Arys Health Pty Ltd v Le

[2020] NSWSC 45

Supreme Court

New South Wales

Medium Neutral Citation:	Arys Health Pty Ltd v Le [2020] NSWSC 45
Hearing dates:	29 January 2020
Date of orders:	07 February 2020
Decision date:	07 February 2020
Jurisdiction:	Equity
Before:	Henry J
Decision:	Limited interlocutory relief granted. See paragraph [115].
Catchwords:	EQUITY — Interlocutory injunction – seeking access to sub-leased premises – where conflicting evidence as to the circumstances in which sub-lease was signed – whether plaintiff has established prima facie case that the first defendant has interfered with rights of quiet enjoyment – whether balance of convenience warrants the grant of an injunction – whether damages are an adequate remedy – delay in seeking relief – limited injunctive relief granted
Legislation Cited:	Health Practitioner Regulation National Law (NSW)
Cases Cited:	AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd (2007) 17 VR 334; [2007] VSC 73 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58 Esposito v Commonwealth [2013] FCA 546 Glasshouse Investments Pty Ltd v MJP Holdings Pty Ltd [2005] NSWSC 456 Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 Shercliff v Engadine Acceptance Corporation Pty Ltd (1978) 1 NSWLR 729 Showcorp Pty Ltd v Ashcroft [2001] FCA 1396 Spathis v Hanave Investment Co Pty Ltd [2002] NSWSC 304 Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11,173
Texts Cited:	Nil
Category:	Procedural and other rulings
Parties:	Arys Health Pty Ltd (Plaintiff) David Le (First Defendant) Sydney Mechanics School of Arts (Second Defendant)
Representation:	Counsel: J K Raftery (Plaintiff) R J Pietriche (First Defendant) K Pierce (Second Defendant)   Solicitors: Woods and Day Solicitors (Plaintiff) Keith Arthur Bagley (First Defendant) Stewart Cuddy & Mockler (Second Defendant)
File Number(s):	2019/219390
Publication restriction:	Nil

Judgment

1. The plaintiff, Arys Health Pty Ltd (Arys Health), operates a medical practice and integrated health care facility known as ARYS Health Medical Centre (Medical Centre) from the ground floor of the building at 280 - 282 Pitt Street, Sydney (Premises).

2. The first defendant, David Le, owns and operates a pharmacy business, also from the Premises. Mr Le is the lessee of the Premises from the second defendant, Sydney Mechanics School of Arts (SMSA).

3. On 15 July 2019, Arys Health commenced these proceedings on an urgent basis claiming that Mr Le was restricting access to the Premises in breach of a sub-lease between Arys Health and Mr Le dated 4 November 2017 (Sub-lease). On that occasion, Pembroke J granted urgent ex parte relief requiring Mr Le to provide Arys Health with access to the Premises.

4. On 16 July 2019, the proceedings came back before Pembroke J. Mr Le sought to vacate or vary the interlocutory orders due to concerns that compliance may give rise to a breach of the Health Practitioner Regulation National Law (NSW), which requires a pharmacist to be present when a pharmacy business is carried on in approved premises. Pembroke J refused to vary the orders made.

5. The proceedings continued in the usual way until they came before me as Duty Judge on 20 January 2020. I granted Arys Health leave to file a notice of motion seeking interlocutory relief and appointed 29 January 2020 as the return date.

6. On 29 January 2020, Arys Health proceeded with its application for interlocutory relief seeking orders for access to the Premises. Mr Le appeared and contested the application. SMSA also appeared although no interlocutory relief is sought against it.

7. At the end of the hearing, I provided the parties with a summary of my views, noting that I would be unable to provide detailed reasons that week due to the number of other matters in the duty vacation list. Based on my comments, counsel for Arys Health indicated that he hoped the matter could be resolved. I was informed last Friday that the matter has not resolved. Accordingly, these reasons deal with Arys Health’s contested interlocutory application.

Issues in dispute

8. In the proceedings, Ayrs Health seeks final relief that Mr Le and SMSA be restrained from taking steps to prevent it from accessing the Premises, an order that the Sub-lease be specifically performed, and damages for breach of the covenant to give quiet enjoyment.

9. Mr Le denies entering into the Sub-lease. He has filed a cross-claim seeking a declaration that the Sub-lease has no effect and that Arys Health’s occupation of part of the Premises is governed by the terms of a licence agreement (Temporary Arrangement). He also seeks an order for an amount which he contends is due and payable under the terms of the Temporary Arrangement.

10. Arys Health seeks the following orders by way of urgent interlocutory relief:

1. that Mr Le provide Arys Health access to the ground floor of the Premises;

2. that Mr Le be restrained from taking steps to prevent Arys Health, its staff and patients from accessing the Premises at any times between 8.00am and 6.00pm each day; and

3. that Mr Le be restrained from interfering with Arys Health’s quiet enjoyment of the sub-leased Premises.

11. In support of its application for interlocutory relief, Arys Health relies on two affidavits affirmed on 20 and 28 January 2020 by Mirza Salman Baig, a director of Arys Health and the principal doctor at the Medical Centre.

12. Mr Baig deposes to a range of acts alleged to have been carried out by or on behalf of Mr Le from April 2019 to 7 January 2020 which Mr Baig says has interfered, and continues to interfere, with the area out of which the Medical Centre operates.

13. All of the interlocutory relief sought by Arys Health is opposed by Mr Le. He relies on an affidavit affirmed by him on 24 January 2020.

14. Mr Le submits that, in light of his evidence, the Court should not be satisfied that Arys Health has a prima facie case for relief. He also submits that the balance of convenience and discretionary factors weigh against the grant of relief, including because damages are an adequate remedy, there has been significant delay on the part of Ayrs Health in seeking relief and granting the orders might expose Mr Le to potential liability under applicable regulatory regimes.

15. The issues for determination are, therefore, whether:

1. Arys Health has established a prime facie case or serious question to be tried that Mr Le’s conduct is in breach of the Sub-lease;

2. the balance of convenience is in favour of granting interlocutory relief; and

3. whether there any discretionary factors that tend against the grant of such relief.

Facts

16. The evidence relied on the parties is, in a number of respects, conflicting. It is not possible to resolve the various disputed factual matters on this application; they will need to be tested and determined at a final hearing. What follows is a summary of the relevant facts that seem not to be the subject of dispute, as well as those key facts contended for by Arys Health noting where they are disputed by Mr Le.

17. Mr Le owns and operates a pharmacy business, known as “Chemist Max” (the Pharmacy), from the Premises.

18. Mr Le is the lessee of the Premises pursuant to a lease with SMSA which commenced on 1 February 2015 (Lease).

19. The Lease is for a term of three years, with two five year options to renew. Relevantly, the Lease provides:

1. the permitted use of the Premises is as a retail pharmacy and associated uses: item 17, cl 6.1;

2. the lessee must open the Premises for business during the hours of 8.00am to 6.00pm on Monday to Friday and 9.00am to 1.30pm on Saturday: cl 26.01 and definition of “Minimum Trading Hours”; and

3. the lessee shall only be admitted to the building between the hours of 8.00am and 8.30pm on any Monday to Friday (except public holidays) and 8.00am to 5.30pm on Saturdays (building hours): Annexure C, cl 11.

20. From at least August 2017, Arys Health has operated the Medical Centre from an area towards the back of the Premises. There is a conflict on the evidence as to precisely when Ayrs Health commenced operating the Medical Centre from the Premises and the circumstances in which it did so.

21. Arys Health contends that the area of the Premises which comprises the Medical Centre is the following:

1. the back-left area of the Premises, comprising one consult room, one procedure room and one pathology collection room (back-left medical rooms);

2. part of the back-right area of the Premises, comprising two consult rooms (one referred to as an Allied Health room) and one nurse room (back-right medical rooms); and

3. a waiting area that extends from the start of the curve of the left hand side wall up to the reception area which is just before the back-left medical rooms (waiting/reception area).

22. In these reasons, I refer to the back-right and back-left medical rooms as the Medical Rooms.

23. Attached to these reasons is a plan of the Premises which highlights in yellow the area of the Premises that Arys Health contends comprises the Medical Centre (Plan) (Ex B). The Plan also marks (with stripes) those parts of the Premises which Arys Health contends are common areas for use by both the Medical Centre and the Pharmacy.

24. As is apparent from the Plan, there are two ways to access the Medical Centre. First, through a front door of the Premises on Pitt Street and along either of the corridors marked “Medical Centre Corridor” or “Pharmacy Corridor”. Second, through a side door accessible from Pitt Street via the SMSA entrance and past the SMSA lift foyer. It is not in dispute that Arys Health relies on Pharmacy staff to unlock the front and side doors that provide access to the Medical Centre at the start of each day.

25. The Medical Rooms and waiting/reception area which Arys Health contends comprise the Medical Centre are also referred to on plans at annexure A to Mr Baig’s affidavit of 28 January 2020. Mr Baig’s evidence is that those plans were prepared in consultation with Mr Le in May 2017 in relation to fit-out works of the Medical Rooms and a new dispensary which were undertaken between May and July 2017 by a builder engaged by, and at the cost of, UTSG Pty Limited, one of Arys Health’s shareholders.

26. Mr Le disputes that the back-right medical rooms form part of the area that Arys Health is entitled to occupy. His evidence is that the Pharmacy occupies the whole of the Premises except for the back-left medical rooms which are occupied by Arys Health pursuant to what Mr Le describes as the “Temporary Arrangement” agreed between Mr Le and Arys Health in or around May 2017. Mr Le’s evidence is that the back-left medical rooms were already fitted out before Arys Health commenced occupation and that they have not been altered since.

27. On 4 November 2017, Arys Health and Mr Le signed the Sub-lease for part of the Premises for use by Arys Health as the Medical Centre.

28. There is a dispute on the evidence as to the circumstances in which the Sub-lease was signed. Mr Le denies entering into the Sub-lease. His evidence is that Arys Health exerted undue pressure on him and required him to sign the document on the misrepresentation that the sole purpose for the document was a Medicare requirement. Mr Baig denies these matters.

29. The Sub-lease provides for the following:

1. a term of five years commencing on 2 November 2017 and a further term of five years: cl 4 and summary 1 (a) and (b);

2. rent of $1 per annum plus turnover rent: cl 5(a) and (b) and summary 1(c);

3. outgoings (defined as council rates, water rates, land tax on a single holding basis, building and public risk insurance and owner corporations levies) in a percentage of 50% will be payable by the sub-lessee in the amounts and at the times set out in estimates and statements to be given to the sub-lessee by the sub-lessor: cl 5(c) and summary 1(e);

4. the sub-lessee is to pay for all water, gas, electricity, phone, heat and other utilities provided to the premises to the extent and in the proportion used by the sub-lessee: cl 5(d);

5. the sub-lessee shall not occupy the sub-leased area outside the hours as are from time to time stipulated by law: cl 18(d);

6. a right of the sub-lessee to use common property: cl 18(j); and

7. a covenant of quiet enjoyment by the sub-lessor with the sub-lessee paying the rent reserved: cl 18(k).

30. The Sub-lease identifies the relevant property for use by Arys Health as “Part folio identifier 1/535299, being the area hatched in the plan contained in Annexure C hereto”. There is no plan contained in Annexure C of the Sub-lease.

31. Counsel for Arys Health informed the Court that Arys Health will amend its pleadings to seek rectification of the Sub-lease to include a plan of what it contends is the Sub-leased area, consistent with the areas referred to at [21] above and the Plan.

32. From August 2017 to April 2019, the Medical Centre occupied and used all of the Medical Rooms for consulting and treating patients and carrying out procedures. It also used the waiting/reception area identified on the Plan.

33. In or about April 2019, the Medical Centre ceased using the back-right medical rooms as patient consulting rooms. Mr Baig’s evidence is that it did so due to concerns arising from the move by Mr Le of the Pharmacy dispensary to a new location parallel to the Medical Centre reception. According to Mr Baig, the move meant that Medical Centre patients would be required to pass the Pharmacy dispensary which might raise issues under applicable regulatory regimes. Mr Le disputes that the Pharmacy dispensary has been altered or moved.

34. From April 2019 to around 6 January 2020, Arys Health stored medical equipment, furniture, medical records and other items in the back-right medical rooms. Mr Baig’s evidence is that, in July 2019, he observed that his key no longer worked and concluded that the locks to the doors to all of the back-right medical rooms had been changed. Mr Le denies changing the locks.

35. On 16 July 2019, a high metal structure was installed by Mr Le in the Medical Centre corridor between the front door of the Premises at Pitt Street and the waiting/reception area of the Medical Centre.

36. Mr Baig describes the metal structure as a “metal fence”. Mr Le refers to it as a two-sided metal display stand for Pharmacy stock. Mr Le contends that it did not affect free movement through the Premises. The photographs in evidence suggest otherwise; the metal structure blocks free movement to and from the Medical Centre’s waiting/reception area from the Pitt Street front door via the Medical Centre corridor.

37. By 22 July 2020, the metal structure had been moved down the Medical Centre corridor closer to the Medical Centre’s waiting/reception area. Around this time, a low makeshift barrier between the Pharmacy corridor and the Medical Centre’s reception/waiting area was also installed. Mr Le’s evidence is that he installed the makeshift barrier to secure the Pharmacy dispensary from incursion by unauthorised persons.

38. Mr Baig’s evidence is that, during the period from 16 July 2019 to 24 December 2019:

1. Mr Le has refused to allow Arys Health access to the back-right medical rooms. Mr Le does not dispute this but contends that any prior use of those rooms by the Medical Centre was without his authority and that use of them is not included as part of the Temporary Arrangement;

2. on several occasions, Mr Le moved upwards or covered up the security camera which Arys Health had installed. Following most of these occasions, Medical Centre staff reported that the reception area had been vandalised, medical records had been compromised and cash was missing from the Medical Centre’s cash box. Mr Le says that the camera was installed without his authority or consent and that it has been moved or covered up as it amounts to an invasion of privacy to him and his customers;

3. the metal structure remained in place. Mr Le contends that it was removed on or about 18 September 2019. Photographs in evidence show that it was in place as at 22 July and 29 December 2019;

4. Mr Le has refused to provide Arys Health access to the Premises on weekends and that, on numerous occasions, Pharmacy staff did not unlock the front door until after 8.00am and forced Arys Health to close the Medical Centre prior to 6.00pm; and

5. Arys Health’s access to the internet was removed, the key which allowed Arys Health’s staff and patient access to the toilets went missing and was not replaced by Mr Le, and garbage and other items were frequently placed in the reception/waiting area of the Medical Centre. Each of these matters are disputed by Mr Le.

39. From 25 December 2019 to 2 January 2020, the Medical Centre was closed for the Christmas period.

40. On 6 January 2020, Mr Le (or someone on his behalf) moved a number of the chairs in the waiting room area of the Medical Centre to the corridor outside the back-left medical rooms. The metal structure was moved closer to the Medical Centre reception desk which meant that it encroached on and reduced the size of the Medical Centre’s waiting/reception area. A higher makeshift wall/divider between the Pharmacy and the Medical Centre reception desk was also installed and the security camera covered.

41. Mr Le does not dispute these matters. He says the chairs were restricting movement of Pharmacy customers, the divider was installed to prevent unauthorised access to the dispensary and the camera lens was covered to protect the privacy of Pharmacy customers.

42. On 7 January 2020, and without prior notice, Mr Le moved the medical equipment, medical records and other furniture which had been stored by Arys Health in the back-right medical rooms (Equipment) to the corridor outside the back-left medical rooms. Photographs in evidence indicate that the presence of the Equipment in the corridor blocked access to some of the back-left medical rooms.

43. Mr Le’s evidence is that the Equipment was moved because it had been placed in the Pharmacy dispensary, Arys Health was not authorised to use the dispensary for storage purposes and because he needed the back-right medical rooms, which he refers to as ‘the Pharmacy’s store rooms’, for his own storage needs.

44. As a consequence of the events of 6 and 7 January 2020, Arys Health cancelled about 90 appointments which had been scheduled for that week, as well as a locum doctor who was due to start on 6 January 2020.

45. On 13 January 2020, Mr Baig returned to work and observed that the Medical Centre’s sign which had been hanging outside the Premises, and all posters and frames for the Medical Centre, had been removed. Mr Le’s evidence is that these items were restored on 16 December 2019.

46. Mr Baig also observed that the metal structure close to the Medical Centre’s reception desk remained in place and the Equipment remained in the corridor outside the back-left medical rooms and blocked access to some of those rooms

47. On 13 January 2020, the solicitors for Arys Health wrote to Mr Le’s solicitors and demanded that Mr Le move the Equipment from the corridor to the back-right medical rooms, failing which it was instructed to approach the Supreme Court for urgent interlocutory relief.

48. Around this time, Arys Health moved the Equipment from the corridor into the back-left medical rooms. Dr Baig’s evidence is that, as a result, there is insufficient space to use the back-left medical rooms for consulting and treating patients. Storing the Equipment in the back-left medical rooms also, he says, poses a health and safety risk to the staff and patients using the rooms. Mr Baig also gives evidence that he is concerned about the health and safety risks to staff and patients from the placement of the metal structure so close to the Medical Centre’s reception area.

39. Due to Dr Baig’s concerns, on 13 January 2020, Arys Health closed the Medical Centre other than to provide urgent scripts and to have a nurse on call in case of any emergency.

40. On 15 January 2020, Mr Le’s lawyers responded to the email from the solicitors for Arys Health dated 13 January 2020. The letter asserts that the Temporary Arrangement does not include any obligation on Mr Le to store any property and it is a matter for Arys Health to relocate the Equipment. The letter also asserts that Arys Health has breached, and continues to breach, the terms of the Temporary Arrangement and that any claim for interlocutory injunctive relief would be opposed.

Legal principles – interlocutory relief

51. The legal principles applicable to whether interlocutory relief should be granted were not in dispute.

52. The Court must consider whether Arys Health’s case for interlocutory relief raises a serious question to be tried and whether the balance of convenience and related factors warrant the grant of an interlocutory injunction: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46 at 81-82 (Gummow and Hayne JJ) (“ABC v O’Neil”); Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 622-3.

53. The relative strengths of the parties’ cases are not irrelevant to the exercise of the Court’s discretion. The stronger the case for final relief, the less may be required to tip the balance of convenience. The greater the balance of convenience, the less strong a case for final relief may be required: ABC v O'Neill at 81-84.

54. It is also to be borne in mind that the purpose of an interlocutory injunction is to preserve the status quo until final hearing: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 at [62] (Gaudron J), at [64] (Gummow and Hayne JJ), at [162] (Kirby J).

55. Whether the plaintiff has a prima facie case justifying interlocutory relief requires evidence that the plaintiff has a “sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial”: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46 at [65] (Gummow and Hayne JJ); Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 622-3. How strong that probability needs to be depends upon the nature of the rights that the plaintiff asserts and the practical consequences likely to flow from the orders sought: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 622; Shercliff v Engadine Acceptance Corporation Pty Ltd (1978) 1 NSWLR 729 at 735E, 736G.

Serious question to be tried

56. What must ultimately be determined in these proceedings is:

1. whether the Sub-lease is valid and enforceable;

2. if it is, what is the scope of the Sub-leased area for the Medical Practice; and

3. whether, by engaging in the acts alleged by Arys Health, Mr Le has breached his obligations under the Sub-lease, including to provide quiet enjoyment and exclusive occupation of the Sub-leased area to Arys Health.

57. Arys Health submits that there is a serious question to be tried that Mr Le’s conduct during the period from April 2019 to 7 January 2020 is in breach of its rights under the Sub-lease.

58. In support of that submission, it points to the terms of the signed Sub-lease and what it says is an admission by Mr Le on the pleadings that the Medical Centre “occupies the back left and part of the back right-side of the Premises and comprises two doctors’ consulting rooms, one procedure room, one pathology collection room, one practice nurse room and an open reception waiting area”. It also argues that the evidence of Mr Le’s actions in relation to the Medical Centre involves clear breaches of Arys Health’s right of quiet enjoyment and use of the Sub-leased premises.

59. Mr Le accepts that the existence of the signed Sub-lease operates as a persuasive factor supportive of the ultimate relief sought by Arys Health. However, he contends that the Court cannot be satisfied that the existence of the Sub-lease supports a finding that Arys Health has a sufficient likelihood of success to justify interlocutory relief, as Mr Le’s evidence that the Sub-lease was procured by duress, misrepresentation and/or misleading or deceptive conduct raises real doubt as to its validity.

60. Mr Le submits that the existence of such a serious conflict on the evidence as to the circumstances in which the Sub-lease was entered into suggests that Arys Health’s evidence would not necessarily establish a prima facie case.

61. Mr Le also notes that Arys Health’s claim, as currently pleaded, relies solely on the right of quiet enjoyment under cl 18(k) of the Sub-lease. He contends there is a real dispute on the evidence as to whether the instances of alleged interference are sufficient to substantiate breaches of the covenant of quiet enjoyment as some of the acts alleged to have taken place, particularly in January 2020, did not occur, have now been rectified or did not interfere with Arys Health’s title or possession.

62. Mr Le also contends that there is a real question as to whether Arys Health is entitled to take the benefit of cl 18(k) as it is expressly conditioned on Arys Health having paid rent and 50% of the outgoings. Mr Le’s evidence is that Arys Health has failed to pay these amounts.

63. Counsel for Arys Health accepts that it will need to amend its pleadings. He indicated that other breaches of the Sub-lease will be pleaded, the definition of Medical Centre will be amended to include the third of the back-right medical rooms and the boundaries of the waiting/reception area, and that a claim for rectification of the Sub-lease to incorporate a plan of the area for the Medical Centre will likely be included.

64. A plaintiff’s pleading may not always be comprehensive in interlocutory applications, having been prepared in more urgent circumstances than usual, and while further factual inquiries are ongoing. An injunction may nevertheless be appropriate where the pleading does sufficiently (albeit imprecisely) identify a serious question to be tried: see Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 at [159] (Kirby J).

65. In that context, I have proceeded on the basis that Arys Health will amend its pleading to reflect the area of the Medical Centre it argues for as outlined in the Plan and that the alleged acts of interference relied upon involve claims of breaches of Arys Health’s right of exclusive occupation of the Sub-leased area as well as its right of quiet enjoyment.

66. In determining an application for interlocutory relief, the Court does not undertake a preliminary trial, seek to resolve conflict between the evidence of the parties or grant or refuse the application upon the basis of such findings or a forecast as to the ultimate result of the case: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 622; Shercliff v Engadine Acceptance Corporation Pty Ltd (1978) 1 NSWLR 729 at 734D.

67. The Court is to weigh up and take into account the whole of the evidence although where there is a clear conflict of evidence, as there is in this case, the use which may be made of a defendant’s evidence in determining whether a plaintiff has made out a prima facie case may be a limited one: Shercliff v Engadine Acceptance Corporation Pty Ltd (1978) 1 NSWLR 729 at 734D.

68. Based on the evidence before the Court, I am satisfied that there is a serious question to be tried and Arys Health has established a reasonably strong prima facie case that the Sub-lease is valid, the area of the Medical Practice is as contended by Arys Health, and that Mr Le has breached the covenant of quiet enjoyment under the Sub-lease as well as Arys Health’s right of exclusive occupation of the Medical Centre area. I have come to this conclusion for the following reasons.

69. First, and as accepted by Mr Le, the existence of a signed Sub-lease is a significant and persuasive factor supportive of it being valid. While Mr Le’s evidence is a denial of the Sub-lease, that denial is based on assertions of conversations and events surrounding its signing which were not tested at the interlocutory hearing and are, in turn, denied by Dr Baig. The conflict of evidence cannot be determined on this application.

70. Second, the only other contemporaneous documentary evidence before the Court suggests that a refit of the Premises was completed at significant cost to a party related to Arys Health in May to July 2017 and in a manner consistent with the evidence of Mr Baig. The invoice quoting for that refit refers to building four new medical/allied rooms, a medical reception and a procedure room, as well as a “floor plan”, which is seemingly consistent with the areas of the Medical Practice contended for by Arys Health.

71. Third, the use by Arys Health of the back-right medical rooms for patient consultations from at least August 2017 until April 2019 and for storage of its own items until 6 January 2020 is seemingly consistent with those rooms comprising part of the Medical Practice. It is also consistent with what appears to be, as Arys Health contends, an admission on the pleadings by Mr Le that at least two of the back-right medical rooms comprise parts of the Medical Centre.

72. Fourth, other than the solicitor’s letter dated 15 January 20120, there is no documentary evidence that refers to the Temporary Arrangement relied on by Mr Le. I also note that the terms of the Temporary Arrangement provide for Arys Health to pay 50% of the rent and outgoings under the Lease, although Mr Le contends that Arys Health is only entitled to occupy less than one third of the Premises, and to the arrangement coming to an end after the refit.

73. Fifth, I am satisfied that there is serious question to be tried that some of the acts outlined in Mr Baig’s evidence amount to breaches of Arys Health’s right of quiet enjoyment to the Medical Practice area under the Sub-lease, as well as its right of exclusive occupation.

74. The restriction on Arys Health’s access and use of the back-right medical rooms, the encroachment on and reduction of the waiting/reception area by the placement of the metal structure, the installation of the high makeshift barrier and the removal of the Equipment to the corridor outside the back-right medical rooms all involve, in my view, seriously arguable substantial interferences by Mr Le (or by those on his behalf) of Arys Health’s ordinary and lawful enjoyment of the Sub-leased area of the Medical Practice: AF Textiles Printers Pty Ltd v Thalut Nominees Pty Ltd (2007) 17 VR 334 at [38]; Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11,173 at 11,177 cited with approval by Young CJ in Eq (as he then was) in Glasshouse Investments Pty Ltd v MJP Holdings Pty Ltd [2005] NSWSC 456 at [14].

75. I also consider that it is seriously arguable that those instances of interference do not constitute disturbances which would be characterised as merely temporary. It is also seriously arguable that they interfere with title or possession given under the Sub-lease: Spathis v Hanave Investment Co Pty Ltd [2002] NSWSC 304 at [153]-[160].

76. Together, the acts referred to in paragraph 74 have the consequence of encroaching on the Medical Practice’s sub-leased area to which Arys Health is arguably entitled. They result in a significant reduction of the workable space in the Medical Centre’s consulting rooms and the waiting/reception area which, on the evidence of Dr Baig, resulted in the closure of the Medical Centre due to insufficient space to consult patients and health and safety concerns.

77. Sixth, based on the Minimum Trading Hours in the Lease, the terms of cl 18(d) of the Sub-lease and Mr Baig’s evidence that the Medical Centre usual opening hours includes the weekends, I am satisfied there is a serious question to be tried that Mr Le’s refusal to grant Arys Health access to the Premises to enable the Medical Centre to open from 9am to 1.30 pm on Saturdays is in breach of the Sub-lease.

78. Finally, I do not consider Mr Le’s evidence in respect of unpaid rent and outgoings as a matter of decisive consideration at this stage of the proceedings. Mr Le’s claim for outstanding rent and outgoings is disputed by Mr Baig. The application is being heard urgently and on an interlocutory basis. There is no suggestion that the evidence on this issue before me now is all the evidence that will be available at the hearing.

79. I also note that, contrary to Mr Le’s written submission that no rent has been paid, Mr Le’s evidence accepts that rent in the amount of $6,035.63 was paid on 10 July 2019 (Affidavit, David Le, 24 January 2020 at [64]). Mr Le’s claim for outstanding rent and outgoings is also based on the Temporary Arrangement. Other than copies of invoices in the name of Mr Le, Mr Le’s claim is also not supported by any documentary evidence before the Court, such as demands for payment, estimates on the amount of outgoings, default notices, or the like.

Balance of convenience and other discretionary factors

80. On the question of balance of convenience, the Court considers the risks of doing injustice according to whether the injunctions are granted or refused. What would be the loss and convenience to Arys Health if the injunctions are not granted, compared to the loss to Mr Le if they are, and whether damages for Arys Health’s loss would be an adequate remedy: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58 at 155; Esposito v Commonwealth [2013] FCA 546 at [43].

81. The apparent strength of the parties’ substantive cases is relevant to consider although, as the grant of interlocutory relief in this case will not have the practical effect of conclusively determining the dispute between the parties, the Court is not required to definitively assess the strength of Arys Health’s claim for final relief: Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536.

82. In his written submissions, Mr Le raises a number of factors which he contends weigh against the grant of relief.

83. The first point raised relates to the existence of an arguable defence to Arys Health’s claim for final relief and/or the alleged instances of interferences not being sufficiently substantial so as to breach the covenant of quiet enjoyment.

84. It is not appropriate or possible for the Court to make any determination on the strength of Mr Le’s defence that the Sub-lease is not binding on him. Mr Le’s evidence in support is denied and should be expected to be the subject of a significant contest at any final hearing. The existence of such a defence does not, in my view, weigh against the grant of relief in this case.

85. I refer to my earlier reasons as to why I consider that some of alleged instances of interferences are sufficiently substantial so as to breach the covenant of quiet enjoyment.

86. Mr Le also argues that damages should be considered a suitable remedy in this case. He relies on the evidence of Mr Baig which refers to loss suffered from the inability to use the back-right medical rooms for consultations as limiting the number of patients the Medical Centre can service. Mr Le submits that such loss could be ascertainable by assessing the number of customers and appointments as would otherwise be the case were full access to all Medical Rooms provided on each day of business.

87. I accept that damages of some losses could be assessable in this case. Arys Health’s claim for final relief includes a damages claim arising from breaches of the Sub-lease. In order establish damages at the final hearing, Arys Health will have to show that Mr Le has breached his obligations and that it has suffered loss that is quantifiable to support a monetary award. Presumably, that loss will be calculated based on loss of business.

88. But, to my mind, there are other potential losses which may be more difficult to quantify. As Dr Baig’s evidence identifies, the impact of the reduction in the size of the Medical Centre and the inability to fully service patients may impact negatively on Arys Health’s reputation and good will. It has also caused, on his evidence, uncertainty and stress for Medical Centre staff as a result of the “abuse” from angry and frustrated patients following cancellation of appointments and closure of the Medical Centre.

89. Mr Le submits that the Court should not accept that there might be irreparable reputational or goodwill damage to Arys Health’s business in circumstances where the cancellation of appointments and the closure of the practice was a decision it made, despite having access to the left-back medical rooms. I do not accept that submission. The photographs in evidence show that the location of the Equipment in the corridor significantly restricted access to the left-back procedure and consulting rooms and has the potential to create occupational health and safety issues for patients and staff. The movement of the Equipment into the left-back medical rooms themselves also appears to raise similar issues.

90. Similarly, the photographs in evidence also suggest that the placement of the metal structure on 6 January 2020 means that the medical waiting/reception area is arguably unworkable for a Medical Centre that takes up to 90 patients per week.

91. Mr Le also points to the delay since the occurrence of many of the matters about which Arys Health complains and upon which reliance is placed to justify the grant of interlocutory relief.

92. Unexplained delay may be a decisive factor for refusing relief, particularly where the grant of that relief requires merely that a plaintiff demonstrates the existence of a serious question to be tried: Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633 at 638-9; Showcorp Pty Ltd v Ashcroft [2001] FCA 1396 at [24].

93. In my view, delay is a significant factor in respect of those instances of interference that are alleged to have taken place in relation to the restriction on access to the back-right medical rooms in April 2019 and the placement of the metal structure in the Medical Centre Corridor on 16 July 2019. Arys Health had an opportunity to raise those matters when the proceedings were first before the Court in July 2019 but chose not to do so.

94. I accept Mr Le’s submission that this unexplained delay suggests that those matters are not of sufficient seriousness or severity to warrant the grant of urgent relief which would have the effect of putting Arys Health back into the position it was in at those times. The Medical Centre continued to operate for more than six months without using the back-right medical rooms for patient consultations, and for just over five months with the metal structure in place in the Medical Centre corridor, close to the front door.

95. There has also been delay in respect of many of the other incidents which comprise the “continued interference” with the Medical Practice alleged to have taken place between July and December 2019. I am also persuaded by Mr Le’s submissions that some incidents relied on, such as the movement of garbage bins, the change to the internet and the lack of a key to the common area for a day, are not of sufficient seriousness or interference that would necessitate the grant of injunctive relief.

96. The position is different in respect of the actions complained of that took place on 6 and 7 January 2020. Those actions being the encroachment on and reduction of the waiting/reception area by the placement of the metal structure much closer to the Medical Centre reception desk, the installation of the high makeshift wall/divider between the Pharmacy and the Medical Centre, the removal of the Equipment from the back-right medical rooms to the corridor outside the back-left medical rooms, and the refusal by Mr Le to provide access to the back-rights medical rooms for storage purposes.

80. Those actions have had a significant impact on the workable space and operation of the Medical Practice and are, in my view, actions which give rise to a seriously arguable and prima facie case that Mr Le is in breach of the Sub-lease.

81. The delay between those events on 6 and 7 January 2020 and the application for injunctive relief on 20 January 2020 is not significant and does not, in my view, warrant the refusal of any injunctive relief. The evidence reveals communication between the solicitors. The interlocutory application was brought on promptly after those communications.

82. Mr Le also submits that granting injunctive relief of the type sought by Arys Health could expose him to potential liability under applicable regulatory regimes as well as cancellation of the Pharmacy’s approval. That exposure arises, he submits, if he were required to grant Arys Health access to the right-hand medical rooms for patient consultations as it would have the effect of permitting public access to or through the Pharmacy dispensary.

83. For reasons of delay, I am not prepared to grant injunctive relief to Arys Health that would enable it to utilise the back-right medical rooms for patient consultations. Accordingly, the risk identified by Mr Le should not arise.

84. Mr Le also refers to the risk of exposure to criminal liability under s 11 of Schedule 5F of the Health Practitioner Regulation National Law (NSW) if orders are made requiring him to grant Arys Health access to the Premises when the Pharmacy is closed. That section requires a pharmacist to personally supervise the carrying on of a pharmacy business.

85. As Pembroke J stated in his ex tempore reasons of 16 July 2019:

“The operative words of the Health Regulation are, in effect, the carrying on of a pharmacy business. The purpose and intent of any orders which requires Mr Le to provide access to Arys Health and the patients attending the medical practice to the ground floor of the Premises, is not that a pharmacy business be carried on in the Premises, but to engage someone to open the door to allow access to the Medical Practice. That will not require the business to be open or amount to the carrying on of the pharmacy business.”

103. In any event, at the interlocutory hearing, counsel for Arys Health informed the Court that its claim that Mr Le be restrained from taking steps to prevent Arys Health, its staff and patients from accessing the Premises was limited to 8.00am and 6.00pm Monday to Friday and 9.00am to 1.30pm on Saturday, reflecting the Minimum Trading Hours in the lease between Mr Le and SMSA. Accordingly, the risk identified should not arise as Mr Le is required under the Lease to operate the Pharmacy business in the hours of access sought by Arys Health.

104. Further, if Mr Le chooses not to carry on the Pharmacy business during the Minimum Trading Hours, which would seemingly be in breach of the terms of the Lease, he should be protected by the separation of the Medical Centre from the Pharmacy provided by the placement of a lower barrier between the Medical Centre’s waiting/ reception area and the Pharmacy corridor, similar to the barrier that was in place as at 29 December 2019: see photograph at annexure H to Dr Baig’s affidavit, 28 January 2020.

105. Finally, other than the regulatory risks referred to above, Mr Le identifies no other no loss or significant impost on him if injunctions were to be granted in this case. Presumably, Mr Le will be in a position to recover any losses he can prove on the undertaking as to damages provided by Arys Health if he ultimately succeeds at a final hearing.

106. Overall, and while accepting the force of some of his submissions, I am not persuaded that the matters raised by Mr Le provides a basis for concluding that the balance of convenience and discretionary factors favour not granting any relief or warrant not preserving the status quo until determination at a final hearing. I am satisfied that the balance of convenience favours the grant of interlocutory relief to ensure the Medical Centre has access to sufficient workable space to provide services to its patients and accommodate its staff on an ongoing basis.

Conclusion

107. This is a case which, in some respects, is finely balanced. However, I am persuaded to grant Arys Health injunctive relief.

108. In my view, Arys Health has demonstrated there are serious questions to be tried and that it has a reasonably strong prima facie case that that the conduct by or on behalf of Mr Le on 6 and 7 January 2020, of placing the metal structure much closer to the Medical Centre reception desk, installing the high makeshift wall/divider between the Pharmacy and the Medical Centre, removing the Equipment from the back-right medical rooms to the corridor outside the back-left medical rooms and the refusal to provide access to the back-right medical rooms for storage purposes, is conduct in breach of the Sub-lease.

109. I also consider there is a serious question to be tried as to whether Mr Le’s refusal to provide Arys Health with access to the Premises on Saturday mornings is in breach of the Sub-lease.

110. On balance, and having considered all the matters raised, I am also satisfied that the balance of convenience is in favour of granting Ayrs Health limited interlocutory relief that would have the effect of restoring the Medical Centre to the area of the Premises it was using prior to 24 December 2019 and ensuring that it has continued access to the Premises during Minimum Trading Hours.

111. It follows that I will not grant relief in the terms provided for in Arys Health’s notice of motion or the proposed short minutes of order handed to the Court at the interlocutory hearing. In my view, those orders goes beyond what is appropriate and necessary in this case.

112. Rather, I will grant orders of a more limited nature with the intent that they will have the effect of maintaining what was the status quo prior to 24 December 2019 pending final determination of the issues in the proceedings.

113. The parties did not address the issue of costs, although they indicated that they may need a hearing on that issue.

114. In my view, the appropriate order in this case is for costs to be in the cause and I will make such an order. If any party considers that another order should be made after considering these reasons, they are to confer with the other parties and, within seven days, notify my associate that some other costs order is sought. They should also provide an agreed timetable for the exchange of short written submissions so that the issue of costs can be determined on the papers or at a short oral hearing.

115. For these reasons, I make the following orders:

1. Upon Dr Mirza Salman Baig giving the usual undertaking as to damages, until further order of the Court or the final determination of the proceedings, order that:

1. the first defendant provide the plaintiff with access to the rooms referred to on the Plan attached to the Court’s reasons as “consult 3 plus allied health”, “consult 2” and “nurse room” (back-right Medical Rooms) for the purposes of the plaintiff storing and accessing medical equipment, medical records, furniture and other items (Equipment);

2. the first defendant be restrained from removing or interfering with the Equipment in the back-right Medical Rooms;

3. the first defendant;

1. to move the metal structure located in or around the waiting area referred to on the Plan attached to the Court’s reasons and reinstate the low retractable barrier (Barriers) to the positions they were in as at 29 December 2019 and 22 July 2019, as shown in the photographs at annexures F and H of Dr Baig’s 28 January 2020 affidavit;

2. be restrained from moving the Barriers to encroach upon the waiting area and Reception area referred to on the Plan attached to the Court’s reasons (Waiting/Reception Area); and

3. to otherwise provide the plaintiff, the plaintiff’s staff and patients attending the medical practice known as ‘Arys Health Medical Centre’ (Medical Centre) with access to the Waiting/Reception Area;

4. the first defendant provide the plaintiff, the plaintiff’s staff and patients attending the Medical Centre access to the premises on the ground floor of 280 Pitt Street, Sydney NSW 2000 between the hours 8 am and 6pm on weekdays and between 9am and 1.30 pm on Saturdays, but excluding public holidays (Hours); and

5. the first defendant be restrained from preventing the plaintiff, the plaintiff’s staff and patients attending the Medical Centre from accessing the Premises during the Hours.

2. Costs of the application for interlocutory relief be costs in the cause.

3. Grant leave to the plaintiff to file and serve any amended points of claim by 14 February 2020.

4. The first and second defendants to file and serve any defence to the amended points of claim by 28 February 2020.

5. Note that it is not intended by these orders that the first defendant be required to open its pharmacy for business during the Hours, only that it allows access to the plaintiff, the plaintiff’s staff and the plaintiff’s patients.

Exhibit B Floor plan (1.12 MB, pdf)

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Decision last updated: 07 February 2020