244 Norman v Matthews (1916) 85 LJ KB 857 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Queensland University of Technology v Project Constructions (Aust) Pty Ltd [2003] 1 Qd R 259 Roadships Logistics Ltd v Tree [2007] NSWSC 1084 Thorneton Avenue Pty Ltd v Body Corporate for the Avenue [2013] QCAT 39 World Best Holdings Limited v Sarker [2010] NSWCA 24 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 („QCAT Act‟). REASONS FOR DECISION [1] On 22 October 2010 the applicant lessee, Amjad Enterprises Pty Ltd (“Amjad”) commenced a 5-year lease of premises at Macquarie Street, Teneriffe, Brisbane, owned by the respondent Crux Investments Pty Ltd (“Crux”). [2] Crux brings the present application (“the interlocutory application”) for the dismissal or striking out of the proceedings1 commenced by Amjad on 22 November 2012 (“the original application”). [3] On 4 March 2013 the Tribunal directed that the interlocutory application be decided on the papers. [4] By the original application, under the Retail Shop Leases Act 1994, (“RSLA”) Amjad claims compensation for loss or damage suffered in consequence of Crux‟s wrongful termination of its lease, misappropriation of security deposit, breaches of certain covenants and false or misleading statements or misrepresentations inducing Amjad to enter the lease.2 Amjad also claims costs. 1 QCAT Act, s 47. 2 RSLA, s 43. -- 2 of 5 -- 3 [5] Amjad contends, upon several grounds, that a Notice to Remedy Breach of Covenant3 served upon it Crux, dated 30 July 2012 (“the July Notice”) is invalid, and that accordingly the termination of the lease is wrongful and ineffective. [6] The only breach alleged in the July Notice is “Schedule 5 USE The lessee shall not use the demised premises otherwise than for the purpose stated in summary (l) hereto and shall comply with all requirements of law in relation to that use”. Scant particulars are given, but it appears that the breach alleged was the installation, without Council consent, of a storeroom in the car park of the subject premises.4 [7] However, Crux relies not upon the July Notice, but upon one dated 2 August 2012 and served upon Amjad by letter dated 3 August 2012 “the August Notice”). The August Notice is more specific and broad-based than the July Notice; it relies on non-payment of rent and outgoings, as well as the storeroom mentioned in the July Notice. It claims $11,479.79 for rent, and $1,500 (plus GST of $150) for “legal costs of an [sic] incidental to this [August] Notice”. [8] Crux filed submissions in support of the interlocutory application on 28 February 2013. Amjad filed a response on 4 April 2013, and Crux replied on 12 April 2013. [9] Crux says that it allowed the July Notice to lapse, and that it relies on the August Notice.5 It says that when Amjad failed to remedy the breaches alleged in that Notice by the stipulated time, Crux lawfully re-entered and terminated the lease.6 [10] Crux submits, in effect, that the original application should be struck out or dismissed because it “is premised on the alleged deficiencies in the [abandoned] July Notice”,7 whereas Crux “acted at all [material] times pursuant to the August Notice”.8 [11] However, Crux implicitly recognises that some of the claims pleaded in the original application do not – or at least, may not - turn upon the validity of the July or August Notices.9 Clearly Amjad‟s allegations regarding the security deposit, disruption of its trading, conversion of its goods, and misrepresentations inducing it to undertake the lease are in this category.10 (This is not to decide whether those allegations are adequately particularised, let alone established.) 3 Property Law Act 1974, s 124. 4 Submissions of Crux filed 28 February 2013, paragraph 5(b). 5 Ibid paragraphs 6-8. 6 Ibid paragraph 11. 7 Ibid paragraph 19. 8 Ibid paragraph 22(b). 9 See the alternative application for a partial striking out in paragraph 1(d) of Crux‟s submissions filed on 28 February 2013. 10 Particulars appended to the original application, paragraphs 35-37. -- 3 of 5 -- 4 [12] Amjad‟s response to Crux‟s submissions may be summarised as follows: a) The August Notice was not duly served;11 b) In any event, the service of the invalid July Notice constituted a repudiation, by Crux of the subject lease, so that the August Notice was also invalid;12 c) The storage area, while it admittedly lacked the Council‟s consent, was “specifically negotiated” with Crux;13 d) The rent allegedly due and owing has not been correctly calculated;14 e) The amount claimed by Crux for outgoings (body corporate levies) wrongly includes expenditure of a capital nature;15 f) The amount claimed for legal costs should be taxed, and the amount claimed for GST is not properly payable;16 and g) The original application is not frivolous, vexatious or misconceived within the meaning of the QCAT Act.17 [13] In effect, the claims advanced in [12](a) and [12](b), above are amendments to Amjad‟s original application. No leave to amend has been sought, but I shall allow them.18 In today‟s courts points of pleading are ruled by the “dictates of justice”19 even when leave is not sought,20 provided that the application is not embarrassingly late, or a trial in progress is not compromised.21 This approach is appropriate in this Tribunal.22 [14] Crux‟s reply to Amjad‟s submissions contends that: a) Authority cited by Crux in support of its submission in [12](b), above, is distinguishable;23 that is, a breach notice served after an invalid notice is not per se invalid;24 b) The July and August Notices were not termination notices, but notices to remedy breaches.25 11 Submissions of Amjad paragraph 9. 12 Ibid paragraphs 7-18. 13 Ibid paragraphs 19-21. 14 Ibid paragraphs 22-26. 15 Ibid paragraphs 27-30. 16 Ibid paragraphs 31-35. 17 Ibid paragraphs 36 ff. 18 QCAT Act, s 64(2). 19 Dense Medium Separation Powders Pty Limited v Gondwana Chemicals Pty Limited [2011] NSWCA 84 at [11] per Young JA; Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 155. 20 Collie v Edmunds [2006] QSC 343 at [5]. 21 Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; Thorneton Avenue Pty Ltd v Body Corporate for the Avenue [2013] QCAT 39 at [21]. 22 QCAT Act, s 28(3)(d), (e), s 64; Grasso & Anor v CMG Consulting Engineers Pty Ltd [2011] QCATA 244 at [17], [18], [23]. 23 Crux‟s submissions in reply paragraphs 2-4. 24 Ibid paragraph 4(c). 25 Ibid paragraphs 4(a) and (b). -- 4 of 5 -- 5 [15] Crux‟s main attack is upon Amjad‟s plea that a breach notice replacing an invalid notice is per se invalid, and consequently that Crux‟s re-entry was unlawful. Crux‟s reply is that the decision of the NSW Court of Appeal in World Best Holdings Limited v Sarker,26 upon which Amjad presently relies, does not support that argument. [16] It does seem to me that the ratio of World Best Holdings is not simply that the second notice followed an invalid one, but rather that it displayed the same fatal flaw as the first notice, namely a false assumption that a clause in a lease can magically make a non-fundamental breach fundamental.27 But in these interlocutory proceedings the question is not whether Amjad‟s criticism of the August notice is ultimately correct, but whether it is so obviously untenable that it cannot possibly succeed,28 or is such that no reasonable person could regard it as bona fide29 and worthy of further consideration.30 The onus upon Crux is to show that those tests mandate an affirmative answer in this case. I am not satisfied that it has done so. I prefer to leave open the possibility that Amjad might persuade the trial Tribunal, in the light of World Best Holdings or for some different reason, that Crux‟s re-entry was unlawful. Of course, if Amjad‟s allegation of non- service is upheld, the validity of the August notice is academic. [17] There is a clear distinction between deciding whether there is a genuine dispute, on one hand, and deciding the merits of the dispute, on the other.31 My present task is of the former, not the latter kind. The courts are understandably very cautious before they apply such a provision as s 47 of the QCAT Act. In this case there are several claims that must obviously go to trial on issues of fact and credit, including a claim that the second notice was not in fact served upon Amjad. In any event there must be a trial, and I consider that the validity of the August notice may be conveniently and more adequately treated at that stage. I am not satisfied that Amjad should be summarily forbidden to canvass that issue. If full inquiry at the trial discloses that one or more of Amjad‟s claims should never have been made, Crux may have a remedy in costs.32 ORDERS: 1. The application of Crux Investments Pty Ltd that whole or part of the amended claim of Amjad Enterprises Pty Ltd be struck out is dismissed. 2. The costs of this application are reserved. 26 [2010] NSWCA 24. 27 Ibid at paragraphs [44] and [48]. 28 Burton v Shire of Bairnsdale (1908) 7 CLR 76 at 92 per O‟Connor J; Queensland University of Technology v Project Constructions (Aust) Pty Ltd [2003] 1 Qd R 259 at 264-265. 29 Norman v Matthews (1916) 85 LJ KB 857 at 859 per Lush J. 30 Roadships Logistics Ltd v Tree [2007] NSWSC 1084. 31 Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787 per McLelland CJ in Eq. 32 QCAT Act, s 102. -- 5 of 5 --