Beaumont Australia Pty Ltd v PRYV 04 Pty Ltd [2025] QCAT 426

Ashmore Developments Pty Ltd v Eaton [1992] 2 Qd 1.

Lo Guidice v Biviano [1962] VicRp 61; [1962] VR 420.

Diemasters Pty Ltd v Meadowcorp Pty Ltd [2001] NSWSC 495; (2001) 52 NSWLR 572.

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425.

State of Queensland v Morecroft & Anor [2024] QCA 11

• [1] The applicant Beaumont Australia Pty Ltd (Beaumont) had been the registered lessee of premises at 4 Ereton Drive Arundel since 2015. The respondent PRYV 04 Pty Ltd ('PRYV') acquired the freehold of the premises during the course of Beaumont's lease on 8 September 2023. A dispute arose with respect to primarily rent and asserted arrears of rent and the form and quantum of the security bond applicable. Beaumont sought orders as follows.

1. Beaumont was not in breach of its lease

2 Beaumont was not indebted to PRYV for rent or outgoings payable under the lease for the period from lease inception (2015) to 30 August 2023.

3 Beaumont had validly exercised its option to extend the lease to 31 January 2030.

4 PRYV pay compensation of $203,785.00 to Beaumont or such other sum as the Tribunal determined.

• [2] In its response PRYV sought orders as follows.

1. A declaration that the lease over the premises 4 Ereton Drive Arundel is comprised only of the registered lease and registered amendment.

2. A declaration that Beaumont is in breach of the registered lease.

3. A declaration that Beaumont is not permitted to exercise its option in the registered lease.

4. Beaumont pay PRYV the monetary sum it claims.

5. Such other orders as the Tribunal deems appropriate.

6. Beaumont's application be otherwise dismissed.

• [3] On 16 August 2024 the Tribunal made interim orders including as follows.

1. PRYV to immediately reinstate Beaumont's access to the premises at 4

Ereton Drive Arundel (consequent on lockout).

2. PRYV be restrained from issuing a notice of determination of lease, re-entering the premises, or otherwise taking steps to enforce the alleged and disputed breaches the subject of the proceeding.

• [4] On 9 May 2025 the Tribunal directed the hearing be limited to final written submissions and submissions in reply. Consideration is therefore limited to Beaumont's submissions of 20 May 2025, PRYV submissions of 21 May 2025, Beaumont's submissions in reply of 3 June 2025 and PRYV's submissions of 3 June 2025 (including documents/material referenced in all those submissions). Those four submissions constituted the totality of submissions considered by the Tribunal at the hearing and for the purpose of coming to its decision.
• [5] At the conclusion of the hearing, in view of the absence of case law based on similar fact evidence the parties were given 14 days to produce any case law or further case law they considered would be of assistance to the Tribunal in coming to its final decision[1].

• [6] Beaumont originally leased the premises 4 Ereton Drive Arundel from Leo Terence Anderson and Del Enid Anderson as trustees (original owner) for a period of five years from 1 February 2015 to 31 January 2020 together with four options of five years each. In November 2015 LDD Executive Pty Ltd as trustee acquired the freehold (prior owner). In early 2020 by amendment the lease period expiry date was recorded as 31 January 2025 together with four options of five years each (effectively extending the life of the lease for a further five years). Both the original lease and the amendment were registered on the freehold title. The freehold was sold to PRYV in July 2023 with settlement on 8 September 2023.
• [7] According to Beaumont from lease inception to September 2023 rent and outgoings were reviewed and agreed between Beaumont and the original owner and prior owner not necessarily following the strict terms of the registered lease. Email correspondence confirmatory of variations in rent often conducted by phone was produced to the Tribunal. Rent and outgoings as agreed were evidenced by monthly invoices issued by the original and prior owners and paid by Beaumont. Twenty-three invoices were produced for the period 13 March 2015 to 15 August 2023. The prior owners invoice dated 15 August 2023 for rent and outgoings for the period 2 August 2023 to 2 September 2023 recorded the amount due at that point as nil. At the foot of that invoice appeared the words "Inv 628 and Inv 631 paid in full 28 September finalising rent period with Anderson Family Trust. No outstanding. Many thanks Diane Anderson". In addition, the same Diane Anderson emailed Beaumont's Chris Roberts on 29 September 2023 stating "Received payment made in full. Rent payments are complete for tenancy period with Anderson Family Trust. Many thanks and wish you all the best in the future".
• [8] In that same period on 17 March 2022 the prior owner in the person of Diane Anderson emailed Chris Roberts Beaumont manager stating.

I trust everything is back on track again after closures etc with covid. And hopefully business is picking up successfully. As you may be aware that I have not applied any CPI increases since February 2017. Due to quiet times and covid situations, I have held your rent and also assisted in these difficult times. But now I must apply a 5% increase bringing rent to $10,344.54 plus GST. I will retain outgoings; you may remember that I didn't charge that last time either. But I'm sure you realise that everything has gone up, but that can remain as they are. So, if we could start this from invoice sent 15 May, due in June. Please let me know if this is a problem. Look forward to hearing from you.

• [9] On the day following, 18 March 2022 Chris Roberts emailed Diane Anderson stating.

Hi Diane, thanks for your email and support over the years. Very much appreciated. With regards to the increase, are we able to meet at 3.5% increase? Then reviewed in line with the lease at the next anniversary Happy to discuss further.

Yes, of course. That sounds reasonable at 3.5% increase. I will apply to May increase, due June. $10,196.75 plus GST and outgoings.

• [11] Beaumont submitted that the mere fact that the amounts invoiced and paid did not align to a mathematical calculation of rent escalation was not evidence of an underpayment. There was nothing in the lease nor in the Retail Shop Leases Act 1994 (Qld) (RSL Act) that precluded alternative arrangements with respect to payment by agreement of rent or outgoings.
• [12] Beaumont stated that at the time of PRYV's acquisition of the freehold in September 2023 it was paying $12,362.00 inclusive of GST in rent and outgoings on a monthly basis.
• [13] On 24 May 2024 Beaumont was issued with a Notice to Remedy Breach of Covenant by PRYV giving it 14 days to pay firstly $29,313.94 for rent and outgoings for the period 1 February 2015 to 31 August 2023 and for provision of a bank guarantee in the sum of $31,564.50 (first notice to remedy breach). Beaumont confirmed rent and outgoings were paid in accord with agreement made with the prior owner. In addition, the lease schedule in PRYV's purchase contract stating, "current rent per annum of $122,361.00 plus GST plus capped outgoings" accorded with the sum stated in the prior owners' invoices.
• [14] The original owner did not require Beaumont to provide a bank guarantee as such was provided for in the lease at the outset but rather a cash bond of $10,500.00 was accepted by agreement. It was asserted by reference to the email of 19 October 2023 from Gokani & Associates on behalf of PRYV to Beaumont that in lieu of a bank guarantee for $31,564.50 a cash bond for the same sum could be provided (less the $10,500.00 already provided).
• [15] On 12 June 2024 Beaumont was locked out of the premises for failure to comply with the notice to remedy breach. On 27 June 2024 Beaumont applied to the Tribunal for an interim order for PRYV to provide immediate access to the premises, for PRYV to provide documentary evidence of underpayment of rent and compensation for loss incurred. On 16 August 2024 the Tribunal ordered that in addition to Beaumont's reinstatement of immediate access to the premises and restraint on lease determination and re-entry PRYV was to produce documents in its possession for the period 1 February 2015 to 31 July 2024 including invoices and receipts for rent and outgoings, annual estimates of outgoings, final statements of outgoings, annual audited statements of outgoings, contract of sale settlement statement at point of sale in September 2023 and calculations of rent deposits and outgoings. Upon re-entry on 16 August 2024 Beaumont paid rent though neither could agree on the monthly rent payable. Any claim for compensation and costs would be considered as part of the substantive proceeding.
• [16] In the interim on 17 July 2024 a second notice to remedy breach had been issued by PRYV for rent and outgoings for the period 1 July 2024 to 31 July 2024 in the sum of $13,339. 23 inclusive of GST. On 14 August 2024 Beaumont notified PRYV of its intention to exercise the five-year option to extend the lease to 31 January 2030.
• [17] Beaumont claimed $203,785.00 for direct and consequential loss due to the lockout to 31 December 2024 set out in its schedule of claim filed 30 January 2025 made up of
  • (A) Costs incurred during the lockout period without sales revenue - $82,709.00.
  • (B) Loss of normal operating profit (after costs) during the lockout period - $35,092.00.
  • (C) Direct overhead costs during the lockout period - $14,463.00.
  • (D) Consequential loss of profit for the period to 31 December 2024 - $71,521.00.
• [18] Beaumont stated the method of calculation could be summarised as follows.

(a) Revenue was determined on an average daily basis using the three months sales immediately prior to lockout.

(b) The trading margin (gross profit) was calculated using the same margin percentage realised in the same three-month period.

(c) Wages were the actual wages paid to employees plus usual on-costs of superannuation, payroll tax etc.

(d) Consequential loss relating to lower custom was calculated by reference to the same average daily sales compared to actual sales following reopening.

• [19] While Beaumont conceded it had not been possible to provide evidence to validate its assumptions key aspects of financial records were produced. Beaumont relied on its schedule of claim filed 30 January 2025 detailing all losses incurred but was amenable to an independent auditor's review of its calculations.
• [20] In submissions PRYV stated that Beaumont sought to assert rights based on alleged unregistered or verbal arrangements made with the prior owner; that such arrangements took preference over the terms of the registered lease as against a bona fide purchaser for valuable consideration. Such a position was not maintainable because the precise terms of such arrangements had not been specified, there was no valid contract or deed, such arrangements were not registered and notice of such arrangements were not provided by either Beaumont or the prior owner prior to completion of the contract of sale. PRYV considered there were prior multiple breaches of the registered lease with respect to provision of bank guarantee, underpayment of rent and outgoings as well as costs consequences for failure to comply. It was asserted Beaumont had demonstrated a pattern of non-compliance with the registered lease for many years and had elected not to respond to multiple requests by PRYV to rectify identified breaches.
• [21] It was asserted that where a registered lease is the subject of unregistered or verbal arrangements any rights claimed by a tenant (Beaumont) against the new landlord (PRYV) are to be examined through the lens of equitable principles. Only the Supreme Court had jurisdiction to review such matters. There was no basis in law or equity to impose liability on PRYV for any preacquisition conduct of the prior owner.
• [22] PRYV drew a comparison between Beaumont's parent corporation Wesfarmers Limited (Wesfarmers) as an "enormously resourced landlord" with 26,000 times larger financial resources than itself.
• [23] PRYV sought a declaration that Beaumont was in breach of the registered lease because it did not provide a bank guarantee, historically underpaid rent and outgoings and failed to meet PRYV's costs associated with breaches. The registered lease provided for provision of a bank guarantee from lease commencement date. During the course of the registered lease the prior owner rejected Beaumont's request to formally remove the requirement for a bank guarantee. The guarantee was only provided on the 18 June 2024. The dilatory provision of the bank guarantee by Beaumont did not cure the breach of the registered lease and caused PRYV to incur costs that could have been avoided.
• [24] PRYV sought rent shortfall for the entire period 1 February 2015 to 31 August 2023 in the sum of $29,486.57. Any purported dealings with the prior owner were not binding on PRYV which never adopted any such arrangements. Upon being invoiced current rent by PRYV post completion of the contract of sale Beaumont commenced paying rent and outgoings in accord with those invoices. However, no rent and outgoings were paid during the re-entry/lockout period. Re-entry did not amount to termination. When again in possession of the premises Beaumont was not paying rent and outgoings in accord with the registered lease. Rent payment breaches were established.
• [25] It was asserted there was a shortfall in payment of outgoings in the period 1 July 2018 to 31 August 2023 in the sum of $10,577.17. Entitlement to recovery was on the same basis as that for rent shortfall.
• [26] PRYV claimed costs consequent on default under the registered lease on the basis that such were reasonably incurred to protect its legitimate interests.
• [27] PRYV sought a declaration that Beaumont was not permitted to exercise its five-year option set to commence on 1 February 2025. Beaumont being in default any purported exercise of option would be void and of no effect.
• [28] PRYV sought interest at the rate nominated in the registered lease on monies found to be due but unpaid as well as interest on loss associated with restraint to terminate the registered lease and costs incurred in the period 30 June 2024 to 18 March 2025.
• [29] PRYV finally sought dismissal of Beaumont's application in full.
• [30] In submissions in reply Beaumont stated PRYV knew what the actual rent was at the time of purchase and would have appreciated it differed from what it would have been had the registered lease rent review provisions been strictly applied for the reason the actual annual rent was stated in the freehold contract of sale. Additionally, the registered lease provided for agreement on rent to be paid despite the express procedures for rent adjustment. Clause 4.1 of lease annexure C was cited as allowing for owner and lessee to agree on rent despite the procedure prescribed for periodic "market reviews".
• [31] Beaumont submitted that rent and outgoings payable from the date PRYV assumed ownership ought to be.

1. Starting rent $122,361.00 plus GST per annum (the annual rent recorded on the contract for PYRV's purchase of the freehold). 2. Outgoings contributions a maximum of $15,000.00 plus GST per annum.

1. Starting rent subject to CPI review on 1 February 2024 and market review on 1 February 2025

1. If rent and outgoings contributions were still in issue the proceeding could be adjourned for the parties to resolve differences.

• [32] Beaumont stated it was not contending that arrangements with the original owner and prior owner overrode and took preference over the terms of the registered lease as against a bona fide purchaser for valuable consideration, here PRYV. Whilst PRYV might argue it was not bound by such arrangements from the time it assumed ownership it could not claim back payment of alleged shortfalls of rent and outgoings where Beaumont had paid rent and outgoings as agreed between it and the original owner and prior owner. Nor did those prior arrangements bind PRYV or affect its rights under the registered lease from its point of acquisition. The terms of the registered lease were not altered by those arrangements apropos PYRV as a bona fide purchaser going forward.
• [33] With respect to exercise of option Beaumont submitted there had been no act or omission that constituted a breach of its leasehold obligations that would have precluded it from exercising its option to renew. Even if there had been pursuant to section 128 (4) of the Property Law Act 1974 (Qld) an act or omission it would not have had the effect of precluding Beaumont from exercising such option because in the 14 days following exercise of option PRYV did not serve on it the prescribed notice of act or omission.
• [34] It was argued that costs were not applicable for the reason there had not been any breach of the lease terms. Section 100 of the Queensland Civil and Administrative Act 2009 (Qld) which states the initial or primary position is that each party bear their own costs was relied on by Beaumont.
• [35] In submissions in reply PRYV stated though rent continued to be paid it was not in accord with either the terms of the registered lease or tax invoices issued. The bank guarantee required was only furnished some nine months after first required. The cash bond was only ever a deposit. The sale contract was not capable of overriding or operating in priority to the terms of the registered lease. Beaumont had failed to establish that PRYV had unlawfully entered the premises.
• [36] PRYV asserted that even if re-entry was unlawful there was a failure on Beaumont's part to mitigate its loss in that it could have firstly furnished a bank guarantee in 2021 when a request for removal of the lease bank guarantee provision was turned down, secondly placed PRYV on notice as to any purported prior dealings, thirdly paid PRYV a sum of money under protest thereby possibly avoiding accumulating costs and lastly a failure to demonstrate loss of custom.

• [37] The notice to remedy breach dated 24 May 2024 sought $29,313.94 including GST for rent and outgoings arrears for the period 1 February 2015 to 31 August 2023. Item 4 of annexure A to the lease document provided for CPI rent review on numerous dates including 2022, 2023, and 2024 and market review in 2025, 2030 and 2035.
• [38] On 18 March 2022 Beaumont and the prior owner agreed to a CPI increase of 3.5% which was in excess of the capped 3% increase (due to non-application of CPI increases for some years prior). The 3.5% CPI increase was applied from May 2022 rent due payable June 2022 being $10,196.75 plus GST being $11,216.43 inclusive of GST.
• [39] The contract of sale for the purchase of the freehold dated 2 July 2023 and completed 8 September 2023 recited "current rent per annum $122,361.00 plus GST plus capped outgoings. That is a monthly rent inclusive of GST of $11,216.43 precisely the same figure as agreed between Beaumont and the prior owner (Anderson) on 18 March 2022.
• [40] Clause 5.2 of annexure C to the lease document stated.

The right of the lessor and the lessee to initiate or require a determination of the new rental pursuant to this annexure C as at any relevant review date shall not prevent, impede, or restrict the Lessor and Lessee at any time after the due relevant review date for determination to determine the new rental as of and with effect from the due relevant review date.

• [41] Neither party produced any evidence of any CPI rental review in about February 2023. Nor do the rent review or market review provisions of annexure C, whilst capping increases, state that any sort of increase was obligatory. From 9 September 2023 the day after completion of the purchase contract PRYV increased monthly rent from $10,196.75 to $10.559.78 ($11,238.15 and $11,809.78 inclusive of GST) for the period through to 31 January 2024.
• [42] On 31 January 2024 PRYV issued Beaumont a rent review notice and tax invoices for revised rent and outgoings for the period 1 February 2024 to 31 January 2025. Until 1 July 2024 Beaumont paid the tax invoices issued and did not raise any concerns about same. Monthly rent and outgoings (charged at the capped rate) totalled $13,339.23.
• [43] Clause 4.2 of annexure D to the lease document provided that if outgoings for a particular year were less than $15,000.00 per annum cap the lessee would only be required to pay the actual outgoings and not the full sum of the cap. Email correspondence of 17 March 2022 between Diane Anderson and Chris Roberts Beaumont manager records reintroduction of outgoings after a break on the basis that "everything has gone up ". PRYV produced an estimate of yearly outgoings of $31,193.68 which included insurance, land tax, rates and water though the Tribunal observes land tax is precluded form inclusion in outgoings pursuant to Section 7(3)(a) of the RSL Act.
• [44] In the period 12 September 2023 to 24 May 2024, about eight months, there was correspondence, engagement, negotiation, and rejection but no finality with respect to asserted arrears of rent and provision of a bank guarantee. On 24 May 2024 PRYV informed Beaumont that provision of a $31,564.50 cash bond was not agreed to due to cost involved. A bank guarantee was required. That prompted PRYV to issue the first notice to remedy breach on 24 May 2024. That notice demanded provision of a bank guarantee for $31,564.50 within 14 days, that is, by 7 June 2024. According to Beaumont PRYV had reneged on its agreement to accept a cash deposit and not informed Beaumont. It should have done that before demanding a bank guarantee in 14 days. On 28 May 2024 Beaumont informed PRYV that the bank guarantee process would require consultation with and input from PRYV. Contact details were requested for that process to commence. The bank guarantee was provided initially electronically on 18 June 2024 twenty-five days after being notified that it was required.
• [45] On 12 June 2024 PRYV re-entered the premises due to non-payment of rent arrears and non-provision of bank guarantee. Beaumont was locked out.
• [46] On 2 July 2024 Beaumont filed in the Tribunal an application for interim order seeking access to the premises. On 16 August 2024 after failure of mediation in the interim the Tribunal reinstated Beaumont's access to the premises. Prior on the 17 July 2024 PRYV issued a second notice to remedy breach for rent and outgoings for the period 1 July 2024 to 31 July 2024 in the sum of $13,339.23.
• [47] On 14 August 2024 Beaumont gave notice of its intention to exercise of a five-year option available under the registered lease. It did not consider it was in breach of the registered lease and therefore entitled to exercise such option.
• [48] PRYV produced to the Tribunal a table of rent and outgoings paid by Beaumont for the period 16 August 2024 to 31 January 2025 totalling $58,763.25. A market review provided for in the registered lease was due on 1 February 2025. On 12 February 2025 PRYV engaged a valuer to complete a market rental assessment. PRYV stated the market rent as $16,250.00 plus GST per month and outgoings as $2,004.39 plus GST per month.
• [49] PRYV pointed to a number of propositions/concerns including equitable jurisdiction of the Supreme Court as an avenue of recovery, lack of consideration for lease variation, necessity for a deed of variation, registered lease being a reversionary interest, rental concessions during the covid period and power imbalance between PRYV and Beaumont.

• [50] Beaumont produced post hearing two cases relevant to its position. Firstly, Ashmore Developments Pty Ltd v Eaton[2]. It was there held "that section 117 of the Property Law Act (1974 Qld) conferred on the assignee of the reversion a right to the benefit of arrears of rent accrued prior to the assignment and once that right was acquired by the assignee it was lost by the assignor in the absence of agreement to the contrary". Here it was contended there were no arrears of rent at point of sale only variations by agreement long since carried into effect. Secondly, Lo Giudice v Biviano (No 2)[3]. It was held there that "on the proper construction of the lease, the option of renewal ceased to be exercisable after the lease had been determined, prior to the expiration of the term, for non-payment of rent. Here it was contended the registered lease had not been determined and that the option to renew had been properly exercised.
• [51] PRYV produced a number of cases in support of it position that lease registration was paramount, three cases more prominently. They were Diemasters Pty Ltd v Meadowcorp Pty Ltd[4], Cassegrain v Gerard Cassegrain & Co Pty Ltd[5], and State of Queensland v Morecroft & Anor[6]. It was contended that if the lease was registered on the title, then the parties' rights ran in accord with what was registered on the title. A licence or informal agreement did not run with the land.

• [52] The premises is the subject of a retail shop lease [7]pursuant to the Retail Shop Leases Act 1994 (RSL Act). Section 83 of the RSL Act states that the Queensland Civil and Administrative Tribunal ('QCAT') "may make the orders, including declaratory orders, QCAT considers to be just to resolve a retail tenancy dispute". Orders could include an order for a party to a dispute to do, or not to do, anything, an order requiring a party to a dispute to pay an amount (including an amount for compensation) to a specified person, and an order that a party to a dispute is not required to pay an amount to a specified person. The Tribunal's jurisdiction with respect to retail shop leases is all encompassing. The Tribunal is empowered to deal holistically with retail shop leases disputes whether the lease is registered or not. The very wording of the RSL Act does not envisage other jurisdictions involvement (other than appeals and the imposition of a monetary jurisdictional limit not relevant here). If it did it would have said so. In short, save for appeals and monetary jurisdictional limit, the retail shop lease jurisdiction here resides entirely within the Tribunal.
• [53] QCAT is empowered to deal with matters under an enabling act (here the RSL Act) in a way that is accessible, fair, just, economical, informal**,** and quick.[8] The Tribunal is obliged in conducting the proceeding to act fairly and according to the substantial merits of the case observing the rules of natural justice, not being bound by the rules of evidence, informing itself in any way it considers appropriate, acting with as little formality as possible and ensuring all relevant material is disclosed to enable it to decide the proceeding.[9]
• [54] As an incoming owner PRYV is protected by the terms of the registered lease in its capacity as a bona fide purchaser for valuable consideration. It was never envisaged that lease registration would result in an abrogation of the Tribunal's right and duty to bring about an outcome that is fair and reasonable. Nor was it ever the case that lease registration was meant (in the context of the Tribunals expansive power to make orders it considered to be just to resolve a retail tenancy dispute) to give PRYV authority to act as a retrospective arbiter of prior arrangements made between Beaumont and the prior owner over a period of years and long since carried into effect. It was never a case of a pattern of non-compliance. The exchanges between Beaumont's Chris Roberts and prior owner's Diane Anderson are indicative of a cordial agreeable commercial relationship encompassing a good deal of give and take.
• [55] The compelling evidence of those prior arrangements being carried into effect are the twenty-three invoices produced for the period 13 March 2013 to 15 August 2023, payment of those invoices, acknowledgement of rent and outgoings paid in full as of 2 September 2023 and email exchanges between Beaumont's Chris Roberts and prior owners Diane Anderson even to the extent of Diane Anderson wishing Beaumont all the best for the future in September 2023. Nor was Beaumont ever under any obligation to explain prior arrangements/variations going back years (some of which so far back in time as to raise difficulty in producing any tangible record) to PRYV. It may have been unfortunate in retrospect not to do so but it was never an obligation. What is clear is that there was a flexible informal commercially friendly relationship between the original owner, the prior owner, and Beaumont with the registered lease sitting in the background. Nor did Beaumont pursue permanent continuity of any diminution in rent. It did not know what further accommodation would be granted, if any, by PRYV as incoming owner. On 9 September 2023 the day after settlement of the purchase contract PRYV increased the rent. It then set rent and outgoings at $13,339.23 for the period 1 February 2024 to 31 January 2025. Beaumont paid through to 1 July 2024.
• [56] Any lack of disclosure if indeed there was any by the prior owner at the time of contracting to sell the freehold was not the fault of nor referable to Beaumont. If there was that would be a matter for those two parties. Nor was it for PRYV to draw conclusions about the prior lessor/lessee relationship to the effect that there were breaches of the registered lease. Because a variation was not recorded formally did not mean it did not occur or was not agreed to.
• [57] The case law proffered by the parties has virtually no applicability to the subject circumstances. Where the original owner/prior owner has accepted a lesser sum on account of rent at any particular time not only can it be construed as a variation of the registered lease terms but (even if that cannot be upheld) can also be construed as being in full satisfaction of the rent payment obligation at the time. In other words, diminished payment of rent was accepted as full compliance with rent obligations under the registered lease. That is abundantly clear from the manner in which the prior owner and Beaumont parted company in 2023. There is a clear differentiation between prior breach actionable by a subsequent purchaser of the freehold and deemed compliance with lease terms as agreed between a prior owner and tenant.
• [58] To the extent the first notice to remedy breach dated 24 May 2024 demanded payment of long since settled rent (not rent arrears) it was invalid in the context of the Tribunal's obligation to be fair, just, economical, informal, and quick.
• [59] Neither the original owner nor the prior owner ever insisted on provision of a bank guarantee strictly in accord with the registered lease. Rather a cash bond was accepted by agreement from the outset to point of sale by the original and prior owner. Whilst there was a formal request by Beaumont in 2021 for the bank guarantee requirement to be dispensed with that appears to have come about due to the takeover of Beaumont by Wesfarmers and policies associated with such national entities. It was rejected with the result the registered lease was left as is. There was never any attempt by the prior owner to then enforce the bank guarantee provision. Rather the prior owner saw no benefit in agreeing to the requested variation and the cash bond of $10,500.00 simply remained in place ongoing. The cash bond arrangement subsisted otherwise unperturbed from 1 February 2015 to at least 8 September 2023 a period of over eight years.
• [60] The first notice to remedy breach dated 24 May 2024 gave fourteen days to provide a bank guarantee. Following an exchange of emails between PRYV and Beaumont in the preceding September and October 2023, PRYV advised Beaumont by email on 19 October 2023 that it would accept increasing the cash bond from $10,500.00 to $31,564.50 in lieu of a bank guarantee. PRYV advanced no documentation that its position on this point changed until it advised Beaumont by email dated 24 May 2024 that it insisted on a bank guarantee.
• [61] It seemed to be argued by PRYV that due to Beaumont's latter day parent company Wesfarmers much greater size that it should have been able to produce a bank guarantee virtually immediately. On 28 May 2024 Beaumont informed PRYV that the bank guarantee process would require consultation with and input from PRYV. In the event the bank guarantee was provided on the 18 June 2024 twenty-five days after demand. In the context of an arrangement that had subsisted for over eight years and the absence of any finality in the period September 2023 to 24 May 2024 the Tribunal finds the demand for provision in fourteen days even if marginally extended was unreasonable. In Hookey & Anor v Whitelaw & Ors[10] it was found in circumstances where there was a prior history of engagement dispute and negotiation, absent finality, that a notice to remedy breach, about amongst other things, financial security by way of a bank guarantee giving two months to remedy the breach was "reasonable time". Here provision of the bank guarantee in 25 days was reasonable by any measure.
• [62] PRYV's implication that it was David up against Goliath is at odds with the evidence particularly PRYV's evidence which was suffocatingly voluminous given the issues involved. Rather PRYV presented as an extremely savvy commercially oriented player.
• [63] In summary the first notice to remedy breach was invalid in its entirety. The re-entry on 12 June 2024 was entirely without just cause. It was argued that re-entry did not in any event constitute termination. That may well be the case where the re-entry was justified. Where re-entry is not justified accompanied by lockout and associated business loss it is difficult to see where continuity of payment of rent in the lockout period can be justified. It follows that the second notice to remedy breach for unpaid rent being based on the legitimacy of the lockout was also invalid.
• [64] There was never any dispute about the actual 14 August 2024 timing of exercise of option for the period 1 February 2025 to 31 January 2030. Rather it seems it was contended that Beaumont was precluded from exercising the option perforce of existing breaches. There being no breach of the registered lease as of 14 August 2024 the Tribunal finds the option for the further five years to 31 January 2030 was validly exercised.
• [65] Tax invoices from 1 February 2024 for monthly rent and outgoings totalling $13,339.23 were paid to 1 July 2024 except for the period 12 June 2024 to 16 August 2024 when no rent or outgoings were paid. There is no reason why rent and outgoings ought not to have continued at the rate of $13,339.23 per month through to 31 January 2025. Rent and outgoings at the rate of $13,339.23 for the period 1 June 2024 to 31 January 2025 totals $106,713.84. That sum less a lockout credit of 18 days in June (12 June to 30 June), $8,003.54, the month of July, $13,339.23 and 16 days in August (1 August to 16 August), $6,884.76, a total of $28,227.53, results in net rent and outgoings for the period of $78,486.31 ($106,713.84 minus $28,227.53).
• [66] Rent and outgoings paid by Beaumont was for the month of June, $13,339.23 and for the period 1 July 2024 to 31 January 2025 (accepting PRYV's table of payments produced to the Tribunal), $58,763.25 a total of $72,102.48. With Beaumont liable to pay $78,486.31 and having paid $72,102.48 there is a shortfall of $6,383.83 due to PRYV for the period ending 31 January 2025.
• [67] PRYV stated it engaged a valuer on 12 February 2025 to assess market rent which was assessed by such valuer at $16,250.00 plus GST. Outgoings were assessed at $2,004.39 plus GST per month. The registered lease provided for a market rent review on 1 February 2025 with market rent to be as agreed between lessor and lessee or as determined by a licensed valuer. There was no evidence before the Tribunal of agreement about market rent or agreement about the appointment of a licensed valuer nor about any such licensed valuer notifying the lessor or lessee about acceptance of the any appointment. The Tribunal does not intend to comment on that matter further other than to say it is incumbent on both lessor and lessee to follow the market rent assessment procedure in the registered lease in order to arrive at market rent as at and applicable from 1 February 2025.
• [68] Beaumont claimed losses because of the lockout and ongoing disruption of trade. Its claim is confined to that set out in its schedule of claim totalling $203,785 filed 30 January 2025 made up of

A Costs incurred during the lockout period without sales revenue - $82,709.00.

B Loss of normal operating profit (after costs) during the lockout period - $35,092.00.

C Direct overhead costs during the lockout period - $14,463.00.

D Consequential loss of profit for the period to 31 December 2024 - $71,521.00.

• [69] Whilst Beaumont was willing to engage an independent auditor to review the calculation to review its calculation it did not do so to date. Beaumont was given ample opportunity to present its best evidence but did not do so. The lockout period was 57 trading days over a total period of 67 days from 13 June 2024 to 18 August 2024 (Beaumont was allowed access on Monday 19 August 2024). Beaumont's claim was for 56 days representing a slight understatement of its claim.
• [70] Calculation of lost profits during the lockout period based on Beaumont's data is as follows.

Average daily sales in lead up to lockout was $6,558.00.

Average net profit in lead up to lockout was 9.555% ($35,092.00 divided by $367,276.00), which is equal to $626.62 per trading day.

Lost profit over 56 trading days claimed by Beaumont is $35,092.00.

But wages of $72,121.00 continued to be paid during the lockout period in order to maintain staff when lockout period ended and needs to be added to lost profit.

Beaumont claimed depreciation over the lockout period. The Tribunal does not accept such because it is a sunk cost. It would have been incurred whether the shop was open or not.

Beaumont also saved $55,742.00by not paying/incurring rent, advertising, cleaning/waste, electricity, and freight. That sum should have been deducted from its claim, but it was not.

Therefore, total lost profits during the lockout period were $51,471.00 ($35,092.00 plus $72,121.00 less $55,742.00).

• [71] The claim for direct overhead expenses during the lockout period of $14,463.00 is disallowed because such expenses would have been incurred whether the lockout occurred or not. The uncertainty over the lost $51,471.00 during the lockout period is that Beaumont failed to demonstrate whether its next closest Beaumont Tiles store (at Bundall, 9.5 kilometres to the south) achieved higher sales during the lockout period. To the extent that lost sales were transferred to the Bundall store, then those sales were not lost to Beaumont. That is an unknown. A discount factor ought properly to be applied to recognise this circumstance even though there was no evidence about any such factor. Some sales would have been retained by the Beaumont Tiles Group. In the absence of such evidence the Tribunal considers a discount factor ought to apply. Adoption of a 30% discount would seem commercially reasonable.
• [72] During the post - lockout period to 31 December 2024 actual sales were $371,475 .00 compared to $518,121.00 if the pre-lockout sales level was maintained, representing lost sales of $146,646.00. A gross margin of 48.8% was applied to arrive at $71,521.00. The Tribunal agrees with this calculation. The continuing low daily sales level over the whole period from reopening to December 2024 suggests that lower trading levels continued beyond December 2024 (but not claimed by Beaumont). However, there was no evidence to rule out other factors occurring in the local market to influence the lower sales level. These other factors could include the opening of competition in the local area, declining housing construction in the general locality of the subject premises (building approvals on the Gold Coast fell by 15% in 2024/25 compared to 2023/24), or supply chain issues in the industry.
• [73] In summary the Tribunal allows the claim for lost profits during the lockout period of $51,471.00 less a discount factor of 30% to arrive at compensation of $36,030.00. The claim for post lockout period is not allowed for the reason there is too much uncertainty over other possible factors affecting sales.
• [74] Taking into account the rent shortfall of $6,383.83 the final compensation sum available to Beaumont is $29,646.17.
• [75] Both parties have accrued substantial costs. There is no discernible reason why there should be a departure from the primary position that each party bear their own costs.[11] There will be no orders about costs.

1. There is no breach of registered lease between Beaumont Australia Pty Ltd and PRYV 04 Pty Ltd consequent on the issue of notices to remedy breach issued on the 24 May 2024 and 17 July 2024.
2. Beaumont Australia Pty Ltd is not indebted to PRYV 04 Pty Ltd in respect of any rent and outgoings in the period 1 February 2015 and 30 August 2023.
3. The bank guarantee issued by Beaumont Australia Pty Ltd in favour of PRYV 04 Pty Ltd is registered lease compliant.
4. The exercise of option by Beaumont Australia Pty Ltd extending the registered lease period from 1 February 2025 to 31 January 2030 has been validly exercised.
5. Beaumont Australia Pty Ltd is entitled to net compensation of $29,646.17 in respect of the lockout imposed by PRYV 04 Pty ltd for the period 12 June 2024 to 16 August 2024.
6. PRYV 04 Pty Ltd shall pay Beaumont Australia Pty Ltd the sum of $29,646.17 within twenty-eight days.
7. No order as to costs.

[2] Ashmore Developments Pty Ltd v Eaton [1992] 2 Qd R 1.

[3] Lo Giudice v Biviano [1962] VicRp 61; [1962] VR 420.

[4] Diemasters Pty Ltd v Meadowcorp Pty Ltd [2001] NSWSC 495; (2001) 52 NSWLR 572.

[5] Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425.

[6] State of Queensland v Morecroft & Anor [2024] QCA 11.

[10] Hookey & Anor v Whitelaw & Ors [2020] QSC 63 paras 129-134