Australian East India Trading Company Pty Ltd v Goldsea Pty Ltd [1999] RSLT 9

1 [1999] RSLT 9 THE RETAIL SHOP LEASES ACT In the matter of Dispute 30/1998 AUSTRALIAN EAST INDIA TRADING COMPANY PTY LIMITED - Claimant - and - GOLDSEA PTY LIMITED - Respondent DECISION (on Point of Law) Given in Brisbane on 7 April, 1999. -- 1 of 7 -- Aust-East India-v-Goldsea 2 Decision This Retail Tenancy Dispute was instituted by a Notice of Dispute dated 30 March 1998 and received and registered in the Retail Shop Lease Tribunal Registry on 31 March 1998 as Dispute 30/1998. A Notice of Mediation dated 1 April 1998 was sent to the parties, an unsuccessful mediation hearing was conducted on 22 April 1998, and the dispute referred by the Mediator to the Chief Executive to be determined by a Tribunal. In Item 6 of the Notice of Dispute dated 30 March 1998, in which the claimant is required to “Set out in reasonable detail as simply as possible the main points of the dispute. (If insufficient space, attach additional sheets)” the main points are stated in the following words set out in lines as follows: - “MISREPRESENTATION WHEN ENTERING INTO AGREEMENT WE WERE TOLD THAT WE WOULD NOT DO LESS THAN $600000 PER YEAR We only achieved that in the 1st year WE ALSO STATE THAT OUR ORIGINAL LEASE IS STILL IN FORCE AS OUR ARREARS WERE NIL BECAUSE THE MANAGEMENT HAD NOT RETURNED OUR OVER PAYMENTS THEY FORCED US OUT OF PART OF OUR SHOP (COFFEE SHOP) AND ARE NOW SAYING THE LEASE IS NULL & VOID THEY DID SERVE THE NOTICES CORRECTLY UNLAWFUL TERMINATION” There appears to be an almost complete lack of punctuation in the setting out of Item 6 of the Notice. On or about 26 May 1998 the claimant filed an “Amended Claim” in the following terms: “Australian East India Trading Company P/L v. Goldsea P/L The Company claims the following reckless, negligent or fraudulent misrepresentations were made by the lessor (Goldsea P/L) and/or its agents before the Company entered into agreement: (a) The Company was told by the landlord and/or its agents that the sales would be not les than $600,000.00 each and every year for duration of the Lease term (8 years). The sales achieved by the Company were only that much in the first year only. (b) The Company was told that the rental would be 17% of the turnover and that no other payments would be required. The lessor has been claiming additional rental payments. (c) That the monorail would be free of charge for at least 8 years from 1993. However, the monorail was free only for two yars and -- 2 of 7 -- Aust-East India-v-Goldsea 3 Decision after that a fee was payable for the use of the monorail. (d) That there would be at least 120,000 people coming to the Oasis Shopping Centre each week and probably increase each and every year for duration of the Lease term. The Company relied on representations in mentioned in (a) and (b), (d) and (d) and signed the Lease. The figure of 120,000 people was not reached at all. Furthermore, after about one (1) year, the number of people dropped off even further. (e) The landlord wrongfully purported to terminate the lease and its agents damaged the goods and committed a trespass by removing he goods from the shop. (f) The landlord wrongfully locked out the Company from the shop causing further loss and damage to the Company. By locking out the Company, the landlord thereby interfered with the quiet enjoyment. The landlord did not serve Notice correctly as there was no default in payment of the rent. In the alternative, the landlord, negligently, recklessly, or fraudulently misrepresented the true rental situation. The Company was misled as to the rental provision. The Company never consented to the rental provision as stipulated in the Lease agreement. There was never any agreement as to the Rental provision between the parties. In the premises, there was no agreement between the parties. The landlord’s conduct was misleading, negligent, reckless or fraudulent. The Company suffered a loss and damage as a result of the misrepresentations, wrongful termination and the trespass and damage to the goods. The Company claims compensation for loss and damage suffered together with reinstatement and rectification of the lease.” A directions hearing, of which notice had been given before 26 May 1998, was held on 28 May 1998. At that hearing, Mr Savage of Counsel, the approved agent of the respondent, submitted that because the respondent was to commence proceedings in the District Court at Brisbane to recover its arrears of rent, the Tribunal should refer the Dispute to that Court pursuant to s.111(2) of the Act. Mr Bass, the approved agent of the claimant, opposed that application. I adjourned the application to enable the parties to file and exchange written submissions on the point of the transfer. Written submissions were made and exchanged. The Dispute came on for a further directions hearing on 11 February 1999. At that hearing, although the respondent continued its submission that the Dispute should be referred to the District Court at Brisbane, the main thrust of its argument was that the Tribunal had no jurisdiction to deal with items (b), (c) and (d) in the Amended Claim, the claimant having in its submissions abandoned items (e) and (f), and the respondent having acknowledged -- 3 of 7 -- Aust-East India-v-Goldsea 4 Decision that item (a) in the Amended Claim was covered by the original Notice of Dispute. Essentially, the respondent argued that the items (b), (c) and (d), were not simply “particulars” of the original claim but were in substance new disputes on different grounds. The respondent argued that, if such can be shown to be the case, Notice of Dispute dealing with those new claims had not been filed and served within four months of the termination of the Retail Shop Lease the subject of the original Notice of Dispute. If that were the case, the respondent argued, s.63.(1)(b) of the Act prevented reference of the alleged new disputes by the Mediator to the Chief Executive and by the Chief Executive to a Tribunal. S.63 of the Act reads, so far as is relevant:- “63.1 This section applies if (a) a retail tenancy dispute is within a Tribunal’s jurisdiction and - (i) the parties can not reach a mediated solution to the dispute; (ii) …. (iii) …. (b) the retail shop lease has not ended (whether by expiry, surrender or termination) more than 4 months before the dispute notice was lodged. (2) The mediator must, by written notice given to the chief executive, promptly refer the dispute to the chief executive.)”. There is a certain lack of clarify in subs.(2) arising from the use of the word “must” perhaps leaving it open to a Mediator at his discretion, but without obligation so to do, to refer a dispute where paragraph (b) of subs.(1) does not apply. But I have found it unnecessary to decide that point for the purposes of this decision. The respondent went on to argue the fact that the Notice of Mediation attached the original Dispute Notice rather than the Amended Claim meant that the dispute in the Amended Claim had not gone to mediation, and therefore could not come back, under any circumstances, to the Tribunal; and, further, that it was too late to refer the Amended Claim to mediation and have it referred back to the Chief Executive and to a Tribunal, because a period exceeding four months had expired since the termination of the retail shop lease. (As an aside, the respondent’s agent submitted that the new Dispute could not be referred even to a Mediator after four months had elapsed from termination of the lease. I do not accept that submission.) The claimant relies on s.73 of the Act, which reads as follows: - “71.(1) The Tribunal may at any stage of the hearing of the retail tenancy dispute amend the particulars of the dispute in the way it considers appropriate – (a) if asked by the party who lodged the dispute notice; or -- 4 of 7 -- Aust-East India-v-Goldsea 5 Decision (b) on its own initiative if the parties to the dispute agree. (2) For this Act, the amended dispute is taken to be the dispute.” In doing so, the claimant referred to s.72(1)(b) of the Act which requires a Tribunal, when conducting a hearing, to (inter alia) act as quickly, and with as little formality and technicality, as is consistent with a fair and proper consideration of the issues before it. The claimant submitted that against the background of a lay person doing his best to set before the Tribunal the main point of the dispute as being misrepresentation, that no prejudice would be suffered by the respondent if the Tribunal were to accept that the Amended Notice containing paragraphs (b), (c) and (d) be regarded as further particulars of misrepresentation. In summary, the issue argued by the parties is whether the “main points of the dispute” as set out in item 6 of the Notice of Dispute enable the Tribunal to exercise the discretion conferred on it by s.73 to “amend the particulars of the dispute” so that in terms of subs.(2) of that section items (a) to (d) in the Amended Claim constitute “the dispute”. That is an issue which must be decided in the context of the Retail Shop Lease Act 1994, a remedial Act, having as its object “to promote efficiency and equity in the conduct of certain retail businesses in Queensland”, such object to be achieved through (inter alia) “a low-cost dispute resolution process for retail tenancy disputes”. A “retail tenancy dispute” is defined by the Act to mean “any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into.” The Act contains certain provisions setting up a dispute resolution process and provides in s.44.(1) that where by virtue of the covenants implied into retail shop leases by s.43 of the Act a lessee is entitled to compensation and the amount of the compensation is not agreed between the lessor and the lessee, then the amount of compensation “is to be decided by way of the dispute resolution process”. It is common ground that there is a “retail tenancy dispute” as defined, because the lessor and the lessee are unable to agree on an amount of compensation to which the lessee claims to be entitled. That is, there is a dispute between the lessor and the lessee which falls to be determined by way of the dispute resolution process. S.42 of the Act implies into every retail shop lease (with certain presently irrelevant exceptions) the covenants contained in s.43 and s.44. One of the implied covenants appears in subs.2 of 43, which subsection reads as follows:- (2) The lessor is liable to pay to the lessee reasonable compensation for loss or damage suffered by the lessee because – (a) the lessee entered into the lease, or a renewal of it, on -- 5 of 7 -- Aust-East India-v-Goldsea 6 Decision the basis of a false or misleading statement or misrepresentation made by the lessor or any person acting under the lessor's authority;” Sections 42, 43 and 44 do not require a claimant to set out in his Notice of Dispute any particulars at all of the false or misleading statement or misrepresentation. Further, there is nothing in s.43 which would give any separate entitlements to compensation if the claimant were to prove to the Tribunal’s satisfaction the allegations contained in paragraphs (a), (b) and (c). The lessee’s claim is, by virtue of s.43.(2)(a) made on the basis of entry into a lease induced by a false or misleading statement or misrepresentation. The purpose of a Notice of Dispute bears some resemblance to the purpose of a Writ of Summons issued out of the Supreme Court, in that it is required to state a cause of action but not particulars of the claim. The practice pursuant to the Act adopted by the Chairmen of the Tribunal is to call a directions hearing to set out and appoint a timetable for the interlocutory steps to be taken before disputes actually reach a full Tribunal for determination. The first interlocutory step requires a claimant to prepare, file in the Registry and serve on the respondent copies of all material, including witnesses’ statements, and a statement of the precise orders sought from the Tribunal, within a certain time. The response to that order is tantamount to a statement of claim in an action in the Supreme Court. Further orders deal with the Tribunal’s equivalent of defence and counter-claim, reply and answer, discovery of documents and so forth. But it must be understood that it is the order made on a directions hearing which gives rise to the interlocutory steps. It is clear that it was not necessary for the claimant in this dispute to include in item 6 anything more than the words which appear in the first line, namely: “MISREPRESENTATION WHEN ENTERING INTO AGREEMENT”. Had the claimant done that, and had the usual order been made on a directions hearing, the claimant would have been called upon to supply the equivalent of particulars, as adverted to above. The respondent could, if it saw fit, complain that the statements delivered by the claimant pursuant to the first order were insufficient and could seek further particulars then. Having regard to provisions contained in 42, 43 and 44 of the Act, I hold that the claimant is not prevented by anything contained or implied in the Act from claiming compensation in respect of loss or damage suffered by the claimant as lessee, because it entered into the lease on the basis of any false or misleading statement or statements or misrepresentations made by the lessor or the lessor’s agent, and I hold further that the claimant is not confined to a claim for compensation for loss arising out of the allegations concerning turnover contained in item 6 of the Notice of Dispute. In due course the claimant will be restricted to the allegations contained in the material to be filed and served pursuant to an order to be made on a directions hearing. Mr Gynther of Counsel, approved agent for the respondent, presented argument and referred to authority, particularly to the judgment of Keifel J. in -- 6 of 7 -- Aust-East India-v-Goldsea 7 Decision the unreported decision of the Supreme Court in Queensland Industry Banking Development Corporation –v- Australia & New Zealand Banking Group Limited. That decision dealt with “particulars” as that term is understood in the Supreme Court of Queensland. Her Honour’s rulings dealt with whether certain particulars could be added to an original pleading that she held to be deficient in particularity. There is no rule requiring particularity in the Notice of Dispute filed pursuant to s.55 of the Act. By subs.2 a “dispute notice must be in the approved form and accompanied by the fee prescribed by regulation.” The approved form is that in which the original Notice of Dispute in this matter was drawn. Given the requirements of ss. 42, 43 and 44 of the Act, it is sufficient to state, in item 6 of that form, that a claimant seeks compensation, in such a way as to invoke s.43(2)(a). The first line in the claimant’s dispute notice does that. The rest is surplusage. On that reasoning, it is not necessary to apply s.73 of the Act. The Dispute Notice and the Amended Claim can be read as a claim based on those sections providing for compensation for loss suffered because of entry into the lease on the basis of a false or misleading statement or misrepresentation (of any kind) made by or on behalf of the lessor. Particulars of the alleged conduct must be given, in due course, in response to an order which will be made by the Tribunal at a directions hearing, the date for which would be appointed in the near future. I have considered the respondent’s submissions concerning the transfer of the dispute to a District Court in Brisbane. The submissions have not given rise to an opinion that the dispute should be heard in any forum other than the Tribunal. I order:- 1. That the claim not be transferred to the District Court in Brisbane, and; 2. The claimant is entitled as a matter of law by the provisions of the Retail Shop Leases Act 1994 to proceed with the whole of its claim based on the covenant implied into the retail shop lease by s.43.(2)(a) of The Retail Shop Leases Act 1994. A W Couper, Chairman. -- 7 of 7 --