Tobacco and Other Smoking Products (Dismantling Illegal Trade) and Other Legislation Amendment Bill 2025

This article considers the Tobacco and Other Smoking Products (Dismantling Illegal Trade) and Other Legislation Amendment Bill 2025 (the Bill), which proposed significant amendments to the Tobacco and Other Smoking Products Act 1998 (Qld), and the impact these changes may have on commercial property managers and their lessor clients.

The Bill introduced nation leading frameworks, targeted at providing additional enforcement tools required to address the rapidly expanding illegal trade of illicit tobacco, vapes and nicotine products. 

Terminating leases

Under the new statutory lease termination powers, lessors can terminate a commercial lease where the premises are subject to a closure order.

Pursuant to section 209B of the Act, the chief executive of Queensland Health may make an order that the premises be closed for 90 days (a short-term closure order) if the chief executive is satisfied that illicit tobacco or illicit nicotine products are being supplied or possessed at the premises as part of a business activity, or a business is being carried on at the premises in a way that involves a contravention of section 65 of the Act. Section 65 of the Act states that a supplier must not sell a smoking product unless the supplier holds a retail or wholesale licence that authorises that type of sale.

In addition, a magistrate may, on the application of the chief executive, make an order that the premises be closed for a period of 1 year (a long-term closure order) if the magistrate is satisfied that illicit tobacco or illicit nicotine products are being supplied or possessed at the premises as part of a business activity, or a business is being carried on at the premises in a way that involves a contravention of section 65 of the Act.

In accordance with section 209CB of the Act, within 7 days after a closure order is made, the chief executive must give a relevant lessor (the person who leases the premises directly to a person conducting a tobacco business at the premises or otherwise directly allows a person conducting a tobacco business at the premises to occupy the premises):

• A copy of the order;
• A notice stating:

- the reason for making the order;

- that the order may allow the lessor to terminate the lease of the premises under section 209CC of the Act; and

- the lessor may be liable for an offence under section 209CE of the Act or a civil penalty under section 209CF of the Act.

If a closure order is made in relation to the premises and the premises are subject to a lease, then, pursuant to section 209CC of the Act, the lessor may terminate the lease by giving the lessee a notice (the termination notice) stating that the lease is terminated on a stated date. The termination day must be at least 14 days after the day the lessor gives the lessee the termination notice. The termination notice must be in the approved form and must be given before the end of the closure order.

The termination is taken to be a termination of the lease for a repudiation of the lease by the lessee.

The lessor is not liable for damages or compensation to any person in relation to the termination of the lease under section 209CC of the Act and may enter and take possession of the premises after the termination of the lease.

In accordance with section 209CC(11) of the Act, if the lease is terminated and the lessee has not removed the lessee’s property from the premises under the lease, the lessor may deal with the property as the lessor considers appropriate, including, for example, by disposing of the property.

If the lease of the premises subject to a closure order ends, the lessor has must (unless the lessor has a reasonable excuse) give the chief executive a notice stating the lease of the premises has ended within 7 days after the end of the lease. If the lessor fails to give the required notice, the maximum penalty is 10 penalty units ($1,669).

The intention of these changes is to give lessors the ability to terminate a lease while the premises are subject to a closure order and reduce the potential financial impacts of closure orders on lessors. In addition, a reduction in the availability of commercial premises for illicit trade was a major driving factor of the introduction of the Bill.

Use of the premises

Pursuant to section 209CE of the Act, a lessor 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. The lessor commits an offence only 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 for a breach of this section is 1,000 penalty units ($166,900) and/or 1 year imprisonment.

Civil proceedings may also be taken in relation to a contravention of section 209CE(1) of the Act. If a court is satisfied the relevant lessor has contravened section 209CE(1) of the Act, the court may make an order that the lessor pay a civil penalty of an amount of up to 1,000 penalty units ($166,900) for individuals, or if the lessor is a corporation, up to 5,000 penalty units ($834,500).

In deciding whether a lessor has contravened section 209CE(1) of the Act, the court may have regard to the following:

• whether there is a pattern of supply or possession of illicit tobacco or illicit nicotine products at the premises;
• whether the chief executive has notified the lessor that 1 or more closure orders have been made in relation to the premises;
• whether the 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; and
• whether the lessor has taken steps to terminate the lease of the premises or otherwise prevent the supply or possession of illicit tobacco or illicit nicotine products at the premises.

However, a Court must not make an order against the lessor if the lessor has 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 lessor bears the evidential burden of proving they have a reasonable excuse.

Conclusion

The amendments to the Act strengthen the lessor’s ability to terminate leases where premises as subject to a closure order and addresses several major drivers of the illicit tobacco and nicotine trade, namely the availability of commercial premises and lessors who knowingly permit premises to be used for illicit trade, are reckless, or turn a blind eye to the unlawful activity.

It is important that property managers ensure that their lessor clients are aware of the recent changes in relation to the tobacco industry and the impact it may have on their commercial tenancies, including the requirement to notify the chief executive if a lease of the premises the subject of a closure order ends and the serious penalties for knowingly permitting a lessee from using the premises for the supply or possession of illicit tobacco or illicit nicotine products.

Read another article from Carter Newell Lawyers: QCAT update - Compensation claims.

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