plaintiff. There was a valid and enforceable agreement for lease between the Applicant and the Respondent in the terms set out in the Offer to Lease dated 5 August 2019 (see [36(1)]).
Key principles
An Offer to Lease that records agreement on all essential terms and is acted on by the parties (possession given, rent paid, part performance) can amount to a binding retail shop...
Where a landlord delivers possession and accepts rent and both parties proceed on the basis that a lease exists, it may be unconscionable for the landlord to rely on an express...
The identity of the intended lessee is a matter of construing the Offer (including annexures) and surrounding correspondence; where Annexure 'A' names the company as lessee and...
Issues before the court
Who was the intended lessee under the Offer to Lease: the company (Dixi-Lee Pty Ltd) or the director/trading name?
Whether the Offer to Lease gave rise to a binding lease despite express wording that it was 'not intended to be a binding lease' and that the...
Whether the Respondent validly withdrew the Offer to Lease or was precluded from so doing by equitable estoppel.
Plain English Summary
QCAT held that an Offer to Lease signed by the tenant's director and acted on by both sides (tenant took possession and paid rent; landlord allowed occupation) created a binding retail shop lease in the Offer's terms. The Tribunal applied Masters v Cameron to find the agreement fell into the category where parties intended to be immediately bound and only formalised the terms later. The Tribunal also held that the landlord could not validly withdraw the Offer because its conduct induced the tenant to rely and it would be unconscionable to withdraw (equitable estoppel). The Applicant succeeded; remaining claims for damages and outstanding rent were left to the substantive proceedings.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
1,994 words · generated 24/06/2026
What happened
Dixi-Lee Pty Ltd (trading as Fresh Made Café) and A & M Investments Pty Ltd (owner of Station Square Shopping Centre) negotiated an Offer to Lease for Shop 17 in August 2019. The Offer recorded the essential commercial terms: area, base rent ($63,000 per annum), outgoings, a three year term, occupation and lease commencement dates (19 August 2019) and included an Annexure 'A' naming the company as the lessee ([4], [6], [17]). The Offer also contained clear wording stating it was not intended to be a binding lease and that the landlord could withdraw the offer until formal executed lease documentation had been delivered in a form acceptable to the landlord ([5]).
Cited legislation
No linked legislation citations have been extracted yet.
Despite the absence of a formal, executed lease document, the Applicant took possession and commenced trading from 19 August 2019, paying rent and outgoings through to February 2020 ([7]; see also [30(a)-(b)]). A dispute arose over whether the café could use crockery mugs (the Applicant's position) or had to use disposable cups in the food court (the Respondent's rule) ([8]). The dispute escalated and on 29 January 2020 the Respondent's solicitors wrote asserting the Offer was not a binding lease and purported to withdraw the Offer, demanding vacation by 28 February 2020 ([9]–[10]).
The Applicant filed a Notice of Dispute under the Retail Shop Leases Act and sought an interim restraining order to prevent the Respondent retaking possession. The Tribunal granted the interim order; the Applicant then advised it would vacate the shop and the interim order was later vacated ([11]–[15]). The substantive issue before Member Richard Oliver was whether the Offer to Lease had become an enforceable retail shop lease (or whether it was validly withdrawn), and who the intended lessee was ([16], [19]).
The Tribunal concluded the company (Dixi-Lee Pty Ltd) was the intended lessee (Annexure 'A', signature and subsequent correspondence made that clear) ([17]–[18]). Applying Masters v Cameron and equitable estoppel principles informed by Waltons/Austotel, the Tribunal found the parties had agreed all essential terms and proceeded on that basis, so the arrangement fell into the first Masters v Cameron category, an agreement intended to be immediately binding though to be formalised later, and that it would be unconscionable for the landlord to rely on the express withdrawal clause after delivering possession and accepting rent. The Tribunal ordered there was a valid and enforceable agreement for lease in the Offer terms ([26]–[29], [30]–[33], [36(1)]).
Why the court decided this way
Two interlocking legal paths underpinned the Tribunal's decision.
Masters v Cameron classification:
The Tribunal applied the High Court's three-class analysis from Masters v Cameron [(1954) 91 CLR 353] to decide whether the parties had reached a concluded bargain or had deferred conclusion until formal documents were executed ([26]). The Tribunal found the circumstances fit the first class: agreement upon all essential terms and an intention to be immediately bound, with the parties only intending to have the terms restated in fuller form later ([28]). The Offer contained the essential commercial terms and both parties acted on that basis (possession and rent), indicating finality in substantive terms even though formal documentation remained to be executed ([4], [7], [27]).
Equitable estoppel and conduct of the parties:
The Offer's express clause allowed withdrawal until formal lease documentation was delivered ([5]). But the Tribunal emphasised that the Respondent had delivered up possession and accepted rent, and both parties proceeded on the basis a lease existed ([30(a)-(e)]). The Tribunal reasoned that, given those facts, it would be unconscionable for the Respondent to assert the withdrawal clause to defeat the Applicant's rights. The Tribunal applied established equitable estoppel principles (as stated in Austotel following Waltons), describing the elements required: creation or encouragement of an assumption, reliance, and unconscionability in departing from that assumption ([31]). The centre manager's assurances induced the tenant to sign and take possession; the tenant relied and suffered detriment by committing to occupation and trading ([22]–[24]). On these facts estoppel prevented the Respondent from withdrawing the Offer ([31]–[33]).
The Tribunal therefore resolved the conflict between the express non-binding phrase in the Offer and the parties' conduct by treating the parties' conduct (possession, rent, consistent mutual approach to the arrangement) and equitable considerations as decisive.
Before and after state of the law
Before this decision:
Masters v Cameron provides the longstanding test for whether parties intended to be immediately bound or intended to defer legal effect until formal documentation is executed. It remains the primary analytical tool in contract formation disputes where formal documents are contemplated ([26]).
Waltons Stores and the cases that followed (e.g. Austotel) establish that where one party induces an assumption of legal relations and the other party relies, equitable estoppel can prevent the inducing party from reneging if it would be unconscionable.
What this decision confirms (after):
The Tribunal applied these established doctrines in a retail shop lease context and affirmed that explicit 'non-binding' language will not automatically prevent a binding agreement from arising where the parties have agreed all essential terms and both act on that basis ([28], [30]).
It also reiterates that equitable estoppel is available to prevent a landlord from relying on a contractual withdrawal clause where its conduct (delivery of possession and acceptance of rent) induced detrimental reliance ([30]–[33]).
Practically, the decision reinforces that taking possession and paying rent are powerful indicators that parties have created a binding relationship and that landlords should be cautious about relying on reservation clauses in offers once conduct indicates acceptance.
Key passages with plain-English translation
Selected passages from the decision, with simple translation.
Paragraph 5 (Offer clause):
Text: "The information contained in this letter is not intended to be a binding lease ... this offer may be withdrawn by the Landlord until such time as executed lease documentation has been delivered ..."
Plain English: The Offer said it was not a binding lease and allowed the landlord to take the Offer back until the tenant delivered signed formal lease papers acceptable to the landlord.
Paragraph 26 (Masters v Cameron summary):
Text: "Where parties ... reach agreement upon terms ... the case may belong to any of three classes."
Plain English: The judge recites the standard test: parties may have made a complete bargain, may have agreed subject to a condition (formal document), or may have intended no binding contract until a formal contract is signed.
Paragraph 28 (application of Masters):
Text: "Therefore, the circumstances here fall within the first class of cases ... there was agreement as to all of the essential terms ..."
Plain English: The Tribunal holds that the parties had agreed the important bits of the lease and intended to be bound right away, even though a formal lease would be prepared afterwards.
Paragraph 31 (equitable estoppel test):
Text: "For equitable estoppel to operate there must be the creation or encouragement ... and reliance ... where departure ... would be unconscionable."
Plain English: If the landlord created the belief that a lease would exist, the tenant relied on that belief, and it would be unfair to let the landlord go back on it, then equity will stop the landlord from withdrawing.
Paragraph 36(1) (order):
Text: "There was a valid and enforceable agreement for lease between the Applicant and the Respondent ..."
Plain English: The Tribunal concluded that the Offer did create an enforceable lease in the terms stated.
What fact patterns trigger this precedent
The decision is focused on a factual constellation that would trigger the same reasoning:
An Offer to Lease or heads of agreement records all essential commercial terms (rent, outgoings, term, commencement) but also contains wording asserting non-binding status and a right of withdrawal until formal lease documentation is delivered ([4], [5]).
The prospective tenant takes possession and begins trading pursuant to the Offer without formal execution of a lease, and pays rent and outgoings ([7], [30(a)-(b)]).
The landlord (or its agent) gives clear assurances that a lease will be granted or acceptance is a formality, inducing the tenant to enter and expend costs or otherwise rely ([22]–[23]).
Later, a dispute gives the landlord an ostensible reason to try to withdraw the Offer and retake possession (for example, alleged breaches of trading hours or centre rules) ([8]–[10]).
The tenant sues or seeks interim relief to prevent retaking of possession, putting the Tribunal or court to decide whether a binding lease existed or whether withdrawal was effective ([11]–[15]).
Where these facts exist the reasoning in this decision, applying Masters v Cameron to find the first-class situation and invoking equitable estoppel where appropriate, is likely to be persuasive in QCAT and comparable tribunals.
How later courts have treated it
This judgment itself does not report later treatment. The decision applies established High Court authority (Masters v Cameron) and equitable cases (Waltons/Austotel). It is a QCAT decision at first instance; its persuasive value depends on later citation in tribunals or courts. The judgment identifies the controlling authorities it applied: Masters v Cameron ([26]), Austotel and Waltons for estoppel ([31]), and cites a Queensland decision on specific performance ([24]). Practitioners should treat this as a properly reasoned tribunal decision applying established principles rather than a binding appellate authority.
If relying on this decision in subsequent disputes, note:
It closely follows orthodox High Court authority on classification of agreements and equitable estoppel.
It emphasises facts: delivery of possession and acceptance of rent are central to the finding of a binding agreement and to the estoppel argument; different facts may lead to a different outcome.
Still-open questions
Several matters remain unresolved or only partially addressed in the judgment:
Remedies and measure of loss:
The Tribunal did not determine the Applicant's potential claim for damages nor the Respondent's account of outstanding rent and outgoings; those issues were left to the substantive proceeding ([33]–[35]). The measure of damages for terminating an agreement for lease or for wrongful eviction/termination was not decided.
Scope of agent's authority:
The Tribunal found that the centre manager's assurances induced reliance but did not find evidence that the agent had authority to bind the Respondent to the lease terms ([21], [25]). The precise scope and legal effect of a centre manager's representations in similar contexts may turn on different facts, agency documentation and the principal's express authorisations.
Interaction with express contractual bargain terms:
The decision treats parties' conduct and estoppel as sufficient to overcome express withdrawal wording. It does not fully analyse the limits of that approach where withdrawal clauses are more elaborate, where conditional elements remain unresolved, or where the alleged inducing representation expressly disclaims authority. Future cases may test the boundary between written reservation clauses and the equitable intervention of estoppel.
Effect on third parties and registrability:
The decision does not address whether any interest arising from the agreement for lease would have implications for third parties (e.g. priority against subsequent purchasers) or registrability under any land instrument. Those issues would require separate consideration.
Appellate status and precedential weight:
As a QCAT member decision, the judgment is persuasive but not binding on higher courts. The extent to which superior courts will adopt the same factual balancing in similar commercial tenancy contexts remains for further authorities.
Practical takeaways for practitioners:
Where a landlord wishes to preserve an ability to withdraw, avoid conduct that could be seen as accepting a tenant into possession or accepting rent in circumstances where the landlord expects to rely on the reservation.
Tenants who receive assurances and take possession should document reliance and, where possible, secure formal execution promptly; if reliance is necessary, preserve evidence of the landlord's assurances.
In disputes, Masters v Cameron and equitable estoppel remain the central doctrines to argue whether an agreement initially said to be non-binding has in fact acquired binding force through conduct.
Judgment (32 paragraphs)
[1]
LANDLORD AND TENANT - RETAIL AND COMMERCIAL TENANCIES LEGISLATION - where the dispute as to whether a lease exists between the parties - where the parties executed an Offer to Lease - where the respondent sought to withdraw the Offer to Lease - whether the Respondent is bound by the Offer to Lease - whether the Offer to Lease could be withdrawn.
[1] Mr Lee Colgrave is a director of the Applicant, Dixi-Lee Pty Ltd.
[2] Between 19 August 2019 and 1 March 2020 the Applicant rented Shop 17 at the Station Square Shopping Centre in Maryborough to conduct the business of a coffee shop. The Applicant took over the operation of the business from a previous tenant, Georgina Claxton, who had operated the shop for some years.
[3] The Respondent is the owner of the Station Square Shopping Centre in Maryborough. It retained Green Group Property Investments as Centre Manager. Green Group was represented by Douglas Sanderson. Green Group's role was to act as the Respondent's agent for the purposes of the management of the centre and also for the negotiation of retail shop leases with the tenants of the shopping centre as the need arose.
[4] In August 2019, Mr Sanderson had discussions with Mr Lee Colgrave, a director of the Applicant, about leasing Shop 17 to the Applicant to conduct the business of a coffee shop. An Offer to Lease[1] was signed by Mr Colgrave for Shop 17 which set out the essential terms of the lease, being:
[7]
(d) term of the lease 3 years and date of occupation 19 August 2019;
[8]
[5] There is a further provision in the Offer that the formal lease documentation will be in accordance with the Offer's essential terms. There is also a further provision in the Offer which is relevant to this application, that is:
[9]
The information contained in this letter is not intended to be a binding lease between the Tenant and the Landlord. The Tenant acknowledges that this offer may be withdrawn by the Landlord until such time as executed lease documentation has been delivered by the Tenant to the Landlord's solicitors in a form acceptable by the Landlord. No other act or conduct of any kind will be considered as giving rise to a lease.
[10]
[6] Annexure "A" to the Offer to Lease sets out the Tenancy information, noting that the tenant will be the Applicant. It also provided details of the Applicant's solicitors.
[7] The Applicant took possession of the premises in August 2019 and continued in occupation until 1 March 2020. It did so without a formal lease being prepared and signed by the lessee and the lessor.
[8] The dispute arose between the Applicant and the Respondent concerning the Applicant's proposal to use crockery mugs for serving tea and coffee rather than just being restricted to disposable cups as required by the Respondent. The Applicant considered it was at a disadvantage in the food court because other outlets were not restricted to disposable cups, thus resulting in a loss of business. The Applicant must have known of the restriction, hence the seeking of a relaxation from Mr Sanderson about the restriction. There was an exchange of emails in respect of this issue between Mr Colgrave and Mr Sanderson but ultimately Mr Sanderson took the firm position that "the food court is only ever disposable and that cannot change".
[9] The issue between them escalated, until on 29 January 2020 the Respondent's lawyers, MRH Lawyers, wrote to the Applicant noting the history of the Offer to Lease and alleging that the Applicant had not traded during the hours required by the Offer to Lease. The letter referred to the emails between Mr Colgrave and Mr Sanderson concerning the dispute about the use of crockery and whether a lease was in place.
[10] The Respondent's lawyers then informed the Applicant that:
The information contained in the Offer to Lease is not intended to be a binding lease between you and our client.
The offer contained in the Offer to Lease may be withdrawn by our client until such time as executed lease documentation has been delivered by you to our office in a form acceptable to our client.
No other act or conduct of any kind will be considered as giving rise to a lease.
[11]
As it appears from your correspondence to our client that you are either unable and/or unwilling to trade in the premises in accordance with our client's standard lease, we advise that in accordance with our rights, our client withdraws its offer to lease to you contained in the Offer to Lease dated 12 August 2019.
[12]
[11] There was a demand that the Applicant vacate the premises by 28 February 2020. That letter initiated the application in the Tribunal being the Notice of Dispute - Retail Shop Leases Act1994. In that application the Applicant sought broad relief.
[12] At the same time the Applicant filed an application for an interim order seeking to restrain the Respondent from taking possession of the premises on 28 February 2020. That application came on for hearing on 28 February 2020 and was contested..
[13] The Respondent's position in that hearing was that there was no binding lease between the parties and therefore there was no basis upon which a restraining order could be made. The application for the interim order was dependant on a determination as to whether a lease existed between the Applicant and the Respondent consistent with the terms of the Offer to Lease.
[14] An order was made restraining the Respondent from taking possession of the retail shop premises until further order of the Tribunal.
[15] The day after making the restraining order, the Applicant sent an email to Mr Sanderson informing him that the Applicant had decided to vacate the shop. More specifically the email said, "Despite having been granted an interim order, it is with sad regret that we have decided to vacate Shop 17, Station Square Shopping Centre." Subsequently the restraining order was vacated.
[16] The Respondent raises two issues for determination. Firstly whether the Offer to Lease was made to Mr Colgrave personally instead of the Applicant; and secondly, that the Offer to Lease was validly withdrawn which could give rise to there being no lease between the parties.
[13]
[17] The Respondent contends that it did not offer the lease to Dixi-Lee Pty Ltd but rather, to Lee Colgrave t/a Freshmade as is evident on the first page of the Offer. However that ignores Annexure "A" which clearly identifies the Applicant as the 'lessee' and that Mr Colgrave and Ms Stephenson are the directors of the Applicant. Furthermore the Offer was signed by Mr Colgrave as director. The correspondence, from MRH Lawyers directed to the Applicant is also consistent with a finding that the Applicant was the intended lessee. The demand was made for the Applicant to vacate the premises by the end of February 2020 and not Mr Colgrave.
[18] I therefore find that at all times it was intended that the Offer to Lease was made between the Applicant and the Respondent and if and when the lease was formalised, the lessee would be Dixi-Lee Pty Ltd.
[14]
[19] The next question is whether there is an enforceable lease in terms of the Offer to Lease between the Applicant and the Respondent or a periodic tenancy. 'Lease' is defined in the Retail Shop Leases Act as:
[15]
Means an agreement under which a person gives or agrees to give to someone else for valuable consideration a right to occupy premises whether or not the right is -
[16]
(b) for a term or by way of a periodic tenancy or tenancy at will.[2]
[17]
[20] Mr Colgrave knew when he was negotiating the lease with Mr Sanderson, representing the Centre Manager, that he was acting on behalf of the Respondent. Mr Colgrave also knew that the Respondent would ultimately have to agree to the lease in accordance with the Offer to Lease, even if it was a formality.
[21] Based on these facts I also infer that Mr Colgrave knew that the Centre Manager could not bind the Respondent to a lease in terms of the offer with the Applicant. All of this is supported by the process of the terms of Offer to Lease submitted to Mr Colgrave dated 12 August 2019.
[22] I accept that Mr Colgrave was anxious to ensure that the Applicant had a lease after taking over the business in July 2019. To this end they sought an assurance from Mr Sanderson that they would be granted a lease because there was little point in buying/taking over the business from the previous owner unless they were assured of a lease. I find that Mr Colgrave and Ms Stephenson met with Mr Sanderson at the Centre Management office on 15 August 2019 and were assured that the Offer would be accepted by the Respondent and they then signed the Offer to Lease on 15 August 2019. I accept Mr Colgrave's evidence that Mr Sanderson said it "was a given' and signing the Offer to lease 'was a formality'.
[23] Even though Mr Sanderson's assurances do not go so far as to amount to an acceptance by the Respondent they did induce Mr Colgrave to sign the Offer and proceed to take possession of the premises and commence operating the business. There were further assurances given by Mr Sanderson in late December 2019 as to the existence of the lease and these fall within the same category.
[24] There is no doubt that a properly formulated agreement to lease with the agreed essential terms can be specifically enforced.[3] This is particularly so, where both parties have partly performed the lease by giving up possession of the leased premises and the payment of rent and outgoings. In such circumstances, here the lessor would be estopped from refusing enter into a formal lease. However, the Respondent contends that because of the specific wording of the Offer to Lease that it 'is not intended to be a binding lease between the Tenant and the Landlord' no lease exists because the Offer was withdrawn.
[18]
Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
[19]
[27] Mr Colgrave was certainly of the view that an agreement as to the lease of the premises had been reached with the Respondent on the basis of the conversations with Mr Sanderson. Then, pursuant to and in reliance on those assurances he proceeded to take possession of Shop 17 and commence trading in the business. At no stage was any query or concern raised by the Respondent about the Applicant taking possession and paying rent. The commercial relationship proceeded on the basis that a formal lease would be prepared for the parties mutual execution.
[28] Therefore, the circumstances here fall within the first class of cases referred to by the High Court. That is, there was agreement as to all of the essential terms and which would then be restated in the formal document.
[29] It follows from this conclusion that there was retail shop lease between the parties in the terms set out in the Offer to Lease.
[20]
[30] The right retained in the Offer to Lease to withdraw the offer is preserved 'until such time as executed lease documentation has been delivered by the Tenant to the Landlord's solicitors in a form acceptable by the Landlord'. Further, it specifically provides that 'no other act or conduct of any kind will be considered as giving rise to a lease'. The difficulty here for the Respondent is that:
[21]
(a) in August 2019 the Respondent has delivered up possession of the premises to the Applicant;
[22]
(b) the Applicant has paid rent from August 2019 through to February 2020 on the basis it had a lease;
[23]
(c) the Respondent seeks to withdraw the offer on the basis that the Applicant has not complied with stipulated trading hours;
[24]
(d) save for any dispute about the trading hours, the Applicant has performed all of its obligation under the agreement for lease until it vacated the premises on 1 March 2020
[25]
(e) both parties have proceeded on the basis that a binding lease had been entered into between them.
[26]
[31] In these circumstances, although not specifically relied on by Mr Colgrave who is not a lawyer, the principles of equitable estoppel are enlivened.
[27]
For equitable estoppel to operate there must be the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed or an interest granted to the plaintiff by the defendant, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable.[5]
[28]
[32] Given that both parties proceeded after August 2019 on the basis that a lease existed it would be unconscionable for the Respondent to purport to rely on the right to withdraw the offer when the Applicant, with the agreement of the Respondent performed all of its obligations pursuant to the Offer to Lease. The agreement for lease was specifically enforceable by the Applicant but it chose to adopt a course of accepting the Respondents demand to deliver up the premises and reserve its rights. It also seems that he Respondent was reliant of the agreement for lease to terminate the tenancy on the basis of the alleged non-compliance with the conditions concerning trading hours. Also it sought to enforce the requirement for the Applicant to only use disposable cups for beverages. This is inconsistent with any notion of a right to withdraw the offer or that the Respondent is not bound by the Offer.
[33] The agreement for lease has now been terminated and the consequence of that remains to be determined.
[34] The Applicant contends it has a claim for damages but has not formulated the claim pending the determination of this issue. Once formulated it will be part of the substantive application.
[35] The Respondent also has a claim for $13,697.74 outstanding rent and outgoings because it submits it did not retake possession until the Tribunal vacated the restraining order and is entitled to rent up until that time. Once again the determination of this issue will be part of the substantive application.
[36] The order of the Tribunal is that:
There was a valid and enforceable agreement for lease between the Applicant and the Respondent in the terms set out in the Offer to Lease dated 5 August 2019.
There was a valid and enforceable agreement for lease between the Applicant and the Respondent in the terms set out in the Offer to Lease dated 5 August 2019 (see [36(1)]).
[25] The Applicant relies on the many assurances given by Mr Sanderson, even the recording of the conversation, where Mr Sanderson acknowledged that the Applicant had a lease with the Respondent. But there is no evidence, nor any factual basis upon which to infer, that his authority as agent went so far as to bind the Respondent to a lease which created a formal interest in the tenancy for the 3 year term in favour of the Applicant.
[26] The Respondent relies on Masters v Cameron,[4] which sets out the principles to assist in deciding whether a binding contract/lease had been entered into between the parties. In that case the High Court posed three scenarios concerning the making of a contract after negotiations: