Bedside Story v Stockland Trust Group [1992] RSLT 1

[1992] QRSLT 1 RETAIL SHOP LEASES ACT 1984 - 1994 In the matter of Dispute No. 58 of 1991 M J BLOOMFIELD & E R WARNER (T/A BEDSIDE STORY) Tenants - and - STOCKLAND TRUST GROUP - Landlord RULING ON JURISDICTION Given in Brisbane on 18 March, 1992 -- 1 of 3 -- Decision - 2 The claim as indicated by the Notice instituting the Reference of Dispute and amplified in oral and written submissions is for compensation for loss allegedly suffered by the claimants because of the defendant's failure to agree to assignments and change of use of the subject premises. The lease, which was for a period of 5 years, contained a provision prohibiting assignment without the prior consent of the landlord which was not to be unreasonably withheld provided other (and usual) conditions were satisfied. Clause 5.01 of the lease provided as follows: PERMISSIBLE USE: The lessee shall not use the demised premises or any part thereof for any purpose other than as set out in Item 10 of the Reference Schedule without the prior consent in writing of the lessor. Item 10 in the Reference Schedule provides as follows: PERMISSIBLE USE: The retail sale of manchester, curtaining and brass beds. The tenants claim that in September, 1990, they were refused permission to assign the lease to Focus Photo and to permit Focus Photo permission to carry on a photography business. In July 1991, the landlord refused to allow an assignment and change of use to allow Edgar Lodge Pty Ltd, trading as Bagstop, to trade in handbags unless it agreed to a higher rental, a longer lease and an increased security deposit. The tenants rely on S121(3) and S121(4) of the Property Law Act 1974-1986. Those sections read: (3) In all leases, whether made before or after the commencement of this Act, containing a covenant, condition or agreement against the alteration of the user of the leased premises without licence or consent, such covenant, condition or agreement shall, if the alteration does not involve any structural alteration of the premises, be deemed, notwithstanding any express provision to the contrary, to be subject to a proviso that no fine or sum of money in the nature of a fine, whether by way of increase of rent or otherwise, shall be payable for or in respect of the licence or consent; but this proviso does not preclude the right of the lessor to require payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to him and of any legal or other expenses incurred in connection with the licence or consent. (4) Where a dispute as to the reasonableness of any such sum has been determined by a court of competent jurisdiction, the lessor shall be bound to grant the licence or consent on payment of the sum so determined to be reasonable. The subsections must be contrasted with subsections 121(1) and 121(2) -- 2 of 3 -- Decision - Page 3 which specifically provide that a landlord cannot unreasonably withhold consent to subletting or the making of improvements. Subsection 121(4) is an independent subsection and not part of Subsection 121(3). It is, in my opinion, a machinery provision where compensation payable under earlier sections of Section 121 have to be assessed. Subsection (3) prohibits the payment of a sum of money as a fine or in the nature of a fine, whether by increase of rental or otherwise as a condition to a consent to change of user. Taken in its context and contrasting its provisions with the express wording of S121(1) and 121(2), I find nothing in this subsection preventing a landlord from withholding a consent to change of use, whether unreasonably or otherwise. If the landlord does give consent, he cannot impost a fine. On this basis, I conclude that the claimants are not entitled to compensation. This ruling is made on the facts stated to me in writing and is not contradicted. I have not dealt with the question of jurisdiction. In previous decisions (which are not binding), I have held that the word "or" where it first appears in S36, has the effect of giving the Tribunal jurisdiction to determine any dispute which concerns the liability of any person to pay moneys in connection with a retail shop lease. In my opinion moneys include damages. P V LOEWENTHAL Chairman. -- 3 of 3 --