Blue Gamers Pty Ltd v Conias Corporation Pty Ltd [2012] QCAT 250

CITATION: Blue Gamers Pty Ltd v Conias Corporation Pty Ltd [2012] QCAT 250 PARTIES: Blue Gamers Pty Ltd t/as The Bunker Internet Gaming Cafe v Conias Corporation Pty Ltd APPLICATION NUMBER: RSL026-12 MATTER TYPE: Retail shop leases matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Ann Fitzpatrick, Member DELIVERED ON: 15 June, 2012 DELIVERED AT: Brisbane ORDERS MADE: [1] The application be dismissed. [2] No order as to costs. CATCHWORDS: Retail Shop Leases – Jurisdiction to hear application and make order to extend time or waive compliance Stremo Pty Ltd v Opal Collections Pty Ltd [2011] QCATA 129, followed McDonald’s Australia Ltd v Emaaas Pty Ltd [2011] QCAT 293, considered 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] The applicant, the lessee of certain retail premises, filed an application for an order to resolve a retail tenancy dispute on 8 March, 2012. The applicant also filed an application to extend a time limit on 8 March, 2012. [2] The respondent filed an application for leave for legal representation on 23 April, 2012. -- 1 of 10 -- 2 [3] The applicant and respondent were parties to a lease of premises at 62 Queen Street, Brisbane. The lease document expresses the commencement date as 2 September, 2004 and the expiry date as 1 September, 2011. [4] In general terms a dispute has arisen between the parties in relation to alleged unconscionable conduct by the respondent, outgoings, equipment, quiet enjoyment and loss of retail space, air-conditioning and return of a bank guarantee. [5] The respondent lessor purported to terminate the lease and entered into possession of the premises on 16 December, 2010. [6] The applicant lodged a notice of dispute pursuant to the Retail Shop Leases Act 1994 (Act), on 6 January, 2012. [7] The Tribunal file reveals a notice from the mediator appointed under the Act, to the effect that a mediation was conducted, however the parties cannot reach a mediated solution to the dispute. The mediator noted that the retail shop lease ended by termination on the 16 December, 2010, the notice of dispute was lodged by the applicant on 6 January, 2012 and that the lease had ended more than 1 year before the dispute notice was lodged. Therefore the mediator said that pursuant to the provisions of section 63 of the Act the dispute cannot be referred to QCAT. Application to extend time limit [8] The applicant submits that it lodged the dispute notice three weeks outside the time limit referred to in section 64 of the Act. It seeks an order from this Tribunal under section 61 of the Queensland Civil and Administrative Tribunal Act 2009 that the time limit fixed by the Act be extended. [9] Although not clearly stated by the applicant, the time limit the subject of the application can only be the period between the end of the lease and the lodgement of the dispute notice referred to in section 64 of the Act, that being the only period potentially amenable to extension. The precise order sought has not been stated, however, I assume it to be an order that the time limit of 1 year be extended for a sufficient period to ensure that the lease had not ended more than 1 year before the dispute notice was lodged. [10] The grounds set out in the application are: (a) The applicant made attempts to resolve its dispute with the respondent from 16 December, 2010, however, the respondent failed to reply to correspondence until 12 January, 2011. (b) After receipt of a demand received on 28 February, 2011 for $85,048.95 for rent and outgoings for the months of January and -- 2 of 10 -- 3 February, 2012, the applicant formed the view that a resolution of the dispute between the parties was not possible. (c) The applicant’s collation of documents was hindered by the effects of the January, 2011 floods. Documents stored by a previous solicitor were located in flood affected areas delaying access to documents required to clarify sections of a previous lease relating to the bond. (d) A lack of financial resources as the company was unable to trade after leaving the premises and its assets were held by the respondent. (e) On 7 July, the respondent’s agent notified the applicant it wished to remove and dispose of equipment held on the premises. At that time the applicant gave notice that the claim was in dispute. The applicant asserts that as a result the respondent cannot claim surprise in relation to the application for an order to resolve a tenancy dispute. (f) The respondent failed to communicate, negotiate and act in good faith and combined with the natural disasters of the region it is not unreasonable for a small delay in lodgement. (g) Alternatively, the applicant asserts that the expiry date of the lease was 1 September, 2011 not 16 December, 2010, in which case its application is not out of time. [11] By submissions filed 13 April, 2012 the applicant expanded on these grounds, adding: (a) It challenges the validity of the purported termination on the basis of the way in which the termination was effected and because it says the respondent was in breach of the lease prior to the purported termination. (b) It considers that seeking relief against forfeiture would place it in an intolerable position, although this is not further explained. (c) The respondent’s conduct suggests the expiry date of the lease was not 16 December, 2010 as it issued invoices for rent payments for January, February and March, 2011 and it has not brought an action for compensation. Further it did not “make good” the premises until 15 July, 2011 and did not advertise the premises until 10 June, 2011, suggesting that the respondent did not consider the lease terminated on 16 December, 2010. (d) Given the long standing nature of the dispute, since 2008 and correspondence as late as 15 July, 2011 the respondent cannot claim surprise, hardship or injustice. [12] The applicant filed further submissions on 8 May, 2012, adding: -- 3 of 10 -- 4 (a) Notice of dispute under the Act was first lodged by it on 6 January, 2012, 18 weeks after the lease end date and one year 3 weeks after the respondent entered the premises. (b) The applicant rejects any assertion that it has been in breach of the lease and sets out details of payments and payment arrangements suggesting the respondent has been responsible for problems in processing payments. No notices to remedy breach had been received over the course of 9 years of trade until 28 September, 2010. That notice was amended and re-issued on 30 September, 2010. (c) Outgoings and a bond are issues of dispute between the parties. (d) The respondent has not availed itself of the dispute resolution procedures of the Act to claim arrears and it is seeking an advantage in a superior court. (e) The applicant has had to organise, produce and collate all the evidence and information to start the case without the financial resources to rely on legal representation. [13] The respondent opposes the application and submits that: (a) There has been a history of breaches of the lease by the applicant and delivery of notices to remedy breach. On 30 November, 2010 a notice to remedy breach was delivered in accordance with the lease and the Property Law Act 1974. The breach was not satisfied and a notice of termination dated 16 December, 2010 was delivered to the applicant. (b) The lease was validly terminated. (c) No relief against forfeiture has been sought. (d) Section 64 of the Act permits a party to a retail tenancy dispute to apply to QCAT for an order to resolve a dispute provided that the “retail shop lease has not ended (whether by expiry, surrender or termination) more than 1 year before the dispute notice was lodged”. (e) The application was lodged in excess of 1 year after the retail shop lease ended. (f) The applicant has previously lodged an application with QCAT which was referred to mediation. The mediator refused to refer the dispute to QCAT pursuant to the provisions of section 63 of the Act. (g) The applicant has not provided any compelling reason for the failure on its part to make application to QCAT within the time limit stipulated in section 64 of the Act and has given no compelling reason for QCAT to extend the time limit for compliance. -- 4 of 10 -- 5 (h) It intends to bring separate proceedings against the applicant to recover significant arrears of rental and other monies owing under the lease and the applicant will be at liberty to counterclaim against the respondent in those proceedings should it so desire. [14] The respondent further submitted in submissions filed on 15 May, 2012, that questions as to validity of the termination of lease, whether the applicant has been in breach of the lease and the rights of the respondent to bring a claim under the Act, are not relevant to the application to extend the time limit. [15] The respondent says that none of its conduct suggests that it does not consider the lease was terminated on 16 December, 2010. [16] It say that it is currently quantifying its loss prior to instituting proceedings against the applicant. [17] Further, the respondent submits the applicant retains its right to seek relief against forfeiture. It says the applicant has to its knowledge received legal advice during the course of the matter. [18] Finally, the respondent says the floods would not have any impact on the applicant bringing its claim before the Tribunal. Legislation [19] Retail Shop Leases Act 1994 Section 3 Object of Act “The object of this Act is to promote efficiency and equity in the conduct of certain retail businesses in Queensland.” Section 4 How object of Act to be achieved “The object of this Act is to be achieved through- … (b) a low cost dispute resolution process for retail tenancy disputes.” Section 55 Lodgement of retail tenancy disputes “(2) A party to a retail tenancy dispute that is within a mediator’s jurisdiction under section 97 may lodge notice of the dispute with the chief executive.” Section 63 Reference of dispute – by mediator “(1) This section applies if- (a) a retail tenancy dispute is within QCAT’s jurisdiction and – -- 5 of 10 -- 6 (i) the parties cannot reach a mediated solution to the dispute; or … and (b) the retail shop lease has not ended (whether by expiry, surrender or termination) more than 1 year before the dispute notice was lodged. (2) The mediator must – (a) refer the dispute, as provided under the QCAT Act, to QCAT…” Section 64 Application to QCAT – by party “(1) A party to a retail tenancy dispute may apply, as provided under the QCAT Act, to QCAT for an order to resolve the dispute if – (a) Any of the following provisions apply – (i) … (ii) A mediator refuses to refer the dispute to QCAT because the mediator is of the opinion that the dispute is not within QCAT’s jurisdiction;… and (b) The retail shop lease has not ended (whether by expiry, surrender or termination) more than 1 year before the dispute notice was lodged…” Section 103 QCAT’s jurisdiction “(1)… (2) …QCAT has jurisdiction to hear a retail tenancy dispute about _ (a) the procedure for the determination of rent payable under a retail shop lease, but not the actual amount of the rent; or (b) the basis on which the lessor’s outgoings are payable by and the procedure for charging the lessor’s outgoings to, a lessee under a retail shop lease, but no the actual amount of the outgoings; or (c) whether an item, or part of an item, of the lessor’s outgoings for the retail shopping centre or leased building in which a leased shop is situated was reasonably incurred in or directly attributable to, the operations, maintenance or repair of the centre or building; or (d) arrears of rent payable under a retail shop lease if the dispute is also about the payment of compensation by the lessor to the lessee under the lease.” [20] Queensland Civil and Administrative Tribunal Act 2009 -- 6 of 10 -- 7 Section 9 Jurisdiction generally “(1) The tribunal has jurisdiction to deal with matters it is empowered to deal with under this Act or an enabling Act. (2) … (3) Without limiting the Acts Interpretation Act 1954, section 49A, an enabling Act confers jurisdiction on the tribunal to deal with a matter if the enabling Act provides for an application, referral or appeal to be made to the tribunal in relation to the matter.” Section 61 Relief from procedural requirements “(1) The Tribunal may, by order – (a) extend a time limit fixed for the start of a proceeding by this Act or an enabling Act; or (b) extend or shorten a time limit fixed by this Act, an enabling Act or the rules; or (c) waive compliance with another procedural requirement under this Act, an enabling Act or the rules. (2) An extension or waiver may be given under subsection (1) even if the time for complying with the relevant requirement has passed. (3) The tribunal cannot extend or shorten a time limit or waive compliance with another procedural requirement if to do so would cause prejudice or detriment, not able to be remedied by an appropriate order for costs or damages, to a party or potential party to a proceeding.” Analysis [21] There are only two ways a retail shop leases dispute can come before this Tribunal, either upon referral by a mediator or upon application by a party to the dispute. In both cases certain conditions need to be met before the Tribunal is vested with jurisdiction to resolve the dispute. [22] In this case the applicant has filed an application for an order to resolve a retail tenancy dispute, as contemplated by section 64 of the Act. The applicant has indicated on the application form that the ground on which the application is made, is that a mediator refused to refer the dispute to the tribunal because the mediator is of the opinion that the dispute is not within QCAT’s jurisdiction. The form sets out each of the grounds referred to in section 64 of the Act. [23] If the mediator had refused to refer the matter on that ground, it is possible the applicant may be entitled to file an application for an order to resolve the dispute. The applicant may then argue that it requires the assistance of the Tribunal to meet the second pre-condition for an application to the Tribunal, and call on the Tribunal’s powers under section 61 of the QCAT Act to extend the time limit set out in the enabling -- 7 of 10 -- 8 Act. That is to ask that the time of 1 year be extended for a sufficient period to ensure that the lease had not expired more than 1 year before the dispute notice was lodged. I make no decision on that point and query whether the period of 1 year is a “time limit” as contemplated by section 61 of the QCAT Act. [24] Although it is asserted by the applicant, it is not the case that the mediator has refused to refer the dispute to the Tribunal because he is of the opinion that the dispute is not within QCAT’s jurisdiction. That is, the dispute is not about the matters set out in s103 of the Act. He has refused to make the referral, because “the lease has ended more than 1 year before the dispute notice was lodged.” [25] The explanatory memorandum to the Act (although at that time involving an application to a different body), indicates that an application by a party to the Tribunal, is intended to operate as a type of appeal from the decision of the mediator as to jurisdiction. [26] I do not think the Act intended that the end of the lease 1 year before the dispute notice is lodged may of itself constitute a lack of jurisdiction on the part of QCAT. That appears to be the implication of the applicant’s application under section 64. Section 64 is structured so that compliance with a time limit and an opinion as to lack of jurisdiction are set up as two discrete conditions which must both be met before the applicant may apply to QCAT. [27] In the decision of Stremo Pty Ltd v Opal Collections Pty Ltdi Member Howard, with whom Justice Wilson agreed, considered the jurisdiction of the Tribunal to deal with a retail tenancy dispute in circumstances where the time limit in sections 63 and 64 had not been met. In that case both parties agreed the time limit had not been met and no application to extend time was on foot. Member Howard addressed the significance of the requirements of the sections not being met. Relevantly in Stremo that was the time limit, however her comments are apposite to the other conditions or requirements in the sections. Member Howard said: “On a plain construction of the words in s63 (1)(b), the dispute must be referred to the Tribunal by a mediator if the section applies. Where the requirements of the section are not met, relevantly, when the lease has ended more than one year before the dispute notice was lodged, the section does not apply. There is no residual discretion which allows a mediator to refer the proceeding to the Tribunal if the section is not met. The provision is mirrored in 64(1)(b) whereby a party must apply to the Tribunal for orders to resolve a dispute either during the term of a lease, or within one year of it coming to an end…The mirror provision in s64 (1)(b) supports an interpretation that outside of these time frames, the Tribunal has no jurisdiction to deal with the matter. It is my view that the Tribunal does not have jurisdiction to determine the dispute before it”ii [28] On the basis that the requirement of s 64(1)(a)(ii) has not been met I find that the Tribunal has no jurisdiction to determine the dispute before it, nor to determine the consequent application for extension of a time limit. -- 8 of 10 -- 9 [29] In making this finding I am conscious of the decision of McDonald’s Australia Ltd v Emaaas Pty Ltdiii. Justice Wilson considered whether QCAT had jurisdiction to make orders by consent in the nature of an injunction, when the parties had not first proceeded through a mediation process under the Act. [30] His Honour observed that: “It is not apparent, however, that sections 63 and 64 are intended under the RSL Act to provide the only gateway to QCAT. Those provisions do not expressly qualify the broad jurisdiction given to QCAT under section 103.” Later he said: “QCAT can exercise the original jurisdiction conferred by an enabling Act if an application is brought to it.” Justice Wilson found that QCAT did have jurisdiction to order an injunction, following application to it, despite the preliminary process of a mediation not having been followed. [31] I consider the facts of this case are distinguishable from those in McDonald’s case. His Honour concluded his reasoning in McDonald’s case by saying: “Different questions may arise, and different considerations may apply, when proceedings do not involve applications to this Tribunal for relief under section 58 and 59 of the QCAT Act.” [32] In this case no urgent relief such as an injunction is sought. The parties have attended the mediation required by the Act, so they fall squarely within sections 63 and 64 of the Act. The fact remains that there has been no referral and there has been no opinion on the part of the mediator that QCAT lacks jurisdiction, which would enable an application to be made to QCAT, and a consequent application to extend a time limit under s 61 of the QCAT Act. [33] I conclude that there is no means contemplated by the Act which enables QCAT to consider the applications before it on the facts of this case. Application for legal representation [34] Because of my finding in relation to applicant’s request for an extension of time, and the order set out below, it is not necessary to determine the respondent’s application. Orders [1] I order that the application to extend a time limit be dismissed. [2] As a result of the findings made in this decision I intend to make an order in Application No. RSL026-12, being the application for an order to resolve a retail tenancy dispute, that it be dismissed. [3] In view of the terms of section 100 of the QCAT Act I make no order as to costs. i [2011] QCATA 129. ii Ibid at para [22]and [23]. -- 9 of 10 -- 10 iii [2011] QCAT 293. -- 10 of 10 --