Shop lease claims dismissed: licensing salon rooms is not a retail business, so QCAT had no power

What happened

The tenant, Freedom Suites Australia Pty Ltd, occupied premises at 115–157 Queen Street, Southport, in a centre known as Queen Street Village. The permitted use written into the lease was the "licensing of individual salon rooms to freelancers for the provision of hair, beauty and associated services." The lease began on 5 June 2022 for a term expiring 3 June 2030, with an eight-year option. The premises were identified in the lease annexure as tenancy "T37" with a surveyed area of 360m², and had earlier been the subject of a 2019 Lessor Disclosure Statement given by a previous trustee owner, Nerang Street Pty Ltd. The property was owned at the time of the dispute by WDP Shore 001 Pty Ltd, whose managing agent was Handler Property.

Between May and August 2025 three disputes arose between the tenant and the landlord's agent: an increase in the tenant's outgoings contribution, who should pay the cost of replacing a bank guarantee after the change of landlord, and who was responsible for an air conditioning repair. On 22 August 2025 the tenant lodged an application for mediation with the Queensland Small Business Commissioner. A mediation conference was held on 23 September 2025 without a resolution, and on 17 October 2025 the dispute was referred to the tribunal under section 63 of the Retail Shop Leases Act 1994 (Qld).

After the mediation the tenant filed a Schedule of Claim that added two further issues: that rubbish removal charges should be itemised separately, and a claim for damages said to arise from inadequate customer parking. The landlord's response, filed on 15 January 2026, opposed every claim. The landlord then filed a submission arguing the tribunal had no jurisdiction at all. The matter was heard and determined on the papers, meaning on the written material rather than at an in-person hearing.

The tribunal recorded that Level 1 of the building was made up of only three tenancies: the tenant's salon-room premises, EMF Fitness (described as a 24-hour fitness and training facility with only incidental café and merchandise sales) and KKTC (a registered training organisation providing early-childhood-education qualifications). The tenant had originally described EMF Fitness as a beauty salon but corrected that in its reply and accepted it was primarily a fitness and training facility.

What each side wanted

The tenant asked the tribunal to decide its five complaints: how outgoings were calculated (including how lettable area was treated), who paid for the air conditioning repair, separate itemisation of rubbish removal, and damages for a shortfall in customer car parking. It argued the tribunal had jurisdiction on two bases: first, that the test in section 5B(b) looks at what the premises are used for, and the premises were fitted out with salon chairs, wash stations and mirrors to deliver hair and beauty services to the public; and second, that the premises were a "retail shop" simply because they sat inside a retail shopping centre, with the landlord bearing the onus of proving the exclusion and having produced no floor-area figures. It also pointed to three successive landlords having classified the tenancy as retail. The landlord argued the tribunal had no jurisdiction because the tenant's own business was licensing rooms to others, closer to a sub-letting or flexible-office model than a retail business, and that even inside a shopping centre the statutory exclusion applied because none of the three tenants on Level 1 ran a retail business.

What the tribunal decided

The tribunal ordered that it does not have jurisdiction to determine the proceeding as a retail tenancy dispute under the Retail Shop Leases Act 1994 (Qld), the lease not being a retail shop lease within the meaning of section 5A of that Act.

The application was dismissed for want of jurisdiction and the referral by the mediator was closed. Each party was ordered to bear its own costs of the proceeding. No money was ordered to be paid either way, and because the jurisdiction question came first, none of the five substantive complaints about outgoings, the bank guarantee, the air conditioning, rubbish charges or parking was decided.

Why the tribunal decided it that way

The Act only protects leases of a "retail shop". Section 5B says premises are a retail shop if they are in a retail shopping centre or are used wholly or predominantly to carry on a "retail business". A "retail business" under section 5C is one prescribed by regulation, and regulation 8 of the Retail Shop Leases Regulation 2016 (Qld) sets a positive test: the business must be listed in Schedule 1, or its whole or main activity must be selling, hiring or supplying goods or services listed there. Schedule 1 lists hairdressing, barber and beauty salon services. It contains no item for licensing, hiring or letting out rooms or premises. The tribunal found the tenant's own business was granting rights of occupation to freelancers for licence fees, and that it was the freelancers, not the tenant, who supplied the hair and beauty services. Selling gift vouchers and taking bookings through a website showed the tenant promoted the premises and its licensees, but did not show it supplied the services itself, so the tenant had not met the onus on that ground.

The tribunal read the Act as aimed at a tenant who itself trades with the public from the shop. It gave four reasons. The stated purpose in section 3 concerns the conduct of retail businesses, and the explanatory notes to the 2015 amending Bill describe the Act as addressing the imbalance between major shopping centre landlords and small retail tenants. The working provisions assume the tenant trades from the shop: turnover rent is based on the tenant's sales (sections 9 and 25), rent reviews disregard the tenant's goodwill (section 29), compensation is payable for disruption to the tenant's trading (section 43), and the relocation rules apply to the tenant's business (section 46C). A "lease" includes any agreement giving a right to occupy for payment, so the tenant's licences to freelancers were themselves leases. And the Act fixes a lease's status by things knowable when the lease is signed, with section 14 saying the Act does not apply where premises become a retail shop only later. Making the answer depend on the trade of licensees who are not named in the lease and may change during the term would not fit that scheme.

On the second ground, the landlord accepted Queen Street Village was a retail shopping centre, so everything turned on the exclusion in section 5A(3). That exclusion applies only if both conditions are met: the premises are not used wholly or predominantly for a retail business, and the "retail area" of the level is 25 per cent or less of the level's total lettable area. Because the same words appear in sections 5A(3)(a) and 5B(b), the tribunal gave them the same meaning, so the first condition was met. Section 5A(4) defines the retail area as the area taken up by premises used wholly or predominantly for retail businesses, counting whole tenancies by their main use rather than carving out retail corners inside a tenancy. As none of the three tenancies making up the whole of Level 1 was characterised as a retail business, the retail area was nil, which is necessarily 25 per cent or less whatever the total area turned out to be. That is why the landlord's failure to produce precise floor-area figures did not defeat it.

The tribunal also confirmed that jurisdiction comes from statute alone and cannot be created by the parties' agreement, conduct or assumptions. Using a standard retail lease form, or three successive landlords treating the tenancy as retail, showed what the parties assumed but did not decide whether the lease was in law a lease of a retail shop. The tribunal noted its finding was provisional to the extent it depends on EMF Fitness's café and merchandise sales being incidental to, rather than equally important as, its fitness use, which was a matter not fully detailed in the material before it.

What this means if you are in a similar position

If you are in a similar position as a small business tenant in Queensland, this decision shows that the protections and the cheaper dispute path in the Retail Shop Leases Act do not cover every shop-style tenancy. The threshold question is what your own business does from the premises, measured against the list of retail businesses in Schedule 1 of the regulation. A fit-out that looks retail, a tenancy inside a shopping centre, and years of landlords labelling the tenancy "retail" on their paperwork do not settle it. Where the tenant's business is letting or licensing space to other operators who do the trading, the decision shows a tribunal may treat that as a business of granting occupation rights rather than a retail business.

It also shows how the shopping centre exclusion can work without any survey figures. Because the retail area of a level is worked out by looking at whole tenancies and their main use, a level where no tenancy is predominantly retail has a retail area of nil, and precise measurements become beside the point. The decision shows that an argument about who carries the onus of proof will not rescue a claim once the character of each tenancy on the level is established.

The practical consequence of losing on jurisdiction is that none of the actual money complaints get looked at, and the usual costs position is that each side pays its own. If you are in a dispute of this kind, the step most people take first is a written notice to the other side setting out the dispute and what they want fixed, together with a request for mediation, before any application is made to a tribunal or court.

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

Source: Freedom Suites Australia Pty Ltd v WDP Shore 001 Pty Ltd ATF WDP Shore 001 Queen St Village Trust [2026] QCAT 462 (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.