Shop tenant’s $338,000 road-closure claim fails and landlord wins $57,858 counterclaim (QCAT, 2026)

What happened

In November 2020 a beauty and laser treatment business signed a 10-year lease, with a five-year option, over a 56 square metre shop in the Gabba Central Shopping Centre at Woolloongabba in Brisbane. An incentive deed gave the tenant 18 months rent free and a $10,000 plus GST contribution to its shop fit out. The tenant began trading on 18 March 2021. After repeated requests for more help with rent, the landlord agreed to halve the base rent from 1 June 2022 to 31 May 2023.

The centre was anchored by a Coles supermarket with about 19 other ground-level shops. Its basement car park could only be reached from Gibbon Street, which in turn was reached from Stanley Street at one end and Hawthorne Street at the other. About 80 metres to the north, across a four-lane road, the Cross River Rail project was building a new underground station. Construction on that site had started in September 2019. Between 23 February 2023 and about 24 June 2023 the slip lane from Stanley Street into Gibbon Street, plus the northern 20 metres of Gibbon Street, was closed to all traffic, so drivers had to detour to the southern entrance. The tribunal found the closure became necessary to realign a sewer connection to the new station, and ran longer than expected because of unexpected ground conditions, a crowded utilities environment and a micro-tunnelling machine that broke down.

The tenant said its takings fell during the closure. The landlord issued a first notice to remedy breach on 13 April 2023 over unpaid rent, outgoings and GST, which the tenant fixed about 27 April 2023. That same date was the first time the tenant formally raised the claim that the lessor's disclosure statement was false or misleading. A second notice to remedy breach followed on 13 July 2023 for unpaid rent, outgoings, GST and legal costs. The tenant asked the tribunal to suspend that notice until the dispute was resolved; the tribunal refused on 11 October 2023. The landlord terminated the lease on 25 October 2023 because the second notice was not remedied, and the tenant vacated by that date.

A lessor's disclosure statement is the written statement a landlord must give a prospective retail shop tenant before the lease is signed, setting out specified details about the premises. Question 17.1 of the approved form asks whether there are any alteration works "planned or known to the lessor" affecting the premises, the building or centre, or surrounding roads.

What each side wanted

The tenant argued the answer to question 17.1 in the lessor's disclosure statement was a false or misleading statement or a misrepresentation, that the lease should therefore be treated as void, and that the landlord should pay $337,992.63 plus interest, made up of $33,323.74 in lost revenue between March and July 2023, $124,669.89 in lost fit out costs and $179,999 for a fall in the value of the business. It asked for no order as to costs. The landlord denied the statement was false or misleading, said the tenant had not relied on it, and said in the alternative that the tenant had suffered no loss or not the loss claimed. The landlord also counterclaimed $57,858.68 for losses caused by the tenant's breaches of the lease: $11,650.62 in unpaid rent and outgoings to termination, $38,744.30 in rent and outgoings for November 2023 to November 2024, $4,889.50 to make good the shop after termination, and $2,574.26 in commission paid to re-let it.

What the tribunal decided

The tribunal dismissed the tenant's claim and upheld the landlord's counterclaim. It ordered the tenant to pay $57,858.68 into the landlord's nominated bank account by 30 November 2026, and ordered the landlord to supply its bank account details to the tenant as soon as possible.

On costs, the tribunal said any party is free to apply for its costs to be paid by the other party. Any such application must include full details of supporting documentation, must be made within 28 days of the decision being delivered, and a copy must be served on the other party. The responding party then has 21 days from receiving the application to file a response. If a costs application is made, the tribunal will decide it on the papers under section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

Why the tribunal decided it that way

The tribunal first confirmed it had power to hear the matter. The shop was a retail shop in a retail shopping centre under sections 5B and 5D of the Retail Shop Leases Act 1994 (Qld), the lease was a retail shop lease under section 5A, and the argument about the disclosure statement was a retail tenancy dispute under section 103 and the Act's dictionary. Mediation with the Queensland Small Business Commissioner under section 63 had already failed. The tenant carried the burden of proving its case on the balance of probabilities, meaning more likely than not.

The tribunal noted that the regulation setting out what must be disclosed limits alteration works to those the landlord knows are to be carried out by or for the landlord, while the approved form's words "planned or known to the lessor" are wider and, as an earlier decision in the same dispute had said, are not clearly drafted. It did not need to settle which reading applied, because the tenant's evidence failed either way. Only the 14 Cross River Rail works notices issued up to 20 November 2020, the date the disclosure statement was signed, could show what was planned or known then. Those notices did not mention the Gibbon Street closure or Gibbon Street at all; they described work on the station site, access from other streets, and possible minor traffic delays and temporary lane and footpath changes. The Gibbon Street closure was not mentioned in a works notice until September or October 2022, a point the tenant's director accepted. The tribunal found the tenant had not shown the landlord knew about the closure, nor that any other party had planned it, as at 20 November 2020, so the disclosure statement did not contain a false or misleading statement or misrepresentation.

That finding was enough to dispose of the claim, but the tribunal dealt briefly with the rest. It found the tenant had not shown it relied on the answer: the lessee's disclosure statement pointed only to the incentive deed when asked what representations it relied on; the complaint was first made some 29 months after the lease was signed; there was no pre-lease correspondence showing reliance; the director's own evidence was that he had driven past the construction site, expected minor delays and would have signed anyway; and the real motivations were a more affluent area, a long rent-free period and a long lease. On the money, the tribunal accepted some revenue was lost, probably up to $30,000, but there was no evidence converting lost revenue into lost net profit. The fit out loss was found to be $13,847.39, the leasehold improvements figure in the accounts, not $124,669.89. The business value claim failed because it was built on the difference between two broker listing prices, the witness accepted she was not qualified to value a business, and takings had recovered to an average of $4,700 a week by October 2023.

On the counterclaim, the tribunal found the landlord had lawfully ended the lease after repeated failures to pay rent and outgoings, and had proved its losses with tax invoices, statements, emails and the notices to remedy breach. The tenant accepted the arrears existed and put forward nothing to challenge the figures. All of the claimed costs, including the re-letting commission, flowed directly from the breaches and the termination, so the full $57,858.68 was allowed.

What this means if you are in a similar position

If you are in a similar position as a shop tenant who believes a landlord's disclosure statement should have warned you about nearby works, this decision shows how such a claim is tested. The tribunal looks at what the landlord actually knew, or what was actually planned, at the date the statement was signed, not at what later happened. Documents created after that date, such as later project notices, do not show what was known earlier. It also shows that a claim of misrepresentation usually turns on reliance: what you recorded as the representations you were relying on, when you first raised the problem, and whether your own evidence suggests you would have signed anyway.

The decision also shows how losses are proved. Lost revenue is not the same as lost profit, because some costs fall away when trade falls, and a tribunal may decline to put a figure on a loss when that work has not been done. A figure taken from a company balance sheet needs to be explained by someone who can connect it to the actual spending, and a change in a business broker's asking price is not treated as evidence of what a business is worth. A short disruption may also be treated as a temporary dip rather than a permanent loss of value, particularly where takings later recover.

It is worth noting the other side of this case. A tenant who stops paying rent while a dispute is on foot can still face notices to remedy breach, termination and a counterclaim covering arrears, rent for the remaining period, make-good costs and the commission paid to find a new tenant. In this kind of dispute most people start by putting the issue in writing to the other side, with a formal notice of dispute and a request for mediation that sets out what is claimed and why, before any application is made to a tribunal.

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

Source: Vanish Laser Clinic Pty Ltd v Gabba Nominees Pty Ltd [2026] QCAT 463 (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.