The restaurant's licence to operate at the Dockside Marina, Kangaroo Point was validly terminated
The Queensland Supreme Court, in a recent decision, has ruled that the licence of popular Brisbane seafood restaurant The Prawnster to operate at the Dockside Marina in Kangaroo Point had been validly terminated.
Since 2019, The Prawnster has been a destination for seafood enthusiasts and tourists. Brisbane River manages the marina under a Crown lease granted by the State. The Prawnster occupies the site at the marina and operates its business there under a berthing and mooring agreement with Brisbane River.
The State claimed that The Prawnster's operation violated the use conditions outlined in the lease agreement, as it did not permit the leased land to be used for a commercial purpose of the kind conducted by The Prawnster.
The Crown lease specifically designates the purpose as a 'Marine Facility,' with conditions stating that the leased land should be used for marine facility purposes, including berthing private vessels and operating a public boardwalk and ferry terminal. The State argued that The Prawnster's commercial activities do not align with these conditions.
Brisbane River, facing pressure from the State, terminated its berthing and mooring agreement with Furniture Funk, owner of The Prawnster. Brisbane River demanded that The Prawnster vacate the marina. However, Furniture Funk has refused to comply, asserting that it has not breached the use conditions of the Crown lease. It contended that the State had misinterpreted the relevant lease requirements and had wrongly caused Brisbane River to make it quit the site. Furniture Funk further argued that the State has unreasonably "backflipped" on a previous in-principle agreement that would have permitted it to operate its business from the leased land.
Furniture Funk brought the matter before the Queensland Supreme Court, seeking relief against forfeiture of its rights under the berthing and mooring agreement. It also claimed that Brisbane River and the State should be estopped from refusing it the right to operate The Prawnster at the marina.
The legal battle centred around three key issues: the interpretation of the use conditions in the Crown lease, whether Furniture Funk is entitled to relief against forfeiture, and whether Brisbane River and the State should be estopped from refusing The Prawnster's right to operate at the marina.
No entitlement to relief against forfeiture
The agreement terms between Furniture Funk and Brisbane River described Furniture Funk as the "tenant" and Brisbane River as the "lessor." It noted the tenant's "vessel" was the decommissioned trawlers and the pontoon from which The Prawnster conducts business. It noted the 'dockage term' was to be on a monthly periodic basis.
Brisbane River has long been supportive of The Prawnster. It has always considered that the restaurant's business was not a breach of the use conditions of the Crown lease. Nevertheless, it made several attempts to have the Crown lease varied to ensure that The Prawnster could operate at the marina. Each of its applications for a variation of the lease has been rejected.
Furniture Funk seeks relief against forfeiture on several grounds, asserting that the agreement is a lease rather than a licence. The court, however, firmly rejected these arguments, finding that the agreement is unequivocally a licence even though the terms "tenant" and "lessor" were used within the deed to describe the contracting parties.
The court pointed out that the express language of the deed made it plain that Furniture Funk was granted a licence to use and occupy berths at the marina, that the arrangement was not a lease, and that the agreement did not create the relationship of tenant and landlord.
The court found that the agreement permitted Furniture Funk to moor its "vessel" at the marina. It did not grant Furniture Funk a legal right to exclusive possession of the marina berths. Furthermore, the court said the agreement did not grant Furniture Funk any right to conduct its seafood restaurant business.
Accordingly, the court said that the agreement was not a lease and should not be regarded as such under the Property Law Act or the Retail Shop Leases Act. The court concluded that Furniture Funk had not established any entitlement to relief against forfeiture.
Furniture Funk contended that Brisbane River and the State should be estopped from denying its right to operate The Prawnster seafood restaurant. This claim was hinged on alleged representations made during negotiations, suggesting an in-principle agreement between Brisbane River and the State to vary the Crown lease, permitting Furniture Funk's business. However, the court rejected this argument.
The State denied there was any in-principle agreement or that it made any representation to that effect.
The court explained that estoppel by the conduct of the kind asserted by Furniture Funk would arise where the conduct of one party induces another party to act upon an assumption of some fact or as to the representer's future conduct. The representee, acting in reliance upon the assumption, will suffer detriment if the representer acts inconsistently with the assumption.
The court emphasises that for a representation to result in estoppel, it must be clear, precise and unambiguous. The court found that Furniture Funk failed to establish any proper basis upon which it could conclude that their conduct should estop Brisbane River and the State from refusing it the right to operate its seafood restaurant business from Dockside Marina.
Ultimately, the court concluded that the agreement between Furniture Funk and Brisbane River was a licence agreement and not a lease. Further, the court found that Brisbane River validly terminated the licence agreement. The court was also not satisfied that the State had an in-principle agreement with Brisbane River that it would vary the use conditions of the Crown lease to permit food and beverage operations on the leased land or that the State made any such representation. Accordingly, the court dismissed Furniture Funk's claims.