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Disputes between a person operating a retail shop and a landlord are not uncommon.

Disagreements about rent rises, maintenance costs, fixtures and other terms of the lease can, in some cases, become intractable and lead to threats of legal action by the parties involved.

In Queensland, a mechanism to resolve such disputes exists under the Retail Shop Leases Act 1994 (Qld) (‘the Act’), provided the retail business is covered by the Act.

A shop that sells goods will generally be considered to fall under the provisions of the Act but there are exceptions, such as stalls in arts and crafts markets, shops with a floor area greater than 1000m2, or retail outlets that only take a small space in a location mostly devoted to other activities, such as commercial offices.

What is the First Step If a Dispute Exists?

Where a dispute exists between a retail shop owner and a landlord that can’t be resolved through one-on-one discussion, the parties are encouraged to enter a non-compulsory mediation process under the Act after filing a dispute notice with the Queensland Civil and Administrative Tribunal (QCAT).

QCAT will nominate a mediator, an independent, accredited person with experience in resolving this type of dispute. Mediation is a faster, cheaper and more accessible means of achieving a mutually satisfactory resolution of the dispute, with each party invited to put their case before negotiations towards an agreement begin.

Legal representation at a mediation is not generally permitted unless approved prior to the session by the mediator. Lawyers at mediation sessions are usually confined to providing advice on the possible terms of the proposed agreement – the process is designed to empower the parties themselves to create their own resolution.

The disparity in power between a tenant and a landlord, such as where one is a large corporation and the other an individual, may be one reason to permit legal representation of one or both parties.

The role of QCAT

Sometimes the parties will not be able to reach an agreement through the mediation process. In this event, the mediator may refer the dispute for consideration by QCAT or a party to the dispute may apply to QCAT if the other party did not participate in mediation or did not comply with the terms of the agreement.

A QCAT hearing is a less formal setting than a court where each party is able to put its side of the dispute and then listen to the other side’s claims.

Although not a judicial body, witnesses may be called and a legal representative can be present if the Tribunal provides permission. The fact the other party is represented, or where both parties agree to legal representation, are factors influencing the Tribunal’s decision to allow lawyers at the hearing.

Parties are generally responsible for their owns costs in appearing before QCAT, although the Tribunal may order one party to pay the other party’s costs if it is in the interests of justice.

QCAT will consider the arguments before it and then make a declaratory order on the retail lease dispute. The Tribunal’s range of available remedies include:

  • Payment of a monetary amount or compensation to a party;
  • declaring that a party is not required to make any payment;
  • orders giving effect to, or setting aside, a mediation or settlement agreement;
  • orders for the determination of market rent.

Why is legal advice necessary?

While legal advice may not be strictly necessary through the mediation process, the guidance of an experienced lawyer is recommended before making an application to QCAT. A lawyer with expertise in this area can assess the strength of your argument in the dispute and help refine your case.

A legal representative can also provide advice if you later wish to appeal the decision of QCAT.

Time limits apply to a number of the steps outlined above in resolving a retail lease dispute – a lawyer will be able to provide more detail on the relevant deadlines.

Legal advice can help clarify whether the path identified in this article is the right one for your retail business.