Cassie Potts Enterprises NSW Pty Ltd v FTTOA Pty Ltd [2025] QCAT 375

Retail Shop Leases Regulation 2016 (Qld), s 8, Schedule 1

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

• [1] On 11 July 2022 an application for an order to resolve a retail tenancy dispute - Retail Shop Lease Act was filed in the tribunal. The dispute is brought by the applicant Cassie Potts Enterprises NSW Pty Ltd ('Cassie Potts Enterprises') trading as Fitts+Potts who is the lessee/tenant against the respondent FTTOA Pty Ltd ('FTTOA') who is the lessor/landlord .[1] The key issues in dispute are in relation to overcharging of costs and compensation for unconscionable conduct.
• [2] On 10 March 2023 the respondent FTTOA raised concerns that the tribunal lacked jurisdiction to determine the dispute as this was not a retail shop lease. On 31 March 2023 FTTOA filed an application for miscellaneous matters (strike out or dismissal) seeking the matter be dismissed due to the tribunal not having jurisdiction. Both parties filed submission in response to the application for miscellaneous maters.
• [3] This is the decision in relation to the strike out application. All written submissions as provided by both Cassie Potts Enterprises and FTTOA have been considered in this decision.

• [4] The tribunal can dismiss a proceeding if, among other things, it considers the proceeding to be frivolous, vexatious, misconceived or lacking in substance.[2] It is a significant step to dismiss or strike out a proceeding prior to a full hearing of a matter. However, where it is clear that the tribunal has no jurisdiction then it is appropriate.
• [5] The tribunal is a creature of statute and must derive its powers from the Queensland Civil and Administrative Tribunal Act 2009 (Qld) ('QCAT Act') or an enabling Act.[3] The enabling Act here is the Retail Shop Leases Act 1994 (Qld) ('RSLA'). The RSLA and the Retail Shop Leases Regulation 2016 (Qld) ('the Regulation') provide specific pathways to resolve certain disputes between certain tenants and landlords. Not all disputes between commercial tenants and landlords may be resolved by the tribunal.

• [6] The tribunal's powers to make orders under the RSLA are contingent on the proceeding being one of a number of certain types of 'retail tenancy disputes.[4] The phrase 'retail tenancy dispute' is defined in the RSLA to mean:

any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into.[5]

• [7] 'Retail shop lease' is defined in the RSLA[6] to mean "a lease of a retail shop". A number of exceptions as to what constitutes a 'retail shop lease' are contained in subsections 5A (2) and (3). 'Retail shop' is defined in the RSLA[7] to mean premises that are:

(a) situated in a retail shopping centre; or

(b) used wholly or predominantly for the carrying on of a retail business.

• [8] 'Retail business' is defined in the RSLA[8] to mean "a business prescribed by regulation as a retail business". Section 8 of the Regulation provides:

(1) For section 5C of the Act, a business is a retail business if -

(a) it is a business mentioned in schedule 1; or

(b) its whole or predominant activity is, or is a combination of, the sale, hire or supply of goods or services mentioned in schedule 1.

(2) The wholesale sale of goods is not a retail business.

• [9] In the present case, the initial question is whether this is a retail shop lease, in that was the premises used wholly or predominately for a 'retail shop' and if not, was it located in a shopping centre. There are two leases in relation to the premises. The first was between 1 September 2015 and 31 August 2019 between FTTOA and Brett Fitzpatrick and Carolyn Potts (the director of Cassie Potts Enterprises). The second was between FTTOA and Cassie Potts Enterprises and was executed on 16 June 2019 and noted the lease period was 1 May 2019 until 31 August 2023. The terms and conditions are largely the same between both leases, and in particular the permitted use of the premises in both leases is "the retail sale of liquor and associated uses". It is the second lease which is of relevance to this matter.
• [10] Cassie Potts Enterprises asserts that it is a retail shop lease, both by virtue of the business being a retail shop, namely a cafe and due to the premises being located within a retail shopping centre. FTTOA dispute this and assert that the premises was not in a shopping centre and as the applicant's business was a bar, it is not a retail shop as defined by Schedule 1 of the Regulation.

• [11] The key issue in relation to whether the applicant's business was a retail shop is whether the whole or predominant use of the premises was a bar, or a cafe. This is because a bar is not a retail business. Schedule 1 of the Regulation refers to alcoholic beverages, but it is only liquor trading for off premises consumption, which falls within the definition of a retail business and therefore a bar is not a retail shop. Dine-in food retailing including a café and restaurant are however retail businesses as defined in Schedule 1 and therefore are retail businesses.
• [12] In support of their position that the premises was used for a retail business, Cassie Potts Enterprises asserts:

(a) They operated a licenced café from the premises for the entire period of the lease, since the commencement in 2019 until after the application was filed in the tribunal. The mere fact they have a liquor licence and sell alcohol does not mean it is not a café and a retail shop.

(b) The predominant part and focus of the business is the provision of food which is consumed on the premises. They need to also sell alcohol as it is a commercial reality to ensure the business is profitable.

(c) The sale of alcohol is an adjunct to the sale of food. The sale of food is an "associated use" to sale of liquor and is not a breach of the permitted use in the lease.

• [13] In support of their position that the premises was used as a bar and not a retail business FTTOA assert:

(a) The permitted use in the lease is the retail sale of liquor and associated use,[9] therefore the sale of alcohol must be the dominant use, not the sale of food which can only be an associated use.

(b) The applicant's liquor licence does not allow for off-premises consumption.

(c) Clause 4.01(a) of the lease prohibits the use of the premises for any purpose other than the permitted use referred to in the Reference data. Cassie Potts Enterprises have not agreed to any change to the permitted use referred to in the lease. As such running a cafe is not a permitted use under the lease.

(d) It would be contrary to the intent of the legislation for a tenant without any consent from the lessor to change its permitted use and therefore claim it is a retail shop enabling it to exercise rights which it would not otherwise have

(e) Google searches of the business Fitz+Potts refer to it being a bar. There is also a number of reviews referring to the business as a bar; winning Brisbane's Best Bar in 2016 and 2018 and being listed as one of Australia's best bars in both The Australian and Gourmet Traveller.

• [14] Cassie Potts Enterprises also assert that FFTOA had acted as if the lease was a retail shop lease in the past by providing a disclosure notice, using a specialist retail valuer under the RSLA to resolve issues in relation to rent increases and delivering an annual estimate of outgoing under the RSLA. Cassie Potts Enterprises asserts that this therefore estops FFTOA now asserting the lease is not a retail shop lease. FFTOA accepts they took those steps and made an error by providing a disclosure statement but asserts that just because a lessor mistakenly believes that a lease may fall under the retail shop lease legislation, does not deem it to be a retail shop lease and the RSLA contains no reference to a lease being deemed a retail shop lease in these circumstances.
• [15] The parties' actions and intentions in relation to the lease, while can be a relevant consideration, are not determinative. The tribunal being satisfied that there is jurisdiction to hear the application before it, is a fundamental issue to be determined before the tribunal can progress to determine the substantive issues in dispute. In this matter, the tribunal only has jurisdiction if the lease is a retail shop lease in line with the legislative definition. Whether the parties believed that the lease was a retail shop lease or acted in a way consisting with it being a retail shop lease, had no legal bearing and does not impact on whether in fact, this lease is a retail shop lease accordingly to law.
• [16] Cassie Potts Enterprises as the applicant bears the onus of proving sufficient cogent evidence to support the application. The requisite standard of proof is the balance of probabilities, albeit to a sliding scale. According to Justice Dixon in Briginshaw v Briginshaw[10] "reasonable satisfaction" should not be provided by inexact proofs, indefinite testimony, or indirect references.
• [17] The applicant has provided a liquor licence dated 2018 which refers to the business as a cafe and noted that liquor may be sold or supplied only whilst the premises adheres to its principal activity of provision of prepared food to be eaten on the licenced premises. The liquor licence also requires that the majority of the premises must be set up for the business of a café at all times the premises is open except when the premises is being used for a function and prepared food must be available up to one house before closing time. The liquor licence is however at odds with the lease as the liquor licence asserts the principal activity is the provision of prepared food, however the lease notes the permitted use (and therefore the principal activity) is the sale of alcohol. A copy of a food licence was also provided; however it is dated from September 2022 to 29 September 2023, which is three years after the lease commenced and therefore of little evidential value.
• [18] Notwithstanding being aware that it was disputed by FTTOA that the business was a café as opposed to a bar, little evidence has been provided by the applicant to counter the assertions by FTTOA that the business was in fact trading as a bar. Cassie Potts Enterprises have not provided any independent evidence, such as trading records or account to demonstrate that the sale of food and not the sale of alcohol, was the true predominant activity of the business.
• [19] FTTOA asserts that the advertising and marketing for the business was as a bar. In the response material filed February 2023 FTTOA asserts that the website for the applicant's business "fitzandpotts.com.au" refers to the business as a bar and references having a "bright astro-turfed tiki-bar style wrap-around balcony; perfect for sipping mojitos on a Sunday arvo." The website also promoted that the applicant business had won Brisbane's best bar in 2016 and again in 2018 and are listed as one of Australia's best bars in both The Australian and Gourmet Traveller.[11]
• [20] At the time of this decision, the business Fitts+Potts is no longer trading, and the website is no longer functional. However, a search of Fitts+Potts on the internet does demonstrate the business was perceived to be a bar. Top results under a search of the trading name identifies that Mustdobrisbane.com; Yelp.com; Bestofbrisbane.com; Tripadvisor.com.au, and the Urbanlist.com all identify the business as a bar. The Nundah news also had an article identifying the business was in danger of closing due to the Nundah development and refers to the business as a bar, calling it "the home for locals who are fond of catching up over a few rounds of beer".
• [21] The evidence of the party's intention in relation to the use of the premises at the time the lease commenced in 2019 is contained within the lease, in item 7, permitted use. The permitted use is described as "the retail sale of liquor and associate uses". It is accepted by both parties, that the applicant's business sold alcohol for consumption on the premises and did not sell alcohol for off-premises consumption.
• [22] It is accepted that an associated use for a business that predominantly sells liquor, such as a bar, is the provision and sale of food, noting the requirements in liquor licences for food to be provided to ensure the responsible service of alcohol. However, by its nature as an "associated" use, the sale of food, is not the main or predominant use.
• [23] The difficulty for the applicant is that the business mentioned in Schedule 1 needs to be the whole or predominant activity of the business. While the tribunal accepts that the applicant's business sold food, both as a requirement of their liquor licence and as a necessary business requirement to be profitable, the tribunal is not satisfied on the evidence provided that this is a café or that the sale of food is the predominant activity of the business at the commencement of the lease.
• [24] At the time the lease was entered into, it was not the intention of the parties as noted in the lease documents for the predominate activity to be the sale of food in the form of a café. It was only agreed to the premises being used for the retail sale of alcohol and associated purposes. In addition, Cassie Potts Enterprises also appeared to hold itself out as a bar, and it was perceived by others to be a bar that sold food as opposed to a café which also provided licenced alcoholic drinks.
• [25]

As the sale and service of alcohol for consumption on the premises is not a retail business under the Regulation, the tribunal finds that the premises was not used wholly or predominantly for the carrying on of a retail business. As such, unless it can be established that the premises is situated in a retail shopping centre, there is no jurisdiction for the tribunal to hear this application.

• [26] A 'retail shopping centre' as defined in the RSLA[12] is a cluster of premises having all of the following attributes:

(a) five or more of the premises which are used wholly or predominantly for carrying on retail businesses;

(b) all the premises - are owned by one person; or are located in one building; and

(c) the cluster of premises is promoted, or generally regarded, as constituting a shopping centre, shopping mall, shopping court, or shopping arcade.

• [27] The lease is in an old Queensland House located at 1180 Sandgate Road, Nundah[13] which is in the Nundah Village precinct.[14] Item 3 of the lease defines the premises being leased as the upstairs level of the building. While there is no reference to only a specific part of the upstairs area on the lease, it is accepted by both parties that there was one other level one tenant at the time the lease was entered into which was leased as an office tenant to Zig Zag resources. There are a number of tenants on the lower floor of the building. There is a dispute between the parties as to which tenants were in the premises at the commencement of the lease.
• [28] The lessor also owns two adjoining buildings to 1180 Sandgate Road at 1188 Sandgate Road and 1192-1196 Sandgate Road.[15] At the time the lease was entered into the three premises were all owned by FFTOA but were on separate titles. At the time of the tribunal proceedings commencing in 2022, the three premises were all on the same title.
• [29] Cassie Potts Enterprises asserts that the premises is in a shopping centre as:

(a) The three adjoining premises are all owned by the lessor, FFTOA and combined have more than five retail business contained within the premises.

(b) Even if considering 1180 Sandgate Road alone, there are five retail business in that premises including their business.

(c) The premises are generally regarded as constituting a shopping centre, as they are part of Nundah village which is where shops are most densely concentrated, and the buildings contain a group of retail stores and service establishments with parking facilities that are designed to serve the community and neighbourhood.

• [30] FFTOA assert that the premises is not a shopping centre as:

(a) The other buildings, which are situated next to 1180 Sandgate Road, are not adjoining buildings as defined in the RSLA as each building is standalone and built at a different time and each have their own car park, power metre and water meter. Therefore, they should not be counted together when considering the cluster of premises.

(b) Regardless of whether considering all of the buildings owned by FTTOA as a cluster of adjoining buildings or just 1180 Sandgate Road, there are not five retail business within the cluster of shops.

(c) The applicant's business is located on level 1 of the building and less than 25% of the total lettable area of the level was a retail business and therefore the RSLA does not apply.

• [31] In terms of what buildings constitutes the premises/cluster of premises in this matter, the tribunal agrees with the position of the applicant Cassie Potts Enterprises, that the premises is made up of the three buildings from 1180-1196 Sandgate Road. FTTOA dispute the buildings are adjoining but did not address the other definitions of section 5D which includes that the premises are all owned by the one person and the building are separated by common areas or other areas owned by the owner or a road. Based on the photographs provided and the evidence provided by the parties, the tribunal finds that the buildings meet this definition and therefore all three buildings should be considered together in determining whether they meet the definition of a retail shopping centre.
• [32] One of the issues in dispute in this matter is at what time period is it to be determined whether there are five or more of the premises which are used wholly or predominantly for carrying on retail businesses. That is, is it at the time of the dispute arising or at the commencement of the lease? This is relevant as in a small complex like this one, as leases end and new tenants enter, the number of retail business within the complex may change which can impact on whether there are five or more retail businesses within the premises.
• [33] Section 14(1) of the RSLA provides that the RSLA does not apply to a lease of premises that become a 'retail shop' only after the commencement of the lease and s14(2) provides that the RSLA continues to apply to a lease of premises that ceased to be a 'retail shop' after commencement of the lease. As such, it is at the commencement of the lease, which in this case is 11 June 2019, which is the relevant time to determine whether the premises was a shopping centre.
• [34] Cassie Potts Enterprises assert that there was in excess of five businesses at the commencement of the lease in June 2019. She counts her business as a retail shop in her submission. Given the above finding, the applicant's business cannot be considered a retail business.
• [35] In addition to their own business Cassie Potts Enterprises asserts there was two, (potentially three) beauty salons, an Indian and Middle Eastern supermarket, two cafés, a clothing store, a barbershop, an eyewear store and a tattooist in the combined buildings, which are all retail business. In support of these assertions Cassie Potts Enterprises provided Google Earth photographs of the premises from June 2019.
• [36] FTTOA accept that there were four retail businesses within the premises being a café (at 1180 Sandgate Road), an optometrist, a hairdresser/barber and a Tattooist. FTTOA do not accept that there were any beauty salons, starting the business were massage parlours and as such were not retail businesses. FTTOA accept there was an Indian grocer on the basement level of 1180 Sandgate for periods of the applicant's lease, but state that that lease did not commence until after Cassie Potts Enterprises' lease and at the time the lease commenced that premise was vacant.
• [37] In terms of the Indian grocer, as there is no photographic evidence of the Indian grocery store as at the time the lease commenced and the only evidence the applicant could provide was photographs that the business was operating from the premises in 2020 the tribunal accepts the evidence of FTTOA that that business was in the premises at a later stage but was not present at the time the lease commenced so was not a retail business in the premises in 2019.
• [38] The three potential businesses Cassie Potts Enterprises asserts are beauty salons are a business called Bodi Balance which is as massage therapist, a business called We Lash You which is a beauty salon dealing largely in eyelash services and Thai Royal Orchard which is a remedial massage salon. In terms of the business We Lash You, the applicant is not certain on their own evidence whether the business was still operating from the site in June 2019. The evidence provided from Google Earth photographs note that the business signs are evidence in images from August 2018 but in October 2020 there is a for rent sign. There are no photographs of the business in 2019. Noting that FTTOA as the lessor states the business was not there in June 2019 and refers to vacant spaces within the premises, the tribunal cannot be satisfied that "We Lash You" was a retail business within the premises in June 2019.
• [39] In relation to the two massage therapists, while the applicant states they are arguably a beauty salon as in addition to massages the businesses provide some beauty treatment, this is not correct. In order to be a retail business under the Regulation the provision of beauty treatments would need to be the sole or predominate use of the premises, which it is not. As massage therapy is not one of the businesses prescribed under Schedule 1 of the Regulation as a retail business. Accordingly, the tribunal finds that neither Bodi Balance nor Thai Royal Orchard are not retail business.
• [40] FTTOA does not address Cassie Potts Enterprises' assertion that there was a clothing shop business within the premises. The photographs provided from Google Street view from June 2019 support the applicant's assertion there was a clothing store called Pree within the premises. The photographs demonstrate that a clothing store is clearly operating within the premises. There is both clothes in the window and a rack on the street. Accordingly, the tribunal finds that there was a clothing store operating on the premises which is a retail business according to the Regulation.
• [41] In relation to the second café in the premises at 1192 Sandgate Road there are photographs on Google Street view demonstrating a business called Éclair Macaron which appears to be a café. FTTOA do not specifically address the applicant's assertion that there was a second café, other than to note that there was a vacant premises, which it is assumed is the café's location. It is difficult to determine from the photograph whether there was still a café operating on the premises or whether there had previously been a café in the premises, but the premises was now empty. Unlike the other businesses in the photographs, there is no evidence of patrons, there is no sign outside the business demonstrating it was open, and there is no evidence of any lights on in the premises. Therefore, the tribunal cannot make a positive finding that this second café was a retail business in the complex at the time of the lease commencing in June 2019. Regardless given the finding about the clothing store in addition to the four businesses both parties agree are retail business, there are five retail business within the respondent's premises.
• [42] While the applicant has satisfied the criteria in s 5D(a), (b) and (c) that the premises are all owned by the one person/company, that the multiple businesses are adjoining or separated by common areas or other areas owned by the owner or a road and that there are five or more premises used wholly or predominantly for carry on a retail business, that is not sufficient to find that the cluster of premises was a retail shopping centre. Section 5D requires all of the attributes to be satisfied and where Cassie Potts Enterprises have failed is in demonstrating that the cluster of premises are promoted or generally regarded as a shopping centre, shopping mall, shopping court or shopping arcade.
• [43] The premises are not a traditional mall or arcade, which are generally a larger complex with numerous shops operating within the complex. The applicant has not provided any specific evidence to demonstrate that these cluster of buildings are promoted or regarded as a shopping centre or shopping court. Cassie Potts Enterprises appears to be asserting that as the cluster of buildings are within the larger area of Nundah Village, and that as Nundah Village is generally regarded as a shopping precinct, that they therefore are within a shopping centre. However, it is not whether the area that the buildings are in, together with other building are a shopping area, but whether this cluster of shops on their own are promoted or generally considered to be a shopping centre. If the tribunal was to consider whether the general area was promoted and considered a shopping centre, this would result in section 5D(b), that all premises are owned by one person, not being satisfied.
• [44] As Cassie Potts Enterprises have provided no evidence that the premises from 1180-1192 Sandgate Road, which contain a mix of both retail shops and non-retail shops and other business, were promoted or generally considered as a shopping mall, other than a bare assertion about the nature of the general location of the premises, the tribunal is not satisfied on the balance of probabilities that all the attributes in s 5D are met. As all of the attributes must be met for the premises to be considered a retail shopping centre, the tribunal finds that the premises at 1180-1196 Sandgate Road are not a retail shopping centre.
• [45] Even if the tribunal is wrong and the premises are a shopping centre, the lease would still not be a retail shop lease given the exemptions in section 5A (3) of the RSLA. Section 5A (3) states that a retail shop lease does not include a lease of premises located in a retail shopping centre if:

(a) the premises are not used wholly or predominantly for carrying on a retail business; and

(b) at the time the lease is entered into, either -

(i) if the premises are located on a level of a multi-level building - the retail area of the level is 25% or less of the total lettable area of the level....

• [46] Given the finding that the applicant's business was not a retail business, and as they were located on the first floor of the building, it is necessary to determine what other retail businesses there were on the first floor of the buildings 1180-1192 Sandgate Road. FTTOA asserts that none of the business on the first floor were retail business.
• [47] FTTOA asserts that the total area of the first-floor level of the three buildings is 660m2. The applicant's business occupied 115/660m2 (17.4%). FTTOA asserts the other leases on the first level of the buildings was an office leased to Zigzag resource, comprised of 115m2, an upstairs premises at 188-1190 Sandgate Road with an area of 180m2 which was vacant and KLM solicitors at 1192-1196 Sandgate Road which comprised of 250m2. None of these businesses are retail business as defined in Schedule 1 of the Regulation.
• [48] Cassie Potts Enterprises does not specially address this issue in the material provided to the tribunal and none of the photographs provided by Cassie Potts Enterprises provide any evidence to dispute the assertions of FTTOA as to the business occupying a first-floor lease at the time the lease commenced in June 2019.
• [49] Accordingly, the tribunal is not satisfied that the lease between FTTOA and Cassie Potts Enterprises is a retail shop lease as the tribunal is not satisfied on the balance of probabilities that the business was a retail shop or that the premises was in a retail shopping centre. In addition, as the lease was on the first floor of the premises and the applicant was unable to demonstrate that at least 25% of the total letting area of the first floor was used for retail businesses, the RSLA does not apply in relation to this lease.
• [50] Accordingly, the tribunal does not have jurisdiction to determine this matter under the RSLA. The proceedings are therefore misconceived and lacking in substance because the tribunal has no power to make the orders sought.
• [51] Where a proceeding is frivolous, vexatious or misconceived, lacking in substance or otherwise an abuse of process, the tribunal may dismiss the proceeding.[16] In this case, the tribunal does not have jurisdiction to determine the dispute between the parties as it is not a retail shop tenancy dispute. Accordingly, the only appropriate order in this matter is for the tribunal to grant the application for strike out pursuant to section 47 of the QCAT Act and to order that the application to resolve a retail tenancy dispute filed on 11 July 2022 is dismissed for want of jurisdiction.

• [52] The orders of the tribunal are:
  1. The application for miscellaneous matters (strike out) is granted.
  2. The application to resolve a retail tenancy dispute filed on 11 July 2022 is dismissed for want of jurisdiction.

[1] The original application named Karl Jameson (the Director of FTTOA Pty Ltd) and Locale Apartments as the respondents, but this was corrected to FFTOA Pty Ltd on 5 December 2022.

[9] Item 7 of the reference data on page 2 of the Lease.

[10] [1938] HCA 34; (1938) 60 CLR 336, 362.

[11] Respondent's submission dated 31 March 2023.

[13] The location is also referred to as 1800-1188 Sandgate Road, Nundah and 1 Chapel Street.

[14] Applicant's submission filed 20 January 2023 para 4.

[15] Application submission June 2023 para [11].