Relocation compensation in Queensland – position refined

HWLE have successfully defended a shopping centre landlord against a claim by a tenant for compensation following service of a relocation notice.

The case involved a Tenant (newsagency) claiming compensation in the order of $300,000 for, amongst other things, the loss of their business as a consequence of the Landlord issuing a relocation notice and the Tenant electing to terminate. This is the first reported case dealing with this issue.

The Tenant argued that the delivery of the relocation notice triggered an entitlement to claim compensation at large under the general compensation provisions of s.43 of the Retail Shop Leases Act (Qld) 1994 (RSLA) (for the value of its lost business). That section relevantly provides that a tenant can claim compensation:

” … because the lessor, … causes the lessee to vacate the leased shop before the end of the lease or renewal of it because of the extension, refurbishment or demolition of the retail shopping centre or leased building containing the shop.”

The Landlord argued that section 46C to 46G (not s.43) of the RSLA provide a complete regime for determining compensation in circumstances of relocation and as such, the general compensation provisions had no application in circumstances where:

• The Tenant had made an election to terminate early pursuant to the relocation notice; and
• The Tenant had vacated before the works commenced.

Section 46C to 46G of the RSLA provide that where a valid relocation notice has been issued, the Tenant is entitled to either terminate the lease (s.46E) or if they relocate, payment of their reasonable costs of relocation (s.46G), including, but not limited to:

• The costs of dismantling and reinstalling any fixtures and fittings;
• Modifying or replacing any fixtures and fittings to the standard existing immediately before the relocation; and
• Legal costs.

It was argued by Landlord that the Tenant, having made an election to terminate, had exhausted its available remedies.

QCAT agreed with the Landlord and found that the Tenant could not be compensated under s.43(1)(f) RSLA in the circumstances of this case. In reaching its decision, QCAT followed the reasoning of the Supreme Court of Queensland in Laldy Pty Ltd v Archer & Ors [2016] QSC 257 (a case dealing with demolition notices and termination).

The Landlord was also successful in defending a claim for compensation arising from a range of other claims made by the Tenant.

If you find that you are having difficulties with any particular tenants and the matter has the potential to escalate, we extend an invitation to call us for an obligation free discussion regarding your particular circumstances.

This article was written by Simon Tolhurst, Partner, Steven Henderson, Partner and Michael Cameron, Special Counsel.