Australian Competition and Consumer Commission v Dukemaster Pty Ltd
[2009] FCA 682
•24 June 2009
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Dukemaster Pty Ltd (ACN 050 275 226) [2009] FCA 682
TRADE PRACTICES – misleading and deceptive conduct – unconscionable conduct – retail tenancies – lease negotiations.
Retail Leases Act2003 (Vic), ss 2, 11, 28, 37(2) and Pt 14
Retail Tenancies Reform Act 1998 (Vic), ss 4, 16, 18
Trade Practices Act 1974 (Cth), ss 51AC, 52, 53(e), 75B, 87ACCC v Allphones Retail Pty Ltd(No 2) [2009] FCA 17
ACCC v Gary Peer and Associates Pty Ltd (2005) 142 FCR 506
ACCC v Harbin Pty Ltd [2008] FCA 1792
ACCC v Nationwide News Pty Ltd (1996) 36 IPR 75
ACCC v Prouds Jewellers Pty Ltd [2008] FCAFC 199
ACCC v Target Australia Pty Ltd (2001) ATPR 41-840
Bateman v Slatyer (1987) 71 ALR 553
Construction, Forestry, Mining and Energy Union v Hadkiss (2007) 160 FCR 151
Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193
Foxtel Management Pty Ltd v Australian Video Retailers Association Ltd (2005) 214 ALR 554
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Hannaford (trading as Torrens Valley Orchards) v Australian Farmlink Pty Ltd [2008] FCA 1591
Insight Oceania Pty Ltd v Philips Electronics Australia Ltd [2008] NSWSC 710
Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1
Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164
SA Service Stations Pty Ltd v BP Australia Ltd (1989) ATPR 40-949
Spencer v The Commonwealth (1907) 5 CLR 418
Strickland v Minister for Lands for Western Australia (1998) 85 FCR 319
Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
WJ Barton Ltd v Long Acre Securities Ltd [1982] 1 All ER 465NC Seddon and MP Ellinghaus, Cheshire and Fifoot’s Law of Contract (9th Australian Edition, 2008), [11.116].
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v DUKEMASTER PTY LTD (ACN 050 275 226) and PATRICIA SUK-KING WONG
VID 813 of 2008
GORDON J
24 JUNE 2009MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 813 of 2008
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: DUKEMASTER PTY LTD (ACN 050 275 226)
First RespondentPATRICIA SUK-KING WONG
Second Respondent
JUDGE:
GORDON J
DATE OF ORDER:
24 JUNE 2009
WHERE MADE:
MELBOURNE
THE COURT DECLARES THAT:
Shop 3
1.The First Respondent (“Dukemaster”), the landlord of the Paramount Centre at 108 Bourke Street, Melbourne (the “Paramount Centre”), in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth) (“the TPA”), by on or about 27 November 2003 giving to Keum Mi Shin (“Mrs Shin”), the owner of the “Korean Lunch Box” and the tenant of Shop 3 (“Shop 3”) in the food court at the Paramount Centre (the “Food Court”) in relation to a lease from Dukemaster for the period from 1 February 2001 to 31 January 2004 (the “First Shop 3 Lease”), a letter (“the 27 November 2003 letter”) that:
(1)indicated that Dukemaster would agree to Mrs Shin having a further lease term of three years, with a proposed rental of $48,000 plus GST for the period from 1 February 2004 to 31 January 2005 (the “$48,000 Rent”); and
(2)stated “We believe the new rent is very reasonable and below the market value”,
thereby representing to Mrs Shin that:
(3)Dukemaster believed that the $48,000 Rent was very reasonable and below the market value (the “First Shin Representation”) when, in fact, Dukemaster did not believe the $48,000 Rent was very reasonable and below the market value; and
(4)Dukemaster had a reasonable basis for believing that the $48,000 Rent was very reasonable and below the market value (the “Second Shin Representation”) when, in fact, Dukemaster did not have a reasonable basis for that belief.
2.Dukemaster, during the period from April 2003 to February 2004, in trade or commerce, in connection with the renewal of the First Shop 3 Lease and the negotiation of the lease of Shop 3 for the period from 1 February 2004 to 31 January 2007 (the “Second Shop 3 Lease”), engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)seeking a rental for the renewal of the First Shop 3 Lease for which there was no basis beyond Dukemaster’s decision to seek the amount stated;
(2)requiring a response within 11 days of their 27 November 2003 letter without providing a sufficient or any reason;
(3)failing to acknowledge that the lease document delivered to Mrs Shin in February 2004 was not, as anticipated and previously indicated, a renewal of the First Shop 3 Lease but the Second Shop 3 Lease, in circumstances where Mrs Shin was unlikely to realise that by entering into the Second Shop 3 Lease she would lose certain rights and be subject to different conditions;
(4)conveying the First and Second Shin Representations in the circumstances outlined above in English when it knew Mrs Shin had little or no ability to speak or read English.
3.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 3 January 2007 giving to Mrs Shin a letter (“the 3 January 2007 letter”) that:
(1)indicated that Dukemaster would agree to Mrs Shin having a further lease term of three years, with a proposed rental of $90,000 plus GST for the period from 1 February 2007 to 31 January 2008 (the “$90,000 Rent”); and
(2)stated “We believe the new rent is very reasonable and below the market value”,
thereby representing to Mrs Shin that:
(3)Dukemaster believed that the $90,000 Rent was very reasonable and below the market value (the “Third Shin Representation”) when, in fact, Dukemaster did not believe the $90,000 Rent was very reasonable and below the market value; and
(4)Dukemaster had a reasonable basis for believing that the $90,000 Rent was very reasonable and below the market value (the “Fourth Shin Representation”) when, in fact, Dukemaster did not have a reasonable basis for that belief.
4.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 3 January 2007, through the Second Respondent (“Ms Wong”), making statements to Hye Min, Mrs Shin’s daughter, to the effect that the $90,000 Rent was reasonable, thereby representing to Mrs Shin that:
(1)the $90,000 Rent was reasonable (the “Fifth Shin Representation”) when, in fact, the $90,000 Rent was not reasonable; and
(2)Dukemaster had a reasonable basis for expressing its opinion that the $90,000 Rent was reasonable (the “Sixth Shin Representation”) when, in fact, Dukemaster did not have a reasonable basis for expressing that opinion.
5.Dukemaster, in trade or commerce:
(1)engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA; and
(2)in connection with the leasing of premises in the Paramount Centre, made a false and misleading representation with respect to the rental payable in contravention of s 53(e) of the TPA,
by on or about 3 January 2007, through Ms Wong, making statements to Hye Min to the effect that the $90,000 Rent was lower than the rental paid by other tenants in the Food Court, thereby representing to Mrs Shin that the $90,000 Rent was lower than the rental paid by other similar tenants in the Food Court at that time (the “Seventh Shin Representation”) when, in fact, the $90,000 Rent was not lower than the rental paid by other similar tenants in the Food Court at that time.
6.Dukemaster, during the period from January 2006 to March 2007, in trade or commerce, in connection with the renewal of the Second Shop 3 Lease and the negotiation of the lease for Shop 3 for the period from 1 February 2007 to 31 January 2010 (the “Third Shop 3 Lease”), engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)seeking a rental for the Third Shop 3 Lease for which there was no basis beyond Dukemaster’s decision to seek the amount stated;
(2)requiring a response within 7 days of their 3 January 2007 letter without providing a sufficient or any reason, particularly given that it would be difficult for Mrs Shin to obtain independent advice over that period; and
(3)conveying the Third to Seventh Shin Representations in the circumstances outlined above in English when it knew Mrs Shin had little or no ability to speak or read English.
7.Dukemaster, in March 2007, in trade or commerce, in connection with the continuing operation of the Third Shop 3 Lease, engaged in conduct, that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)refusing to address Mrs Shin’s complaint as to the excessive nature of the rental for the Third Shop 3 Lease, including rejecting a proposal to proceed to rental determination, when the rental for the Third Shop 3 Lease had no basis beyond Dukemaster’s decision to seek the amount stated;
(2)threatening to evict Mrs Shin should she not pay the balance of the March rental at the new rate within 7 days;
(3)denying that Mrs Shin had ever objected to the rental for the Third Shop 3 Lease; and
(4)the conduct referred to in paragraph 6 of this Order.
Shop 4
8.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 16 March 2004 giving to Ricky Hee Hua Tan (“Mr Tan”) and Deolinda Lai (“Mrs Lai”), the owners of “East on Paramount” and the tenants of Shop 4 in the Food Court at the Paramount Centre (“Shop 4”) under a lease from Dukemaster for the period from 12 April 1999 to 11 April 2004 (the “First Shop 4 Lease”), a letter that:
(1)indicated that Dukemaster would agree to Mr Tan and Mrs Lai having a further lease term of three years, with a proposed rental of $72,000 plus GST for the period from 12 April 2004 to 11 April 2005 (the “$72,000 Rent”); and
(2)stated “We believe the new rent is very reasonable and below the market value”,
thereby representing to Mr Tan and Mrs Lai that:
(3)Dukemaster believed that the $72,000 Rent was very reasonable and below the market value (the “First Tan and Lai Representation”) when, in fact, Dukemaster did not believe the $72,000 Rent was very reasonable and below the market value; and
(4)Dukemaster had a reasonable basis for believing that the $72,000 Rent was very reasonable and below the market value (the “Second Tan and Lai Representation”) when, in fact, Dukemaster did not have a reasonable basis for that belief.
9.Dukemaster, in trade or commerce:
(1)engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA; and
(2)in connection with the leasing of premises in the Paramount Centre, made false and misleading representations with respect to the rental payable in contravention of s 53(e) of the TPA,
by on or about 16 March 2004, through Ms Wong, making statements to Mr Tan to the effect that it had asked a specialist to value the market rent for Shop 4 which was $80,000 per annum and that the $72,000 Rent was a discount on that rent, thereby representing to Mr Tan and Mrs Lai that:
(3)Dukemaster had asked a specialist to determine the market rental for Shop 4 and the specialist had determined that the market rental for Shop 4 was $80,000 per annum (the “Third Tan and Lai Representation”) when, in fact, Dukemaster had not, at the relevant time, asked a specialist or expert to determine the market rental for Shop 4; and
(4)the $72,000 Rent was a discount on the market rental of $80,000 per annum for Shop 4 (the “Fourth Tan and Lai Representation”) when, in fact, the $72,000 Rent was not a discount on the market rental for Shop 4 at that time.
10.Dukemaster, during the period from July 2003 to April 2004, in trade or commerce, in connection with the renewal of the First Shop 4 Lease and the negotiation of the lease for Shop 4 for the period from 12 April 2004 to 11 April 2007 (the “Second Shop 4 Lease”), engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)seeking a rental for the Second Shop 4 Lease for which there was no basis beyond Dukemaster’s decision to seek the amount stated;
(2)not only falsely representing to Mr Tan and Mrs Lai that it had asked a specialist to value the market rent for Shop 4 which was $80,000 per annum and that the $72,000 Rent was a discount on that rent (when it had not) but stating to Mr Tan that although Mr Tan could get another person to do a rental determination, the rental determination would be $80,000 per annum and Dukemaster would not then give Mr Tan any discount and Mr Tan would have to pay $4000 for the rental determination fee being half of the total fee with the other to be paid by Dukemaster;
(3)conveying the First to Fourth Tan and Lai Representations in the circumstances outlined above in English when it knew that Mr Tan and Mrs Lai had little or no ability to speak or read English.
11.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 5 March 2007 giving to Mr Tan and Mrs Lai, a letter (“the 5 March 2007 letter”) that:
(1)indicated that Dukemaster would agree to Mr Tan and Mrs Lai having a further lease term of three years, with a proposed rental of $90,000 plus GST for the period from 12 April 2007 to 11 April 2008 (the “$90,000 Rent”); and
(2)stated “We believe the new rent is very reasonable and below the market value”,
thereby representing to Mr Tan and Mrs Lai that:
(3)Dukemaster believed that the $90,000 Rent was very reasonable and below the market value (the “Fifth Tan and Lai Representation”) when, in fact, Dukemaster did not believe the $90,000 Rent was very reasonable and below the market value; and
(4)Dukemaster had a reasonable basis for believing that the $90,000 Rent was very reasonable and below the market value (the “Sixth Tan and Lai Representation”) when, in fact, Dukemaster did not have a reasonable basis for that belief.
12.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 5 March 2007, through Ms Wong making statements to Mr Tan that the correct rental for Shop 4 was at that time $90,000 per annum, thereby representing to Mr Tan and Mrs Lai that:
(1)the $90,000 Rent was the market rental (the “Seventh Tan and Lai Representation”) when, in fact, the $90,000 Rent was not the market rental; and
(2)Dukemaster had a reasonable basis for expressing its opinion that the $90,000 Rent was the market rental (the “Eighth Tan and Lai Representation”) when, in fact, Dukemaster did not have a reasonable basis for expressing that opinion.
13.Dukemaster, during the period from December 2006 to July 2007, in trade or commerce, in connection with the renewal of the Second Shop 4 Lease and the negotiation of the lease for Shop 4 for the period from 12 April 2007 to 11 April 2010 (the “Third Shop 4 Lease”), engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)seeking a rental for the Third Shop 4 Lease for which there was no basis beyond Dukemaster’s decision to seek the amount stated;
(2)requiring a response within 4 days of their 5 March 2007 letter without providing a sufficient or any reason;
(3)on 22 March 2007, Dukemaster’s lawyers sending a letter to Mr Tan and Mrs Lai referring to the 5 March 2007 letter and requiring a response within 4 days of their 22 March 2007 letter without providing a sufficient or any reason;
(4)on 17 April 2007, and contrary to prior practice, Dukemaster’s lawyers sending a letter of demand to Mr Tan and Mrs Lai for non payment of rent and threatening repossession of the premises;
(5)conveying the Fifth to Eighth Tan and Lai Representations in the circumstances outlined above in English when it knew that Mr Tan and Mrs Lai had little or no ability to speak or read English;
(6)on receipt of the independent rental determination, refusing to grant Mr Tan and Mrs Lai a further term on the Third Shop 4 Lease despite having made previous offers to do so;
(7)the conduct referred to in paragraph 12 of this Order.
Shops 1 and 2
14.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by in late 2003, through Ms Wong, making statements to Reaky Mi Yee Ho (“Mrs Ho”), a director of Australia Gomax Pty Ltd (“Gomax”), the owner of “Boxcar Café” and the tenant of Shops 1 and 2 in the Food Court (“Shops 1 and 2”) under a lease from Dukemaster for the period from 23 January 1998 to 22 January 2004 (the “First Shops 1 and 2 Lease”), to the effect that Gomax should have informed Dukemaster that it wanted to renew the First Shops 1 and 2 Lease half a year ago and Dukemaster had the right not to renew the First Shops 1 and 2 Lease, thereby representing to Gomax that the time for Gomax to exercise its option to renew the First Shops 1 and 2 Lease had expired (the “First Gomax Representation”) when, in fact, the time for Gomax to exercise its option to renew the First Shops 1 and 2 Lease had not expired.
15.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 3 January 2007 giving to Gomax, a letter (“the 3 January 2007 letter”) that:
(1)indicated that Dukemaster would agree to Gomax having a further lease term of three years, with a proposed rental of $96,000 plus GST for the period from 23 January 2007 to 22 January 2008 (the “$96,000 Rent”); and
(2)stated “We believe the new rent is very reasonable and below the market value”,
thereby representing to Gomax that:
(3)Dukemaster believed that the $96,000 Rent was very reasonable and below the market value (the “Second Gomax Representation”) when, in fact, Dukemaster did not believe the $96,000 Rent was very reasonable and below the market value; and
(4)Dukemaster had a reasonable basis for believing that the $96,000 Rent was very reasonable and below the market value (the “Third Gomax Representation”) when, in fact, Dukemaster did not have a reasonable basis for that belief.
16.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, by on or about 10 January 2007, through Ms Wong, making statements to Mrs Ho, to the effect that the $96,000 Rent was the correct rental for Shops 1 and 2 at that time thereby representing to Gomax that:
(1)the $96,000 Rent was the market rental for Shops 1 and 2 (the “Fourth Gomax Representation”) when, in fact, the $96,000 Rent was not the market rental for Shops 1 and 2; and
(2)Dukemaster had a reasonable basis for expressing its opinion that the $96,000 Rent was the market rental for Shops 1 and 2 (the “Fifth Gomax Representation”) when, in fact, Dukemaster did not have a reasonable basis for expressing that opinion.
17.Dukemaster, during the period from January 2006 to August 2007, in trade or commerce, in connection with the renewal of the Second Shops 1 and 2 Lease and the negotiation of the lease for Shops 1 and 2 for the period from 23 January 2007 to 22 January 2010 (the “Third Shops 1 and 2 Lease”), engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)the 3 January 2007 letter was the first notification by Gomax of the $96,000 Rent notwithstanding that:
(a)Gomax had confirmed it wished to exercise the option for an additional term by letter dated 21 August 2006 (“the 21 August 2006 letter”);
(b)Dukemaster had decided on the $96,000 Rent by no later than 23 August 2006 but took no step to advise Gomax until 3 January 2007; and
(c)in October 2006, when Gomax contacted Dukemaster and asked them for a response to the 21 August 2006 letter, Dukemaster not only told Gomax that it “did not have any idea how much rent they should charge” (which was untrue) but Dukemaster did not respond to a reasonable request from Gomax to be told as soon as it could;
(2)the 3 January 2007 letter requiring a response within 7 days at a time when independent advice was not readily available and when there was no explanation provided by Dukemaster to justify the limited time in which Gomax could respond;
(3)in late January 2007, Dukemaster offering Gomax a longer term lease if it agreed to the $96,000 Rent and then sought to have Mrs Ho sign up to the new terms on a copy of the 3 January 2007 letter all at a time when Dukemaster knew the Boxcar business was not going well and Gomax was trying to sell the business;
(4)on 22 March 2007, Dukemaster sending a letter withdrawing the offer of a new lease with the additional term;
(5)on 17 April 2007 and contrary to prior practice, Dukemaster’s lawyers sending a letter of demand to Gomax for non payment of rent and threatening repossession of the premises;
(6)in August 2007, Dukemaster hand delivering lease documents for signing by Gomax with rent in accordance with the rental determination by Mr Sheehan but excluding any additional term;
(7)in August 2007, Dukemaster refusing to resurrect the previous offer of an additional lease term despite being asked to do so by Gomax for the stated reason that because Gomax had refused to take up the lease at the $96,000 Rent, Dukemaster was not going to extend the lease any more to Gomax; and
(8)Dukemaster conveying the Second to Fifth Gomax Representations, in English when it knew Mrs Ho had little or no ability to speak or read English.
Shop 8
18.Dukemaster, in trade or commerce, engaged in conduct that was misleading and deceptive in contravention of s 52 of the TPA, in May 2007, through Ms Wong, making statements to Hong Mei (“Mr Mei”), the owner of “Baiso” and the tenant of Shop 8 in the Food Court (“Shop 8”) under a lease from Dukemaster for the period from 28 July 2002 to 27 July 2007 (the “First Shop 8 Lease”), to the effect that for a new lease for Shop 8 the market value and a reasonable rental for the period 28 July 2007 to 27 July 2008 was $80,000 plus GST (the “$80,000 Rent”), thereby representing to Mr Mei that:
(1)the $80,000 Rent was reasonable and the market value for Shop 8 (the “First Mei Representation”) when, in fact, the $80,000 Rent was not reasonable and the market value for Shop 8; and
(2)Dukemaster had a reasonable basis for expressing its opinion that the $80,000 Rent was reasonable and the market value for Shop 8 (the “Second Mei Representation”) when, in fact, Dukemaster did not have a reasonable basis for expressing that opinion.
19.Dukemaster, during the period from January to July 2007, in trade or commerce, in connection with the negotiation of the lease of Shop 8 for the period from 28 July 2007 to 27 July 2010 (the “Second Shop 8 Lease”), engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)Dukemaster knowing from June 2004 that Mr Mei wanted a new lease;
(2)the First and Second Mei Representations being intended by Dukemaster to secure a new lease at a rental for which there was no basis beyond Dukemaster’s decision to seek the amount stated;
(3)in breach of s 16 of the Retail Tenancies Reform Act 1998 (Vic) (“RTRA”), Dukemaster failing to inform Mr Mei until April 2007 (only three months before the expiration of the lease) that it would grant him a new lease and the rental at which the new lease would be offered, when Dukemaster knew both of those facts as early as August 2006;
(4)Dukemaster refusing to consider a request to reduce the $80,000 Rent notwithstanding other tenants had sought rental determinations and the results of those determinations were imminent;
(5)Dukemaster instructing its lawyers to send a letter of demand on 26 June 2007 when it knew that Mr Mei wanted a new lease, had not rejected the lease but wished to discuss the amount of the rent; and
(6)Dukemaster refusing Mr Mei’s request for 60 days to consider the new lease notwithstanding that its failure to comply with s 16 of the RTRA resulted in the existing lease continuing for at least 6 months after the requisite notice was given in April 2007.
20.After the Second Shop 8 Lease was entered into, Dukemaster, in trade or commerce, in connection with the continuing operation of the Second Shop 8 Lease, engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AC of the TPA by reason of:
(1)Dukemaster refusing to lower the rent payable under the Second Shop 8 Lease after the Rental Determination results for Shop 4 were announced; and
(2)the conduct referred to in paragraph 19 of this Order.
Ms Wong – the Second Respondent
21.Ms Wong was directly and indirectly knowingly concerned in, and party to, the contraventions by Dukemaster of ss 51AC, 52 and 53(e) of the TPA referred to in paras 1 to 20 of this Order by reason of her:
(1)conducting on behalf of Dukemaster all of the dealings with each of Mrs Shin, Mr Tan, Mrs Lai, Mr Mei and Gomax (the tenants) referred to in paras 1 to 20 of this Order;
(2)being aware of the oral and written statements from which the representations referred to in paras 1, 3, 4, 5, 8, 9, 11, 12, 14, 15, 16, 19 and 20 of this Order (the “Representations”) arose;
(3)being aware of the facts and circumstances by reason of which the Representations were misleading and deceptive and/or false; and
(4)knowing the facts and circumstances referred to in paras 1 to 20 of this Order.
THE COURT ORDERS THAT:
Injunctions
22.Dukemaster, whether by itself, its servants, agents or otherwise howsoever, be restrained for a period of 3 years from the date of this Order, from making representations, in any manner whatsoever, to any tenant of premises in the Food Court of the Paramount Centre (“Tenant”) or any person enquiring about becoming a tenant of premises in the Food Court at the Paramount Centre (“Prospective Tenant”) to the effect that in Dukemaster’s opinion a rental it has proposed for particular premises in the Food Court at the Paramount Centre is the current market rental, the market value, the market rental, below the market value or rental, or a reasonable rental for the premises unless Dukemaster has a reasonable basis for making the representation, including written records to evidence its basis for the opinion.
23.Dukemaster, whether by itself, its servants, agents, or otherwise howsoever, be restrained for a period of 3 years from the date of this Order, from making representations, in any manner whatsoever, to any Tenant or any Prospective Tenant to the effect that the rental paid or payable by that Tenant or Prospective Tenant to Dukemaster is less than or equal to the rental payable by any other Tenant when that is not the case.
Other Orders
24.Dukemaster and Ms Wong pay to:
(1)Mrs Shin:
(i)an amount of $65,761;
(ii)interest on $55,082 from and including 1 March 2009;
(2)Mr Tan and Mrs Lai:
(i)an amount of $119,080;
(ii)interest on $91,889 from and including 1 March 2009;
(3) Gomax:
(i) an amount of $22,309;
(ii) interest on $5,427 from and including 1 March 2009;
(4)Mr Mei:
(i)an amount of $68,306;
(ii)interest on $63,683 from and including 1 March 2009,
being the amount of the loss or damage suffered by him, her or it, by reason of the conduct referred to in this Order.
Compliance Orders
25.Dukemaster:
(1)establish the Trade Practices Compliance and Education / Training Program set out in Annexure 1 of this Order:
(a)for the employees or other persons involved in its business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the conduct declared by the Court in this proceeding to be in contravention of Part IVA and Division 1 of Part V of the TPA and any similar or related conduct; and
(b)revising the internal operations of its business which led to it engaging in the conduct declared by the Court in this proceeding to be in contravention of Part IVA and Division 1 of Part V of the TPA;
(2)maintain and administer, at its own expense, the Trade Practices Compliance and Education / Training Program set out in Annexure 1 for a period of three (3) years; and
(3)provide, at its own expense, a copy of any documents to be provided to the Australian Competition and Consumer Commission (“ACCC”) pursuant to Annexure 1.
26.Ms Wong:
(1)no less than once annually for a period of three (3) years from the date of this Order, attend practical training regarding Part IVA and Division 1 of Part V of the TPA, such training to be conducted by a suitably qualified compliance professional or legal practitioner with expertise in the TPA; and
(2)provide to the ACCC within 14 days of the completion of each annual training an affidavit:
(a)verifying that such training has occurred; and
(b)stating precisely the date the training occurred, the topics that were covered and the name of the person who provided the training.
Costs
27.The Respondents pay the Applicant’s costs of and incidental to the proceeding.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
ANNEXURE 1
TRADE PRACTICES COMPLIANCE AND EDUCATION / TRAINING PROGRAMInterpretation
1.In this Annexure:
(a) “ACCC” means the Australian Competition and Consumer Commission;
(b) “Act” means the Trade Practices Act 1974 (Cth);
(c) “Compliance Advisor” means the person defined in paragraph 6 below;(d)“Compliance Officer” means the person appointed under paragraph 2 or 3 below;
(e) “Compliance Policy” means the policy defined in paragraph 8 below;
(f)“Compliance Program” means the Trade Practices Compliance and Education / Training Program in this Annexure;
(g)“Compliance Program Review Report” is the report defined in paragraph 19 below;
(h) “Compliance Trainer” is defined in paragraph 14 below;
(i)“Contravening Conduct” means the conduct declared by the Federal Court of Australia in these proceedings to be in contravention of Part IVA and Division 1 of Part V of the Act;
(j)“Dukemaster: means Dukemaster Pty Ltd (ACN 050 275 226);
(k) “External Reviews” means the reviews required by paragraph 18 below;
(l)“Order of the Court” means the relevant order(s) of the Federal Court of Australia made in these proceedings;
(m)“Relevant Provisions” means sections 51AC, 52 and 53(e) of the Act which were contravened by the Contravening Conduct, and Part IVA and Division 1 of Part V of the Act which deals with similar or related conduct;
(n)“Respondent’s Program” means the steps taken by Dukemaster to comply with the Order of the Court in relation to the Compliance Program;
(o) “Reviewer” is defined in paragraph 18(b) below;
(p) “Risk Assessment” means the assessment required by paragraph 6 below;
(q) “Risk Assessment Report” means the report required by paragraph 7 below;
(r) “Training” means the training required by paragraph 13 below.
Compliance Officer
2.Dukemaster must, within one month of the date of the Order of the Court, appoint a Director or a senior employee with suitable qualifications or experience in corporate compliance as Compliance Officer with responsibility for ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.
3.After the appointment of the Compliance Officer in accordance with paragraph 2, Dukemaster must take all reasonable steps to ensure that, for the duration of the Order of the Court, there is a Director or a senior employee with suitable qualifications or experience in corporate compliance appointed as Compliance Officer with responsibility for ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.
4.Dukemaster must take all reasonable steps to ensure that for the duration of the Order of the Court the Compliance Officer discharges his or her responsibility of ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.
5.Dukemaster must take all reasonable steps to ensure that the Compliance Officer reports in writing to Dukemaster’s board of directors every six months with respect to the on-going maintenance and administration of the Compliance Program including, in particular, whether the Respondent’s Program is effectively:
(a)ensuring an awareness by the employees and other persons involved in Dukemaster’s business of their responsibilities and obligations in relation to the Relevant Provisions; and
(b)revising the internal operations of Dukemaster’s business which led to Dukemaster engaging in the Contravening Conduct.
Risk Assessment
6.Dukemaster must, within one month of the date of the Order of the Court, appoint a qualified, internal or external, compliance professional with expertise in trade practices issues (Compliance Advisor) to conduct a risk assessment to:
(a)identify the areas of Dukemaster’s business where it is at risk of contravening the Relevant Provisions;
(b)assess the likelihood of any such contravention occurring;
(c)identify where there are deficiencies in Dukemaster’s procedures for managing any such risk;
(d)make findings concerning sub-paragraphs (a) to (c) above; and
(e)make recommendations for action having regard to sub-paragraphs (a) to (d) above (Risk Assessment).
7.Dukemaster must instruct the Compliance Advisor to set out, and must take all reasonable steps to ensure that the Compliance Advisor sets out, the findings and recommendations of the Risk Assessment in a written report (Risk Assessment Report), to be provided to Dukemaster’s board of directors within two months of his or her appointment.
Compliance Policy
8.Dukemaster must, within 30 days of the date of the Order of the Court, establish a policy (Compliance Policy) which is communicated in writing to all employees and other persons involved in Dukemaster’s business regarding compliance with the Act, which must include:
(a)a statement of commitment by Dukemaster to comply with the Relevant Provisions;
(b)a direction to all employees or other persons involved in Dukemaster’s business to report any compliance related issues and Act compliance concerns to the Compliance Officer;
(c)a statement guaranteeing that employees or other persons involved in Dukemaster’s business making a complaint or report in relation to Dukemaster’s compliance with the Relevant Provisions will not be prosecuted or disadvantaged in any way by reason of their complaint or report and that their complaint or report will be kept confidential and secure; and
(d)a statement that Dukemaster will take disciplinary action against any persons who are knowingly or recklessly concerned in a contravention of the Relevant Provisions and will not indemnify them.
9.Dukemaster must take all reasonable steps to ensure that the Compliance Program is maintained and administered in a manner that is consistent with the Compliance Policy for the duration of the Order of the Court.
10.Dukemaster will provide a copy of the Compliance Policy to all new staff at the commencement of their employment with Dukemaster.
Complaints Handling System
11.Dukemaster must establish, maintain and administer a trade practices complaints handling system.
12.Dukemaster must take all reasonable steps to ensure that the trade practices complaints handling system is in accordance with AS/ISO 10002:2006 Customer satisfaction - Guidelines for complaints handling in organizations, though tailored to its own circumstances (Complaints Handling System).
Training
13.Dukemaster must take all reasonable steps to ensure that all directors, officers, employees, representatives and agents of Dukemaster, whose duties could result in them being concerned with conduct that may contravene the Relevant Provisions, receive practical training regarding the Act (Training) no less than once annually.
14.The Training must be conducted by either a suitably qualified compliance professional or legal practitioner with expertise in the Act (the Compliance Trainer).
15.Dukemaster must instruct the Compliance Trainer to design the Training, and must take all reasonable steps to ensure that the Training is designed, to ensure that the persons at the Training are made aware of:
(a)the responsibilities and obligations in relation to the Relevant Provisions;
(b)the potential consequences of contravening the Relevant Provisions;
(c)the areas of Dukemaster’s business where it is at risk of contravening the Relevant Provisions, as identified in the Risk Assessment Report; and
(d)the content of the Compliance Program.
16.Dukemaster must provide to the Compliance Trainer, for the purposes of conducting the Training, a copy of:
(a)the Order of the Court;
(b)the Compliance Policy;
(c)the Complaints Handling System; and
(d)the Risk Assessment Report.
17.Dukemaster must take all reasonable steps to ensure that an awareness of the Compliance Program forms part of the induction of all new directors, officers, employees, representatives and agents, whose duties could result in them being concerned with conduct that may contravene the Relevant Provisions.
External Review
18.Dukemaster must take all reasonable steps to ensure that annual reviews of Dukemaster’s compliance with the Order of the Court are carried out in accordance sub-paragraphs (a) to (d) below (External Reviews):
(a)Scope of the External Reviews – The External Reviews are to ascertain whether the Respondent’s Program:
(i)has made the employees and other persons involved in Dukemaster’s business aware of their responsibilities and obligations in relation to the Relevant Provisions;
(ii)has revised the internal operations of Dukemaster’s business in relation to the Relevant Provisions and the circumstances that led to the Contravening Conduct;
(iii)is effectively maintaining and administering the Compliance Program.
(b)Independence of Reviewer – Dukemaster must take all reasonable steps to ensure that all External Reviews are carried out by a suitably qualified, independent compliance professional with expertise in the Act (“Reviewer”). The Reviewer will qualify as independent on the basis that he or she:
(i)is not a present or past director, employee or officer of Dukemaster;
(ii)has no significant shareholding or other interests in Dukemaster;
(iii)has not acted for or consulted to, and does not act for or consult to, Dukemaster in any matters involving alleged contraventions of the Act;
(iv)has not acted for or consulted, and does not act for or consult to, Dukemaster or provide other services in relation to this Compliance Program, other than as the Reviewer in a previous year; and
(v)has no conflict of interest in carrying out the Reviews.
(c)Evidence – Dukemaster must take all reasonable steps to ensure that in the conduct of the External Reviews the Reviewer has access to all relevant sources of information in Dukemaster’s possession or control, including access to:
(i)any officers, employees, representatives or agents of Dukemaster;
(ii)any relevant records of Dukemaster, including its complaints register/reports and any documents relevant to the Training or its induction program; and
(iii)any documents created by Dukemaster’s consultants or legal advisers for use in relation to the Respondent’s Program.
(d)Timing – Dukemaster must take all reasonable steps to ensure that the first External Review is completed within one year of the date of the Order of the Court and that each subsequent External Review is completed within one year thereafter, save that all steps to be taken by Dukemaster in relation to the final External Review are to be completed one month prior to the expiration of the Order of the Court.
19.Dukemaster must instruct the Reviewer to set out, and must take all reasonable steps to ensure that the Reviewer sets out, the findings of each of the External Reviews in a written report (“Compliance Program Review Report”) which addresses each of the following:
(a)details of the evidence gathered and examined during the External Review;
(b)the name and relevant qualifications/experience of the person appointed as the Compliance Officer;
(c)if, and to what extent, the Respondent’s Program includes all the elements and requirements of the Compliance Program;
(d)if, and to what extent, the Respondent’s Program covers the areas identified in the Risk Assessment; and
(e)recommendations that the Reviewer considers are reasonably necessary to ensure that the Respondent’s Program effectively maintains and administers the Compliance Program.
20.Dukemaster must instruct the Reviewer to complete and provide the Compliance Program Review Report to it, and must take all reasonable steps to ensure that the Compliance Program Review Report is completed and provided to it, within one month of each Review.
21.Dukemaster must retain each Compliance Program Review Report.
22.Within 30 days of the receipt of each Compliance Program Review Report, Dukemaster’s board of directors must hold a meeting to consider the matters described in paragraph 23 below.
23.At the meeting referred to in paragraph 22 above, Dukemaster’s board of directors must consider:
(a)the Compliance Program Review Report;
(b)whether to make any changes to the Respondent’s Program to more effectively implement the Compliance Program for the purposes of:
(i)ensuring an awareness for the employees or other persons involved in Dukemaster’s business of their responsibilities and obligations in relation to the Relevant Provisions; and
(ii)revising the internal operations of Dukemaster’s business in relation to the circumstances that led to the Contravening Conduct;
(c)any recommendations of the ACCC for the purposes of sub-paragraph 0 above.
24.Within 14 days of holding the meeting referred to in paragraph 22 above, Dukemaster must advise the ACCC in writing of:
(a)details of when the meeting was held and who was present;
(b)the outcome of the meeting, including:
(i)what, if any, changes Dukemaster decided to make to the Respondent’s Program to more effectively implement the Compliance Program and details of the proposed implementation of any changes; and
(ii)the decisions made by Dukemaster about each of the recommendations that had been made by the ACCC (if any).
25.Within 14 days of holding a meeting referred to in paragraph 23 above at which Dukemaster decides to make changes to the Respondent’s Program it must take all reasonable steps to communicate those changes to all employees or other persons involved in Dukemaster’s business.
Supply of Documents to the ACCC
26.Dukemaster must within 14 months of the date of the Order of the Court, cause to be produced and provided to the ACCC copies of each of the following documents:
(a)documents evidencing the appointment of the Compliance Officer and Compliance Adviser;
(b)the Risk Assessment Report;
(c)the Compliance Policy and the documents evidencing its implementation; and
(d)documents evidencing the provision of Training, including all materials used in the Training.
27.Dukemaster must provide a copy of each Compliance Program Review Report to the ACCC within 14 days of its receipt from the Reviewer.
28.If requested in writing by the ACCC, Dukemaster must, at its own expense, provide copies of documents and information constituting or evidencing compliance or non-compliance with the Order of the Court.
INDEX
CONTENT
PAR No.s
A
INTRODUCTION
[1] – [6]
B
RELEVANT LEGAL PRINCIPLES
[7] – [20]
(1) Section 52 of the Trade Practices Act 1974 (Cth) (“the TPA”)
[8]
(2) Section 53(e) of the TPA
[11]
(3) Unconscionable conduct – s 51AC of the TPA
[16]
(4) Section 75B of the TPA and Ms Wong
[18]
C
SHOP 3 - KOREAN LUNCH BOX
(1) Facts:
[21] – [58]
(a) 1997– Early 2003
[21]
(b) March 2003 – Purchase of Business Conducted at Shop 3
[23]
(c) April 2003 – November 2003 including 27 November 2003 letter
[26]
(d) February 2004 – Second Shop Lease Executed
[31]
(e) October 2006 – January 2007 including 3 January 2007 letter and January 2007 conversation
[33]
(f) March 2007 – February 2008
[49]
(2) Conduct misleading or deceptive or likely to mislead or deceive?
[59] – [122]
(a) 27 November 2003 letter
[60]
(b) 3 January 2007 letter
[86]
(c) January 2007 conversation
[117]
(3) Conduct Unconscionable?
[123] – [140]
(a) Renewal of First Shop 3 Lease / “Negotiation” of Second Shop 3 Lease
[126]
(b) Renewal of Second Shop 3 Lease / “Negotiation” of Third Shop 3 Lease
[130]
(c) Conduct in March 2007
[133]
(4) Relief
[141] – [143]
D
SHOP 4 - EAST ON PARAMOUNT
(1) Facts:
[144] – [171]
(a) Early April 2004 including 16 March 2004 letter and 16 March 2004 conversation
[144]
(b) April 2004 – 2007 including 5 March 2007 letter and 5 March 2007 conversation
[157]
(2) Conduct misleading or deceptive or likely to mislead or deceive?
[172] – [211]
(a) 16 March 2004 letter
[173]
(b) 16 March 2004 conversation
[184]
(c) 5 March 2007 letter
[191]
(d) 5 March 2007 conversation
[205]
(3) Conduct Unconscionable?
[212] – [222]
(a) Renewal of First Shop 4 Lease / “Negotiation” of Second Shop 4 Lease
[215]
(b) Renewal of Second Shop 4 Lease / “Negotiation” of Third Shop 4 Lease
[220]
(4) Relief
[223]
E
SHOPS 1 AND 2 – BOXCAR CAFÉ
(1) Facts
[227] – [264]
(a) 2000 – Early 2004
[227]
(b) 2004 – 2007 including 3 January 2007 letter and January 2007 conversation
[243]
(2) Conduct misleading or deceptive or likely to mislead or deceive?
[265] – [291]
(a) Late 2003 conversation
[266]
(b) 3 January 2007 letter
[274]
(c) 10 January 2007 conversation
[286]
(3) Conduct Unconscionable?
[292] – [301]
(a) First Renewal
[294]
(b) Second Renewal
[300]
(4) Relief
[302]
F
SHOP 8 – BAISO JAPANESE CAFÉ
(1) Facts
[306] – [323]
(a) Up to 2004
[306]
(b) 2006 - 2008
[311]
(2) Conduct misleading or deceptive or likely to mislead or deceive?
[324] – [336]
(a) May 2007 conversation
[325]
(b) July 2007 conversation
[334]
(3) Conduct Unconscionable?
[337] –[342]
(a) “Negotiation” of Second Shop 8 Lease
[339]
(b) Conduct after entry into Second Shop 8 Lease
[342]
(4) Relief
[343]
G
OTHER MATTERS
(1) Similar Fact Evidence
[347]
(2) Tax Considerations
[349]
H
ORDERS
[350]
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 813 of 2008
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: DUKEMASTER PTY LTD (ACN 050 275 226)
First RespondentPATRICIA SUK-KING WONG
Second Respondent
JUDGE:
GORDON J
DATE:
24 JUNE 2009
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
A. INTRODUCTION
The “Paramount Centre” is a complex situated at 108 Bourke Street, Melbourne which opened in 1997 (the “Paramount Centre”). It comprises a number of levels. At the Bourke Street level, there are retail shops. At the lower ground level, there is a supermarket and a food court (the “Food Court”). Above street level, are office suites and some 200 apartments. There is also a carpark under the Paramount Centre.
The Paramount Centre is owned by Dukemaster Pty Ltd (ACN 050 275 226) (“Dukemaster”), the First Respondent. The Second Respondent, Patricia Suk-King Wong (“Ms Wong”), commenced employment with Dukemaster in 1997 as an accountant. In 2000, she was appointed Finance and Operations Manager of Dukemaster. In 2003, she was appointed General Manager of the Paramount Centre, a position she still retains.
The Australian Competition and Consumer Commission (“the ACCC”) alleges contraventions of ss 51AC, 52 and 53(e) of the Trade Practices Act 1974 (Cth) (“the TPA”) by Dukemaster in relation to certain tenancies in the Food Court of the Paramount Centre. In general terms, the ACCC contends that Dukemaster (through Ms Wong) engaged in false, misleading, deceptive and unconscionable conduct in fixing or seeking to fix increases in rent payable by four tenants on the extension of the terms of their leases in the Food Court in circumstances where, inter alia, the rental increases sought by Dukemaster were excessive and significantly greater than the market rental. The ACCC also seeks relief against Ms Wong under s 75B of the TPA in relation to her involvement in the alleged contraventions by Dukemaster.
There are four tenancies in issue: Shop 3 leased by Keum Mi Shin (“Mrs Shin”) trading as “Korean Lunch Box”, Shops 1 and 2 leased by Australian Gomax Group Pty Ltd (“Gomax”) trading as “Boxcar Café”, Shop 4 leased by Ricky Hee Hua Tan (“Mr Tan”) and Deolinda Lai (“Mrs Lai”) trading as “East on Paramount” and Shop 8 leased by Hong Mei (“Mr Mei”) trading as “Baiso Japanese Café”. To the extent that the leasing history of the each tenancy was not in dispute, it is summarised in Annexure A.
The proceedings are, in fact, four separate claims by the ACCC that the Respondents contravened the TPA in respect of each of the tenancies in issue. Each case requires separate analysis of conduct undertaken over the better part of a decade.
The evidence was heavily contested. Unfortunately, in many areas the evidence of both the ACCC and the Respondents was lacking, and the manner in which each party sought to rely upon the evidence they adduced was often not made clear. As a result, a far more extensive analysis of the evidence has been necessary.
B. RELEVANT LEGAL PRINCIPLES
There are two principal allegations – contraventions of ss 52 (and 53(e)) and 51AC of the TPA. The relevant principles were not in dispute. I will summarise each in turn.
(1) Section 52 of the TPA
In relation to each tenancy in dispute, the conduct concerns statements (both oral and in writing) by the landlord (Dukemaster) to a tenant concerning lease terms including statements to the effect that a proposed rent for a shop (1) was “very reasonable” and (2) was below the “market value”.
The parties’ submissions approached the various issues of alleged contravention of s 52 of the TPA by Dukemaster by seeking to categorise the conduct as “statements of opinion” and, then, asking whether that “statement of opinion or belief” contained a representation that the opinion or belief was held by Dukemaster. In my view, resolution of each issue is not achieved by “categorising” the conduct or by reference to slogans. It is necessary to identify the conduct complained of and then identify the proper approach to the conduct which is sought to be impugned: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 87-90.
The following principles are worth restating.
1.A contravention of s 52(1) of the TPA is established by “conduct” which is misleading or deceptive or likely to mislead or deceive: Global Sportsman Pty Ltd 2 FCR 82, 87. The “conduct”, in the circumstances, must lead, or be capable of leading, a person into error (Hannaford (trading as Torrens Valley Orchards) v Australian Farmlink Pty Ltd [2008] FCA 1591 at [252] citing Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198) and the error or misconception must result from “conduct” of the corporation and not from other circumstances for which the corporation is not responsible: Global Sportsman Pty Ltd 2 FCR 82, 91. “Conduct” is likely to mislead or deceive if there is a “real or not remote chance or possibility regardless of whether it is less or more than fifty per cent”: Global Sportsman Pty Ltd 2 FCR 82, 87.
2.Section 52(1) is concerned with the effect or likely effect of “conduct” upon the minds of that person or those persons in relation to whom the question of whether the “conduct” is or is likely to be misleading or deceptive falls to be tested. The test is objective and the Court must determine the question for itself: Global Sportsman Pty Ltd 2 FCR 82, 87. Section 52 is not designed for the benefit of persons who fail, in the circumstances of the case, to take reasonable care of their own interests: Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 241. Moreover, it would be wrong to select particular words or acts which although misleading in isolation do not have that character when viewed in context: Elders Trustee 78 ALR 193 at 241 citing Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199.
3.“Conduct” can, of course, include making a statement which is misleading or deceptive or likely to mislead or deceive: Global Sportsman Pty Ltd 2 FCR 82, 88.
4.By making a statement of past or present fact, a corporation’s state of mind is irrelevant unless the statement involved the state of the corporation’s mind: Global Sportsman Pty Ltd 2 FCR 82, 88. Contravention of s 52(1) does not depend upon the corporation’s intention or its belief concerning the accuracy of the statement of fact but upon whether the statement conveys a meaning which is false. A false meaning will be conveyed if what is stated concerning the past or present fact is inaccurate but also if, although literally true, the statement conveys a meaning which is false.
5.Precisely the same principles control the operation of s 52(1) to statements involving the state of mind of the maker when the statement was made (e.g. promises, predictions and opinions). A statement which involves the state of mind of the maker ordinarily conveys the meaning (expressly or impliedly) that the maker of the statement had a particular state of mind when the statement was made and, commonly, that there was a basis for that state of mind: Global Sportsman Pty Ltd 2 FCR 82, 88.
6.A statement of opinion will not be misleading or deceptive or likely to mislead or deceive merely because it turns out to be incorrect, misinforms or is likely to do so: Elders Trustee 78 ALR 193, 242 and Bateman v Slatyer (1987) 71 ALR 553, 559. An incorrect opinion does not of itself establish that the opinion was not held by the person who expressed it or that it lacked any or any adequate foundation: Global Sportsman Pty Ltd 2 FCR 82, 88. An expression of an opinion which is identifiable as an expression of opinion conveys no more than that the opinion is held and perhaps that there is a basis for the opinion. If that is so, an expression of opinion however erroneous misrepresents nothing: Global Sportsman Pty Ltd 2 FCR 82, 88.
7.However, an opinion may convey that there is a basis for it, that it is honestly held and when it is expressed as the opinion of an expert, that it is honestly held upon rational grounds involving an application of the relevant expertise. If the evidence shows that the opinion was not held or that it lacked any or any adequate foundation, particularly if the opinion was expressed as an expert, a statement of opinion may contravene s 52 of the TPA: Elders Trustee 78 ALR 193, 242, proposition (4): see also Hannaford [2008] FCA 1591 at [253] and RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; NC Seddon and MP Ellinghaus, Cheshire and Fifoot’s Law of Contract (9th Australian Edition, 2008), [11.116].
(2) Section 53(E) of the TPA
Section 53(e) and its application to the facts in these proceedings was not separately addressed by the ACCC or the Respondents. Relevantly, s 53(e) headed “False or misleading representations” provides:
A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:
…
(e)make a false or misleading representation with respect to the price of goods or services;
In ACCC v Gary Peer and Associates Pty Ltd (2005) 142 FCR 506 at [57] and [58], Sundberg J described the two elements in s 53(e) as follows:
[57]A representation may be false within the meaning of s 53(e) if it is contrary to fact, irrespective of the knowledge of the representor: Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212 at 217.
[58]A “price” of goods or services in s 53(e) does not have to be a precise figure. There can be a “price” even though it is stated to be within a range of a particular figure or that otherwise an element of approximation is involved: Trade Practices Commission v Penfolds Wines Pty Ltd (1991) 104 ALR 601 at 612. It was submitted that the relevant issue is whether the advertisements falsely or misleadingly represented the price, namely the monetary consideration for the sale of the Property: Australian and Consumer Commission v Nationwide News Pty Ltd (1996) 36 IPR 75 at 82-83.
In relation to the second element of s 53(e) in its application to the present matters – price – it requires no further explanation than that the proposed rental was a “price” of goods or services: see ACCC v Nationwide News Pty Ltd (1996) 36 IPR 75; Foxtel Management Pty Ltd v Australian Video Retailers Association Ltd (2005) 214 ALR 554.
In relation to the first element, s 53(e) requires the representation to be “false or misleading” as opposed to “misleading or deceptive” (in s 52). I was not taken to, and I have not found, any authority which attributes a meaningful difference to this dichotomy for the purposes of the TPA. (For a discussion of the phrase “false and misleading” under a different Act, see Construction, Forestry, Mining and Energy Union v Hadkiss (2007) 160 FCR 151). Indeed, the vast majority of cases that discuss an alleged breach of s 53(e) couple it with a breach of s 52 and deal with the “false or misleading” and “misleading or deceptive” aspect of the conduct mutatis mutandis: see Foxtel Management Pty Ltd (2005) 214 ALR 554 at [94]; ACCC v Target Australia Pty Ltd (2001) ATPR 41-840; ACCC v Harbin Pty Ltd [2008] FCA 1792; ACCC v Prouds Jewellers Pty Ltd [2008] FCAFC 199 at [42].
That is not altogether surprising. The purpose of s 53 has been described as being to “[support] s 52 by enumerating specific types of conduct which, if engaged in by a corporation in trade or commerce in connection with the promotion or supply of goods or services, [would] give rise to a breach of the Act”: see R Miller, Miller’s Annotated Trade Practices Act (30th ed, 2009), [1.53.5]. Accordingly, and in the absence of any submission to the contrary, I see no reason why the application of s 53(e) should not fall to be determined upon the conclusions I reach in relation to s 52 – namely that the representations were misleading and deceptive or likely to mislead or deceive.
(3) Section 51AC of the TPA
Section 51AC of the TPA entitled “Unconscionable conduct in business transactions”, so far as is relevant, is in the following terms:
(1) A corporation must not, in trade or commerce, in connection with:
(a)the supply or possible supply of goods or services to a person (other than a listed public company); or
…
engage in conduct that is, in all the circumstances, unconscionable.
…
(3) Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a corporation … (the supplier) has contravened subsection (1) … in connection with the supply or possible supply of goods or services to a person or a corporation (the business consumer), the court may have regard to:
(a) the relative strengths of the bargaining positions of the supplier and the business consumer; and
…
(c) whether the business consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and
(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the business consumer or a person acting on behalf of the business consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and
…
(j)the extent to which the supplier was willing to negotiate the terms and conditions of any contract for supply of the goods or services with the business consumer; and
(k) the extent to which the supplier and the business consumer acted in good faith.
Section 51AC has been the subject of limited judicial consideration. Most recently in Australian Competition and Consumer Commission v Allphones Retail Pty Ltd(No 2) [2009] FCA 17 Foster J summarised the relevant propositions in the following terms:
109Section 51AC was introduced into Part IV of the TPA by the Trade Practices Amendment (Fair Trading) Act 1998 (Cth). It came into effect on 1 July 1998. Sections 51AA and 51AB were already in the TPA as at 1998.
110Subsections (3), (4), (5) and (6) set out statutory guidance as to the factors to which the Court can and cannot have regard for the purposes of determining whether a corporation has contravened either subsection (1) or (2) of s 51AC. The list of factors set out in those sub-paragraphs to which the Court is permitted to have regard is not exhaustive.
…
113There is a body of authority in this Court which establishes the following propositions:
(a)The scope of s 51AC is wider than that of s 51AA. The meaning of unconscionable for the purposes of s 51AC is not limited to the meaning of the word according to established principles of common law and equity: per French J in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at [24] and [25] (p 503); per Sundberg J in Australian Competition and Consumer Commissioner v Simply No-Knead Franchising Pty Limited (2000) 104 FCR 253 at [31] (p 265); per Selway J in Australian Competition and Consumer Commission v 4WD Systems Pty Limited (2003) 59 IPR 435 at [183] (p 487) and per Jacobson J in Pacific National (ACT) Limited v Queensland Rail (2006) 28 ATPR 46-268 (p 53,515) at [918] (p 53,527).
(b)The ordinary or dictionary meaning of unconscionable, which involves notions of serious misconduct or something which is clearly unfair or unreasonable, is picked up by the use of the word in s 51AC. When used in that section, the expression requires that the actions of the alleged contravenor show no regard for conscience, and be irreconcilable with what is right or reasonable. Inevitably the expression imports a pejorative moral judgment: per Heerey, Drummond and Emmett JJ in Hurley v McDonalds Australia Limited (2000) 22 ATPR 41-474 (p 40,578) at [22] (p 40,585). This helpful articulation of the meaning of the word when used in s 51AC was followed by Selway J in ACCC v 4WD Systems Pty Ltd (2003) 59 IPR 435 at [183]-[185] (pp 487-488) and by Sundberg J in ACCC v Simply No-Knead Franchising Pty Limited (2000) 104 FCR 253 at [30] (p 264); and
(c)Normally, some moral fault or moral responsibility would be involved. This would not ordinarily be present if the critical actions are merely negligent. There would ordinarily need to be a deliberate (in the sense of intentional) act or at least a reckless act: per Selway J in ACCC v 4WD Systems Pty Ltd (2003) 59 IPR 435 at [185] (p 488).
114The above statements of principle provide useful guidance as to the content of the concept of unconscionability or unconscionable when used in s 51AC of the TPA. Of necessity, the authorities to which I have referred do not prescribe a precise definition which would be able to be applied to every set of circumstances presented to the Court for consideration. The application of the meaning accorded to the concept will always be a matter of judgment in every case and will depend upon a careful consideration of the circumstances of each case.
115It must also be remembered that, as is the case with other sections of the TPA contained in Parts IVA, IVB and V, s 51AC establishes a norm of conduct. Failure to observe that norm has consequences provided elsewhere in the Act. (See the judgment of the High Court in Master Education Services Pty Ltd v Ketchell (2008) 82 ALJR 1322 at [28] to [32] (pp 1329-1330) and the cases cited in those paragraphs).
(Emphasis in bold added).
(4) Section 75B of the TPA and Ms WONG
Mention must also be made of s 75B of the TPA. It provides that if a person is “in any way … knowingly concerned in, or party to” (inter alia) a contravention of s 52 of the TPA by another, that person will be liable for that contravention under ss 82 and 87 of the TPA: Hannaford [2008] FCA 1591 at [256].
The ACCC contends that the Second Respondent, Ms Wong, was a person who was knowingly concerned in, or party to the contraventions of ss 52, 53(e) and 51AC of the TPA. I accept this contention. Ms Wong commenced employment with Dukemaster in 1997 as an accountant. In 2000, she was appointed Finance and Operations Manager of Dukemaster. In 2003, she was appointed General Manager of the Paramount Centre, a position she still retains. She was the face of, and point of contact for, Dukemaster with the tenants the subject of the present matter.
As the following analysis will demonstrate, Ms Wong was a person who was directly and indirectly knowingly concerned in, and party to, the contraventions by Dukemaster of ss 52, 53(e) and 51AC of the TPA referred to below by reason of her:
(1)conducting on behalf of Dukemaster all of the dealings with each of Mrs Shin, Mr Tan, Mrs Lai, Mr Mei and Gomax (the tenants);
(2)being aware of the oral and written statements from which the representations referred to below arose;
(3)being aware of the facts and circumstances by reason of which the representations were misleading and deceptive and/or false; and
(4)knowing the facts and circumstances which constitute the conduct which was, in the circumstances, unconscionable.
C. SHOP 3 – KOREAN LUNCH BOX
(1) FACTS
(A) 1997- Early 2003
Mrs Shin was born in Korea. She arrived in Australia in early 1997 with her husband and two children. She speaks Korean and gave evidence through a Korean interpreter. She speaks little English.
Upon her arrival in Australia, she worked part time for about one year as a waitress in a Korean restaurant. From 1998 until 2002, Mrs Shin owned and operated a Korean restaurant in Clayton known as “Korean Garden”. Mrs Shin leased the premises from which she operated the Korean Garden. The lease, executed in September 2002 for a three year period from 1 July 2001 until 30 June 2004, was the standard Law Institute of Victoria Lease of Real Estate for Commercial Property. Mrs Shin had a solicitor acting for her in relation to this lease.
(B) March 2003 – Purchase of Business Conducted at Shop 3
In March 2003, Mrs Shin engaged in negotiations to purchase a business known as “Bann Thai”, a Thai take away food outlet, operated at Shop 3 in the Food Court at the Paramount Centre. Shop 3 occupied an area of 48m2. Mr Yao, a solicitor, acted for Mrs Shin in relation to the purchase of “Bann Thai”. Mrs Shin also had a solicitor, Mr George Bourozikas, acting for her. (Mrs Shin’s evidence was that Mr Bourozikas last acted for her in 2007). Mrs Shin often took her daughter, Hye Min Zu (“Ms Zu”), with her when she had to communicate in English. Mrs Shin and her daughter converse in Korean. At that time, Ms Zu was approximately 18 years of age, having been born in January 1985.
On 13 March 2003, Mrs Shin signed a conditional purchase agreement to purchase “Bann Thai” for $70,000 plus GST. The price paid was the asking price. Mrs Shin did not recall who translated the contract for her. The contract provided that settlement was to take place on 28 March 2003. A formal contract of sale of business was executed by the vendor on 2 April 2003 with settlement on 4 April 2003. The purchaser was named as Mrs Shin. The contract did not contain a restraint of trade clause.
At the time of purchase, the lease for Shop 3 (which commenced on 1 February 2001) was to expire on 31 January 2004 (the “First Shop 3 Lease”). The rent was $41,600 per annum excluding GST. The lease contained an option to renew which had to be exercised not less than three months prior to expiration of the term: cl 5.8. There was no annual rental review during the first term. Clause 5.16(A) provided for Mrs Shin to proceed to rental determination at the end of the first term (“the Rental Determination”) as follows:
(a)The Lessor may by notice in writing to the Lessee fix the rent (subject as herein provided) at an amount which in the opinion of the Lessor would be the current market rent for the premises as at the commencement of the Review Period (“the Review Date”).
(b)If the Lessee considers the rent fixed by the Lessor pursuant to Clause 5.16(A)(a) hereof not to be the current market rent for the premises the Lessee may by notice in writing to the Lessor within twenty-one (21) days after being notified in writing of such rent require the rent to be determined by a valuer and upon receipt of such written notice the Lessor shall request the President for the time being of the Australian Institute of Valuers Incorporated (or its successor) to appoint a valuer who shall be a practising Estate Agent and a member of the Australian Institute of Valuers Incorporated (or its successor) and shall have not less than five (5) years experience in the determination of rentals in the locality of the premises. The fees of the valuer shall be borne equally between the Lessor and Lessee. The valuer shall act as an expert and not as an arbitrator and his determination shall be final and binding on the parties hereto. Until the valuer shall determine as aforesaid the Lessee shall continue to pay the monthly instalments of rent applying immediately prior to the Review Date and following determination of the rent the Lessee shall forthwith pay to the Lessor the amount which equals the difference between the rent so determined and the rent actually paid by the Lessee from and including the Review Date from the period commencing on the Review Date and ending on the last day of the period for which the rent is then payable by the Lessee.
(c)The amount so fixed by the Lessor pursuant to Clause 5.16(A)(a) shall be the rent payable by the Lessee as from the relevant Review Date if the Lessee for whatever reason fails to deliver to the Lessor the notice referred to in Clause 5.16(A)(b) within twenty-one (21) days of being notified by the Lessor.
(C) April 2003-November 2003 Including 27 November 2003 Letter
On 22 April 2003, Dukemaster’s solicitors (Lim Whalen & Co) sent a letter to Mrs Shin advising her that they acted for Dukemaster. The letter stated that:
[Dukemaster] under the Retail Tenancies Reform Act 1998 is required to notify you that your option to renew the Lease cannot be exercised after 31/10/03. Please find enclosed such a Notice. Could you please acknowledge receipt by signing where indicated and return the Notice to us as soon as possible.
An extra copy of the Notice is enclosed for your retention.
(Emphasis added).
The letter and the notice were in English. Mrs Shin acknowledged receipt of the letter by signing the enclosed notice in Korean. Her acknowledgement is dated 1 May 2003.
On 16 September 2003, Mrs Shin notified Dukemaster of her intention to exercise the option to renew the lease for the further three years provided in the First Shop 3 Lease. Ms Zu typed the letter for her. Mrs Shin did not seek legal advice before sending the letter. On 30 September 2003, a letter was hand delivered to Mrs Shin (from Dukemaster’s solicitors) acknowledging receipt of the notice exercising the option and advising Mrs Shin that the “Renewed Lease documents” would be forwarded to her in due course. That in fact did not occur: see [31] and [32] below.
Two months later, on 27 November 2003, Dukemaster delivered a letter to Mrs Shin in the following terms (“the 27 November 2003 letter”):
Thank you for your notification through our solicitors, Lim Whalen & Co, in relation to the above shop.
We refer to your exercise of option for a further term of 3 years and advise the rent for the above shop will be $48,000.00 plus GST commencing 01/02/2004.
Please advise by 5.00pm on 8th December, 2003 whether you accept this offer.
We believe the new rent is very reasonable and below the market value. If you object to our proposed rent, the matter will proceed to valuation in accordance with clause 5.16 of the lease contract.
If you have any queries in relation to this matter, please contact this office.
(Emphasis added).
Mrs Shin’s daughter, Ms Zu, translated the 27 November 2003 letter for her mother. Mrs Shin did not consider objecting to the proposed rent. Not long after receiving the letter, Mrs Shin instructed her daughter to accept the offer in the 27 November 2003 letter. Her daughter wrote on the letter “accepted on behalf of Mrs Shin” and then signed it. Mrs Shin did not sign it. Mrs Shin did not think to compare the rent proposed in the letter with other rents in similar buildings in the city.
Ms Wong, who does not speak Korean, gave evidence that after the 27 November 2003 letter was delivered to Mrs Shin she spoke in English to Mrs Shin, that Mrs Shin asked her for a further term of three years and that Ms Wong responded saying that “it should be okay”. I reject Ms Wong’s evidence in this respect. None of this conversation was put to Mrs Shin in cross examination and it does not explain how the other lease terms came to be included in the subsequent lease documents or on what basis.
(D) February 2004 – Second Shop Lease Executed
In early February 2004, Dukemaster delivered lease documents to Mrs Shin at her shop. The documents were not a renewal of the First Shop 3 Lease. The lease documents provided for a new and different lease (“the Second Shop 3 Lease”). In particular, the lease terms differed from the First Shop 3 Lease in critical respects – annual rental reviews by reference to CPI increases (cl 5.16(B)) and a different time period in which the tenant was able to exercise the option to renew the lease (cl 5.8): see also Annexure A. Mrs Shin’s daughter explained the rent and the lease period to her.
On about 9 February 2004, Mrs Shin signed the Second Shop 3 Lease to commence on 1 February 2004. Mrs Shin’s evidence was that she understood the lease to be for three years and that she did not know that it included a further term of three years. She further stated that she did not know how the rent increased or how it should have been calculated. Neither Mrs Shin nor her daughter was cross examined on these matters.
(E) October 2006 - January 2007 Including 3 January 2007 Letter and January 2007 Conversation
The Second Shop 3 Lease was due to expire on 31 January 2007. The option to renew had to be exercised no earlier than 12 months and no later than six months prior to the expiration of the lease: cl 5.8.
Just before 27 October 2006 (and not in accordance with cl 5.8), Mrs Shin’s daughter drafted a letter for her mother to send to “Dukesmaster” (sic). The letter dated 27 October 2006 read:
Dear whom it may concern (sic)
RE: Option to Renew LEASE: Korean Lunch Box Shop 3, 108 Bourke Street, Melbourne
I, Keum mi Shin of above mentioned premise, would like to renew my lease for a further period of 3 years.
Please kindly let me know if you require anything regarding the renew of the lease.
Yours faithfully,
Keum mi SHINThe letter was signed by Mrs Shin in Korean.
3 January 2007 Letter
Mrs Shin heard nothing further from Dukemaster until 3 January 2007 when Mr Robert Sant (“Mr Sant”), a Dukemaster employee, hand delivered to Shop 3 a letter addressed to Mrs Shin (“the 3 January 2007 letter”). The 3 January 2007 letter was in English in the following terms:
Dear Keum
RE: SHOP 3, FOOD COURT LITTLE BOURKE STREET LEVEL
108 BOURKE STREET, MELBOURNE VICTORIA 3000
Thank you for your exercise of option for further term of 3 years in relation to the above lease.
We note the current lease expires on 31st January 2007 and we advise the following:
Commencement Date: 1st February 2007
Rent per annum 1st year $90000.00 (plus GST)
2nd year: To CPI
3rd year: To CPIPlease advise by 5.00pm 10th January 2007 whether you accept this offer.
We believe the new rent is very reasonable and below the market value. If you object to our proposed rent, the matter will proceed to valuation in accordance with clause 5-16(A) of the lease contract.
If the above proposals are acceptable to you please advise us by signing below and return a copy to us by 5pm 10th January 2007. We will instruct our solicitors to prepare the lease and forward it to you for your perusal and execution.
If you have any queries in relation to this matter, please contact this office.
PATRICIA WONG
GENERAL MANAGERI have read and accept the terms & conditions of the above lease:
_______________________
Signature
Date:(Emphasis added).
The form and content of this letter (subject to different particulars) was the same as a letter Dukemaster sent to East on Paramount on 5 March 2007 (see [160] below) and to Gomax in relation to Boxcar Café on 3 January 2007 (see [247] below).
Ms Zu (Mrs Shin’s daughter) read the 3 January 2007 letter to her mother in Korean. By this time, Ms Zu was about 22 years of age and was completing a Bachelor of Accounting and Banking and Finance. Mrs Shin started to cry and asked her daughter to read the letter to her again to make sure that the rent was $90,000 and that she had to respond by 10 January. Her daughter read the letter to her mother again at least two more times. Mrs Shin said to her daughter that the rent was nearly double what she was currently paying and the increase would mean that she could not afford to pay the rent. Mrs Shin told her daughter that she was scared that if she did not accept the offer in the letter by 10 January, she would be kicked out. Mrs Shin asked her daughter to telephone Ms Wong and try to lower the rent.
Ms Zu gave evidence that she read that part of the 3 January 2007 letter which mentioned objecting to the increased rent and a “valuation in accordance with clause 5.16(A)” (see [35] above) but she did not understand it. She said that she was not aware of the option to go to a rental valuation or that her mother could object and had difficulty explaining this to her mother as she did not understand what it meant.
January 2007 Conversation
Ms Zu’s evidence was that she telephoned Dukemaster’s offices from her mother’s shop. Her mother was also at the shop. Ms Zu’s evidence was that she said to Ms Wong that they had received the letter (the 3 January 2007 letter), the rent increase was “too high” or “too expensive” and that they “[could] not really afford [the rent]”. Ms Zu’s evidence was that she asked “can you please lower the rent” and then said “we understand you increase a little bit but this is too high”. According to Ms Zu, Ms Wong’s response was that “The rent is reasonable”, “I can’t give you a lower rent because you are asking me to be unfair to the other tenants” and the rent was “cheap against what other tenants are paying”.
The ACCC complains about the content of this conversation (“the January 2007 conversation”). Mrs Shin’s evidence was that Ms Zu told her Ms Wong had said that the rent that had been set for her was not any more expensive than other tenants. Although Ms Wong denied that there was any expression of concern about the rent, she ultimately admitted that Ms Zu asked her if the rent could be lower. However, Ms Wong said that this did not amount to expressing any concern about the rent. On any view, the request to lower the rent was an expression of concern on Mrs Shin’s behalf that the rent was too high. I accept that Ms Zu told Ms Wong that “they [could] not really afford [the] rent”.
Counsel for the Respondents did not seek to cross examine Ms Zu about the contents of the January 2007 conversation except to ascertain that it took place somewhere between 3 and 9 January 2007 and that during the conversation she stopped from time to time to translate for her mother. The Respondents’ position on this issue was not consistent. The Respondents’ amended points of defence alleged the January 2007 conversation took place on or about 9 January 2007. Ms Wong’s sworn evidence was that the conversation took place close to 3 January 2007. Ms Zu could not recall precisely when she telephoned Ms Wong but thought it might have been a day or two after receipt of the 3 January 2007 letter. In any event, the January 2007 conversation took place between receipt of the 3 January 2007 letter and 9 January 2007, at most a period of six days.
Counsel for the Respondents put to Ms Zu that it was during the January 2007 conversation that Ms Zu asked for a further term of three years and, in response to that request, Ms Wong said “yes”. However, both Ms Zu and her mother denied that Mrs Shin told her daughter to make sure in her discussions with Ms Wong to get an additional term on the lease. The thrust of the Respondent’s cross examination of Mrs Shin was that because Mrs Shin was seeking to sell the business, it was her that had sought the additional term on the lease. I address this issue below: see [48] below.
In relation to the January 2007 conversation, Ms Zu’s oral evidence did not correspond precisely with the summary given in the ACCC’s case summary. The Respondents sought to make much of the discrepancies. I do not. Ms Zu’s oral evidence, in substance, was consistent with the ACCC summary. Moreover, it would not be consistent with human nature if Ms Zu’s evidence had been entirely consistent. Such variation as there was is of no account. It is the variation that was to be expected in giving an account of events that occurred some years earlier.
Mrs Shin gave evidence that before signing the 3 January 2007 letter she and her husband tried unsuccessfully to contact their solicitor (but found that his office was closed for the Christmas holidays and did not reopen until 12 or 13 January, after the deadline in the 3 January letter) and then asked some of the other shop owners to recommend a solicitor but they told her that all solicitors’ offices would be closed over the holidays. By that time, Mrs Shin had only a few days to respond to the 3 January letter. Her uncontroverted evidence was that she was extremely panicky because she knew she would have to make her decision without advice.
Mrs Shin signed the 3 January letter and dated it 9 January 2007. Her signature was in Korean. I accept Mrs Shin’s evidence that she did so because she feared that Dukemaster would take over her business if she did not answer the 3 January 2007 letter by the due date. Ms Zu delivered the letter to Dukemaster’s office after her mother signed it. Mrs Shin was asked in cross examination why she did not go back to her solicitors after he returned from holidays to discuss whether she should sign the lease. Her response was that she had already signed the document – the 3 January 2007 letter.
Third Shop 3 Lease
On 16 January 2007, Lim Whalen & Co arranged for a letter to be hand delivered to Mrs Shin at the shop enclosing a copy of a lease in duplicate, a disclosure statement and a retail leases information brochure. The last paragraph of the letter read:
If you have a solicitor acting for you in this matter we suggest that you take the enclosed documents to your solicitor as soon as possible. If you execute and return the Lease to us without advice from a solicitor our client will treat your execution and return of the Lease as acknowledgement by you that you are satisfied with all the terms and conditions of the Lease.
Contrary to the contents of the 3 January 2007 letter, the lease that was sent was not a renewal of the Second Shop 3 Lease but a new lease (“the Third Shop 3 Lease”).
Ms Zu gave evidence that she translated the letter for her mother, checked the rent and noticed it was $90,000 plus GST per year with CPI increases each year. Again Mrs Shin was asked in cross examination why she did not contact her solicitor after she received the 16 January letter and before she signed the lease. Her response, consistent with her actions from 3 January, was:
I already signed – I already signed my signature in that letter and I thought it – everything was included in that and the rest I thought it was just a formality on the contract.
On 25 January 2007, the Third Shop 3 Lease was executed by the parties. The lease was for a term of three years with a further term of three years.
During January 2007, Mrs Shin wished to sell the Korean Lunch Box. It was put to Mrs Shin in cross examination that the additional term of three years was far more important to her than the amount of rent. Mrs Shin did not agree. Her evidence was that the rent would have been far more important. Counsel for Dukemaster also put to Mrs Shin that the additional term was sought by or on her behalf because a prospective purchaser wanted a lease that had the additional term. Mrs Shin’s response was that she did not understand the question. Correspondence in late February between the potential purchaser’s solicitors and Dukemaster was tendered in evidence. One of the letters was addressed to Mr Bourozikas and was intended to facilitate Dukemaster’s consent to the transfer of the lease. The proposed purchase did not proceed and negotiations ceased in February 2007. I accept that an additional term on the lease was an issue more likely than not raised by Ms Zu during her January 2007 conversation with Ms Wong and explains why Dukemaster provided the Third Shop 3 Lease and not a renewal of the Second Shop 3 Lease as had been initially requested by Mrs Shin: see [41] above. However, the manner in which Dukemaster behaved in this context is an issue to which I will need to return to later in these reasons for decision.
(F) March 2007-February 2008
By 19 March 2007, Mrs Shin had retained Jholl Lawyers & Consultants to act for her in relation to the Korean Lunch Box. At that time, her daughter was overseas. On 19 March 2007, Jholl Lawyers & Consultants sent a letter to Ms Wong entitled “Re: Shop 3, Food Court Little Bourke Street Level, 108 Bourke Street, Melbourne, 3000” which read, in part, that:
I act for [Mrs Shin] in relation to the above lease.
My client instructs that she executed a new lease in relation to the above premises. My client disputes the new rental on grounds that such a huge increase is not reasonable and by any measure rather excessive.
My client signed the lease and documents forwarded to her under pressure of being evacuated (sic) from the lease premises. As you are aware she has limited knowledge of English. She has referred the matter or dispute to the Small Business Commissioner.
I am instructed to act for her and am instructed to resolve this dispute amicably. The Lessee considers the rental fixed by the Landlord not to be the current rental. I therefore recommend that the issue of rent be referred to a valuer within 21 days of receipt of this advise in accordance with clause 5.16(A) of the lease.
In the interim pending determination of the rent, my client will pay the old rent of $4,622.70. I enclose my client’s cheque for the said sum of $4,622.70 herewith. Kindly acknowledge receipt.
My client is happy to discuss this matter in conference with you at any time and should you so desire kindly contact me to arrange the meeting.
Should you wish to discuss any matter arising herein, please do not hesitate to contact Mr Gobind Jholl …
It is in everybody’s interest to settle this dispute as quickly as possible and seek your cooperation.
In fact, by then, Mrs Shin had completed an application to refer the dispute to the Small Business Commissioner. The application to the Small Business Commissioner is dated 7 March 2007. It was signed by Mrs Shin in Korean. The application was completed in English by her son in her presence. The application was supported by a statutory declaration made by Mrs Shin in the following terms:
Dear to whom may I concern. At the start of this of year our shop received a letter from our landlord informing us about a rise in our annual rent fees. This figure was very extreme and unexpected. The reason for this was because of the rent fee from $50,429 going up to 90,000 and had to make a clear decision between 3/1/07 to 9/1/07. We clearly didn’t have time to think it over with ourselves and our lawyer because our lawyer was away on a holiday because of the time of year. I signed the form that the landlord gave because I was afraid of being eliminated from the shop if I didn’t agree. We were clearly not given a decent amount of time to think about this matter which felt very rushed. The rent rise is too much of an increase to handle, it was unexpected and mostly unfair. With this new rent fee figures, making profits at Paramount Centre is very hard and slim. Lastly this price is unreasonable for a shop which only sells to lunchtime customers and too expensive for a place where not a lot of customers come to eat. I very much hope that you understand this complaint and I truthfully believe these reasons I am saying is right and fair.
Making application to the Small Business Commissioner was not Mrs Shin’s idea. It was first raised at a meeting of the tenants of the Food Court at the Paramount Centre. This issue is further addressed below in the context of the allegation that Dukemaster’s conduct was unconscionable: see Section C(3) below.
Some time after 21 March 2007, Mrs Shin’s lawyers provided her with a copy of the letter in reply from Dukemaster’s solicitors. One of Mrs Shin’s regular customers translated the letter for her. The letter stated that Dukemaster denied putting any pressure on her to sign the lease and that the 19 March 2007 letter was the first time that Mrs Shin had complained that the rent was excessive. That was inaccurate: see [38] and [39] above. The letter also rejected the proposal that Mrs Shin continue to pay the old rent and said that if the balance of the rent for March was not paid within seven days, Dukemaster could re-enter the premises and terminate the lease without further notice. The next day, Mrs Shin paid the balance of the March rent because she was afraid that Dukemaster would terminate her lease as it had threatened.
Tough times continued for Mrs Shin. She was having trouble paying the rent. Eventually she sold the Korean Lunch Box to Imexinda Amite Pty Ltd on 30 November 2007 for $100,000. The purchaser took over on 1 February 2008.
Before turning to consider the application of the relevant legal principles to these facts, I should say something about two matters – the tenants’ committee and the evidence given by Mrs Shin and Ms Zu.
On 7 May 2007, Mrs Shin signed a statement that had been typed for her by a son of one of the other tenants. That statement made a number of allegations, some of which have been addressed above. Other allegations appear to be incorrect, were not the subject of evidence or are, on their face, exaggerations. The document was typed by the son of Irene Watts (but it is otherwise unclear who assisted Mrs Shin in drafting the letter), was never sent to anyone and was created sometime after March 2007 and most likely closer to the date it was apparently signed. What the Respondents sought to achieve by tendering this document was far from clear. Two possibilities exist.
First, although this does not seem to be the primary basis upon which the document was tendered by the Respondents, it may be said that it goes to demonstrate that Mrs Shin had access to assistance when required in the form of the Paramount Centre Tenant’s Committee (the “Committee”). The nature and relevance of this Committee is worth some explanation. The Committee was an undefined group of tenants who, from some time in late 2006 or early 2007 onwards, attempted in various ways to alter their perceived hardships in the Paramount Centre and “to make it better for tenants”. One of the most active members of the Committee was a Mr Sandro Vasta (“Mr Vasta”) who was called by the Respondents to give evidence at trial. The various mechanisms used by the Committee to improve the lot of the tenants included seeking legal advice, writing to the Paramount Centre management about particular problems and agitating for publicity in the media. The Respondents submitted that the presence of this Committee was a factor to be weighed against the claim of unconscionable conduct due to the bargaining power provided by the Committee to the tenants. That general contention is rejected. The position of each tenant needs to be considered separately.
Dealing with Mrs Shin, there was no evidence that the Committee played any, let alone a significant role, in the exchanges between the tenants of Shop 3 and the Respondents. Mrs Shin, at one point during re-examination, stated that it was possible that she showed the 3 January 2007 letter to Mr Vasta before it was signed. What was said in this conversation or its relevance was never explored by the Respondents. By way of submission, Counsel for the Respondents alleged that by having access to the Committee, Mrs Shin had a greater capacity to access legal advice during the 7 day period following the 3 January 2007 letter. I do not accept that submission. First, the evidence of Mrs Shin stands on its own – she did not gain access to legal advice and further, it would have been difficult to obtain access to legal advice during this period: see [43], [44] and [46] above. Secondly, even assuming for a moment that the Committee provided some alternate ability for tenants to gain legal assistance (and the evidence did not demonstrate that such advice was ever ‘on-call’, freely accessible or of such a nature that it would have ameliorated the plight of Mrs Shin in that period), the Committee in early 2007 was in its nascent stages and it was never demonstrated that it could have provided at that point in time the sort of assistance alleged by the Respondents to be available. As a result, the role of the Committee (and the 7 May 2007 statement, if used for the first purpose identified) may be put to one side.
The second possibility in relation to the 7 May 2007 statement is that, given its alleged flaws, it goes to credit. This seemed to be the primary purpose of the document being tendered by the Respondents. The thrust of the Respondents’ cross examination and the written submissions focused upon what the Respondents alleged were apparent falsehoods in the statement. Practically, there are evident difficulties in challenging Mrs Shin’s credit on the basis of a document that was apparently drafted by another person, never sent to anyone, in a language Mrs Shin did not speak or read well and in circumstances where her understanding of its contents was only briefly explored.
Secondly, and turning now more generally to the issue of credit of Mrs Shin and Ms Zu, during the course of final submissions (and contrary to the position adopted during the hearing of the evidence), the Respondents’ Counsel did not submit that I should find that they were not telling the truth. Although the Respondents submitted that I should have real doubts about the reliability of what was said in the witness box by all of the ACCC’s lay witnesses, the Respondents stated in closing address that it was not their “purpose to attack the credit of these people in relation to everything that they’ve said, but it’s quite clear that there’s been a lot of reconstruction of these events, and that their actual memories … are very dubious”. Yet, as the description of the facts records, much of the conduct said to contravene the TPA was of two kinds – documentary (about which there was no dispute) and oral conversations (the content of which the Respondents did not seek to challenge in cross examination). It is that conduct to which I now turn.
(2) CONDUCT MISLEADING OR DECEPTIVE OR LIKELY TO MISLEAD OR DECEIVE?
The ACCC had three complaints. Each complaint dealt with separate representations. Although some of the representations contain common elements, each must be considered separately because each is said to constitute a separate contravention of s 52 of the TPA.
(A) 27 November 2003 Letter
First, the ACCC contended that the contents of the 27 November 2003 letter (see [28] above) were misleading and deceptive because, by the 27 November 2003 letter, Dukemaster represented to Mrs Shin that:
1.it believed that the proposed rent for the renewal of Shop 3 of $48,000 from 1 February 2004 to 31 January 2005 (“the $48,000 Rent”) was very reasonable and below the market value (“the First Shin Representation”);
2.it had a reasonable basis for believing that the $48,000 Rent was very reasonable and below the market value (“the Second Shin Representation”),
when, in fact, Dukemaster did not believe and did not have a reasonable basis for believing that the $48,000 Rent was very reasonable and below the market value. Moreover, the ACCC submitted that Dukemaster had not obtained appropriate valuation advice or evidence in relation to the market rental for Shop 3 from 1 February 2004 to 31 January 2005 and that if it had done so, the market value was approximately $43,000 plus GST per annum.
On 10 March 2007, Mr Mei (with the assistance of his daughter) wrote to Dukemaster in the following terms:
Dear Dukemaster Pty Ltd:
I am the owner of Baiso Japanese Café in the Paramount Retail Centre food court. I am aware that our lease ends on 28 July 2007, I would like [to] continue by signing a new lease with Dukemaster. Can you please arrange a time for a discussion at your convenience. Thank you very much.
In April or May 2007, Mr Mei met Ms Wong and Mr Sant to discuss the new lease for Baiso. The fact of the meeting was not in dispute (“the May 2007 conversation”). Mr Mei’s evidence was that Ms Wong and Mr Mei spoke in Mandarin. Ms Wong and Mr Sant spoke in English. Mr Sant did not speak Mandarin. Ms Wong offered Mr Mei a three by three year lease, first year rent of $80,000 per annum plus GST with CPI rent increases after each year, market rent review at the end of the third year and no more promotional fee. Mr Mei said the rent was too high and that it would put too much pressure on him. He asked for a lower rent. Ms Wong responded saying that she was the manager, not the boss and that Ms Wong would have to take it to the bosses. Mr Mei reiterated that the length of the lease was acceptable but not the rent. Mr Mei asked Ms Wong to write the new rent down so that he could have a comparison. Ms Wong then did some calculations on a piece of paper which she gave to Mr Mei - existing monthly rent was $5,995.84 and the future rent was $7,333.33. During the course of this meeting, Mr Mei said that Ms Wong sought to compare the rent for Shop 8 with the rents for other shops in the Food Court and said that the rent for Shop 8 was very similar or comparable to that in the Target Centre or QV Centre. Mr Mei was not cross examined about the contents of his evidence. Ms Wong (who sat in Court during Mr Mei’s evidence) did not contradict Mr Mei’s evidence. She recalled Mr Mei asking for a lower rent. The lack of contradiction is not surprising given the contents of subsequent correspondence: see [317] below.
Mr Mei discussed the rent increase with his wife. On 16 May 2007, a letter was sent to Dukemaster signed by Mr Mei in the following terms:
Since our discussion on 10th May, both my wife and I are very grateful for your help and consideration in many aspects of our business. As for the topics raised in this meeting, we have decided to agree on the following:
1. Rent will increase in accordance with CPI
2. Promotion fees will be cancelled
3. Rent period will by 3 by 3.
However, there are several issues that we’d still like to raise with the shopping centre:
1. Since we purchased the business in 2004, rent has increased by 5% per annum. At the same time, due to the shortage of rain and water, prices for nearly all of the raw materials we use have increased as well. Chilli prices have sky rocketed to $50/kg, snow peas to $16/kg, prices of egg (sic) have increased from $22/box to $40, and chicken meat have increased from $4.2/kg to $6.2/kg. However, we have kept our selling prices steady throughout this time. Not that we don’t want to increase, but due to the concern that our customer flow is very limited and competition in the area is very fierce. Under this sort of circumstances, the increase of rent to $88,000 per annum including GST will be too much for us to handle. Can I please invite the shopping centre management to re-consider our difficulties and give us a more acceptable rent rate?
2. In regards to the offer made by the shopping centre to lease to us the idle shop space near the lift, after careful consideration, we have decided not to accept this offer. The main reason is that we have to pay an extra $20,000 of rent per annum plus renovation costs. We are not confident that we will be able to make as much profit as the costs. Therefore, we would like to pass the offer on and sincerely thank you for your support and consideration.
I am looking forward to your reply.
During cross examination, another version of this letter was shown to Mr Mei and his daughter. The other version contained more sophisticated language and was more structured. The author of the letter was not established although Mr Mei’s daughter believed she might have sent the draft by email to her father. Notwithstanding the differences in language and structure, the letter was substantially in the same terms as the letter ultimately sent to Dukemaster: see [315].
Dukemaster responded on 26 June 2007 when Mr Sant hand delivered a letter to Mr Mei from Dukemaster’s lawyers in the following terms:
…
We refer to your letter of the 16 May 2007 to our client, and note that you have rejected our client’s offer of a New Lease for the above premises for a term of three (3) years and an option of a further term of three (3) years at the commencing rent of $80,000.00 per annum plus GST.
We note that as you have rejected our client’s offer, you will now have the following two (2) options at the expiration of the current term on the 27 July 2007:
Option 1: Continue to occupy the premises pursuant to the Holding Over provision under Clause 3.2 of the Lease, i.e. on a month-to-month basis at the rent of $80,000.00 per annum plus GST on or from the 28 July 2007 and otherwise on the same terms and conditions as the current Lease; or
Option 2: Vacate the premises at the expiration of the Lease, i.e. on or before the 27 July 2007.
Should you take Option 2, we refer to you to Clause 11 of the Lease which requires you to remove your installations / fittings and make good any damages or disfigurements caused to the premises and return the premises to the Landlord in a condition as at the Commencement Date, fair wear and tear excepted. We will also advise the Landlord to contact you to arrange for a final inspection to be conducted on the premises.
Please advise us as soon as possible whether or not you will take Option 1 or Option 2 so that we can advise our client accordingly.
We await your prompt response.
Mr Mei had difficulty understanding the letter. He understood that the rent was to be $80,000. He asked his daughter to translate the letter for him. Mr Mei was shocked. He did not believe that he had rejected the offer of a new lease. He knew he had disagreed with the rent but was waiting for Ms Wong to come back to him after she had spoken to her boss about the rent. As his letter of 16 May stated, he wanted a meeting to discuss the rent. Mr Mei showed the letter to his wife. Neither option in the letter was acceptable to him. However, he knew he had to get a lease to protect his business. Mr Mei decided that even if he had a rent he could not afford, it was a lesser evil than the other option given to him in the letter – lose his business and then possibly his house.
Mr Mei asked his daughter to respond by email to Dukemaster’s lawyers. A letter was sent by his daughter in the following terms:
Dear Mr Lim
My name is Michelle Mei and I write in regards to the letter we received from you on 26 June 2007, titled Lease: Dukemaster Pty Ltd to MEI. It was stated in the letter that because Mei rejected Dukemaster’s offer of a New Lease that he is now provided with two options at the expiration of the current lease on 27 July 2007. I do not know if you have a copy of the letter Mei wrote to Dukemaster on 16 May 2007, or maybe you can contact your client to get a copy, but there was nothing in that original letter that insinuated in anyway that Mei was going to reject the offer. The letter was set out in a format that some agreed points and some disagreed points and the main objective of that letter was to arrange a one-on-one meeting with Dukemaster to discuss about the lease. Up until now, Baiso Japanese Café has not received anything in writing that resembled a lease, all that was said previously was the rent was to increase to $80,000, but no official lease was ever provided. Therefore, I think a misunderstanding has occurred regarding Mei’s letter to Patricia Wong on 16 May 2007, and I’d appreciate it if you could contact your client and notify them that the offer of a New Lease was never rejected by Baiso in anyway. In the meantime, Mei is hoping that he will be able to receive a copy of the New Lease so that he can have someone translate it for him to Mandarine (sic). Mei’s English ability is very limited, and that might have been a vital reason that caused this misunderstanding and confusion. If it’s possible, Baiso would like to arrange for a meeting with Patricia Wong in the presence of the Small Business Commissions in the near future. Your help and understanding on this matter will be very much appreciated.
Regards
Michelle
Baiso Japanese CaféSeveral days later, Mr Sant came to Shop 8 and collected Mr Mei to attend a meeting with Ms Wong. The meeting was attended by Ms Wong, Mr Sant and Mr Mei. It lasted for about 1 hour. Again, during the meeting, Mr Mei and Ms Wong spoke in Mandarin and Mr Sant and Ms Wong spoke in English. Ms Wong told Mr Mei that the tone taken by its lawyers in the letter dated 26 June 2007 was not representative of Dukemaster’s attitude and that Dukemaster was not the sort of landlord who would just kick a tenant out. Ms Wong also told Mr Mei that he should not pay attention to what was said by the other tenants. During the course of this meeting, Mr Mei said he would accept the lease and the $80,000 rent.
On 2 July 2007, Mr Sant hand delivered to Mr Mei another letter from Dukemaster’s solicitors. The letter enclosed a copy of the new lease together with other documents. At about this time, Mr Mei became aware that three other tenants in the Food Court were about to renew their leases and had decided to go to a rent determination rather than pay the rent proposed by Dukemaster. One of the shops, East on Paramount, was larger than the shop operated by Mr Mei and in a similar location. Mr Mei decided to wait until these rental determinations were completed before he signed the lease for Baiso. Mr Mei did not think that $80,000 was the market rent.
Mrs Sheng’s sworn viva voce evidence was that at least on two occasions after receiving the 2 July 2007 letter, she discussed the proposed lease with Ms Wong. At least one of these conversations occurred about two days before the lease was due to expire. Mrs Sheng’s evidence about the timing and contents of these conversations was not altogether clear. At one point, Mrs Sheng admitted that it was possible that at least some of the matters allegedly discussed post 2 July 2007 could have been discussed as early as April 2007. However, it remained her uncontested evidence that at some point after she received the new lease, she discussed a number of matters with Ms Wong, including that she believed the rent was too high and that she was concerned that the new lease did not say that Baiso would be the only Japanese take away restaurant in the Food Court (the “July 2007 conversation”). Ms Wong denied that any oral conversation occurred regarding the lease after 2 July 2007. I reject Ms Wong’s denial. Counsel for the Respondents did not challenge Mrs Sheng’s evidence that there was at least one occasion where Mrs Sheng asked Ms Wong for 60 days to sign the lease and Mrs Wong refused, saying that someone else was waiting to take the premises if Mr Mei and Mrs Sheng did not sign the lease Moreover, the Respondents’ Counsel did not challenge Mrs Sheng’s statement that “we had many discussions, we didn’t only have one discussion, we had many discussions and definitely we had discussion that last time” (being where the conditions of the new lease were discussed).
Mr Mei signed the new lease on 25 or 26 July 2007, two days before the lease was to expire. A week later, Mr Mei learned that the rental determinations had been completed and that the rent for East on Paramount (a larger shop) was about $40,000 per year. Mrs Sheng’s sworn viva voce evidence was that she had a discussion with Ms Wong about the “rental determinations”. The precise circumstances in which this conversation took place were not altogether clear. Mrs Sheng’s evidence was that after she became aware of the rental determination for East on Paramount she approached Ms Wong about lowering the rent and Ms Wong refused. Counsel for the Respondents did not challenge Mrs Sheng’s evidence.
(2) CONDUCT MISLEADING OR DECEPTIVE OR LIKELY TO MISLEAD OR DECEIVE?
The ACCC had two complaints. Each complaint dealt with separate representations. Although some of the representations contain common elements, each must be considered separately because each is said to constitute a separate contravention of s 52 of the TPA.
(A) May 2007 Conversation
First, the ACCC contends that the contents of the May 2007 conversation were misleading and deceptive because, by the May 2007 conversation, Dukemaster represented to Mr Mei that:
1.the proposed $80,000 rent plus GST (“the $80,000 Rent”) for the Second Shop 8 Lease was reasonable and was the market value (“the First Mei Representation”); and
2.it had a reasonable basis for expressing its opinion that the $80,000 Rent was reasonable and was the market value (“the Second Mei Representation”),
when, in fact, the $80,000 Rent was not reasonable and Dukemaster did not have a reasonable basis for expressing its opinion that the $80,000 Rent was reasonable and the market value. Moreover, the ACCC submitted that Dukemaster had not obtained appropriate valuation advice or evidence in relation to the market rental for Shop 8 from 28 July 2007 to 27 July 2008 and that if it had done so, the market value was significantly less than $80,000 and was approximately $40,250 plus GST.
Again, the two questions arise in the context of s 52 of the TPA. (1) Was each representation conveyed and (2) if yes to (1), was it misleading or deceptive or likely to mislead or deceive?
First and Second Mei Representations Conveyed?
It must be recalled that the Respondent’s Counsel did not seek to cross examine Mr Mei about the contents of the May 2007 conversation: see [314] above. Each of the First and Second Mei Representations was conveyed by the May 2007 conversation: see [314] above.
First and Second Mei Representations Misleading or Deceptive or Likely to Mislead or Deceive
Taken as a whole, the evidence reveals no basis for Dukemaster holding a belief that the rent for Shop 8 was “reasonable” and “the market value”. Dukemaster had not obtained valuation advice or evidence in relation to the market rental for Shop 8 for the period from 28 July 2007 to 27 July 2008 that provided a basis for it holding a belief that the rental it was seeking for Shop 8 was “reasonable” and “the market value”: see [88] to [111] above.
Conduct Induce or Capable of Inducing Error?
As explained earlier (see [10(1)] above), if the evidence shows that the opinion expressed by Dukemaster lacked any or any adequate basis, the conduct contravenes s 52 of the TPA only if that conduct induces or is capable of inducing error. If the rent was in fact “reasonable” and / or “the market value”, then it would not be shown that the conduct complained of by the ACCC could induce or would be capable of inducing error. In relation to Shop 8, I consider that the conduct complained of is misleading or deceptive or likely to mislead or deceive because it is much more probable than not that the $80,000 Rent was not “reasonable” and / or “market value”.
I have addressed the evidence of Mr Sheehan above see: [71] to [83]. In relation to Shop 8, Mr Sheehan was asked to express an opinion on the current market rent of Shop 8 for the annual period commencing on 28 July 2007. Against the background set out in the earlier analysis (see [71] to [85] above]) in dealing with Shop 8, Mr Sheehan noted that the previous rent for the shop for the period from 28 July 2006 to 27 July 2007 was $63,813.81 per annum (excluding GST). Shop 8 he described as “situated within the eastern section of the Little Bourke Street level adjacent to the double access doors leading to the loading dock and the garbage area” and “[i]n comparison to other food service outlets within the food court it has a smaller than average frontage of about 6m”. As the summary of evidence records (see Annexure C) Mr Sheehan expressed that the market rent for Shop 8 for the annual period from 28 July 2007 was $40,250 (excluding GST), not $80,000 (excluding GST).
The rent proposed to be charged by Dukemaster ($80,000 excluding GST) is more than 95% above the market rent identified by Mr Sheehan ($40,250 excluding GST).
In the absence of positive evidence from the Respondents that the market value of the rent for Shop 8 for the annual period from 28 July 2007 of $80,000 (excluding GST) was “reasonable” or “market value”, I can only conclude that the First and Second Mei Representations were misleading or deceptive or likely to mislead or deceive Mr Mei.
The $80,000 Rent (excluding GST) was neither “reasonable” nor “the market value”.
(B) JULY 2007 Conversation
Secondly, the ACCC contends that the contents of the July 2007 conversation were misleading and deceptive because, by the July 2007 conversation, Dukemaster represented to Mr Mei that:
1.the $80,000 Rent was reasonable and the market value (“the Third Mei Representation”); and
2.it had a reasonable basis for expressing its opinion that the $80,000 Rent was reasonable and the market value (“the Fourth Mei Representation”),
when, in fact, the $80,000 Rent was not reasonable and Dukemaster did not have a reasonable basis for expressing its opinion that the $80,000 Rent was reasonable and the market value. Again, the ACCC submitted that Dukemaster had not obtained appropriate valuation advice or evidence in relation to the market rental for Shop 8 from 28 July 2007 to 27 July 2008 and that if it had done so, the market value was significantly less than $80,000 and was approximately $40,250 plus GST.
Again, the two questions arise in the context of s 52 of the TPA. (1) Was each representation conveyed and (2) if yes to (1), was it misleading or deceptive or likely to mislead or deceive?
Third and Fourth Mei Representations Conveyed?
I reject the ACCC’s contention that each of the Third and Fourth Mei Representations was conveyed by the July 2007 conversation: see [322] above. The evidence did not disclose that Ms Wong made those representations during those conversations. The claim fails at the first hurdle.
(3) UNCONSCIONABLE CONDUCT
The ACCC also alleged that Dukemaster’s conduct was unconscionable within the meaning of s 51AC(1)(a) of the TPA. Those allegations concern the “negotiation” of the Second Shop 8 Lease.
A summary of the relevant legal principles is set out in Section B above. Again, given my earlier findings in relation to s 52 of the TPA, and subject to the question of the appropriateness of any declarations and injunctions, a contravention of s 51AC would not otherwise add to or alter the other relief available: see generally Part VI of the TPA.
(a) “Negotiation” of Second Shop 8 Lease
The ACCC’s complaint was that Dukemaster’s conduct in relation to the negotiation of the Second Shop 8 Lease (see Annexure A) was unconscionable within the meaning of s 51AC(1)(a) of the TPA by reason of a number of facts.
As I said earlier (see [127]), s 51AC of the TPA does not require resolution of whether the factors listed by the ACCC are proved or not proved. The question is whether the supply by Dukemaster of lease premises to Mr Mei was, in all the circumstances, unconscionable. In assessing that question, the ACCC contends that the matters listed in s 51AC(3)(a), (c), (d), (j) and (k) are relevant.
In all the circumstances, I consider that Dukemaster’s conduct in relation to the negotiation of the Second Shop 8 Lease was unconscionable. Each of the First and Second Mei Representations were conveyed and were not only misleading and deceptive or likely to mislead or deceive (see [325] – [334] above) but were conveyed in circumstances where:
1.Dukemaster knew from the outset that Mr Mei wanted a new lease: see [309] above;
2.the representations were intended by Dukemaster to secure a new lease at a rental for which there was no basis beyond Dukemaster’s decision to seek the amount stated;
3.they were in breach of s 16 of the RTRA, that where a retail premises lease does not have an option under the lease to renew the lease for a further term (as was the case with the Baiso Lease), Dukemaster:
… must, at least 6 months but no more than 12 months before the lease term ends, give written notice to the tenant -
(a)offering the tenant a renewal of the lease on the terms specified in the notice (including a term setting out the rent); or
(b)informing the tenant that the landlord does not propose to offer the tenant a renewal of the lease,
Dukemaster failed to inform Mr Mei until April 2007 (only three months before the expiration of the lease) that it would grant him a new lease and the rental at which the new lease would be offered in circumstances where Dukemaster knew both of those facts as early as August 2006;
4.Dukemaster refused to consider a request to reduce the $80,000 Rent notwithstanding other tenants had sought rental determinations and the results of those determinations were imminent;
5.Dukemaster instructed its lawyers to send a letter of demand (see [317] above) when it knew that Mr Mei wanted a new lease, had not rejected the lease but wished to discuss the amount of the rent (see [315] above);
6.Dukemaster refused Mr Mei’s request for 60 days to consider the new lease notwithstanding that its failure to comply with s 16 of the RTRA resulted in the existing lease continuing for at least six months after the requisite notice was given in April 2007: see s 16(3) of the RTRA.
Dukemaster’s conduct was irreconcilable with what is right or reasonable. For those reasons, that conduct was unfair and unreasonable and contravened s 51AC of the TPA.
(B) Conduct after entry into Second Shop 8 Lease
Finally, the ACCC complaint was that Dukemaster’s conduct after entry into the Second Shop 8 Lease was unconscionable within the meaning of s 51AC(1)(a) of the TPA by reason of a number of facts. Again, in assessing that question, the ACCC contends that the matters listed in s 51AC(3)(a), (c), (d), (j) and (k) are relevant. In all the circumstances, I consider that Dukemaster’s conduct after the entry into the Second Shop 8 Lease was unconscionable because Dukemaster refused to address Mrs Sheng’s complaint regarding the excessive rent for Shop 8 notwithstanding that it had just been provided with a copy of the Rental Determination for a larger shop (Shop 4) which was substantially lower than the $80,000 Rent. For those reasons and the other reasons identified earlier (see [339]-[342], that conduct was irreconcilable with what is right or reasonable. It was unfair and unreasonable and contravened s 51AC of the TPA.
(4) RELIEF
Again, in relation to these contraventions of the TPA, it is appropriate that there be declarations and injunctions. In addition, pursuant to s 87(1A) (read with s 87(1AA)) of the TPA, the Respondents should refund to Mr Mei the amount of rent he was overcharged totalling $63,683.00. The sum of $63,683.00 is calculated by subtracting the market rent from the rent in fact they paid from 28 July 2007 up to and including 2 February 2009.
For the reasons given earlier (see [142] above), on the question of interest, under s 51A of the FCA, Mr Mei is entitled to interest on those amounts from the date of payment up to and including 28 February 2009. That amount of interest is $4,623.00.
The ACCC also sought interest on the total amount from 1 March 2009. For the reasons given earlier (see [143] above), the form of the order sought by the ACCC is not appropriate. Instead, the Respondents should pay Mr Mei interest on the amounts overpaid (see [344] above) from and including 1 March 2009. If the parties are unable to quantify that amount, they may have the matter re-listed.
That leaves two other issues – a continuing claim for excessive rental and an order that the Second Shop 8 Lease be varied to reduce the rental payable by Mr Mei to $40,250 for the period from 28 July 2007 to 27 July 2009 with effect from 1 March 2009 to prevent or reduce the loss or damage suffered or likely to be suffered by Mr Mei. The ACCC is not entitled to both. The first is problematic because the loss and damage has not yet crystallised – the rent has not been paid. There is power to make the second order: s 87(1A) (read with s 87(1AA)) of the TPA. However, in the circumstance, I do not propose to exercise my discretion and make an order in the terms sought. To do so would deal with first one term of the lease (rent) whereas other terms (including lease terms) were also in issue.
G OTHER MATTERS
(1) Similar Fact Evidence
Although the conduct complained of by the ACCC in relation to each of the tenancies shares common characteristics, Counsel for the ACCC conceded the negotiations concerning the renewal of each lease should be considered separately. I have therefore dealt with the matter on the footing that the events surrounding each tenancy should be treated separately from the events relied on in connection with other tenancies. Although I have noted at various points in these reasons for decision, for the assistance of the reader, some of the more striking similarities and points of connection between the various events that give rise to these proceedings, I have not, and I am not to be understood as having, relied on propensity or similar fact reasoning.
Having regard to the way in the matter was argued by the parties, I have refrained from making any finding about whether some underlying unity of conduct on the part of Dukemaster could be identified as informing or explaining what transpired with individual tenants.
(2) Tax Considerations
It is neither appropriate nor possible to determine, for each of the tenants the taxation consequences of the award of damages. The tenants will have to individually deal with the Australian Taxation Office in relation to them: see Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at [60].
H. ORDERS
The ACCC proposed draft orders in the event that it was successful in whole or in part. For the following reasons, the orders I propose to make to give effect to my findings are in some respects substantively different from the orders sought by the ACCC. The orders sought by the ACCC may be divided into a number of categories:
1.declarations of contraventions of the TPA;
2.injunctions;
3.orders under s 87 of the TPA;
4.disclosure orders; and
5.compliance orders.
Subject to minor matters, I have adopted the substance of the orders proposed by the ACCC in relation to categories 3 and 5.
In relation to category 1 (the declarations of contraventions of the TPA), I have adopted in substance the orders proposed by the ACCC in relation to the contravention of ss 52 and 53(e) of the TPA but not the orders proposed by the ACCC in relation to the contravention of s 51AC of the TPA. In my view, the declarations which I propose more appropriately reflect the needs of the case.
In relation to category 2 (injunctions), I consider that the conduct in this case is one which supports the grant of injunctions in the terms I have proposed. The first substantive difference is that the injunctions are limited to the Food Court, where each of the tenancies in dispute was located. The Paramount Centre (see [1] above) is a large building comprising a number of elements and numerous tenants. This proceeding was not concerned with and did not consider Dukemaster’s conduct in relation to those other elements or those other tenants. As has been said on many occasions, an injunction should relate to the conduct established by the evidence and indicate the conduct which is enjoined so that there can be no doubt what is expected of the parties enjoined: see e.g. Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1.
Secondly, I do not consider that it is appropriate to grant the ACCC the mandatory injunctions it sought requiring Dukemaster (a) to deliver a written notice to each tenant that exercises an option to renew a lease in prescribed terms by prescribed dates and (b) to make its initial offers of a proposed rental in writing. First, the Retail Leases Act contains provisions which I have little doubt that Dukemaster is now well aware of – it must comply with them and failure to do so carries with it the consequences set out in the Act. The relevant provisions of the Retail Leases Act might change. In those circumstances, it is inappropriate to grant the first kind of mandatory injunction sought by the ACCC. The second, the requirement that its initial offers of a proposed rental be in writing, is also inappropriate. It lacks specificity – for example, what is an “initial offer”? Moreover, what contravention of the TPA is the injunction addressing?
That brings me to the disclosure orders (category 4) proposed by the ACCC. In general terms, the order required Dukemaster to translate a letter that the ACCC had drafted into Chinese and then to send the translated letter to each tenant and each former tenant of the Paramount Centre. Putting to one side that the reference to tenants and former tenants of the Paramount Centre is inappropriate (see [353] above), the substance of the letter drafted by the ACCC lacked specificity and, in my view, raised more questions than it answered. Moreover, as these reasons for decision demonstrate, a finding of contravention of the TPA by Dukemaster in relation to one tenant does not translate into a contravention against another tenant. The facts of each tenancy must be considered separately.
I certify that the preceding three hundred and fifty-five (355) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.
Associate:
Dated: 24 June 2009
Counsel for the Applicant: Mr C Scerri QC and Ms Lye Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondents: Mr N O'Bryan SC and Dr M Sharpe Solicitor for the Respondents: Kliger Partners
Date of Hearing: 10-13, 16-20 March 2009 Date of Judgment: 24 June 2009 ANNEXURE “A”
SHOP 3 – KOREAN LUNCH BOX
Area of leased premises 48 square metres
FIRST SHOP 3 LEASE
(3 years plus one option for a further 3 years)1/2/2001 – 31/1/2004
No annual rental review during the first term.Time for exercise of option to renew Not less than 3 months prior to expiration of term: cl 5.8. Ability to proceed to Rental Determination at end of term Yes, at the end of the 3rd year: cl 5.16(A)
Annual Rental Payable upon transfer of lease to Mrs Shim on 4/4/2003 $41,600 (ex GST) SECOND SHOP 3 LEASE
(3 years plus one option for a further 3 years)1/2/2004 – 31/1/2007
1st year rental: $48,000 (ex GST)
3 rd year rental: $50,429.96 (ex GST)
Annual rental increase based on CPI: cl 5.16(B).Renewal or new lease? New lease
Time for exercise of option to renew Not more than 12 months and not less than 6 months prior to expiration of the term: cl 5.8.
Ability to proceed to Rental Determination at the end of the term Yes, at the end of the 3rd year: cl 5.16(A). THIRD SHOP 3 LEASE
(3 years plus one option for a further 3 years)1/2/2007 – 31/1/2010
1st year rental: $90,000 (ex GST)
Annual rental increase based on CPITime for exercise of option to renew Not more than 12 months and not less than 6 months prior to expiration of the term: cl 5.8.
Ability to proceed to Rental Determination at the end of the term Yes, at the end of the 3rd year: cl 5.16(A).
SHOP 4 – EAST ON PARAMOUNT
Area of leased premises 48 square metres
FIRST SHOP 4 LEASE
(5 years plus two options for a further 3 years)12/4/1999 – 11/4/2004
1st year rental: $55,000 (GST not applicable)
5th year rental: $61,902.98 (ex GST)
Annual rental increase of 3%Time for exercise of option to renew Not less than 3 months nor more than 6 months before the expiration of term cl 3.3(b)
Ability to proceed to Rental Determination at end of term Yes, at the end of the 5th year (Rent Condition RC3 – which provides that the base rent on commencement of each further 3 year term can be determined by a “market rent review” undertaken by a valuer at the instigation of either the landlord or the tenant)
SECOND SHOP 4 LEASE
(3 years plus one option for a further 3 years)12/4/2004 – 11/4/2007
1st year rental: $72,000 (ex GST)
3rd year rental: $76,384.80 (ex GST)
Annual rental increase of 3%Renewal or new lease? Renewal (according to Respondents) and new lease (according to Applicant)
Time for exercise of option to renew Not more than 12 months nor less than 6 months before the expiration of term: cl 5.8 Ability to proceed to Rental Determination at end of term Yes, at the end of the 3rd year: cl 5.16(A). THIRD SHOP 4 LEASE
(3 years with no option for further years)12/4/2007 – 11/4/2010
1st year rental: $40,500 (ex GST)
Annual rental increase of 3%Renewal or new lease? Renewal
SHOPS 1 AND 2 – BOXCAR CAFÉ Area of leased premises 84.3 square metres
FIRST SHOPS 1 AND 2 LEASE
(4 years plus one option for a further 4 years)23/1/2000 – 22/1/2004
1st year rent: $44,100 (ex GST)
4th year rental: $ 63,000 (ex GST)
Annual rental increase of 5%Ability to proceed to Rental Determination at the end of term Yes, at the end of the 4th year Time for exercise of option to renew Not less than 3 months nor more than 6 months before the expiration of term: cl 3.3(b) Annual Rental Payable upon transfer of lease to Gomax on 20/12/2002 $60,000 (ex GST)
SECOND SHOPS 1 AND 2 LEASE
(3 years plus one option for a further 3 years)23/1/2004 – 22/1/2007
1st year rental: $72,000 (ex GST)
3rd year rental: $75,645 (ex GST)
Annual rental increase based on CPIRenewal or new lease? New lease Time for exercise of option to renew Not more than 12 months nor less than 6 months before the expiration of term: cl 5.8) Ability to proceed to Rental Determination at end of term Yes, at the end of the 3rd year: cl 5.16(A). THIRD SHOPS 1 AND 2 LEASE
(3 years with no option for further years)23/1/2007 – 22/1/2010
1st year rental: $65,000 (ex GST)
Annual rental increase based on CPIRenewal or new lease? Renewal
SHOP 8 – BAISO JAPANESE CAFÉ
Area of leased premises 33.53 square metres
FIRST SHOP 8 LEASE
(5 years with no option for further 5 years)28/7/2002 – 27/7/2007 (option term)
5th year rental: $63,813.76 (ex GST)
Annual rental increase of 5%
No ability to proceed to Rental Determination at the end of the option termAnnual Rental Payable upon transfer of lease to Mr Mei on 30/6/2004 $57,881.25 (ex GST) (from 28/7/2004) SECOND SHOP 8 LEASE
(3 years plus one option for a further 3 years)28/7/2007 – 27/7/2013
1st year rental: $80,000 (ex GST)
Annual rental increase based on CPIRenewal or new lease? New lease
ANNEXURE “B”
ANNEXURE “C”
As at 30 June 2003
| Shop No. | Area sqm | Tenant | Annual Rent (excl GST) | $ rate /sqm | Ref | |
| 1, 2 | 84.31 | Australia Gomax Group Pty Ltd trading as Boxcar Café | Actual | $63,000 | $747 | KFS1 pg 488 |
| Sheehan Valuation | ||||||
| 3 | 48 | Lew & Sons P/L trading as Bann Thai Takeaway | Actual | $46,600 | $971 | KFS1 pg 489 |
| Sheehan Valuation | ||||||
| 4 | 48.04 | Tan & Lai trading as East on Paramount | Actual | $61,903 | $1,289 | KFS1 pg 20, 206 |
| Sheehan Valuation | ||||||
| 5 & 5A | 102.31 | International Business Enterprises Pty Ltd trading as E taste | Actual | $58,295 | $570 | KFS1 pg 491 |
| Sheehan Valuation | ||||||
| 6 | 33.59 | Mano & Jacqueline Marinakis trading as Ice Factory | Actual | $40,516 | $1,206 | KFS1 pg 204 |
| Sheehan Valuation | ||||||
| 7 | 915.75 | Garvon-Dale P/L trading as Paramount Supermarket & Cellars | Actual | $120,000 | $131 | KFS1 pg 204 |
| Sheehan Valuation | ||||||
| 8 | 33.53 | Ze Xiong Deng trading as O’Bento | Actual | $52,500 | $1,566 | KFS1 pg 205 |
| Sheehan Valuation | ||||||
| 9 & 10 | 239.2 | Banksia Rose (Victoria) Investments P/L trading as Chine on Paramount | Actual | $144,000 | $602 | KFS1 pg 443 |
| Sheehan Valuation | ||||||
| 11 | 32.2 | D’Marcos Pty Ltd trading as D’Marcos Café | Actual | $28,600 | $888 | KFS1, pg 465 |
| Sheehan Valuation |
As at 30 June 2004
| Shop No. | Area sqm | Tenant | Annual Rent (excl GST) | $ rate /sqm | Ref | |
| 1, 2 | 84.31 | Australia Gomax Group Pty Ltd trading as Boxcar Café | Actual | $72,000 | $854 | KFS1 pg 26 |
| Sheehan Valuation | $66,500 | $788 | KFS1 pg 39 | |||
| 3 | 48 | Keum Mi Shin trading as Korean Lunch Box | Actual | $48,000 | $1,000 | KFS1 pg 13 & 25 |
| Sheehan Valuation | $43,000 | $896 | KFS 2 pg 10 | |||
| 4 | 48.04 | Tan & Lai trading as East on Paramount | Actual | $72,000 | $1,499 | KFS1 pg 26 |
| Sheehan Valuation | $43,000 | $895 | KFS1 pg 39 | |||
| 5 & 5A | 102.31 | International Business Enterprises Pty Ltd trading as E taste | Actual | $58,295 + CPI | $569 + CPI | KFS1 pg 204 |
| Sheehan Valuation | ||||||
| 6 | 33.59 | Janay & Co Pty Ltd trading as Soup Frezzy | Actual | $45,000 | $1,340 | KFS1 pg 345 |
| Sheehan Valuation | ||||||
| 7 | 915.75 | Garvon-Dale P/L trading as Paramount Supermarket & Cellars | Actual | $120,000 | $131 | |
| Sheehan Valuation | ||||||
| 8 | 33.53 | Hong Mei trading as Baiso Japanese Café | Actual | $55,125 | $1,644 | KFS1 pg 25 |
| Sheehan Valuation | ||||||
| 9 & 10 | 239.2 | Banksia Rose (Victoria) Investments P/L trading as Chine on Paramount | Actual | $144,000 | $602 | KFS1 pg 206 |
| Sheehan Valuation | ||||||
| 11 | 32.2 | D’Marcos Pty Ltd trading as D’Marcos Café | Actual | $31,200 | $969 | KFS1 pg 206 |
| Sheehan Valuation |
As at 30 June 2005
| Shop No. | Area sqm | Tenant | Annual Rent (excl GST) | $ rate /sqm | Ref | |
| 1, 2 | 84.31 | Australia Gomax Group Pty Ltd trading as Boxcar Café | Actual | $73,656 | $874 | KFS1 pg 489 |
| Sheehan Valuation | ||||||
| 3 | 48 | Keum Mi Shin trading as Korean Lunch Box | Actual | $49,104 | $1,023 | KFS1 pg 489 |
| Sheehan Valuation | ||||||
| 4 | 48.04 | Tan & Lai trading as East on Paramount | Actual | $74,160 | $1,544 | KFS1 pg 489 |
| Sheehan Valuation | ||||||
| 5 & 5A | 102.31 | Vacant | Actual | Vacant | Vacant | |
| Sheehan Valuation | ||||||
| 6 | 33.59 | Janay & Co Pty Ltd trading as Soup Frezzy | Actual | $46,035 | $1,370 | KFS 1 pg 491 |
| Sheehan Valuation | ||||||
| 7 | 915.75 | Rollei Pty Ltd trading as Park & Shop Supermarket & Cellars | Actual | $120,000 | $131 | |
| Sheehan Valuation | ||||||
| 8 | 33.53 | Hong Mei trading as Baiso Japanese Café | Actual | $57,881 | $1,726 | KFS1 pg 491 |
| Sheehan Valuation | ||||||
| 9 & 10 | 239.2 | Banksia Rose (Victoria) Investments Pty Ltd trading as Chine on Paramount | Actual | $150,533 | $629 | KFS1 pg 206 |
| Sheehan Valuation | ||||||
| 11 | 32.2 | D’Marcos Pty Ltd trading as D’Marcos Café | Actual | $33,800 | $1,050 | KFS1 pg 465 |
| Sheehan Valuation |
As at 30 June 2006
| Shop No. | Area sqm | Tenant | Annual Rent (excl GST) | $ rate /sqm | Ref | |
| 1, 2 | 84.31 | Australia Gomax Group Pty Ltd trading as Boxcar Café | Actual | $73,656 | $874 | KFS1 pg 489 |
| Sheehan Valuation | ||||||
| 3 | 48 | Keum Mi Shin trading as Korean Lunch Box | Actual | $50,430 | $1,050 | KFS1 pg 202 Sheehan Affd pg 12 |
| Sheehan Valuation | ||||||
| 4 | 48.04 | Tan & Lai trading as East on Paramount | Actual | $76,385 | $1,590 | KFS1 pg 322 |
| Sheehan Valuation | ||||||
| 5 & 5A | 102.31 | Sandro Dario Vasta trading as E taste | Actual | $85,000 | $831 | KFS1 pg 482 |
| Sheehan Valuation | ||||||
| 6 | 33.59 | Janay & Co Pty Ltd trading as Soup Frezzy | Actual | $46,035 | $1,370 | KFS1 pg 205 |
| Sheehan Valuation | ||||||
| 7 | 915.75 | Rollei Pty Ltd trading as Park & Shop Supermarket & Cellars | Actual | $120,000 | $131 | |
| Sheehan Valuation | ||||||
| 8 | 33.53 | Hong Mei trading as Baiso Japanese Café | Actual | $60,775 | $1,183 | KFS1 pg 492 |
| Sheehan Valuation | ||||||
| 9 & 10 | 239.2 | Banksia Rose (Victoria) Investments P/L trading as Chine on Paramount | Actual | $150,533 | $629 | KFS1 pg 206 |
| Sheehan Valuation | ||||||
| 11 | 32.2 | D’Marcos Pty Ltd trading as D’Marcos Café | Actual | $50,000 | $1,553 | KFS1 pg 481 |
| Sheehan Valuation |
As at 30 June 2007
| Shop No. | Area sqm | Tenant | Annual Rent (excl GST) | $ rate /sqm | Ref | |
| 1, 2 | 84.31 | Australia Gomax Group Pty Ltd trading as Boxcar Café | Asking Rent | $96,000 | $1,139 | KFS 1, pg 592 |
| Sheehan Valuation | $65,000 | $771 | KFS1 pg 604 | |||
| 3 | 48 | Keum Mi Shin trading as Korean Lunch Box | Actual | $90,000 | $1,875 | KFS1, pg 25 |
| Sheehan Valuation | $50,500 | $1,052 | KFS1, pg 39 | |||
| 4 | 48.04 | Tan & Lai trading as East on Paramount | Asking Rent | $90,000 | $1,873 | KFS1, pg 634 |
| Sheehan Valuation | $40,550 | $843 | KFS1 pg 646 | |||
| 5 & 5A | 102.31 | Sandro Dario Vasta trading as E taste | Actual | $90,000 | $880 | KFS1, pg 482 |
| Sheehan Valuation | ||||||
| 6 | 33.59 | Vacant | Actual | Vacant | Vacant | Vacant |
| Sheehan Valuation | ||||||
| 7 | 915.75 | Rollei Pty Ltd trading as Park & Shop Supermarket & Cellars | Actual | $120,000 | $131 | |
| Sheehan Valuation | ||||||
| 8 | 33.53 | Hong Mei trading as Baiso Japanese Café | Actual | $80,000 | $2,385 | KFS1, pg 25, 25 KFS1, pg 270 |
| Sheehan Valuation | $40,250 | $1,200 | KFS1, pg 39 | |||
| 9 & 10 | 239.2 | Banksia Rose (Victoria) Investments P/L trading as Chine on Paramount | Actual | $154,618 | $646 | KFS1, pg 686 |
| Sheehan Valuation | $146,250 | $611 | KFS1 pg 700 | |||
| 11 | 32.2 | D’Marcos Pty Ltd trading as D’Marcos Café | Actual | $52,000 | $1,615 | |
| Sheehan Valuation |
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