Significant amendments to the Tobacco and Other Smoking Products Act 1998 (Qld) (the Act) came into effect on 24 November 2025, which are aimed at disrupting the trade of illicit tobacco and nicotine products in Queensland.
The amendments include significant shifts in Queensland leasing law with the imposition of criminal and civil liability on commercial lessors and the introduction of a statutory right to terminate leases of closed premises.
The new lessor criminal offence and civil penalty provisions are outlined below.
Lessor offence
Amendments to the Act have introduced a criminal offence for relevant lessors. Section 209CE(1) of the Act provides that a relevant lessor of premises must not permit another person to use the premises for the supply or possession of illicit tobacco or illicit nicotine products as part of a business activity.
A ‘relevant lessor’ of premises is defined in s 209CA as the person who:
- leases the premises directly to a person conducting a business that involves supplying or possessing illicit tobacco, illicit nicotine products or smoking products at the premises; or
- otherwise directly allows a person conducting a business that involves supplying or possessing illicit tobacco, illicit nicotine products or smoking products at the premises to occupy the premises.
However, a relevant lessor does not include a person, such as a head lessor, who leases the premises to a person who is not occupying the premises for the purpose of conducting a tobacco business at the premises.
A person commits an offence under s 209CE(1) if they knowingly permit another person to use the premises for the supply or possession of illicit tobacco or illicit nicotine products as part of a business activity. The maximum penalty is an amount equivalent to 1,000 penalty units or 1 year imprisonment, or both.
It is not clear what would constitute ‘knowledge’ for this offence, as the Act does not provide any examples or further guidance. However, the Explanatory Notes indicate the offence would apply to a lessor who has actual knowledge of the illegal activity and allows it to continue at the premises. An example given in the Explanatory Notes is where a lessor provides their premises as a base for the illegal activities.
While not explicitly stated in the Act or Explanatory Notes, it appears that a lessor may risk being caught by the offence if they receive a copy of a closure order from Queensland Health and do not take action to terminate the lease under s 209CC of the Act.
Civil penalty
As an alternative to the criminal offence, the chief executive may apply to the court for a civil penalty if they are reasonably satisfied the relevant lessor has contravened s 209CE(1) of the Act. The maximum penalty is an amount equivalent to 1000 penalty units for an individual lessor and 5000 penalty units for a corporation.
The criminal threshold of actual knowledge of the illegal activities is not required for the civil penalty to apply. Instead, it is intended to apply to conduct such as reckless indifference to the illegal activity at the premises, ignoring warning signs or failing to take reasonable steps to prevent illegal activity despite having the opportunity to act. This would include a situation where a lessor suspects illegal activity is occurring on the premises but takes no action because they do not want to lose their rental income.
Section 209CF of the Act sets out factors the court may consider when deciding whether s 209CE(1) has been contravened:
- whether there is a pattern of supply and possession of illicit tobacco or illicit nicotine products at the premises;
- if a closure order has been issued for the premises, whether the relevant lessor has been notified of the closure order;
- whether the relevant lessor and the person using the premises have an arm’s length relationship;
- whether the rent for the premises is significantly above market value or paid well in advance;
- whether the lease is in writing;
- whether the relevant lessor has taken steps to terminate the lease or otherwise prevent the supply or possession of illicit tobacco or illicit nicotine products at the premises.
‘Reasonable excuse’ defence
Importantly, a relevant lessor will have a defence to the criminal offence or civil penalty if they can prove they had a reasonable excuse for permitting the person to use the premises for the supply or possession of illicit tobacco or illicit nicotine products as part of a business activity.
The Act does not give any guidance as to what would amount to a ‘reasonable excuse’ for either the criminal offence or civil penalty. However, the Explanatory Notes provides the following examples in relation to the criminal offence:
- a franchisor is actively taking steps under the relevant franchise legislation to terminate a franchise agreement;
- the lessor did not receive notice of a closure order from Queensland Health and had no reason to suspect illegal conduct;
- other extenuating circumstances beyond the lessor’s control.
Further, the Explanatory Notes suggest lessors will not be penalised if they take reasonable and proactive steps to prevent or respond to illegal activities at the premises or if they genuinely lack knowledge or the ability to control activities on the premises.
Safeguards
An application for a civil penalty order must be made within two years after the contravention or alleged contravention first comes to the chief executive’s notice.
A civil proceeding will be stayed if there is a criminal proceeding against the person for substantially the same conduct. If the person is convicted of a criminal offence, the civil proceeding will be dismissed. However, if they are not convicted, the civil proceeding may be resumed.
Similarly, if a civil order has been made against a relevant lessor, criminal proceedings cannot be commenced against them for substantially the same conduct.
According to the Explanatory Notes, ‘substantially the same conduct’ is the same set of actions or omissions that give rise to civil and criminal action. However, any new and different conduct of a similar nature could give rise to new criminal or civil proceedings.
Conclusion and practical implications
These amendments represent a substantial shift in responsibility and risk allocation between lessors and lessees. Practitioners should familiarise themselves with the legislation so they can adequately advise their lessor clients.
We recommend practitioners who act for lessors of retail and commercial premises:
- Advise their clients on their exposure to criminal and civil liability under the Act if they lease to businesses that sell or possess tobacco, nicotine or other smoking products. As well as tobacconists, this could include premises used as supermarkets or grocery stores, convenience stores, service stations, newsagents, gift stores and warehouses.
- Review lease templates to determine whether they need updating or amending to provide lessors greater rights to monitor and take action against a lessee if they reasonably suspect or know that illicit tobacco or illicit smoking products are sold or stored on the leased premises.
- Advise their clients to maintain records of any steps they take to comply with their obligation under s 209CE(1) of the Act.
- If the lessor receives a closure notice in relation to their leased premises, advise the client on the risks of not taking action to terminate the lease.
Endnotes:
Refer to the Schedule 1 of the Act for definitions of the terms closure order, illicit tobacco, illicit nicotine products, lease, premises, relevant lessor, smoking products and tobacco business.
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