ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n' Chips) v Wallis Lake Fisherman's Co-operative Ltd - [2007] NSWADT 297

No judgment structure available for this case.

CITATION: ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n' Chips) v Wallis Lake Fisherman's Co-operative Ltd [2007] NSWADT 297

DIVISION: Retail Leases Division

PARTIES:
APPLICANT
ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n' Chips)
RESPONDENT
Wallis Lake Fisherman's Co-operative Ltd

FILE NUMBER: 065122

HEARING DATES: 2 and 3 April 2007, 21 June 2007

SUBMISSIONS CLOSED: 1 August 2007

DATE OF DECISION:
14 December 2007

BEFORE: O'Connor K - DCJ (President); Fairweather R - (Advisory) Non Judicial Member ; Harrison B - (Advisory) Non Judicial Member

CATCHWORDS: Retail Tenancy Claim and Unconscionable Conduct

MATTER FOR DECISION: Principal matter

LEGISLATION CITED: Retail Leases Act 1994

CASES CITED: Clasic International Pty Ltd v Lagos and ors [2002] NSWSC 1155
Conoid Pty Limited & Anor v International Theme Park Limited [2000] NSWCA 189
Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557
Armstrong Jones Management Pty Ltd v Saies-Bond & Associates Pty Ltd (RLD) [2007] NSWADTAP 47
Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) FCR 470
HTW Valuers (Central Qld) v Astonland (2004) 217 CLR 640
Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC 1375
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64
Makita (Australia) Pty Ltd v Sprowles (2000) 52 NSWLR 705 Fink v Fink (1946) 74 CLR 127
Biggin & Co v Permanite Ltd [1951] 1 KB 422
Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10, (2003) 77 ALJR 768
Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5
Worsfold v De Goede [2002] NSWADT 273

REPRESENTATION:
G Hoeben, barrister
JT Johnson, barrister

ORDERS: The Tribunal: 1. Declares that the applicant has a lease under the Retail Leases Act; 2. Declares that the respondent engaged in misleading and deceptive conduct, by making misleading representations to the applicant about the entitlement of the applicant to occupy the premises; 3. Declares that the respondent unlawfully evicted the applicant; 4. Declares that the respondent engaged in unconscionable conduct; 5. Orders that the respondent pay to the applicant monetary compensation of $255,561, made up of $249,561 in respect of the retail tenancy claim; and $6,000 in respect of the unconscionable conduct claim; 6. The order shall bear interest pursuant to s 72A from the date of these orders at the rate equal to that payable on a judgment debt of the District Court. ; Further Direction. Applicant to file and serve any submissions in relation to costs within 28 days. Respondent to file and serve any submissions in relation to costs, and in reply to the applicant’s submissions, within a further 28 days. Matter to be determined on the papers unless either party applies for an oral hearing, in which case that application will be considered. Liberty to either party to apply on 2 days’ notice

1 From mid-April 2000 to 2 August 2006 Mr Kerry James (‘Joe’) Morris ran a fish and chips takeaway business, ‘Jolly Joe’s Takeaway’, at the Wallis Lake Fisherman’s Co-operative Ltd (the Co-op). He paid rent, and thought he had a lease under which he had secure tenure until 13 April 2009. The Co-op considered that Mr Morris occupied the area set aside for the takeaway business as a licensee, with no security of tenure, and his occupation could be terminated at will.

2 The Co-op locked Mr Morris out on the morning of 2 August 2006 without alleging any kind of default. The result was that Mr Morris, then aged 66 years, lost his business. Later that day, Mr Morris’s solicitors received the following letter:

Re Jolly Joes Takeaway

I wish to confirm the notice given yesterday to terminate his Licence to occupy the premises.

Mr Morris was to discuss with me yesterday arrangements regarding the removal or sale of his cooking equipment.

Those discussions did not take place and we will have his property removed and stored for him to remove at some time.

We have received detailed legal advice and that advice is that Mr Morris is a Licensee. There has never been a lease created and in those circumstances the Retail Leases Act does not apply.

Any legal proceedings will be vigorously defended.

Yours faithfully

David Bell

General Manager’

3 Mr Morris immediately took action in the Tribunal. The applicant for relief is Mr Morris’s family company, ACN 079 830 596 Pty Ltd. It was the formal party to the agreement which is said to have given rise to a retail shop lease subject to the Retail Leases Act 1994 (RL Act or Act). The application was filed on 10 August 2006. As there had been no pre-filing attempt at mediation, the Tribunal referred the dispute to mediation by the Retail Tenancy Unit. Attempts at mediation were unsuccessful. The applicant did not press at that time an associated application for urgent interim relief by way of relief against forfeiture.

4 The original application, and the amended application filed 2 April 2007, make the two types of claim permitted by the Act – a retail tenancy claim and an unconscionable conduct claim. The amended application alleges, in support of the retail tenancy claim, that the Co-op breached its obligations under the RL Act in numerous respects. In support of the unconscionable conduct claim, the applicant relies on the alleged breaches and several other actions which, if not breaches, were unconscionable. The primary relief that is sought is damages for loss suffered as a result of alleged unlawful repudiation of the lease.

5 The matter came on for hearing in the Tribunal on 2 and 3 April 2007. There was a further hearing on 21 June 2007. (The Tribunal was constituted in accordance with the provisions governing unconscionable conduct claims. It includes two advisory non-judicial members with relevant experience in the retail industry. The decision is the decision of the presiding member alone.)

6 The applicant company relied on the evidence of:

- Mr Keith Lynch, general manager of the Co-op, 1998-2001

- Mr Matthew Pereira, accountant at the Co-op 1993-2003, general manager, 2003-2005

- Mr Keith Lindfield, registered tax agent, who handled Mr Morris’s and the company’s tax and financial affairs until about 2003

- Mr Douglas Atkinson, accountant, who has handled Mr Morris’s and the company’s tax and financial affairs in recent years.

7 The respondent, the Co-op, relied on the evidence of:

- Mr Mark Edmunds, accountant, as to the applicant’s damages claim.

8 At the close of the first two days of the hearing on 3 April 2007, the Tribunal encouraged the parties to have their accountants, Mr Atkinson and Mr Edmunds, produce a joint report as to the losses incurred by the applicant, on the assumption that there was a lease that was prematurely terminated. They did not file a single joint report. However, certain matters were agreed. The result was that Mr Atkinson’s report was filed 20 June 2007 (which includes matters agreed). Mr Edmunds’ report was filed 7 May 2007. They were formally admitted into evidence when the hearing reconvened for one day on 21 June 2007.

9 There were three earlier affidavits from Mr Atkinson (filed 6 October 2006, 7 February 2007 and 2 April 2007) that were not formally admitted; and one earlier affidavit from Mr Edmunds (filed 19 March 2007) that was not formally admitted. However, some of the material in those affidavits was referred to, without objection, in the course of the evidence in chief and cross-examination of Mr Atkinson and Mr Edmunds. To that extent, this material is taken into account.

10 At the close of hearing directions were given for the filing of closing written submissions. This process was completed on 1 August 2007.

Background

11 The Co-op was formed in 1947 and has operated from its present site at 1 Wharf Street, Tuncurry since its formation. It provides services and facilities to professional fishers based at Tuncurry. It is a substantial enterprise. Its major business is the handling and supply of fresh fish to retailers.

12 Mr Bell, the new general manager, said at hearing that in years since 2003 the Co-op has had a significant downturn in income due to the loss of the custom of the tuna fleet and a substantial decline in the amount of fish handled (from over 1000 to about 400 tonnes). He said that the Co-op’s premises are in a poor state, and it does not have any significant cash reserves. Mr Morris in his evidence also referred to the poor state of the premises.

13 During the times relevant to this case, the Co-op had inside its main building two food sales outlets: a fresh fish and seafood outlet, and a takeaway outlet. The fresh fish counter is at the side of the building near to the wharf. Further back is the takeaway outlet. The area of the takeaway outlet, which is fully equipped for cooking fish and chips is about 30 square metres. The two outlets share facilities such as cool rooms and refrigerators.

14 The Co-op managed both outlets until 1999, when it decided to ‘outsource’ the takeaway outlet. According to Mr Lynch, the then general manager, the profit level did not justify the management effort required to operate the takeaway outlet. The equipment also needed upgrading. Mr Lynch, Mr Morris and Mr Lindfield (Mr Morris’s accountant at the time) all gave evidence as to what then occurred. It was consistent, and is accepted.

15 The Board invited expressions of interest in taking up a lease of the takeaway outlet. It provided interested persons with a document containing financial information in relation to the turnover and expenses of the business. The first three sections of this document follow. The fourth section contained contact information, and the fifth segment contained financial data relating to the turnover, costs and profitability of the business.

Wallis Lake Fishermen’s Co-operative Ltd

Section 1 : Introduction

In December 1999 the Board of Wallis Lake Fishermen’s Co-operative decided to outsource the operation of their Seafood Take Away Shop. This would take the form of a lease to a person or persons who the co-op considered would conduct the business in a manner compatible with the rest of their operations.

The prime reason for this change is the recognition that the Take Away business is not a core activity of the co-op and as such consumes a disproportionate amount of management’s time and does not reach its full profit potential.

The Board sees the leasing of this segment of their business as beneficial to the co-op and the lessee. The co-op management will focus more effectively on their core business of buying, selling and packing seafood, and providing services to their members while maintaining a revenue stream from the Take Away business. The lessee will have the opportunity to take over an established profitable business with substantial growth potential.

Section 2 : Scope of Business

Forster/Tuncurry has a permanent population of approximately 20,000 people with an estimated annual growth rate of 4%. The area is extremely popular with holiday makers and is within easy reach of Sydney and Newcastle. The number of visitors to the area estimated to be in excess of 350,000.

The Wallis Lake Fishermen’s Co-operative is located on the waterfront of Cape Hawke Harbour at 1 Wharf Street Tuncurry and is a major tourist attraction in its own right. It was established in 1946 and is the base for commercial fishing in the region. The co-operative has over 80 active fishermen who provide a continuous supply of seafood products to the retail and wholesale outlets.

The take away business is located in the same area as the co-op’s seafood retail shop. This retail shop is open seven days a week and averages in excess of 100 customers a day. Public access is from the carpark in front of the building or directly from the main wharf.

Approximately 30 square meters [sic] is devoted to the take away section which is equipped with four Cookon gas fryers, griller and chip warmer. There is a separate preparation area and ample freezer, chiller and dry storage space is available. Soft drinks and ice creams are sold at both the retail and take away counters.

The lease conditions will include the purchase of existing stock, an initial payment for goodwill, a monthly rental payment in advance, a payment for outgoings, cleaning and hygiene requirements, and options for renewal. The lessee will be responsible for the maintenance of existing equipment and the payment for replacement or additional equipment.

Section 3 : Business Potential

Sales for the last three years have averaged over $400,000 per annum with an average net profit of $24,000. There is potential for a significant improvement on these figures.

The capacity of the cooking operation is frequently reached in busy periods. This is readily overcome by upgrading the older two vats to increase their temperature recovery rate. The cost of this upgrade is estimated at $4,000 to $5,000 with an estimated increase in annual sales of at least $20,000. The Co-op board has been reluctant to outlay this capital on what is perceived as a non-core business.

The extra interest and supervision from an owner/operator will improve quality of service as well as labour and material cost control. There is also room for selective increases in prices. A 10% increase in sales, an increase to 50% gross margin and an expenses reduction of $20,000 p.a. is thought to be achievable. The potential profit after outgoings but before lease payments is considered to be in excess of $80,000 per annum.

No allowance has been made in this analysis for changes in product range or adjustments to opening times.’

16 In March 2000, Mr Lynch mentioned this opportunity to Mr Morris. They had both grown up in the area, and had known each other since childhood.

17 Mr Morris expressed interest. He had an established fish and chips takeaway in Pulteney Street, Taree called ‘Deep Sea Delights’. Mr Morris took the financial information that the Board provided to Mr Lindfield, his tax agent, for advice. Mr Lindfield was concerned that the profitability of the business was quite low. This is understandable. While annual turnover was around $400,000 the net profit after all expenses returned to the Co-op was $24,000. As the Co-op was seeking annual rental of $50,000 the nominal position was that an incoming operator would be taking on a loss-making business.

18 Mr Morris nonetheless decided to proceed. He was experienced in businesses of this type. He felt that with improvements in equipment and over time he could build up the business. The negotiations were amicable. Both sides agreed on what was described always at that time as a ‘lease’.

19 They agreed orally on rent ($50,000 pa), and on a lease period being one year, with an option to renew for three years, and a further option to renew for five years (total nine years). The Board also required a payment of $10,000 as goodwill for the business. The status of that requirement is one of the issues in the case, and will be dealt with later in these reasons.

20 Mr Morris was allowed to move into occupation ahead of any formal documents being executed. He was keen to open in time for Easter. This is one of the three peak selling periods of the year. Easter was late that year, with Good Friday falling on 21 April 2000. Mr Morris commenced operations around 12 April 2000. The same day Mr Lindfield sent Mr Lynch a letter which confirmed the details agreed, and supplied Mr Lynch with terms to be included in the standard form of Law Society Lease. They included: the lease periods (one year, renewable for three years, renewable for five years); the identity of the lease parties (the applicant company was named as the lessee); periods for any notices of termination; rental ($50,000), with a schedule of monthly instalments – the six ‘winter’ months April to September at $3,133.33, the remaining six ‘summer’ months at $5,200.00. The ‘permitted use’ was stated to be ‘take away food shop’.

21 After moving in, there was a meeting in early May between Mr Morris and Mr Lynch. He was told of problems in having a formal Lease issue. Mr Lynch said that he had discovered that the Co-op saw itself as precluded from giving a formal Lease. It had occupied the foreshore site under a Crown Lease for many years, but it had lapsed in 1998. As at 2000, the governing instrument was a Crown Licence.

22 This was the first indication Mr Morris received that there may be some impediment preventing the Co-op issuing a Lease along the lines clearly contemplated by Mr Lindfield in the letter of 12 April 2000.

23 The Crown Licence is in evidence, Instrument LI 309775, and it includes a term:

35. Holder not to deal with Licence or part with Possession of the Premises.

Subject to any provisions of the Licence the Holder will not during the Term of this Licence transfer or create any interest in the Licence or authorise or permit any person to occupy the Premises.’

24 Instead Mr Lynch presented Mr Morris with a document entitled ‘Agreement to Lease’. Mr Morris says that he signed that document, and handed it back. A signed document has not been located. However, in 2005 the Co-op supplied Mr Morris with an undated ‘Agreement to Lease’ between the parties. It is unsigned but it contains the notation on the front, in Mr Lynch’s hand, ‘Copy of Agreement yet to be formalised but agreed to apply by both parties’. It is headed ‘Agreement to Lease between Wallis Lake Fishermen’s Co-operative Limited (ACN ….) and ACN 079 830 596 Pty Ltd (ACN 079 830 596 Pty Limited’). In addition to the matters already referred to (rent periods, identity of parties, notices of termination, rent and payments schedule, permitted use), the document includes a number of clauses dealing with a range of matters of the usual kind addressed by a lease. The Tribunal is satisfied that this is a copy of the same document that Mr Morris says that he signed.

25 As to the nature of the relationship between the parties, Mr Lynch said:

‘…, I repeat that I have no doubt that there was a clear agreement between the co-operative and Joe Morris that he could operate the take-away business on the terms set out in the draft lease conditions and that the lease would be formalised as soon as practical after the opportunity arose.’

26 Mr Pereira gave evidence to similar effect. He worked in a senior position (accountant) at the Co-operative from 1993 to 2003, and was general manager between 2003 and 2005.

27 As to the Crown Lease issue, Mr Pereira said that the Crown Lease had been inadvertently allowed to lapse prior to Mr Lynch’s appointment. Pending negotiation of a new Lease, the relevant Department arranged for an annual Licence to be issued. The settlement of a new Lease was delayed by, according to Mr Pereira, the local Council’s drafting of a new Foreshore Management Plan for the area.

28 The Tribunal is satisfied that the unsigned ‘Agreement to Lease’ reflects the state of understanding of the parties at that time, and that it was a contractual document.

29 Among the terms are the following which are the source of contention in this case:

(7) The owner will maintain the building and grounds in such a way as to comply with and do all such things as are required by any legislative enactment, regulation or ordinance or any requirement of any local or other authority to ensure that the conduct of the business in the building is permitted.

(11) Included in the said lease of the premises are all plant, equipment, fixtures and fittings installed in the take away area by the owner, including but not limited to Four (4) Cookon gas fryers, a griller and chip warmer. The lessee shall be responsible for the maintenance of all plant, equipment, fixtures and fittings installed in the leased area of the premises.

(12) The lessee may replace any such plant, equipment, fixtures or fittings of the owner and install any additional plant, equipment, fixtures and fittings required for the conduct of the business in the premises and any such replacement or additional plant, equipment, fixtures and fittings shall remain the property of the lessee.

(16) The lessee shall have reasonable access to the freezer, chiller and dry storage space in the premises which are not leased by the lessee, for the purpose of the cold and dry storage of stock and consumable items.

(18) In the event that the lessee, before the termination date, exercises its option to renew the lease for a further period of three (3) years, the lessee shall pay to the owner the sum of Ten thousand dollars ($10,000-00) in respect of goodwill. The said payment shall be a once only payment and shall be made at the commencement of the said further period of three (3) years.

(23) The owner covenants that it will not during the term of the lease engage in the conduct of any cooked take away food business in competition with the business of the lessee either at the premises or at any location within a radius of fifteen (15) kilometres from the premises.

(24) The lessee is responsible for the daily cleaning of the leased area, and the area of the retail seafood shop conducted by the owner, to the appropriate health regulation standards. Window cleaning is the responsibility of the owner.’

30 Mr Morris occupied the takeaway outlet for the next five years, paid rent and traded (trading hours seven days a week, 10 am to 9 pm), without any significant incident until the appointment of the new general manager, Mr David Bell, in November 2005.

Jurisdiction

31 The first question is whether the relationship between the parties is subject to the RL Act and the jurisdiction of the Tribunal. Jurisdiction is conferred by s 71 (retail tenancy claim) and s 71A (unconscionable conduct claim). Jurisdiction depends, in both instances, on whether the parties have entered into a ‘retail shop lease’.

32 There is no debate that the business was that of a ‘retail shop’. The sole issue was whether there was a ‘lease’. A ‘lease’ is defined as any:

(a) whether or not the right is a right of exclusive occupation, and

(b) whether the agreement is express or implied, and

(c) whether the agreement is oral or in writing, or partly oral and partly in writing.’

33 The evidence is clear. The Co-op agreed to grant to another person for value a right of occupation of premises comprised by the takeaway outlet. The agreement was express, there was a grant of exclusive occupation of the takeaway outlet portion of the Co-op building. It was initially oral, and its terms are to be found in a combination of the matters agreed orally, the letter sent by Mr Lindfield, and the document entitled ‘Agreement to Lease’ referred to above. None of the special exclusions in the Act are applicable.

34 There is a partial concession to this conclusion in the Co-op’s closing submissions at para [11]. It is conceded that ‘the arrangements for occupation of the premises commencing in 2000 was an arrangement to which the Retail Leases Act 1994 would apply’ but then that concession is, in effect, withdrawn. The submission goes on to refer to s 16(1) and (2), s 6A and s 16(5) of the Act. The submission is less than clear as to what precisely it says was the legal basis of the applicant’s occupation as at August 2006. It appears to be suggesting that it was either a licence or a lease with no security of tenure.

35 Section 16 provides that the minimum term for a retail shop lease is to be five years, unless a shorter term is agreed by the lessee after advice from a lawyer or conveyancer not acting for the lessor. It provides relevantly:

(2) If a lease is entered into in contravention of this section, the validity of the lease is not thereby affected but the term of the lease is extended by such period as may be necessary to prevent the lease contravening this section.

Note. For example, if a lease is entered into for a term of 3 years, its term is extended by 2 years to 5 years. If a lease is entered into for a term of 2 years with an option for a further 1 year after that initial 2 years, the term of the lease is extended to 4 years (with the option for a further 1 year after that initial 4 years).

(3) This section does not apply to a lease if a lawyer, or a licensed conveyancer, not acting for the lessor certifies (before, or within 6 months after, the lease was entered into) in writing that:

(a) the lessee or prospective lessee requested the lawyer or conveyancer to give the certificate, and

(b) the lawyer or conveyancer has explained to the lessee or prospective lessee the effect of subsections (1) and (2) and that the giving of the certificate will result in this section not applying to the lease.

If the certificate is given within 6 months after the lease was entered into, then, without affecting the validity of the lease, subsection (2) ceases to apply to the lease and the extension of the term of the lease effected by that subsection accordingly ceases to be operative.’

36 Section 16(5) modifies the ‘five year’ rule as follows:

‘(5) This section does not apply to a lease to the extent that its application would be inconsistent with the terms of any head lease under which the lessor holds the retail shop.’

37 Section 6A provides:

6A Application of Act to short-term leases

(1) Generally, Act not to apply to short-term leases

Subject to subsection (2), this Act does not apply to a lease of a retail shop for a term of less than 6 months without any right for the lessee to extend the lease (whether by means of an option to extend or renew the lease or otherwise).

(2) Exception for successive, extended or renewed leases for more than one year

If the lessee has been in possession or entitled to be in possession of the retail shop without interruption for more than one year (whether by means of a series of 2 or more leases or by means of an extended or renewed lease or leases, or by any combination of those means), this Act applies to:

(a) the lease on and from the day on which the lessee has been in possession or entitled to be in possession of the shop for more than one year, and

(b) any succeeding lease or leases of the shop to the lessee, where possession or entitlement to possession is not interrupted.

(3) Operation of provisions for disclosure statements

Section 11 does not apply to the lease referred to in subsection (2) (a), but applies to any succeeding lease referred to in subsection (2) (b).

(4) Operation of provisions for minimum 5 year term

Section 16 (1) and (2) do not apply to the lease referred to in subsection (2) (a) unless the lessee notifies the lessor in writing during the term of the lease that the lessee elects to have the benefit of section 16. However, in that case, any period for which the lessee has already been in possession or entitled to possession of the retail shop without interruption is taken to be included in the term of the lease.

(5) Operation of other provisions

The regulations may provide that, if this Act applies to a lease because of subsection (2), specified provisions of this Act (other than sections 11 and 16 (1) and (2) and Part 2A) do not apply to or in respect of the lease or apply with prescribed modifications.

(6) Certain interruptions do not break continuity

The regulations may provide that interruptions for a prescribed period or of a prescribed kind are to be disregarded for the purposes of this section.

(7) Holding over

For the purposes of subsection (1), a provision for holding over by the lessee at the end of the term of the lease does not confer a right on the lessee to extend the lease if it operates at the discretion of each of the lessee and the lessor.

(8) Assignment

This section has effect in relation to a lease whether or not it is assigned to another person, but if it is assigned the period of possession or entitlement to possession by the assignee is taken to include any period of possession or entitlement to possession by the assignor and any previous assignor.’

38 In my view, s 6A is inapplicable to the present case. This is not a short term lease of the kind referred to in s 6A(1). The lease into which the applicant company entered, via Mr Morris, was a one by three by five years lease. It was always subject to the Act. It is unnecessary to resolve now whether its first term (one year) was ‘inflated’ by s 16(1) to five years. For good reasons, explained by Mr Morris in his evidence and confirmed by Mr Lynch, Mr Morris wanted to try out the business before committing to it long term. An informed lessee may not want to have their lease inflated in this way, and should not necessarily be saddled with such an outcome: see further Clasic International Pty Ltd v Lagos and ors [2002] NSWSC 1155 at [45] per Palmer J.

39 The Co-op referred to the terms of the Crown Licence. It noted that it did not permit any sub-occupation without consent of the Crown. The Co-op referred to the nature of a licence. It submitted that to accord to the applicant any period of tenure, let alone tenure of five years, would be inconsistent with the terms of the head instrument, albeit in this case a licence rather than a head lease.

40 In my view, contrary to the Co-op’s submission, it is immaterial that the entitlement under which the Co-op occupied the premises was that of a licence rather than a lease. It will be seen that the definition in the RL Act does not interest itself in the question of the legal entitlement held by the person who grants the right of occupation for value. It is enough to attract the operation of the Act that a person grants to another a ‘right of occupation’.

41 On ordinary principles, the owner of the freehold (in this instance the State) is not affected by any arrangement made by a lessee or a licensee to allow into occupation a third party. Were the owner to bring to an end lawfully the lessee’s or licensee’s occupation the third party would be equally affected. But the third party would have rights enforceable against the other party to the arrangement. See generally, Conoid Pty Limited & Anor v International Theme Park Limited [2000] NSWCA 189 per Giles JA at [18].

42 In Conoid the head lessor and the head lessee occupied the land, on a holding over, on a month to month basis. Either party could terminate that lease on one month’s notice. Nonetheless the head lessee entered a sub-occupation arrangement under which it purported to give a licence to occupy for a period of fifteen months. The judge at first instance, and the appeal court, both held that the sub-occupation transaction constituted a retail shop lease. The section 16(5) point arose in relation to the term of the lease. The sub-occupant argued that s 16 extended the term to five years. The appeal court held, agreeing with the judge at first instance, that in these circumstances sub-section (5) did apply so as not to produce a further inconsistency with the head instrument.

43 There was no doubt expressed that the voluntary grant of a term by the head lessee, though at odds with the position under the head lease, bound the head lessee in respect of the sub-occupant. Sub-section (5) did however protect the head lessee from a further extension of the term voluntarily granted.

Applicant Party

44 The Co-op sought to make a point in the case that the proceedings had miscarried, because it was Mr Morris personally not the family company which had been accorded the right to occupy the premises. It is clear that the negotiations, and the final documentation (the letter from Mr Lindfield read together with the ‘Agreement to Lease’) identified the contracting party as the company. The proceedings are properly brought in the name of the company.

Nature of Retail Tenancy Claim and Unconscionable Conduct Claim

45 A retail tenancy claim is a claim made ‘in connection with a liability or obligation with which a retail tenancy dispute is concerned’: s 70. A ‘retail tenancy dispute’ is a dispute ‘concerning the liabilities or obligations … of a party … to a retail shop lease …, being liabilities that arose under the lease’: s 63. A liability or obligation may arise from the terms of the lease or the provisions of the RL Act. In addition, a retail tenancy claim may be made in respect of conduct by one party to the lease that is misleading or deceptive, or likely to mislead or deceive, another party to the lease: ss 62C, 62D and 62E.

46 An ‘unconscionable conduct claim’ is ‘a claim for relief under s 62B’: s 70. Section 62B allows consideration of conduct that may extend to matters not the subject of a liability or obligation of a party under the lease.

47 Section 62BB provides, so far as lessor conduct is concerned:

62B Unconscionable conduct in retail shop lease transactions

(1) A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable.

…

(3) Without in any way limiting the matters to which the Tribunal may have regard for the purpose of determining whether a lessor has contravened subsection (1) in connection with a retail shop lease, the Tribunal may have regard to:

(a) the relative strengths of the bargaining positions of the lessor and the lessee, and

(b) whether, as a result of conduct engaged in by the lessor, the lessee was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the lessor, and

(c) whether the lessee was able to understand any documents relating to the lease, and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the lessee or a person acting on behalf of the lessee by the lessor or a person acting on behalf of the lessor in relation to the lease, and

(e) the amount for which, and the circumstances under which, the lessee could have acquired an identical or equivalent lease from a person other than the lessor, and

(f) the extent to which the lessor’s conduct towards the lessee was consistent with the lessor’s conduct in similar transactions between the lessor and other like lessees, and

(g) the requirements of any applicable industry code, and

(h) the requirements of any other industry code, if the lessee acted on the reasonable belief that the lessor would comply with that code, and

(i) the extent to which the lessor unreasonably failed to disclose to the lessee:

(ii) any risks to the lessee arising from the lessor’s intended conduct (being risks that the lessor should have foreseen would not be apparent to the lessee), and

(k) the extent to which the lessor and the lessee acted in good faith.

…

(5) A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with a retail shop lease by reason only that the first-mentioned person institutes legal proceedings in relation to that lease or refers to arbitration a dispute or claim in relation to that lease.

(6) A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with a retail shop lease by reason only that the first-mentioned person fails to renew the lease or issue a new lease.

(7) For the purpose of determining whether a lessor has contravened subsection (1) or whether a lessee has contravened subsection (2):

(a) the Tribunal must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention, and

(b) the Tribunal may have regard to circumstances existing before the commencement of this section but not to conduct engaged in before that commencement.

(8) A lessor or lessee, or former lessor or lessee, who suffers loss or damage by reason of unconscionable conduct of another person that is in contravention of this section may recover the amount of the loss or damage by lodging a claim against the other person under section 71A.

(9) If the matter of such loss or damage arises in connection with a matter the subject of proceedings in the Tribunal, the Tribunal may proceed to decide it, and in so doing may award such sum as it thinks fit.

(10) In this section:

lessee or former lessee includes a person who is a guarantor or covenantor under a lease or former lease.’

48 In Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557 at 583 [120–121] (Tobias JA agreeing) Spigelman CJ commented on the role of the unconscionable conduct ground in this area of the law:

121 The Ministerial Second Reading Speech, quoted (at 581 [112]) above, indicates a similar concern to distinguish what is unconscionable from what is merely unfair or unjust. Even if the concept of unconscionability in s 62B of the Retail Leases Act is not confined by equitable doctrine, as the decisions under s 51AC of the Trade Practices Act suggest, restraint in decision-making remains appropriate. Unconscionability is a concept which requires a high degree of moral obloquy. If it were to be applied as if it were equivalent to what as “fair” or “just”, it could transform commercial relationships in a manner which the Minister stated was not the intention of the legislation. The principle of “unconscionability” would not be a doctrine of occasional application, when the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute about a retail lease arises.’

49 An Appeal Panel of the Tribunal (in which I presided) recently noted (Armstrong Jones Management Pty Ltd v Saies-Bond & Associates Pty Ltd (RLD) [2007] NSWADTAP 47 at [141]):

‘In our view [s 62B] requires, ultimately, an holistic examination of all the circumstances of the lease relationship. While no case is likely to involve all of the categories of misconduct enumerated in the non-exclusive check-list, one would normally expect to see an unconscionable conduct finding supported by a range of considerations. It would be unusual, but not impossible, we think, for one instance of egregious conduct to be enough to give rise to a finding of unconscionable conduct.’

50 It follows from the above conclusions that the applicant was unlawfully evicted from the premises on 2 August 2006. There was no proper notice given of the kind required by the lease or the Act, and there was no credible evidence given of any possible breach of the Act by Mr Morris of such seriousness as to justify peremptory action of the kind taken. The retail tenancy claim is established.

51 I will turn now to the conduct that is said to provide other grounds for upholding the retail tenancy claim or for upholding the unconscionable conduct claim.

The Relationship with Mr Morris after Mr Bell’s Appointment

52 Mr Morris’s evidence is that a few days after taking up the position, Mr Bell said to him he did not have a lease, and he was concerned that he had never paid the $10,000 ‘key money’. Mr Bell also criticised him for being in arrears in the rent. He says that on 31 January 2006 at another meeting with Mr Bell, Mr Bell told him that he wanted the takeaway shop so that he could run it for the Co-op. He said that he was told that the Co-op did not have a Lease from the Department, it did not have a right to sub-lease and its legal advice was that he was there illegally and could be locked out. According to Mr Morris, Mr Bell intimated that the Co-op might be prepared to buy him out, and he was told to see his accountant and get some figures.

53 Mr Morris gave evidence as to further events that occurred between 14 March 2006 and the eventual lock-out on 2 August 2006.

54 He said that on or about 14 March 2006 Mr Bell relocated three waste containers (44 gallon drums) into which was placed used cooking oil. They had been situated for many years on the loading dock in the vicinity of his business. The relocation occurred without any consultation with Mr Morris. Mr Bell had them moved across a public street approximately 40 yards from their original position. Mr Morris said that this meant that his staff had to carry hot waste oil across the street. He believed that this might have put him in breach of occupational health and safety requirements.

55 A week later, he said Mr Bell criticised him over his staff, allegedly leaving side doors in the Co-op building unlocked.

56 Ten days later, on 31 March 2006 Mr Bell said to him that the Co-op was getting rid of (the separate) recycling bin as it was costing too much money. In Mr Morris’s view, this was another improper interference with the conduct of his business. Mr Morris had used the Co-op’s recycling bin for disposal of his waste. He had understood this to be one of the aspects of the Co-op’s operations that he was entitled to use.

57 On 8 June 2006 Mr Morris met Mr Bell. At that meeting, Mr Bell advised him that the Co-op was signing a new Lease with the Department, and that it did not include a provision to sub-lease. He was told he would be given notice, possibly one month’s notice. He said Mr Bell again referred to him as an ‘illegal tenant’. Mr Morris said that he asked if Mr Bell would therefore give him back the $300,000 he paid over the years as rent. He said Mr Bell replied: ‘No, that won’t happen Joe. You have had six years to fix this problem.’ Mr Morris said he replied: ‘I have tried on many occasions and I was lead to believe the lease problem would be fixed.’

58 Mr Morris said that on 16 June 2006 the Co-op commenced to sell cooked takeaway seafood, which in his view was in contravention of his lease agreement. He said that on 21 June 2006, the Co-op installed a coffee machine and commenced selling takeaway coffee. He said that his long-term regular employee, Mr Mark Davies, was offered employment by Mr Bell, and two days later left Mr Morris’s employ to take up the offer.

59 In July 2006, the locks were changed to the large freezer room at the Co-op depriving him of direct access. He was now forced to go to one of the staff of the Co-op in order to continue to use the freezer.

60 On 30 July 2006, Mr Bell asked for a meeting with him the next day. Mr Morris replied: ‘I will have to bring my lawyer.’ Mr Morris’s evidence is that Mr Bell replied: ‘No legal people’.

61 A meeting was arranged for 1 August 2006. Present were Mr Noel Gogerly, Chairman of the Co-op, Mr Bell, Mr Doug Atkinson (Mr Morris’s accountant) and Mr Morris. He was informed that his occupancy was to be terminated forthwith. The next morning, 2 August 2006, Mr Morris went, as usual, to his business to open up. He said he was confronted by a security guard employed by the Co-op. The guard told him that he was instructed to prevent him from operating the business. He was permitted only to remove his personal effects. The front counter had been boarded up. A sign was displayed advising ‘Take-away closed for renovations. Opening in two weeks.’ He said he removed some documents, the phone and all keys for operating the cash register.

62 Since being locked out, his company has been paid $600 per month for use of the cooking and display equipment.

63 He said that he is also aware that the Co-op is using other equipment that he owns, including a filter machine, fridge, freezer and cash register. This is occurring, he asserts, without his permission. He said that the sign ‘Jolly Joe’s Fish and Chips’ that is his company’s trading name was erected by the Co-op and is being used without his permission.

64 Mr Bell’s reply to Mr Morris’s account of events is contained, principally, in a signed statement filed on 17 August 2006 in response to the original application. Mr Bell referred to the actions of his that Mr Morris saw as interferences. Mr Bell said that he saw a lot of mess around the bins for the waste oil, and was concerned about vermin, health and other risks. He said he discussed the issue several times with Mr Morris. He was not satisfied that Mr Morris had taken adequate steps to clean up the mess, and for that reason arranged for them to be moved.

65 As to the change of locks on the freezer, he said that towards the end of June 2006 he found that a significant amount of squid (he said ‘several thousand dollars worth’) was missing. He suspected it of being stolen. He said he ‘imposed controls on access to the cool room. This included a restriction on access by Jolly Joes and its employees.’

66 As to the issue relating to doors not being closed, he said that Jolly Joe’s staff had failed to secure the premises on leaving the Co-op at the end of the work day. This had resulted in costly call-outs from the Co-op’s security service. Mr Morris’s evidence on this point was that the doors had faulty locks.

67 He admitted that in about July 2006 the Co-op began offering ‘cooked food’ to customers, but he said it did not include ‘any food offered by Jolly Joe’s and so not in competition with Jolly Joe’s’. He said that Jolly Joe’s menu was fish, chips and calamari, and the Co-op began selling grilled oysters, curried prawns and rice, and potato skins with seafood filling.

68 The rest of the statement contained material in the nature of legal submissions as to the legality of the Co-op’s position.

69 There was no significant dispute with much of Mr Morris’s evidence. Mr Morris presented as credible. Mr Morris’s evidence, as recounted above, is accepted. Some other aspects of the evidence are referred to below.

Findings as to Lessor’s Conduct

70 (1) Peremptory Eviction. The first, and most fundamental, item of misconduct was the peremptory eviction of Mr Morris and his company with more than two and half years to run on the lease. This was a violation of a tenant’s right of the gravest kind. Clearly it is relevant to a finding of unconscionable conduct, as well as being a contractual breach.

71 (2) The Co-op’s approach to the disclosure of information to Mr Morris. The applicant’s complaint is that the Co-op refused promptly to provide Mr Morris with a copy of the Licence when asked for it on or about 1 February 2006. In contrast to the response given by Mr Pereira to the request the previous year (when Mr Pereira had immediately supplied a copy of the Agreement to Lease held on the Co-op’s file), the Co-op refused to give Mr Morris access to the Licence. Mr Bell said in evidence that a Freedom of Information request was refused. Eventually the Co-op supplied Mr Morris with a copy of the Licence.

72 In the Tribunal’s opinion, this conduct was unjustified. Mr Morris was perfectly entitled to be supplied with any document that went to the title of the Co-op, and which, therefore in turn, might affect his title. The conduct was high-handed, and unfair. Mr Morris should not have been put to the trouble of an FOI request, let alone refused. The conduct is relevant to a finding of unconscionable conduct.

73 (3) Whether the Co-op breached cl 23 of the Agreement for Lease (the exclusive use clause). This clause has been set out earlier in these reasons. Mr Bell’s view was that this activity did not impinge on Mr Morris’s operation, as the cooked food being offered was of a different and more gourmet type (grilled oysters, curried prawns and rice, and potato skins with seafood filling). In Mr Bell’s view this was an augmentation of the fresh fish and seafood side of the business. (Mr Bell said that he had, when living in New Zealand, operated a business of this kind.)

74 Mr Bell’s explanation, in the opinion of the Tribunal, is facile. The Tribunal is satisfied that when the negotiations were being conducted in 2000 they were done on the basis that there was to be only one cooked fish and seafood element to the food-selling operations at the Co-op, as had previously been the case.

75 The Co-op’s action breached the exclusivity given to Mr Morris’s business: see cl (23) of the Agreement to Lease. In the Tribunal’s view, there was no scope for any kind of competing takeaway cooked food restaurant. There was a breach of the terms of the lease. This finding is relevant to a finding of unconscionable conduct.

76 (4) The question of the $10,000 payment to goodwill. The Agreement to Lease, in line with the tender advertisement, included a promise by the applicant to pay $10,000 in respect of goodwill. Mr Morris was of the view that this obligation was always subject to the understanding that it was payable on provision of a formal lease. That qualification is not spelt out in the Agreement to Lease. Whatever the position at that point, the Tribunal is satisfied that as from 11 May 2001, at the latest, there was such an understanding between the parties. A letter of that date from the general manager of that time, Ms Coombs, to Mr Morris states that the payment would not be required until a formal lease was granted. She said:

Detailed below is a summary of the matters we discussed during our meeting on Tuesday 8 May.

We have revised your rental schedule to meet the peak trading and quiet periods of your business. The schedule is divided into the following weekly breakdown:

34 Weeks @ $588 = $19,992

13 Weeks @ $1788 = $23,244

5 Weeks @ $2352.80 = $11,764

Total = $55,000

This revised agreement will be effective as at your anniversary date of 12 April. Therefore, we will backdate the rate of $588 per week until that date. We will then recalculate the outstanding arrears and advise you the amount.

Regarding the goodwill amount of $10,000, we have agreed that this will be paid when a full lease is provided. You will receive a months notice of this being due.

Confirming the supply agreement of selected product, we will provide large skinless boneless mullet at $12.00 and medium skin on mullet at $6.40.

We will a [sic] schedule a further meeting to discuss possible marketing strategy.’

77 The Co-op’s insistence, in the face of this evidence from its own records, that it was entitled to such a payment during its dealings with Mr Morris after Mr Bell took over, and persisted with during this litigation, was unfair, and is relevant to a finding of unconscionability.

78 (5) The question of what became of the old cooking equipment. One of Mr Bell’s criticisms of Mr Morris was that he had not accounted for the cooking equipment that was in place when he entered into the lease. When Mr Bell raised the issue with Mr Morris of what became of the old equipment, Mr Morris told him he could not remember. Mr Morris thought that he had discarded and returned it to the Co-op.

79 The evidence is clear that Mr Morris replaced this equipment. That he was likely to do so was well known to those involved in the negotiations at the time, and possible action of this kind was raised in the tender advertisement issued by the Co-op. Mr Morris’s evidence that he expended $4,000-$5,000 at the outset is accepted. In addition the evidence, not disputed, is that he has expended between $40,000 and $50,000 over the six years on new equipment. The Co-op took over this equipment after his eviction, and pays Mr Morris a weekly rental fee for the use of some of it, at least.

80 It was unfair of the Co-op to be raising questions about what became of the old equipment so many years after the event. The conduct was unfair, and relevant to a finding of unconscionability.

81 (6) Rent said to be in default. This is a matter in a similar category to the last one. There may have been some shortfalls on Mr Morris’s part in the payment of rent. Mr Morris disputed that he was ever seriously behind in his payments, and said that he always made them up. The Tribunal is satisfied that over the years, Mr Morris met substantially if not entirely his obligation to pay rent at the rate of $50,000 pa (adjusted upwards in the second year to $55,000, and then held at the same level after that). There is no evidence before the Tribunal showing a formal demand to Mr Morris for any arrears, and setting them out. The Co-op’s conduct in raising this allegation in its dealings with Mr Morris was unfair. This finding is relevant to a finding of unconscionability.

82 (7) Access to cool room and refrigerators. Mr Bell acknowledged that he took steps in June to restrict access to this area of the Co-op. He said that there had been ‘massive’ losses of stock. He had directed that access to keys be restricted and all users of the area be accompanied when they were storing fish or taking it. Mr Morris saw this as an impediment to his ability to run his business. There was clearly an inference to be drawn from Mr Bell’s actions that he suspected that the stock might have been stolen by Mr Morris or one of his staff. He referred to them having access later in the day than anyone else, because of the hours of their business.

83 It is within the prerogative of a general manager to lay down security measures over a facility of this kind. Nonetheless it is clear that Mr Morris was entitled under the original agreement to reasonable and practical access to the cool room. The new arrangement was imposed upon him. He should have been consulted. It was open to the general manager to put in other forms of surveillance that would not have been as negative to Mr Morris’s and his staff’s ability to use the cool room.

84 Matters of this kind should have been discussed with Mr Morris in a mature way. The way Mr Bell dealt with this issue was high-handed, and might well have been seen as casting suspicion on Mr Morris. The conduct was unfair, and relevant to a finding of unconscionability.

85 (8) The movement of the hot oil waste bins. This falls into much the same category as item (7). A general manager will naturally be mindful of the need to observe good safety practices, and to take steps to keep the premises clean and neat. In this instance, the action impeded Mr Morris in the convenient operation of his business. The bins had been nearby for many years, without criticism. They were moved a significant distance away from the building. Mr Morris was blamed for the untidiness, as Mr Bell saw it, that surrounded the bins (oil spills and the like). Mr Morris was of the view that the ultimate responsibility for keeping the area clean lay with the Co-op. The bins were in the general area controlled by the Co-op. Again in the Tribunal’s view, a matter of this kind should have been discussed with Mr Morris in a mature way. The way Mr Bell dealt with this issue was high-handed. The conduct was unfair, and relevant to a finding of unconscionability.

86 (9) Referring to Mr Morris as an ‘illegal’ occupant. Mr Bell disputed Mr Morris’s evidence that he had called Mr Morris an ‘illegal’ occupant or tenant as early as January 2006. However, he conceded that he did use this term, from March/April once he had the legal advice that Mr Morris did not have a lease. This, in the Tribunal’s opinion, was an utterly inappropriate way to refer to a person who had operated a business, of substantial benefit to the Co-op, for many years, regardless of the precise legalities of the situation. The conduct was unfair and is relevant to a finding of unconscionability.

87 (10) Whether the Co-op was planning a significant renovation of the premises when it moved against Mr Morris. Mr Morris is of the view that the Co-op had, by early 2006, begun planning a major redevelopment of the premises, and that it was, therefore, necessary to get rid of him. In his view, the Co-op tried to devise a scheme that got rid of him as cheaply as possible. If there was such a plan, his view is that he should have been advised and consulted. The Tribunal was asked, in effect, to make these inferences from the limited amount of material placed before it. On the final day of hearing, 21 June 2007, Mr Bell was shown a local newspaper report published a few days earlier, which outlined the Co-op’s proposal for a $3m redevelopment, which would include a restaurant. The article referred to steps taken by the Co-op to get government funding and special regional grants. Mr Bell denied that such a proposal was under consideration when the Co-op was trying to oust Mr Morris. He said that references to redevelopment found in the annual reports between 2003 and 2005 concerned minor improvements. The Tribunal accepts his evidence as to that point. As to whether by early 2006 a major plan was in contemplation, the evidence is inconclusive.

88 (11) Engagement by the Co-op of Mr Morris’s long term employee, Mr Mark Davies. At the same time as it set up the new takeaway business linked to the fresh food outlet, the Co-op employed Mr Davies, the long term employee of Mr Morris. Mr Morris clearly saw this action as undermining his business. On or about 29 June 2006 Mr Davies supplied Mr Morris with the following statement, which was counter-signed by Mr Morris:

As you are aware I have tendered my resignation and will finish work on / /2006 [sic].

I acknowledge that all monies due to me have been paid to me and that your company does not owe me any money whatsoever.

I agree to keep confidential all business dealings of your company and in particular the ongoing problems with Wallis Lake Fishermans Co op.

I also agree that all recipes etc which I use at your business remain your property and that I will not use them at my new place of employment whilst your business remains operative.

Mark Davies K J Morris Witness

(signed) (signed) (signed Graeme Sams)

89 Mr Morris claimed that Mr Bell first raised the possibility of Mark Davies switching to the Co-op to work in January 2006. It is not necessary for the Tribunal to resolve the question of when Mr Bell first approached Mr Davies. The Tribunal has already found that the setting up of the rival business was a breach of the exclusivity given to Mr Morris. There is no dispute that at some point Mr Bell decided to approach Mr Davies with a view to securing his services. He, in effect, ‘poached’ Mr Davies from Mr Morris. Not only did Mr Bell obtain the advantage of employing someone who was very experienced in the conduct of a cooked food business in the environment of the Co-op, but he further weakened Mr Morris’s ability to continue in business. It is clear that Mr Morris had relied on Mr Davies over many years. He was Mr Morris’s longest term and most trusted employee. Again, this conduct is relevant to a finding of unconscionability.

90 (12) Whether the Co-op engaged in misleading or deceptive conduct. As a component of its case in support of its retail tenancy claim, the applicant asserts that in the tender process of 8 March 2000 the Co-op, by deceptive and misleading conduct, represented to the applicant that it had authority to issue a lease over the shop; and that by allowing the applicant to lease the shop for six years it continued to mislead and deceive the applicant into believing he would receive a Law Society lease. The applicant also relies on this alleged conduct in support of its unconscionable conduct claim.

91 The Tribunal only acquired a specific jurisdiction to deal with deceptive and misleading conduct in connection with a retail shop lease as from 1 January 2006, when the following amendments to the RL Act commenced:

Division 2 Misleading or deceptive conduct

62C Interpretation and application of Division

(1) In this Division:

misleading or deceptive conduct means conduct to which section 62D applies.

party or former party to a retail shop lease or former retail shop lease includes a person who is a guarantor or covenantor under a lease or former lease.

(2) Nothing in this Division affects the operation of Division 1.

62D Misleading or deceptive conduct in connection with retail leases

A party to a retail shop lease must not, in connection with the lease, engage in conduct that it is misleading or deceptive to another party to the lease or that it is likely to mislead or deceive another party to the lease.

62E Right to compensation

A party or former party to a retail shop lease who suffers loss or damage by reason of misleading or deceptive conduct of another party may recover the amount of the loss or damage by lodging a claim against the other party under section 71.’

92 The pre-1 January 2006 aspects of the case are pressed as part of the unconscionable conduct claim. The unconscionable conduct provisions commenced on 12 October 2001, and applied from that date: s 62A(2).

93 There is no doubt that the Co-op expressed, subsequent to 12 October 2001 (for example via Mr Pereira in 2005), and, subsequent to 1 January 2006 (via Mr Bell), that because it occupied the premises under a licence, Mr Morris did not have a lease. It is also clear that Mr Pereira held out the prospect of a lease in due course. On the other hand there is no evidence that Mr Bell ever held out the possibility of grant of a lease.

94 I am not satisfied that Mr Pereira’s conduct, or that of his predecessors, was deceptive or misleading. The Co-op under the management previous to Mr Bell dealt with Mr Morris on the basis that he was a secure tenant for nine years. Mr Lynch and Mr Pereira were ad idem on this matter in their evidence. The problem for them was that they were hampered in giving a registrable Lease of the usual kind because of the impediment created by the Licence, and the difficulty (whether a Crown Lease or Crown Licence was the head instrument) in giving such a Lease without consent. It is clear that Mr Morris was reasonably at ease with the difficulty they faced until Mr Bell entered the scene.

95 The tender material was misleading, but this conduct, as noted, lies outside the statutory period, a point acknowledged in the final submissions in reply by the applicant.

96 In contrast to his predecessors Mr Bell described Mr Morris’s situation as involving an ‘illegal’ tenancy, with the consequence that he was terminable at any time, and had none of the rights of a secure tenant. Mr Bell gave a misleading warranty as to a present fact: see, for example, Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) FCR 470 at 505-506 per Lockhart and Gummow JJ, cited with approval in HTW Valuers (Central Qld) v Astonland (2004) 217 CLR 640 at [13]. This finding provides another item of unfair conduct relevant to the unconscionable conduct claim; and in respect of the conduct after 1 January 2006 provides another ground for upholding the retail tenancy claim.

Unconscionable Conduct Claim

97 This in my view is a case where an holistic examination of the Co-op’s conduct towards Mr Morris after Mr Bell took over warrants a finding of unconscionable conduct. This is clearly a case where the circumstances reveal conduct that was ‘highly unethical’ to adopt the marker set by the Chief Justice in World Best Holdings.

98 The Co-op controlled the general site and key facilities such as the cool room and refrigerators. It controlled waste disposal. It was in a position through its control of these shared facilities to impede Mr Morris’s ability to conduct his business. Its inability to issue a formal lease gave it an upper hand, which Mr Bell exploited (see factor (a) in the list in sub-section (3) of s 62B). Mr Morris was not given ready access to documents relevant to his understanding of the lease when he was refused access to the Crown Licence (see factor (c)). There were several ‘unfair tactics’ used by Mr Bell in his dealings with Mr Morris (see factor (d)) and several involved the exercise of ‘undue pressure’. While Mr Bell raised doubts about Mr Morris’s occupancy, and foreshadowed the possibility of removing him, the act of removal was executed in a manner that was highly unreasonable (see factor (i)) and without any lawful justification. In my view the Co-op acted capriciously in the way explained recently by Palmer J in Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC 1375 at [52]-[54].

99 In addition, as has been noted, there were several specific breaches of the lease or the Act.

100 The unconscionable conduct claim is established.

Relief

101 The relief available in respect of a retail tenancy claim is set out in s 72; and in respect of an unconscionable conduct claim in s 72AA. The orders that can be made in respect of a retail tenancy claim are wide (monetary orders, conduct orders, declaratory relief), whereas they are confined to monetary orders in the instance of an unconscionable conduct claim. The relief sought divides into damages, relief against forfeiture and various declarations.

Damages

102 This is the principal relief sought. The power of the Tribunal is expressed in the same terms in s 72 (retail tenancy claim) and s 72AA (unconscionable conduct claim), i.e. the Tribunal may make:

‘(a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person,’

103 At hearing the Co-op’s evidence and its cross-examination concentrated on the damages issue.

104 Economic Loss. The principal breach was a contractual one (unlawful repudiation by the lessor). As the unconscionable conduct claim has been made out, it may also be appropriate to make an award to compensate the applicant for pain, distress, disruption and inconvenience suffered as a consequence of the Co-op’s ill-treatment. The applicant has made claims under both these headings.

105 Deane J stated in Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64 (12 December 1991) at 116:

‘The general principle governing the assessment of compensatory damages in both contract and tort is that the plaintiff should receive the monetary sum which, so far as money can, represents fair and adequate compensation for the loss or injury sustained by reason of the defendant's wrongful conduct. The application of that general principle ordinarily involves a comparison, sometimes implicit, between a hypothetical and an actual state of affairs: what relevantly represents the position in which the plaintiff would have been if the wrongful act (i.e. the repudiation or breach of contract or the tort) had not occurred and what relevantly represents the position in which the plaintiff is or will be after the occurrence of the wrongful act.’

106 The economic loss claim in this case is put in relatively simple terms. The claim is for, principally, the return to Mr and Mrs Morris from the business after meeting all outgoings (rent, staff wages and related costs, product costs) in the last year multiplied by the period left on the lease. As previously noted, the applicant is a two dollar company which has one director, Mr Morris and two shareholders, Mr and Mrs Morris. The return to Mr and Mrs Morris comprises: drawings in the nature of remuneration; lease payments in respect of the motor vehicle owned by the applicant and funded out of the takings of the business; and amounts applied in connection with their home office. The claim also includes certain future business deductions brought forward (see below).

107 Mr Atkinson’s report filed 20 June 2007 noted that the Tribunal had asked him and Mr Edmunds to produce a joint report for the purpose of arriving at a fair value of losses incurred by the applicant as a result of the cessation of the lease. The report is divided into two parts, matters agreed and matters not agreed. The matters agreed section is as follows:

Financial Information as agreed between Mark S Edmunds FCPA and Douglas Atkinson CPA

The following financial information as agreed … including add backs as listed in Appendix 1 for the years 2005 and 2006 …:

A C N 079 830 596 PTY LTD

2005 2006

Taxable Income 807 23,441

Plus Add Backs 91,623 69,705

Net Income 92,430 93,146

Scope

This report provides an estimation of the immediate revenue loss that Mr Morris has incurred …

This report does not attempt a full valuation of the business, Jolly Joes Fish and Chips prior to the cessation of business.

The report uses the widely accepted technique of determining the before tax net profit of the business and expanding the profit over the remaining term of the lease. The ongoing costs of the business that remain with Mr Morris after cessation of the business are also added to the net profit. Non-cash deductions such as depreciation are added back to the profit and loss. Extraordinary items with no future impact on the cash flow or net profit have also been removed. Any adjustments are listed at Appendix 1.

All calculations and assumptions are based on un-audited figures supplied by the owner and agreed between Mr Mark Edmunds FCPA and Mr Douglas Atkinson CPA.

Calculated Loss

The loss of future revenue if the tribunal finds there is a lease calculated at an average of the 2005 and 2006 income tax years expanded to the 2.5 years is $231,972 (appendix 2) without any adjustments for CPI. When adjustment for 3% inflation is taken into consideration the loss is $244,709 as per appendix 3.’

108 It will be seen that the above calculation is made on a 2.5 year basis. Strictly the balance of the term was 2 years 8 months and 11 days, i.e. 2.7 years, as noted in the applicant’s closing submissions.

109 Mr Edmunds put forward for consideration two alternative scenarios which resulted in a lower figure. In one, drawings by Mr Morris were excluded. In the other, Mr Morris’s remuneration loss was calculated by reference to the annual wage of a full time shop assistant under a State industrial award.

110 At hearing Mr Johnson, counsel for the Co-op, sought to put in issue any reliance on Mr Atkinson’s report and any reliance on the joint estimate, even though his client’s accountant (Mr Edmunds) had endorsed it. He argued that Mr Atkinson’s evidence and, at the least, Mr Edmunds’ endorsement of the calculation referred to, should be rejected, on the basis that they had not exposed their assumptions (referring in this regard to Makita (Australia) Pty Ltd v Sprowles (2000) 52 NSWLR 705 per Heydon JA at 711 and ff) and they had not been able to examine the source records. I deal with the source records point later in these reasons.

111 As to the former point, this is not a case akin to Makita v Sprowles. There an expert gave an opinion as to a matter of fact (slipperiness of stairs) relying on hypotheses and simulated experiments. The expert’s opinion in Makita was, on its face, far-fetched, as in many years of regular use of the stair-case both before or after the accident there had been no similar slip incident. The assessment in this case is not far-fetched in that way. Moreover, in this case the accountants did provide the Tribunal with criteria enabling evaluation of the validity of their opinion, and had before them factual material of sufficient reliability to give an opinion.

112 There were accounting records of a usual kind made available to Mr Atkinson and Mr Edmunds. For the years 2000 to 2003 the applicant company was the vehicle through which both the Deep Sea Delights and Jolly Joe’s businesses were conducted. So the final statements of account intermingle the input information from the two businesses.

113 The financial statements from 2004 onwards relate only to the Jolly Joe’s business. The main change that occurred after Mr Morris disposed of Deep Sea Delights in 2003 was that he spent more time working at Jolly Joe’s, and to that extent the use of casual employees declined. He said that prior to 2003, he had worked at Jolly Joe’s about 10 hours per week, but after that he was there regularly.

114 At hearing and in closing written submissions, Mr Johnson contended further that the financial statements of the applicant for the financial years ended 30 June 2004, 30 June 2005 and 30 June 2006 were so unreliable as to what they concluded that they should not be given any weight by the Tribunal, and treated as inadmissible. Consequently, it was submitted, there was no material upon which to reach any reliable conclusion as to the award of damages, and the applicant had failed to prove its case on this point.

115 In my view, the information that the experts used is clearly exposed. The assumptions that they used in respect of that information are apparent. They reached a conclusion as to the level of practical profitability of the business, i.e. the amount that reached the shareholders’ Mr and Mrs Morris by way of personal benefit after meeting all outgoings, and multiplied that by the time left on the lease.

116 At hearing Mr Johnson cross-examined Mr Morris at length on the way that Mr Morris had run the business over the years, how he handled money, how he met his external legal obligations, how he dealt with employees wages, how he handled drawings and how he or his accountant chose to record and attribute receipts and costs in the books of account of the company. In line with this approach, the final submissions make several assertions:

(b) the evidence of Mr Morris is that the substantial cash payments were made and in those circumstances it can be inferred that there has been an inadequate provision for; firstly, Pay As You Go tax; secondly, superannuation guarantee payments in respect of employees whether they be permanent or casual; thirdly, a failure to properly reflect fringe benefits made available to employees disclosed in the evidence; fourthly, an undoubted understatement of workers compensation disclosed wages and therefore workers compensation premium payable; and fifthly long service entitlement of Mark Davies who was a continuing employee from the previous activities and pre incorporation business conducted by Mr Morris;

(c) an inaccurate reflection of ‘directors fees’ being payable to Mrs Morris in circumstances where she was not a director at any material time so as to give rise to additional liabilities;

(d) consequential understatement of liabilities in the financial statements;

(e) the inaccurate description of financing assets funded by Esanda Finance Corporation Limited and National Australia Bank the property of the applicant (principally the motor vehicle), as lease finance rather than loan finance under asset purchase contracts;

(f) the failure to reflect the liability for the purchase price of goodwill agreed to under the Agreement for Lease at any time in the financial statements prepared after the date of occupation;

(g) the failure to reflect any relevant outgoings provided for under the Agreement for Lease;

(h) the failure to provide any of the relevant source records or wages records or MYOB records from which the report of Mr Atkinson was prepared.

117 Mr Morris presented as an experienced operator of businesses of fish and chips-type takeaway businesses. Through the years at the Co-op he had one regular employee, Mark Davies. His wife assisted as needed. He also engaged other casuals from time to time, the main one mentioned in these proceedings being a Mr McNally. His practices in relation to keeping records of inputs appeared to be of a usual kind. He kept the invoices for purchases of fish and other goods and provided them to his bookkeeper, Mr Westcott, and to his then accountant – Mr Lindfield in the early years, Mr Atkinson later. As to receipts, he said he supplied till tapes to his accountants.

118 He was not able to produce at hearing the original vouchers and till tapes, or other source documents that had been used by his accountants. His evidence was that since being evicted from the takeaway he had moved home. In the course of the move he left out for collection four boxes of business records, including the kind of records sought. His evidence was that they were mistakenly dumped by the removalist rather than moved to his new home. The Tribunal accepts this evidence.

119 There was substantial ‘secondary’ documentation made available (via a notice to produce) and before the Tribunal. They included the earlier statements prepared by Mr Atkinson and Mr Edmunds that preceded their final reports; and banking records of electronic transfers to the Morris’s business and personal bank accounts. The Tribunal has no reason to doubt the evidence of Mr Lindfield and Mr Atkinson that they prepared statements in the usual way relying on documentation of an appropriate kind supplied by Mr Morris. Both Mr Lindfield and Mr Atkinson presented as credible and reliable.

120 Mr Morris acknowledged candidly at a number of points in cross-examination that his record keeping practices were of a relatively rudimentary kind, and that, as to the treatment of items of expenditure and income, he left that to his accountants. He was also candid in acknowledging that some of his practices, especially in dealing with payment of the wages and the like, may have implicated him in conduct that was not in compliance with external obligations.

121 In the Tribunal’s opinion, it will often be the case that businesses of the kind under notice in this case will not readily withstand the ‘blowtorch’ of scrutiny across the range of legal obligations that bear on the employment of staff, maintenance of records, and taxation requirements. The business was a small one, it relied on seasonal trade, it dealt overwhelmingly in cash, customer purchases would have been, overwhelmingly, in small amounts of cash, and it employed staff as needed with the exception of one or two regulars.

122 The Tribunal is not in the best position in an inquiry of this kind to reach final conclusions of the degree of specificity urged by counsel for the Co-op in relation to particular issues of legal compliance. The obligations to which attention was drawn are sometimes complex, and the ultimate determination of compliance lies with other regulatory bodies and processes.

123 The Tribunal must, in the end, make the best assessment of all the evidence before it: Fink v Fink (1946) 74 CLR 127 at 143; Biggin & Co v Permanite Ltd [1951] 1 KB 422; and recently, Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 per Beazley JA at [135]-[137]. The evidence in this case, in my opinion, is adequate to that task. I do not regard this as a case where the applicant has failed to adduce evidence that might have assisted the Tribunal in its task: see further, Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) [2003] HCA 10, (2003) 77 ALJR 768 at [38] per Hayne J.

124 Mr Atkinson was pressed by counsel for the Co-op on what evidentiary basis he had for accepting Mr Morris’s advice that he and his wife took $600 a week in cash from the till in drawings. He said that this was consistent with what, in his experience dealing with small businesses of this kind, was a likely level of drawings.

125 In my view, Mr Atkinson’s estimate in this regard fits in with the break-up seen in the set of figures with which he and Mr Morris have no connection – those contained in the Board’s tender document of 2000. That document gave figures for the business in the 1997-1999 period. The gross receipts varied between $380,000 and $430,000; and roughly 30% was attributable to remuneration ($110,000 to $120,000 depending on the year). In the most recent accounts, the gross receipts are also around the $400,000 level and the amount attributable to remuneration is also around $120,000 (i.e. Mr Morris and his wife, $62,400; staff wages and related on-costs, $57,000).

126 As noted earlier, Mr Edmunds put forward two lower estimates of damage (assuming a lease due to expire on 13 April 2009) for consideration by the Tribunal. One excluded Mr Morris’ remuneration loss entirely from the equation, while the other diminished the remuneration loss by reference to award wage rates.

127 In my view neither of these approaches should be adopted. The applicant company is, in reality, the alter ego of Mr and Mrs Morris. Economic loss claims in a family business setting of this kind should be assessed by reference to the loss suffered by the owners of the company, i.e. Mr and Mrs Morris.

128 I am of the view that the approach the subject of the joint conclusion is the appropriate one in this case.

129 Two other matters were raised by the applicant – adjustment of the amount awarded by an inflation factor, and compensation in respect of lost goodwill. As to the inflation factor, I am not inclined in this case to increase the award by reference to a CPI-type amount (the accountants used 3%). The financial statements do not suggest that any significant growth was occurring in the business, or that the business had significant growth potential. Mr Morris had referred in a letter of May 2005 to the Co-op, and in evidence, of the increasing difficulty the takeaway had faced from competition from new outlets nearby of the Kentucky Fried Chicken/McDonalds type.

130 As to goodwill, the Tribunal accepts that Mr Morris had built up a marginally viable business, and had he the opportunity to on-sell it he would, the Tribunal thinks, have been able to obtain some consideration for the goodwill. Had he had a registrable lease in the past, the Tribunal accepts that he may have tried to sell the business. The Tribunal accepts that he was deprived of that opportunity by the conduct of the Co-op. However, looking to the future, it was unlikely, in the Tribunal’s opinion, that Mr Morris would have had any further opportunity to sell the goodwill. The Co-op has decided to move back into selling hot takeaway food.

131 The Co-op contended that various off-sets should be applied to any award of damages. The first was in respect of the amount for goodwill that formed part of the original negotiations with Mr Morris ($10,000). This matter has been dealt with earlier in these reasons. This is not a valid claim.

132 The second set of off-sets concerns alleged underpayments of rent at various points in the relationship. The records tendered do show that at times Mr Morris made a reduced payment of the monthly rent. Mr Morris’s evidence is that there were times in the slow months especially in the early years when he did not immediately pay the amount agreed. He says that he made that shortfall up in the busy months, and that that was acceptable to the Co-op. He says that overall he was up to date in his payments. In the Tribunal’s view no adjustment should be made against the applicant on this account. Again there is no evidence to show that the Co-op ever made any formal demands for underpayment of rent. There was no evidence tendered of any current outstanding liability at the date of eviction. In the Tribunal’s view, it is more than likely that any irregularities were matters negotiated between Mr Morris and the manager of the day, in a manner acceptable to the Board of the day.

133 Adopting the agreed net income figure found at Appendix 1 of Mr Atkinson’s report filed 20 June 2007 ($92,430), multiplied by 2.7 years, the amount recoverable is $249,561. This calculation is substantially in accord with the closing submissions filed 13 July 2007 by counsel for the applicant, Ms Hoeben.

134 Apart from the claim for lost profits, the applicant continued to press at the commencement of the hearing the following claims from among a longer list set out in his affidavit filed 28 September 2006):

(b) drinks left in fridge when the Co-op re-entered, and took over the business, $505

(c) equipment that is currently stored and used by the Co-op: 4 tables, 4 wheelie bins, 1 oil filter, 1 fridge, 1 freezer, 1 cash register, specific estimated values given for a total of $3,920.

135 In its final submissions in reply, the applicant did not press its claim for compensation ‘for the loss of equipment left in the shop and signage outside when the applicant had been locked out by the respondent on 2 August 2006’. There is some uncertainty as to where the applicant’s case stands on this matter – as is seen in the Co-op’s closing submissions. The Co-op submits that no evidence has been led by the applicant as to the value of the equipment which is still being used or any costs, charges or expenses likely to be incurred under any lease or hire purchase agreement which have been entered into in respect of that equipment. The submissions further state that so far as the equipment which has been put into storage is concerned it has at all times been available for collection and remains so. In light of the statement made in the applicant’s submissions, I have excluded all aspects of item (c) from further consideration. In any case, if I have misconstrued the applicant’s position, I would not have made an award in respect of item (c). There is insufficient evidence before the Tribunal to reach any firm conclusion as to what the true position is as to whether there is any equipment in use that goes beyond the parameters of the $600 per month agreement. As to equipment that the Co-op has placed into storage, it is unclear what losses, if any, Mr Morris is suffering as a consequence.

136 Mr Morris referred in his affidavit to amounts he owed the Co-op, i.e. two months’ worth of ice cream sales, for June and July 2006, $143.90; and invoices for purchase of fish from the Co-op, $650. These amounts, and those left under (a) and (b) above, almost cancel each other. In the circumstances no award will be made as to these items.

137 The Co-op submitted that a discount should be made on the basis that the applicant had failed in its duty to mitigate its loss. The closing submissions state: ‘The Applicant has failed in all respects to take any steps to mitigate its loss and damage arising for [sic] the asserted conduct of the Respondent. No attempt has been made by it to take possession or start any business using the equipment which it had in the premises. This should mitigate against any award of damages or compensation.’ As the applicant notes in its closing submissions, the duty of the innocent party not to mitigate is not a high one: Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 at 9. It is not obvious to me what ‘reasonable steps’ that a ‘reasonable man’ in the shoes of Mr Morris could have taken to mitigate the loss in the present circumstances.

138 Damages for Unconscionable Conduct. In addition there is a claim for damages for unconscionable conduct. In Worsfold v De Goede [2002] NSWADT 273, I awarded $6,000 for unconscionable conduct described as follows:

‘[The applicant lessee] was undermined by the respondent [the lessor]. He then adopted a hostile attitude to her. She was humiliated by his sending of an eviction notice that was without foundation. After moving out and relocating her family, she went back to do a final clean-up and found the locks changed. Her husband went to see the respondent. I accept her husband's evidence that after receiving the eviction notice, and querying the respondent about it, the respondent threatened to shoot him if he did not get off the property. The applicant has, I accept, endured great anguish and has a deep sense of public humiliation within the environment of a small community.’

139 It may be said that an inanimate entity, as the applicant is in this case – a company, can not have feelings or suffer humiliation. In my view the impact, in particular, on Mr Morris should not be discounted in this way. This company is the alter ego of Mr and Mrs Morris. Commonly small businesses adopt a company structure rather than trade as an individual or as a partnership of individuals. I am satisfied that Mr Morris was disturbed and upset by the way the Co-op dealt with him between November 2005 and August 2006. He had been in business in the Taree/Forster/Tuncurry area for many years, and had grown up there. His business had over many years contributed to the life of the Co-op. He was treated in a humiliating way. There should be a separate award of damages under this heading in a modest amount. In my view, a sum of $6,000 is sufficient in circumstances where a substantial award has been made for economic loss.

Orders Sought by Applicant

140 I will now deal seriatim with all of the orders sought in the amended application.

1. Declaration that the applicant has a lease under the Retail Leases Act and a further order granting the applicant relief against forfeiture.

The declaration is granted. The further order is not granted, for the reason given earlier that it is far too late to be agitating such a claim. Mr Morris chose not to press for relief against forfeiture in his urgent application after being evicted. His principal remedy must therefore be damages.

2. and 3. Declaration that the respondent by deceptive and misleading conduct represented to the applicant, and by a tender process on 8 March 2000, that it had authority to issue a lease over the shop; and that by allowing the applicant to lease the shop for six years it continued to mislead and deceive the applicant into believing he would receive a Law Society lease.

As previously explained, the pre-12 October 2001 conduct can not be considered. I am not satisfied that the conduct of the Co-op from that date until November 2005 involved deceptive or misleading conduct. A declaration will be granted in different terms to those proposed. The offensive conduct is better described as misleading representations by the Co-op, via Mr Bell, from November 2005 onwards, including after 1 January 2006, as to the right of occupancy of the applicant.

4. Declaration that the respondent ‘continued to engage’ in unconscionable conduct which was designed to force the applicant to walk out of his business and repudiate the lease.

The declaration that the respondent, the Co-op, engaged in unconscionable conduct is to be granted.

5. Declaration that the payment of $10,000 is not due or payable.

The Tribunal agrees. A declaration is not required.

6. Order pursuant to s 34 that the respondent failed to keep the area surrounding the shop properly cleaned and maintained.

Section 34 (as at January to June 2006) provided relevantly:

34 Lessee to be compensated for disturbance

(1) A retail shop lease is taken to provide that if the lessor: …

(f) in the case of a shop within a retail shopping centre, fails to adequately clean, maintain or repair the retail shopping centre (including common areas),

and the lessor does not rectify the matter as soon as reasonably practicable after being requested in writing by the lessee to do so, the lessor is liable to pay the lessee reasonable compensation for any loss or damage (other than nominal damage) suffered by the lessee as a consequence.

…

(4) The provisions implied by this section do not apply to any action taken by the lessor:

(a) as a reasonable response to an emergency situation, or

(b) in compliance with any duty imposed by or under an Act or resulting from a requirement imposed by a public or local authority acting under the authority of an Act.

7. Order pursuant to s 71 that the applicant be compensated for the loss of equipment left in the shop and signage outside when the applicant had been locked out by the respondent on 2 August 2006.

Not pressed.

8. Compensation and/or damages.

This matter has been dealt with in the body of the decision and an order is to be made.

9. Interest.

The order is to bear interest at the maximum rate permitted by s 72A of the Act.

10. Costs

Both parties applied for a costs award pursuant to s 77A of the Act. Directions will be given for any further submissions on this matter.

1. Declares that the applicant has a lease under the Retail Leases Act.

2. Declares that the respondent engaged in misleading and deceptive conduct, by making misleading representations to the applicant about the entitlement of the applicant to occupy the premises.

3. Declares that the respondent unlawfully evicted the applicant.

4. Declares that the respondent engaged in unconscionable conduct.

5. Orders that the respondent pay to the applicant monetary compensation of $255,561, made up of $249,561 in respect of the retail tenancy claim; and $6,000 in respect of the unconscionable conduct claim.

6. The order shall bear interest pursuant to s 72A from the date of these orders at the rate equal to that payable on a judgment debt of the District Court.

Further Direction. Applicant to file and serve any submissions in relation to costs within 28 days. Respondent to file and serve any submissions in relation to costs, and in reply to the applicant’s submissions, within a further 28 days. Matter to be determined on the papers unless either party applies for an oral hearing, in which case that application will be considered. Liberty to either party to apply on 2 days’ notice.

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Citations

ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n' Chips) v Wallis Lake Fisherman's Co-operative Ltd [2007] NSWADT 297

Most Recent Citation

Wallis Lake Fisherman's Co-operative Ltd v ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n'Chips) (RLD) [2008] NSWADTAP 34

Cases Citing This Decision

7

Wallis Lake Fishermen's Co-operative Ltd v A.C.N. 079 830 596 Pty Limited [2008] NSWSC 925

Bounouar v South Coogee Bowling Club Ltd [2016] NSWCATCD 67

Fathullah v Varma (RLD) [2013] NSWADTAP 39

Cases Cited

15

Statutory Material Cited

1

Clasic International Pty Ltd v Lagos [2002] NSWSC 1155

Conoid Pty Ltd v International Theme Park Pty Ltd [2000] NSWCA 189

Mickelberg v The Queen [1989] HCA 35

CITATION:	ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n' Chips) v Wallis Lake Fisherman's Co-operative Ltd [2007] NSWADT 297
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT ACN 079 830 596 Pty Ltd (trading as Jolly Joe's Fish 'n' Chips) RESPONDENT Wallis Lake Fisherman's Co-operative Ltd
FILE NUMBER:	065122
HEARING DATES:	2 and 3 April 2007, 21 June 2007
SUBMISSIONS CLOSED:	1 August 2007
DATE OF DECISION:	14 December 2007
BEFORE:	O'Connor K - DCJ (President); Fairweather R - (Advisory) Non Judicial Member ; Harrison B - (Advisory) Non Judicial Member
CATCHWORDS:	Retail Tenancy Claim and Unconscionable Conduct
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	Clasic International Pty Ltd v Lagos and ors [2002] NSWSC 1155 Conoid Pty Limited & Anor v International Theme Park Limited [2000] NSWCA 189 Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557 Armstrong Jones Management Pty Ltd v Saies-Bond & Associates Pty Ltd (RLD) [2007] NSWADTAP 47 Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) FCR 470 HTW Valuers (Central Qld) v Astonland (2004) 217 CLR 640 Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC 1375 Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64 Makita (Australia) Pty Ltd v Sprowles (2000) 52 NSWLR 705 Fink v Fink (1946) 74 CLR 127 Biggin & Co v Permanite Ltd [1951] 1 KB 422 Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10, (2003) 77 ALJR 768 Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 Worsfold v De Goede [2002] NSWADT 273
REPRESENTATION:	G Hoeben, barrister JT Johnson, barrister
ORDERS:	The Tribunal: 1. Declares that the applicant has a lease under the Retail Leases Act; 2. Declares that the respondent engaged in misleading and deceptive conduct, by making misleading representations to the applicant about the entitlement of the applicant to occupy the premises; 3. Declares that the respondent unlawfully evicted the applicant; 4. Declares that the respondent engaged in unconscionable conduct; 5. Orders that the respondent pay to the applicant monetary compensation of $255,561, made up of $249,561 in respect of the retail tenancy claim; and $6,000 in respect of the unconscionable conduct claim; 6. The order shall bear interest pursuant to s 72A from the date of these orders at the rate equal to that payable on a judgment debt of the District Court. ; Further Direction. Applicant to file and serve any submissions in relation to costs within 28 days. Respondent to file and serve any submissions in relation to costs, and in reply to the applicant’s submissions, within a further 28 days. Matter to be determined on the papers unless either party applies for an oral hearing, in which case that application will be considered. Liberty to either party to apply on 2 days’ notice