Landlord ordered to repay $1,521.08 taken from a shop lease bond for his own legal fees (QCAT, 2026)

What happened

A company, Adacam Pty Ltd, leased shop premises at Rochedale South from a private landlord. The lease was dated 7 October 2021, ran for a three-year term starting 1 November 2021, and was on the commercial tenancy agreement form issued by the Real Estate Institute of Queensland. It was covered by the Retail Shop Leases Act 1994 (Qld), the Queensland law that sets the rules for retail shop leases. Clause 15 gave the tenant an option for a further tenancy on the same terms. The agreement listed various payments the tenant had to make, but it did not include a clause requiring the tenant to pay anyone's legal fees.

As the term ran down, the tenant and the landlord's agent, Ray White Commercial Springwood, discussed a renewal. The tenant first asked for a one-year extension and then, by email on 15 October 2024, said it was "agreeable to renew for three years at the current rate plus CPI" and asked for "the document for signing". The agent replied on 22 October 2024 asking the tenant to accept the landlord's terms by return email so the agent could "brief the owner's solicitor to prepare the lease". In the same email the agent said: "The owner will cover the cost of lease preparation, but you will need to cover your own solicitors' costs". The agent had said something similar by email on 22 August 2024.

The landlord's solicitors, Bilic Law, prepared a draft lease and emailed it to the tenant on 6 November 2024. Clause 3.1 of that draft set out various sums the tenant was to pay; legal costs were not among them. The tenant emailed a signed copy of the documents on 21 January 2025 but, despite several reminders, never returned the signed originals. The tenant vacated the premises on 30 April 2025, saying it could not continue with the renewal.

Bilic Law invoiced the landlord for its fees on 17 March 2025. The sum of $1,521.08 was then deducted from the bond money held for the lease. On 14 May 2025 the agent gave the tenant a bond reconciliation statement claiming a further $836.44, saying "we have added the cost of preparing the lease. This is in accordance with section 3 of the retail shop leases act." The tenant did not receive a copy of the solicitors' invoice until well after that bond statement.

What each side wanted

The tenant applied to QCAT for the return of the $1,521.08 taken out of its bond. The landlord defended the claim and counterclaimed, arguing the deducted amount represented unpaid legal fees he was entitled to, and seeking a further $836.44 for those costs, plus interest and the costs of the proceeding. A submission from his solicitors dated 22 May 2025 made clear that the claim for legal costs rested on section 48(3) of the Retail Shop Leases Act, and the same position was taken in the response and counterclaim filed with the Tribunal. Most of the facts were agreed; the dispute was about whether the tenant had to pay the landlord's legal costs at all.

What the tribunal decided

The Tribunal ordered that the landlord "is to pay Adacam Pty Ltd the sum of $1,521.08 within 14 days of the date of this order", and that "the counterclaim is dismissed". The counterclaim included the extra $836.44 for legal costs, interest and the costs of the proceeding, so none of those amounts were allowed.

The matter was decided on the papers, meaning on the written material without a live hearing, under section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). The decision was delivered on 16 October 2026 by Member Lobban.

Why the tribunal decided it that way

The starting point was section 48(1) of the Retail Shop Leases Act. It says a tenant under a retail shop lease is not liable to pay any amount for the landlord's legal or other expenses for preparing, renewing or extending the lease, for getting a mortgagee's consent, or for the landlord complying with the Act. Section 48(2) allows only two exceptions: survey fees linked to registering the lease, and the registration itself. The Tribunal described section 48(1) as the usual position, that a tenant does not pay the landlord's legal costs of preparing a retail shop lease.

Section 48(3) is a narrow exception. It lets a landlord recover reasonable legal costs of preparing a final lease, but only if four things all happen: the parties agree the terms of the proposed lease; the tenant gives written notice to prepare a final lease and it is prepared; the tenant does not sign the final lease; and the landlord gives the tenant a copy of its invoice for the preparation costs. The Tribunal explained the purpose of the exception: it protects a landlord who is left out of pocket for wasted legal fees when a prospective tenant agrees to everything, instructs that the lease be drawn up, and then does not sign.

Two of those four requirements were not met. The condition in section 48(3)(c) failed because the tenant did sign the lease; it emailed a signed copy on 21 January 2025. The Tribunal noted that a landlord faced with a tenant who signs but then does not go ahead may take whatever action it is advised to take, but the remedy is not found in section 48(3), which was the only provision the landlord and his solicitors relied on. The condition in section 48(3)(d) also failed, because the tenant was never given the landlord's invoice for the legal fees at the relevant time. What it received was a bond settlement from the agent after it vacated, and it only got a copy of the invoice much later. The Tribunal observed that section 48(3)(d) does not set a deadline for providing the invoice and that this point was not argued, but that the usual convention is for the invoice to be produced when the lease is presented.

The Tribunal also pointed to something neither side had addressed: the landlord's agent, acting with his authority, had told the tenant it was not required to pay legal costs, saying the owner would cover the cost of lease preparation. The Tribunal remarked that, in hindsight, the agent might think those pre-contract statements should have been more carefully worded. Weighing all the evidence, the Tribunal did not accept that the tenant was liable to pay the landlord's legal costs in the way they had been claimed.

What this means if you are in a similar position

If you are in a similar position as a retail shop tenant in Queensland, this decision shows how section 48 of the Retail Shop Leases Act is applied. The general rule is that the landlord carries its own legal costs of preparing, renewing or extending a retail shop lease, and the exceptions are read strictly. Where a landlord relies on the narrow exception in section 48(3), the Tribunal checks each of its four conditions, and a claim can fail because of a single one, such as the tenant having signed the lease or the invoice not being given to the tenant.

The decision also shows that money taken out of a bond is not settled simply because it has been taken. The Tribunal looked at what the lease actually said, what the agent had put in writing before the renewal, and what the Act allowed, rather than at the deduction itself. What an agent writes during negotiations can matter, because the agent was acting with the landlord's authority when it said the owner would cover the cost of lease preparation.

In this kind of dispute, people usually start by raising the problem in writing with the landlord or the agent, setting out the amount in dispute and the basis for it, and asking for it back. If that does not resolve it, the next step is normally an application to the tribunal, which for retail shop lease matters in Queensland is QCAT.

How to apply: our step-by-step guide to a QCAT application. More decisions: QCAT cases and other civil disputes.

Source: Adacam Pty Ltd v Webb [2026] QCAT 464 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.