Collins v Royalty Team Investors [2001] RSLT 7

1 [2001] RSLT 7 THE RETAIL SHOP LEASES ACT In the matter of Dispute No. 43/01 NICCOLE MAREE COLLINS - Claimant - and - ROYALTY TEAM INVESTORS (T/A AMPOL TUGUN) - Respondent DECISION Given in Brisbane on 7 November 2001. -- 1 of 9 -- Collins-v-Royalty Team 2 Decision The respondent is the lessee of an Ampol Service Station at Tugun. It was represented in the hearing before the Tribunal by Ilana Lenga. She described herself as the sole director of the Royalty Team Investors. Miss Collins appeared before the Tribunal in person. At a directions hearing before the Chairman held a few days before, she was represented by Michael Charles Chircop, who described himself as a "para-legal." In reply to questions by the Chairman, he stated that he had been in business for many years and had worked as a law clerk for the firm of Pilgrim Geddes for four years. The Chairman informed him that legal points were likely to arise at the hearing before the Tribunal, and suggested that it might be advisable for at least one of the parties to be legally represented. Mr Chircop stated that there were financial reasons why the claimant would not be represented. Discussions between the parties commenced in February 2001. The intention was that there should be a sub-lease between the claimant and the respondent of portion of the building from which the service station was being operated. This building consists of a front section from which the service station is operated, and a rear section containing the office of a travel agent, a kitchen from which a refrigerator and cool room lead, and an office associated with the respondent's business. The intention was that the claimant should sub-lease from the respondent the kitchen portion of the building and have the use of the refrigerator or cold room. The following appears on the back of an Ampol Tugun business card reading: -- 2 of 9 -- Collins-v-Royalty Team 3 Decision "$150/week plus GST, with fridge, cool room. $100/wk and GST, without fridge. 6.00 a.m. - 9.00 p.m." It is not disputed that this note is in Lenga's handwriting. The claimant added subsequently: "50% cost electric. Takeover 1 st March." There is no evidence as to whether this was added in Lenga's presence or whether she agreed with it. Lenga required the claimant to have a draft lease prepared and she went to see Mr Chircop at Pilgrim Geddes, Solicitors. He prepared a draft lease in which the premises is described as "496 Gold Coast Highway, Tugun, 4224." No qualification is made to this description, and in particular no reference is made to the fact that the premises were only part of the building at 496 Gold Coast Highway, Tugun. Nor is reference made to the refrigerator and cool room. The commencement date of the sub-lease is given as 1st March, 2001, -- 3 of 9 -- Collins-v-Royalty Team 4 Decision and determination date as 29th December, 2001. The form used for the draft sub-lease contains a sub-heading, "Termination date," and a line on which "29 December, 2001," appears. The next sub-heading is, "Option/s," and between the sub-heading, "Termination Date" and the sub-heading, "Option/s," appear the words, "Conditional on sub-lessor being granted five year option." These words are closer to the sub-heading, "Option/s" and may well relate to the option being conditional and not the whole agreement being conditional. We deal with this below in the light of the evidence which the Tribunal heard. Further against the sub-heading, "Option/s" appear these words: "Option 1: Term 5 X 1 year/s. Option 2: Term 1." Below in brackets are the words, "Delete or select as required.) The Chairman did not have the benefit of any legal argument. He takes the view that the notation on the back of the business card referred to above does not satisfy the requirement for a memorandum in writing, as required by the Statute of Frauds. However, the question of leases is now specifically dealt with under the provisions of the Property Law Act. Section 12 of that Act reads: "Creation of Interest in Land by Parole. 12(1) All interest in land created by parole and not put in writing and signed by the person so creating the same, or by the person's agent lawfully authorised in writing, shall have despite any consideration having been -- 4 of 9 -- Collins-v-Royalty Team 5 Decision given for the same, the force and effects of interests at will only. (2) Nothing in this Act shall affect the creation by parole of a lease taking effect for a term not exceeding three years, with or without a right for the lessee to extend any term or any period which with the term would not exceed three years." The Chairman interprets this as meaning that a lease, together with the period of option, exceeds three years, will only create an interest at will in the absence of writing signed by the parties sought to be bound or that party's agent authorised in writing. On this basis the tenant occupied the premises at the will of the sub-lessor. Further, the Chairman directed the Tribunal that the writing must contain a valid description of the premises in order to have any meaning. The Tribunal finds that describing the premises by the street number of the whole service station complex is meaningless in that there was never ever any intention to lease the complex. This is sufficient to find that the claimant must fail in her claim. However, we look at the claimant's statement as filed in these proceedings. It is dated 27/8/01. In the first clause the claimant states: "The claimant after discussions with the future sub-lessor reached an agreement based on representations made by the sub-lessor to operate the hot food restaurant at Ampol Garage. The basic terms and conditions of the sub-lease are stated on the back of a business card by the sub-lessor, which is annexed. There were further terms and conditions that were not detailed -- 5 of 9 -- Collins-v-Royalty Team 6 Decision in any form or manner." The claimant's statement continues with a sub-heading: "From 1 March 2001, after taking possession of the premises. Sub-lessee paid one month's rental of $600 in advance." Then follow 32 points. We deal with those which we consider may be of some relevance, giving them the numbers allocated in the claimant's statement: 1. Phone connection removed from kitchen area. The evidence from Mrs Lenga is that this telephone was never connected to a line and this evidence is not disputed. 2. Claimant forced to use pay phone, using the line that existed previously. The evidence is that the line which had previously gone to the kitchen area had been allocated to a pay phone long before arrangements between the claimant and the respondent. 3. Sub-lessor and sub-lessee had agreed previously to share cool share space in half-each, and share their electricity account in the same manner. (See 4 below) 4. Sub-lessor restricted sub-lessee to a quarter of the cool room space. -- 6 of 9 -- Collins-v-Royalty Team 7 Decision We accept that these paragraphs probably set out the verbal arrangement between the parties. However, they are in no manner defined in the lease submitted or otherwise. 10. Approximately ten days after sub-lessee began operating from the premises, the sub-lessor introduced a "Mrs Mac" pie warmer, selling ground meat pies, etc. This affected the sales in the restaurant. There is no exclusivity clause in the draft lease, nor was one ever discussed. This is therefore not a ground for complaint. 11. Back door from kitchen is bolted and welded closed. We are told that this was the position well before negotiations between the parties. Sub-lessor could not confirm after receiving copy of lease whether she was in agreement with the terms and conditions. 22. Sub-lessor made derogatory personal comments in respect of the presentation of sub-lessee. -- 7 of 9 -- Collins-v-Royalty Team 8 Decision 23. Sub-lessor threatened to kick sub-lessee. 24. Sub-lessor insisted on knowing personal details of sub-lessee's kitchen staff. 25. Sub-lessee feels like she is an employee of the sub-lessor. Having seen and heard Mrs Lenga, the Tribunal accepts that the probabilities favour the claimant's version of events and the matters set out in these paragraphs did in fact occur. However, we take the view that they are insufficient to justify cancellation of any sub-lease which may have been in existence between the parties. 30. The sub-lessor upon return made the situation so unreasonable that the sub-lessee was driven out of the premises because she had no sub-lease. We touched on this before when we dealt with her evidence in which the claimant stated that the final reason for vacating the premises was that she had no security in that the sub-lease had not been signed by the sub-lessor. The sub-lessor has stated that the sub-lessor's agreement with Ampol terminates on 29th December 2001. As at the date of hearing, she had no indication from Ampol that the lease to the respondent would be renewed. She therefore was unwilling to sign a sub-lease. It appears that she has interpreted the draft -- 8 of 9 -- Collins-v-Royalty Team 9 Decision sub-lease as conditional on Ampol granting to the sub-lessor a five year lease and that not only the option periods but the whole sub- lease was conditional on this consent. Mrs Lenga stated that she did not sign the sub-lease because she had not obtained a lease. Mrs Lenga's interpretation is a possible one, although not favoured by the Tribunal. The Chairman has instructed the Tribunal that a party to a proposed lease where a draft has been submitted (and where the parties are otherwise bound) cannot cancel the agreement between the parties unless there has been an unreasonable delay by the other party, or unless notice making time of the essence has been given and not acted on. On this basis, the Tribunal holds that the claimant was not entitled to cancel any arrangement between the parties and withdraw from the premises. The Members of the Tribunal place on record that their sympathies are with the claimant. She was inexperienced in business. The conduct by Mrs Lenga was unpleasant. Mrs Lenga appears to be a difficult person to deal with. In spite of these, we have come to the conclusion for the reasons stated, both legal and factual, that the claim must fail. We accordingly rule that the claim is dismissed. P V Loewenthal, Chairman. -- 9 of 9 --