Retail tenancy disputes & small business tenancy disputes

On 3 May 2022, the Small Business Commissioner Act 2022 (SBCA) commenced, which has altered the pathway for some commercial tenancy dispute resolution.

We’ve observed confusion regarding this change, which is why I’ve written this article – hopefully I can help clarify how it works. Firstly, if you’re unaware of my role as the Queensland Small Business Commissioner (QSBC) and how my office can help you and your clients, please keeping reading!

We are part of the Queensland Government, with my role reporting directly to the Honourable Di Farmer MP, Minister for Employment and Small Business and Minister for Training and Skills Development.

The QSBC has been established to:

• enhance the operating environment for small businesses in Queensland (we do this through advocating on behalf of small business into all levels of government)
• reduce the time and costs associated with resolving disputes involving small business tenancy disputes and retail shop lease disputes (we do this through informal dispute resolution and mediation services).

We can informally assist with any type of dispute involving a small business; however, we only provide mediation services for disputes which are:

• retail tenancy disputes under the Retail Shop Lease Act 1994 (RSLA); or
• other small business tenancy disputes under the SBCA.

Another point of difference between my office and QCAT is that our processes are entirely online, and don’t require payment of an upfront fee. If a fee is payable, we will send an invoice for payment once we’ve processed the application and are ready to appoint a mediator. Our services are not mandatory, but may be required before lodging with QCAT (this doesn’t limit a party’s rights under the terms of their lease). 

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The QSBC dispute resolution service follows the process set out below. Retail tenancy disputes under the RSLA may skip straight to step 3, but we encourage everyone to start at step 1:

1. Seek informal dispute assistance via our online enquiry form which prompts the applicant to provide key information.  
2. QSBC assigns a case manager who makes initial contact with the applicant by phone.
   
   At this point, the assistance we provide will depend on the nature of the request. Some applicants want help with attempting to resolve a dispute on their own. Others might be seeking a template email to send to the other party to start negotiating an outcome. And, some may have exhausted all such avenues and really need mediation.
   
   If the matter cannot be resolved informally through this process, the applicant will be invited to apply for mediation (step 3). Please note that up until this point, our services are free of charge.
3. Application for mediation is the most common entry point for retail tenancy disputes under the RSLA.
   
   Unless urgent interim relief is being sought, retail tenancy disputes within an RSLA mediator’s jurisdiction must first attempt mediation through QSBC, before making an application to QCAT. QCAT will refuse to accept an application unless mediation has first been attempted with the QSBC.
   
   To apply, either party can complete the online application for mediation which collects key information for the QSBC to assess the application. 
4. QSBC assigns a case manager who will make initial contact with each party by phone.
   
   If the matter commenced at step 1, the dispute typically remains with the same officer. The QSBC assesses whether the matter is within QSBC’s jurisdiction.
5. Mediation fee will be sought from each party to the dispute if the application is eligible ($175 per party).
   
   Under the Small Business Commissioner Regulation 2022, the fee must be paid equally by the parties. The regulation does not permit either party to cover the other party’s share of the fee. The mediation fee is usually required to be paid within seven days, but it can be extended on request.
   
   I am able to waive the mediation fee under certain circumstances. For example, I may decide to waive fees for disputes involving leased premises affected by a flood or bushfire.
6. A mediator is nominated once all parties have paid their mediation fee.
   
   QSBC mediators are currently all RSLA mediators. The case manager will provide the parties with information to help them prepare for mediation. Mediations are conducted online or over the phone.
   
   If a party does not pay their share of the mediation fee, the matter cannot proceed to mediation. The other party’s payment will be refunded, and I will issue written confirmation (which can be provided to QCAT) as evidence of the attempt to first resolve the dispute via mediation with QSBC.
7. Mediation outcome: if the matter is successfully resolved at the mediation and/or a mediation agreement is signed by the parties, the mediator will notify QSBC and that is the end of the process with us.
   
   If the matter is not resolved at mediation, the next step will depend on whether it is a retail tenancy dispute under the RSLA, or a small business dispute under the SBCA.
   
   For retail tenancy disputes, these must be referred by the mediator to QCAT under s63 of the RSLA; however, small business tenancy disputes are not required to be referred anywhere, and it will be up to the parties to decide if they wish to apply for the matter to be heard in court.

The average time for a matter to progress through steps 1-7 through the QSBC varies depending on the complexity of the dispute; however, we are currently completing matters in around 41 days.

Please visit the QSBC website for more information.

Maree Adshead is the Queensland Small Business Commissioner.