AWPF Management Pty Ltd v Red Roll Pty Ltd & Ors (RLD)
[2009] NSWADTAP 3
•23 January 2009
Appeal Panel - Internal
CITATION: AWPF Management Pty Ltd v Red Roll Pty Ltd & Ors (RLD) [2009] NSWADTAP 3 PARTIES: APPELLANT
RESPONDENT
AWPF Management Pty Ltd
Red Roll Pty Ltd
Multiplex Latitude Retail Landowner Pty Ltd
Multiplex WS Retail Landowner Pty LtdFILE NUMBER: 089064 HEARING DATES: 10 November 2008 SUBMISSIONS CLOSED: 10 November 2008
DATE OF DECISION:
23 January 2009BEFORE: Chesterman M - Deputy President; Rickards K - Judicial Member; Fairweather R - Non-Judicial Member CATCHWORDS: Retail Leases Act 1994 – liability for pre-lease misrepresentations – meaning of ‘party’ DECISION UNDER APPEAL: Red Roll Pty Ltd v Multiplex Latitude Retail Landowner Pty Ltd & Ors [2008] NSWADT 200 FILE NUMBER UNDER APPEAL: 075236 DATE OF DECISION UNDER APPEAL: 07/21/2008 LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Administrative Decisions Tribunal Rules (Transitional) Regulation 1998
Consumer Credit CodeInterpretation Act 1987
Real Property Act 1900
Retail Leases Act 1994CASES CITED: Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150
Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966] HCA 74
IW v City of Perth (1997) 191 CLR 1
Minister for Immigration and Multicultural and Indigenous Affairs v SZAYW [2005] FCAFC 154
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Red Roll Pty Ltd v Multiplex Latitude Retail Landowner Pty Ltd & Ors [2008] NSWADT 200REPRESENTATION: APPELLANT
RESPONDENT
J Young, barrister
V Gray, barristerORDERS: 1. Leave to appeal is granted
2. The appeal is allowed in part
3. The orders made by the Tribunal on 21 July 2008 are set aside
4. In so far as these Tribunal proceedings comprise retail tenancy claims by the First Respondent to the Appeal against the Appellant and the Third Respondent, alleging liability on their part under section 10 of the Retail Leases Act 1994, the proceedings are dismissed
5. Subject to order 4, the proceedings are remitted to the Tribunal as appropriately constituted
6. There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the other parties are to file and serve submissions in response within a further 21 days. The question of costs will then be determined ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997
7. The proceedings are set down for further directions at 12 noon on 29 January 2009. At that directions hearing, all parties (not merely the parties involved in the hearing of the appeal) should attend.
REASONS FOR DECISION
Introduction
1 The question to be determined in this appeal, put shortly, is whether the liability of a party to a retail shop lease, established by section 10(1) of the Retail Leases Act 1994, to compensate another party to the lease for damage suffered by virtue of a pre-lease misrepresentation ‘runs with the land’. In more specific terms, the question is whether an assignee of the interest in the land that was held by the misrepresenting party, whether as lessor or lessee, can be ordered to pay such compensation even though the assignee was not privy to or aware of the misrepresentation at the time when the assignment occurred.
2 In the decision under appeal, Red Roll Pty Ltd v Multiplex Latitude Retail Landowner Pty Ltd & Ors [2008] NSWADT 200, the Tribunal answered this question in the affirmative. The assignee has appealed against this ruling.
Background to the appeal
3 Late in 2004, the Second Respondent to this appeal, Multiplex Latitude Retail Landowner Pty Ltd (‘Multiplex Latitude’) executed an agreement to lease premises in World Square Retail, a retail shopping centre, to the First Respondent, Red Roll Pty Ltd (‘Red Roll’). This agreement was governed by the Retail Leases Act 1994 (‘the RL Act’) and was registered under the Real Property Act 1900. In June 2005, Red Roll moved into occupation of the leased premises (‘the Premises’) and commenced to trade.
4 On or about 26 July 2005, Multiplex Latitude and Red Roll executed a formal lease (hereafter ‘the Lease’) of the Premises.
5 On or about 29 July 2005, Multiplex Latitude assigned its interest under the Lease to the Second Respondent to this appeal, Multiplex WS Retail Landowner Pty Ltd (‘Multiplex WS’), and the Appellant, AWPF Management Pty Ltd (‘AWPF’), as part of a sale of World Square Retail.
6 On 13 December 2007, Multiplex WS and AWPF gave notice to Red Roll of their intention to terminate the Lease and re-enter the Premises if an amount of more than $160,000 alleged to be owing to them for arrears of rent was not paid immediately.
7 Red Roll commenced proceedings in the Tribunal on 19 December 2007, naming Multiplex Latitude, Multiplex WS and AWPF as respondents. An application by Red Roll for an urgent interim order restraining Multiplex WS and AWPF from terminating the Lease and re-entering the Premises was not determined, as these two parties agreed not to take such steps pending the disposal of the proceedings.
8 In its Third Further Amended Application, filed on 6 June 2008, Red Roll alleged (a) that Multiplex Latitude, by its own conduct or through its agents, made certain representations to Red Roll which induced Red Roll to enter into the Lease, (b) that these representations were false and/or misleading pre-lease representations within the meaning of section 10(1) of the RL Act and (c) that the making of them amounted to unconscionable conduct under section 62B. The relief sought by Red Roll comprised various declarations, an award of damages, re-determination of the rent, an order that the rent arrears claimed by Multiplex WS and AWPF were not ‘due or owing’ and an order for costs.
9 None of the three respondents named by Red Roll filed a formal Reply or any evidence.
10 The stance adopted by Multiplex WS and AWPF was instead that they should be dismissed from the proceedings. They asserted that since the misrepresentations alleged by Red Roll had been made only by Multiplex Latitude, they could not be held liable with respect to them and therefore should not be parties to the proceedings. They made this assertion with respect to both (a) Red Roll’s claim for compensation under section 10(1), which is a retail tenancy claim as defined in section 70 (see subparagraph 70(a)(x)), and (b) its claim under section 62B, which is an unconscionable conduct claim as also defined in section 70.
11 It was decided at directions hearings that this assertion by Multiplex WS and AWPF should be treated as a motion to strike out or dismiss Red Roll’s application to the Tribunal in so far as it affected them, and that this motion should be heard and determined on an interlocutory basis. The parties agreed that, as the Tribunal explained in its decision at [10], there should be ‘no requirement on the Tribunal to make any findings of fact’, but the Tribunal should rely instead on ‘the assertions made in the various filed Applications and two or three pages in a filed affidavit’.
12 The following extracts from the Tribunal’s decision (Red Roll Pty Ltd v Multiplex Latitude Retail Landowner Pty Ltd & Ors [2008] NSWADT 200) at [17], [18] and [30] describe factual assumptions on which the decision was based:-
17 I was referred to part of the evidence thus far led (and thus far unchallenged) in or to the effect that the centre manager before and after the assignment remained the same person, the critical point of contact between [Red Roll] and whoever was the owner of the Premises from time to time, such that it was arguable that he was probably the agent of [Multiplex Latitude] and also the agent of [Multiplex WS and AWPF] and be likely to have all the knowledge of the anterior representations made by [Multiplex Latitude] and thus [Multiplex WS and AWPF] could never be taken to have taken title without notice of the pleaded representations.
18 … paragraph 23D [of the Third Further Amended Application] asserts that [Multiplex Latitude] failed to notify [Multiplex WS and AWPF] of the various representations and reliance when contracting to transfer its right title and interest in the Centre – a strange assertion having regard to the reliance on the evidence referred to in [17] above.
30 The original submission of [Red Roll] 21 May 2008 seemed to accept that [Multiplex WS and AWPF] were “personally innocent of the wrongdoing, but … they have to suffer the consequences of section 10 misconduct by the transferor” such that “one innocent party will ultimately bear the loss”…
13 In its decision, dated 21 July 2008, the Tribunal rejected the position advanced by Multiplex WS and AWPF. Orders 1 and 2 were in the following terms (with the names of these two parties substituted in each Order for the phrase ‘Second and Third Respondents’):-
1. The Tribunal declines to make any order dismissing from these proceedings Multiplex WS and AWPF.
2. The Motion by Multiplex WS and AWPF to dismiss them from these proceedings is itself dismissed.
14 The principal ground for the Tribunal’s decision was its conclusion that any liability to pay compensation under section 10(1) of the RL Act that Red Roll could establish against Multiplex Latitude, the grantor of the Lease to Red Roll, could also be enforced under section 10(1) against Multiplex WS and AWPF in their capacity as assignees of Multiplex Latitude’s interest in the Premises – i.e. of the reversion. The Tribunal held that this result flowed from a proper interpretation of section 10(1) having regard to the other provisions of the Act and the aims and purposes underlying the Act. The reasoning on which this conclusion was based is outlined below.
15 With regard to Red Roll’s unconscionable conduct claim against Multiplex WS and AWPF under section 62B of the RL Act, the Tribunal indicated (at [19]) that it would be inclined to grant leave to Red Roll to make further amendments to the pleadings contained in the Third Further Amended Application. The Tribunal did not discuss at any length the interpretation of section 62B nor its potential applicability, following appropriate amendments to the pleadings, to the conduct of Multiplex WS and AWPF.
16 The Appellant in this appeal is AWPF. Although Multiplex WS was, like AWPF, an assignee of the reversion from Multiplex Latitude, it did not join in the appeal or appear at the hearing of the appeal. Multiplex Latitude similarly made no appearance. But both these parties were formally designated as respondents to the appeal, pursuant to section 67(3) of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’) and Schedule 1, rule 41(1) of the Administrative Decisions Tribunal Rules (Transitional) Regulation 1998.
The question of leave to appeal
17 When commencing these appeal proceedings, AWPF filed an Application for Leave to Appeal from an Interlocutory Decision as well as a Notice of Appeal. It filed the former document on the basis that the Tribunal’s decision was an interlocutory one and that leave to appeal was therefore required under section 113(2A) of the ADT Act.
18 In this document, it put forward its principal reasons for disputing the Tribunal’s interpretation of section 10(1) of the RL Act as its grounds for seeking leave to appeal.
19 At the commencement of the hearing of the appeal, however, the grounds advanced by Mr Young, counsel for AWPF, were as follows: (a) the Tribunal’s decision concerned an important question of the interpretation of the RL Act; (b) the decision had significant implications beyond this case; (c) it involved a narrow point of law, taking less than a day to argue; (d) if the appeal succeeded, the proceedings would be dismissed as against AWPF.
20 Mr Gray, appearing for Red Roll, submitted that it would be ‘unfortunate’ if leave to appeal were not granted.
21 We then stated that leave to appeal was granted. Our grounds were the first three of those put forward by Mr Young, coupled with our opinion that the grounds of the appeal itself had merit.
The position with regard to Red Roll’s unconscionable conduct claim
22 Before proceeding to discuss with the primary topic of this appeal, which concerns the interpretation of section 10(1) of the RL Act, it is convenient to deal briefly with AWPF’s arguments regarding the unconscionable conduct claim lodged by Red Roll.
23 In his principal submissions at the hearing of the appeal, Mr Young argued that the matters pleaded against AWPF in the Third Further Amended Application filed by Red Roll did not amount to unconscionable conduct under section 62B of the RL Act. When it was put to him that the Tribunal had said in its decision that Red Roll should have leave to amend these pleadings, his response was that Red Roll had not availed itself of this opportunity. It followed, he said, that Red Roll’s unconscionable conduct claim should be dismissed as against AWPF.
24 In his submissions on this matter, Mr Gray argued that because the appeal had been instituted Red Roll had deferred seeking leave from the Tribunal to amend its pleadings. He also stated out that because both the Notice of Appeal and AWPF’s written submissions filed in advance of the hearing dealt only with the issues arising under section 10(1) and did not refer at all to the unconscionable conduct claim, Mr Young’s submissions relating to this claim had taken him by surprise.
25 In his submissions in reply, Mr Young acknowledged that in view of these considerations Red Roll should still be given an opportunity to amend its unconscionable conduct claim against AWPF. This aspect of the proceedings could, he said, be remitted to the Tribunal or dealt with by us in disposing of the appeal.
26 In our opinion, the proper course of action is to leave this question in the hands of the Tribunal. It was not raised by the Notice of Appeal or in submissions filed before the hearing. We have made no order giving leave for AWPF to enlarge its grounds of appeal so as to include it. Our orders disposing of the appeal will reflect this ruling.
The Tribunal’s interpretation of section 10(1) of the RL Act
27 As we have said, the Tribunal rejected the claim by AWPF and Multiplex WS that liability to pay compensation under section 10(1) of the RL Act on account of pre-lease misrepresentations made by Multiplex Latitude did not extend to them by virtue of their having taken an assignment of the reversion from Multiplex Latitude. The Tribunal’s conclusion was based on the interaction of section 10(1) with the definitions of two terms – ‘lessor’ and ‘party’ – set out in section 3.
28 The relevant parts of these provisions are as follows:-
3 Definitions
In this Act:…
lessee means the person who has the right to occupy a retail shop under a retail shop lease, and includes a sublessee and a lessee’s or sublessee’s heirs, executors, administrators and assigns…
lessor means the person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease, and includes a sublessor and a lessor’s or sublessor’s heirs, executors, administrators and assigns…
party means the lessor or the lessee under a retail shop lease.
(1) A party to a retail shop lease is liable to pay another party to the lease (“the injured party”) reasonable compensation for damage suffered by the injured party that is attributable to the injured party’s entering into the lease as a result of a false or misleading statement or representation made by the party, or any person acting under the party’s authority, with knowledge that it was false or misleading.10 Right to compensation for pre-lease misrepresentations
(2) The giving of a lessor’s disclosure statement to a prospective lessee under a retail shop lease is considered to be the making of a representation by the lessor to the lessee as to the information in the disclosure statement.
29 The Tribunal’s outline of the parties’ submissions on this question and its reasons for the decision that it reached occupy a substantial proportion (paragraphs [24 – 87]) of its decision.
30 At [24 – 28], the Tribunal explained the principal argument put by Multiplex WS and AWPF as follows: (a) the term ‘party’ in section 10(1) can mean only a ‘person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease’; (b) the reason for this is that the subsection imposes liability only for conduct predating the commencement of the lease, from which it follows that once the right to occupy the premises is granted the subsection is ‘spent’; (c) a right to sue for misrepresentation is a right in personam; and (d) to hold that liability for a misrepresentation ‘runs with the land’ would involve derogating from the indefeasibility of title to registered land guaranteed by the Real Property Act 1900.
31 The Tribunal also referred to (a) a submission by Multiplex WS and AWPF that they did not confer either actual authority or ostensible authority (assuming that the latter form of authority was included in the phrase ‘acting under the party’s authority’ in section 10(1)) on Multiplex Latitude and (b) a further submission by AWPF that, whatever might be the relationship between Multiplex WS and Multiplex Latitude, it was itself a completely independent entity.
32 At [29], the Tribunal summarised Red Roll’s ‘primary submission’ as being that since Multiplex WS and AWPF were the ‘assigns’ of Multiplex Latitude within the meaning of the definition of ‘lessor’ in section 3, those two parties were included in the words ‘lessor’ and ‘party’ when either of these words was used in the Act. Consequently, as the Tribunal put it:-
… the combination of Section 3 and Section 10 results in the conclusion “that an assignee of a party who made a false or misleading statement knowing that it was false or misleading which caused another party to enter into a retail shop lease and thereby sustain damage is itself liable to pay reasonable compensation to that other party for that damage”. It was said [by Red Roll] that this reflected a “clear legislative intention that rights and liabilities of parties to leases will pass with the interest assigned to the assignee so that effective justice can be done as between the current parties to the lease and, as a necessary consequence, that a party to a lease is not left to a chance that an outgoing party to a lease remains in existence and solvent and accessible”.
33 At [30], in concluding its summary of Red Roll’s submissions, the Tribunal said that in ‘resolving the problem’ of an innocent party bearing the loss in such circumstances, ‘the Parliament has fashioned the Act such to protect the innocent lessee in circumstances where, as a matter of commercial reality/ contract, any assignee of the person making the false or misleading representation can protect himself from that liability by contract’.
34 The Tribunal then proceeded to state the reasons for its decision. It adopted as its own ‘starting point for a consideration of this thorny issue’ (see [31]) a passage in the Second Reading Speech of the Minister for Small Business relating to the Bill which became the RL Act. From this speech, and from second reading speeches relating to amending Bills in 1997 and 2005, it drew the conclusion that the Act was intended to be remedial legislation in which strong emphasis was placed on the establishment of a ‘disclosure regime’ protecting prospective lessees and lessors from the adverse effects of being supplied with incorrect or incomplete information in the course of negotiating a lease. It referred to a ministerial description of a lease as ‘a business asset’. It followed, the Tribunal said, that the Act should be construed broadly and in a manner conforming with its evident purposes.
35 At [42], the Tribunal summed up this part of its reasoning as follows:-
In other words, the combination of all of the above demonstrates that there was a continuing expression by the State Parliament that the Act was designed to assist the smooth conduct of lease negotiations and subsequent contracts and the relationship between lessors and lessees, the re-enforcement of the primacy of the Act over the terms of any retail lease and the jurisdiction of this Tribunal as a one-stop shop for the resolution of retail lease disputes. And it is with all of that in mind that I approach the interpretation of the Act with a generosity of spirit, understanding the purposive remedial nature of the Act and the need, as best possible within the legislative framework, to make it work in accordance with the above enunciated principles.
36 The ‘second starting point’ (see [43]) that the Tribunal identified was the fact that the Act regulates – indeed it overrides, by virtue of section 7 – the terms of the agreement reached between the lessor and the lessee. The Tribunal went on to say that by virtue of the Act’s role in regulating the lease contract, which is to be viewed as a ‘business asset’, the proposition that the liability of a lessor under section 10 can be enforced against an assignee of the reversion does not contradict the general principle that rights in land created under the Real Property Act 1900 are indefeasible (see [45]).
37 The Tribunal then considered a submission by Multiplex WS and AWPF, based on the High Court’s judgments in Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966] HCA 74, that ‘it is a canon of statutory construction that definitions are not to be treated as statutory provisions’ (see [46]). It concluded at [50] that in this case the Court was saying that the ‘definitional section’ of an Act should be regarded as ‘an aid to the construction of the Act’ and at [51] that it was not necessary to ‘strictly travel down that path’ in the present case. The Court’s judgments in Gibb are discussed further below.
38 The Tribunal then held, at [52 – 56], that statements (which it quoted) by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 supported its view that a ‘purposive and remedial approach’, involving consideration of the ‘context of the Act taken as a whole’, should be taken in construing section 10 (see the decision at [56]). The Court’s judgments in Project Blue Sky are discussed further below.
39 At [57 – 59], having repeated the proposition that a lease falling within the RL Act was subject to the overriding provisions of the Act, the Tribunal discussed section 72, which is headed ‘Powers of Tribunal relating to retail tenancy claims’. It quoted the text of the six subparagraphs of subsection (1), interposing commentary on the impact that each of them has on the present case. These subparagraphs list the types of order (for example, an order for the payment of money; an order that a specified sum is not owing; an order that a specified ‘act, matter or thing’, such as the surrender of possession of premises, be done; a grant of relief against forfeiture; and a declaration of the rights and liabilities of the parties) that the Tribunal may make with respect to a retail tenancy claim.
40 In the course of its commentary on section 72(1), the Tribunal made the following points: (a) the Tribunal in this case could make an order for the payment of money against any of the three respondents to Red Roll’s application (i.e., Multiplex Latitude, Multiplex WS and AWPF), since the proceedings concerned a ‘retail tenancy dispute’, which was defined in section 63(1) so as to include disputes involving former parties as well as parties to a retail shop lease; (b) an order that a specified sum was not owing or that a specified ‘act, matter or thing’ be done, could not usefully be made in Red Roll’s favour against Multiplex Latitude, since Multiplex Latitude was no longer the lessor; (c) the same applied to a grant of relief against forfeiture and to a declaration of the parties’ rights and liabilities.
41 At [60 – 61], after referring briefly to other provisions of the RL Act which equally did not, as the Tribunal saw it, impinge upon the legal position as between Red Roll and Multiplex Latitude, the Tribunal stated the conclusion (at [61]) that the ‘real’ respondents to the retail tenancy claim instituted by Red Roll were Multiplex WS and AWPF, ‘simply because they are the primary entities that are caught by Section 72 orders in relation to the Lease over the Premises and they are the entities asserting arrears of rent’.
42 At [62 – 67], the Tribunal carried out a similar examination of section 72AA(1). This subsection sets out the powers that the Tribunal may exercise in relation to an unconscionable conduct claim. The Tribunal reached a similar conclusion regarding Red Roll’s unconscionable conduct claim, namely that the ‘real’ respondents were Multiplex WS and AWPF, even though an order under section 72AA(1) could be made against Multiplex Latitude.
43 At [68 – 72], the Tribunal discussed some of the implications of the transaction whereby Multiplex WS and AWPF acquired from Multiplex Latitude both the building in which the Premises were situated and Multiplex Latitude’s rights and entitlements as lessor under the Lease. It paid particular attention to the definition of ‘retail tenancy claim’ in section 70 of the RL Act. It pointed out by virtue of the assignment of the reversion, Multiplex WS and AWPF became entitled to commence retail tenancy claims against Red Roll under section 71(1), seeking (for example) a payment of money, surrender of possession of the Premises, rectification of the Lease, a declaration as to the rights and liabilities of the parties, repayment of a security bond and/or the appointment of one or more specialist retail valuers (see section 70(a)(i), (iv), (vii), (ix) and (xii), section 70(b) and section 70(c) respectively). In particular, Multiplex WS and AWPF could obtain orders under section 72(1)(a) and section 72(1)(c)(ii) for payment of the arrears owed by Red Roll and for surrender of possession of the Premises.
44 At [73 – 74], the Tribunal stated in the following terms the conclusions that it drew from this discussion:-
74 There is one further observation: the rights of [Multiplex Latitude] as lessor under the Lease have been assigned to [Multiplex WS and AWPF], such that it is at least arguable (and I express no final view on this) that [Multiplex Latitude] is no longer a party to the Lease (although it may be caught by the appellation “former party”), but it is difficult to see how a retail tenancy claim can be mounted against [Multiplex Latitude] and orders made under Section 72, at least in the circumstances of the case now before the Tribunal, because in reality the only parties that can be bound by Section 72 orders are [Multiplex WS and AWPF] who are now the lessors.73 If that is correct then it must follow that an assignee of a lease, whether or not the interest is that of a lessor or lessee (and in this regard it is worth remembering that the definition of “lessee” in s.3 includes the assigns of a lessee), cannot simply pick and choose which parts of the lease contract it wishes to be bound by or apply to it; similarly, and on the basis that the lease contract incorporates and is governed by the Act, the assignee cannot pick and choose which parts of the Act it is bound by or which it would seek to enforce and which it would assert it is not bound by and the terms of which it can resist. In for a penny, in for a pound. You cannot have your cake and eat it too. An assignee, so it seems to me, is bound by the lease and, if it is a retail lease, it bound by those provisions of the Act which apply to the lease contact.
45 At [75 – 78], having restated the argument advanced by Multiplex WS and AWPF with regard to the interaction of section 10(1) with the relevant definitions in section 3 (see [30] above), the Tribunal expressed the opinion that in making this argument these two parties were seeking to ‘pick and choose which liabilities’ they wished to ‘acquire’. It then said that the ‘right of compensation’ created by section 10(1) was not a right in personam. It supported this proposition by referring to section 10(2) (this subsection is set out above at [28]). The Tribunal reasoned that the representations contained in a disclosure statement formed part of the ‘lease contract’ and would be scrutinised, in the course of exercising ‘due diligence’, by a purchaser/assignee of either the lessor’s or the lessee’s interest. There was, the Tribunal said, ‘only one Lease’, on which both parties relied and which must be taken to include ‘whatever consequences, upside or downside,’ were attached to it.
46 At [79 – 80], the Tribunal commented as follows on the consequences of a dishonest lessor becoming insolvent after having assigned the reversion:-
80 A right to compensation under s.10 is meaningless if, coupled with s.72 rights, it cannot be pleaded as a set-off or contra against a claim by a lessor for, for example, rent. And, if [Multiplex WS and AWPF] are “parties” for the purpose of s.72 (with s.63(1) and s.70) then there is no reason for them not to be a party for the purpose of s.10 (with s.63(1)). There is no provision in the Act that would prevent a lessee from asserting: “I know I owe the lessor arrears of rent but the reason that there are arrears is because I relied upon the pre-lease representations in preparing my business plan and agreeing to the quantum of rent and, because those representations were false and/or misleading, my business plan and my consequent rental payments have been based on an incorrect premise/basis because of the lessor’s misrepresentations and the compensation that I claim is, for example, the difference between the rent I would have reasonably paid had the representations not been false and/or misleading and the rent that I am obliged to pay under the lease”. To seek to deny [Red Roll] that right seems to me to fly in the face of the whole thrust of the Act.79 If the words “lessor” and/or “lessee” are limited, for the purposes of assignment, to the original lessor and/or lessee then, so it seems to me, the Act can be easily circumvented by an unscrupulous lessor by making pre-lease misrepresentations with knowledge that they are false and misleading, and engaging in unconscionable conduct, then transferring its interests to a purchaser, going into liquidation and washing its hands of all its pre-lease misrepresentations and unconscionable conduct, yet at the same time leaving the lessee liable to the purchaser with no remedy under s.10 or s.72. In my opinion that is not how the Act was intended to operate and not how the Act does in fact operate.
47 At [80], the Tribunal held that even if a common law or equitable right to claim remedies for misrepresentation was a right in personam, this was not true of the statutory right created by section 10(1). The reason was that section 10 had to be interpreted in the context of the RL Act, which was remedial legislation designed to ‘create a statutory umbrella’ by imposing ‘overarching conditions and obligations’ that operated ‘uniquely’ to ‘change what would otherwise be an ordinary civil contract’. It would be wrong, the Tribunal said, to excise section 10 from that ‘otherwise all-embracing scheme such that it does not apply to lessor/assignees yet the other provisions of the Act do’.
48 At [82 – 87], under the heading ‘Further Observations’, the Tribunal made the following points: (a) the interpretation of section 10 that it favoured would be beneficial, in appropriate circumstances, to a lessor as much as a lessee; (b) since the term ‘party’ in section 10(1) includes an assignee of a party, the term ‘injured party’ must also include an assignee of ‘the original injured party’; (c) the reason for this was that the assignee ‘has also suffered damage’ (the Tribunal illustrated this by suggesting that the assignee of a lessor would suffer the ‘same damage’ as the original lessor); (d) restricting section to ‘the original grant of the lease’ avoids ‘the reality of the marketplace’, in which ‘properties and business change hands, often on more than one occasion, during the life of a lease; and (e) the interpretation of section 10 being adopted was in line with the principles of interpretation laid down in the High Court’s judgments (from which the Tribunal quoted some short extracts) in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28.
49 At [88], before proceeding to set out its orders dismissing the motion taken out by Multiplex WS and AWPF, the Tribunal said:-
If my analysis is correct then it follows that a purchaser should not only carry out due diligence but also make sure that it is adequately protected against liabilities that may arise under the Act that have not been disclosed (if this is in fact the case). I must say I would have thought, as a practicing lawyer, that a purchaser, properly advised, would have, not only carried out due diligence but also have sought to protect itself in the manner referred to.
Discussion of the Tribunal’s reasoning
50 It is convenient at this stage to indicate that in our respectful opinion the reasoning adopted by the Tribunal did not pay sufficient attention to the text of section 10(1) and that its conclusion as to the operation of this provision in the present case was incorrect.
51 Our reasons for so deciding are much the same as those urged upon us in the written submissions filed in advance of the hearing on behalf of Multiplex WS and AWPF (these were prepared by the solicitor for these parties, Mr Hansen) and in the supplementary written submissions and oral submissions presented by Mr Young (their counsel). Those submissions were of greater assistance to us than might be assumed from the relative infrequency with which they are mentioned in the remainder of this judgment.
52 The language of section 10(1). We will commence this explanation of our reasoning by reproducing, with key words italicised, the terms of section 10(1):-
A party to a retail shop lease is liable to pay another party to the lease (“the injured party”) reasonable compensation for damage suffered by the injured party that is attributable to the injured party’s entering into the lease as a result of a false or misleading statement or representation made by the party , or any person acting under the party’s authority, with knowledge that it was false or misleading.
53 According to the natural meaning of this sentence, standing alone, each of the last two italicised phrases – the party and the party’s – refers back to the first italicised phrase – A party. The sentence refers to the situation where a false or misleading statement or representation has been made by a party to a retail shop lease, or by a person acting under the authority of a party to a retail shop lease. It states that in that situation that same party – no-one else – is liable to pay compensation to another party to the lease, provided that certain other conditions are satisfied. There is no other way in which the sentence, standing alone, can reasonably be understood.
54 The position argued by Red Roll and accepted by the Tribunal requires displacement of this straightforward interpretation of the words used in the subsection, to the extent that the opening phrase (‘a party’) is no longer taken to refer to the same person as the two later phrases (‘the party’ and ‘the party’s’). In the two later phrases, what is referred to unequivocally is the party who made the relevant representation, or under whose authority the representor acted. But according to the Tribunal’s decision, the opening phrase must be taken to include not just this party, but also anyone else who is brought within an extended concept of ‘lessor’ or ‘lessee’ (as the case may be) by the relevant paragraph within section 3.
55 It is illuminating at this stage of the discussion to list all the meanings given to the term ‘party’ by section 3. They are as follows: a person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease; a person who has such a right; a sublessor; a sublessee; an heir, executor, administrator or assign of a lessor, lessee, sublessor or sublessee.
56 The Tribunal’s interpretation, in our opinion, fails to take proper account of the use of the definite article in the phrases ‘the party’ and ‘the party’s’. It thereby contravenes a principle stated by the majority judges (McHugh, Gummow, Kirby and Hayne JJ) in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. In a passage at 382 [71] (quoted by the Tribunal at [53]), their Honours said (footnotes omitted):-
Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In Commonwealth v Baume , Griffith CJ cited R v Berchet to support the proposition that it was “a known rule in the interpretation of statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void or insignificant, if by any other construction they may all be made useful and pertinent”.
57 In reaching this conclusion regarding the interpretation of the phrases ‘a party’, ‘the party’ and ‘the party’s’, we reject a contention by Mr Gray, counsel for Red Roll, that they are ‘inherently ambiguous’ by virtue of the statutory definition of ‘party’. Whatever ambiguities may attach to the term ‘party’, there is in our opinion nothing ambiguous about the subsection’s identification of the party liable to pay compensation with the party who made the relevant representation or under whose authority it was made.
58 This specific feature of the language of section 10(1) constitutes, in our opinion, a sufficient indication that, in this subsection at least, the statutory definition of ‘party’ in section 3 is not intended to operate to the extent that, wherever this word appears, it should be taken to embrace every one of the meanings stated in it. It should not be taken to override the clear intention of the legislature, conveyed through the language of the subsection, that the term ‘a party’, when used at the commencement, refers only to the person who made the relevant representation or under whose authority it was made, or (if this person is deceased) to his or her heir, executor or administrator (as would be the case in any event under general principles of succession). When the definition in section 3 is given what we would regard as its proper scope of operation, it emerges that that person may be a lessor, a lessee, a sublessor or a sublessee.
59 Case law dealing with definition provisions. Despite a submission to the contrary by Mr Gray, this conclusion that we have reached accords with an accepted principle stated in the following terms in Pearce and Geddes, Statutory Interpretation in Australia (6th edn, 2006) at [6.62]:-
All definitions of the meaning of words or phrases used in legislation are to be read either expressly or impliedly as subject to the qualification ‘unless the contrary intention appears’: Hall v Jones (1942) 42 SR (NSW) 203; Transport Accident Commn v Treloar [1992] 1 VR 447 at 449.
60 It also accords with the following dictum of Spigelman CJ in Repatriation Commission v Vietnam Veterans’ Association of Australia NSW Branch Inc (2000) 48 NSWLR 548; [2000] NSWCA 65 at 576 [109]:-
In the case of words in a definition section, the context entitled to particular weight is constituted by the section or section in which the words appear.
61 In our opinion, the judgments in Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966] HCA 74 do not assist greatly in resolving the specific question raised in this appeal, even though both the Tribunal’s decision (at [46 – 50]) and the parties’ submissions treated them as significant. In that case, the High Court held that a statutory definition of ‘dividend’ in income tax legislation, under which an allotment of bonus shares was included within the definition, did not confer on bonus shares the character of income for the purposes of the Act generally. This was the case even though dividends were normally to be regarded as income.
62 At 635 [10], Barwick CJ and McTiernan and Taylor JJ explained this point as follows:-
In our view, and with respect to the learned judge, we cannot agree that the definition of "dividend" operates to invest the allotment of bonus shares in circumstances such as the present with the character of income for the purposes of the Act; it does no more than define the meaning to be assigned to the word "dividend" as used in the Act. Consequently, any distribution of the character mentioned in the definition is for the purposes of the Act a "dividend" whether it constitutes an income or a capital receipt to the shareholders. The line of reasoning employed to support the respondent's contention does not, of course, suggest that the effect of the definition is to convert every distribution of the nature described in the definition into dividends in the ordinary sense of that term. It asserts that, since dividends, in the ordinary and natural sense of that term, are income it follows that when the Act defines the term in a different and artificial sense — that is, to include distributions which are not dividends or income in the ordinary sense — it operates to invest dividends as so defined with the character of income. In our view, and with respect to those who think otherwise, this line of reasoning is fallacious. The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense — or are to be taken to include certain things which, but for the definition, they would not include. Such clauses are, therefore, no more than an aid to the construction of the statute and do not operate in any other way.
63 At 640-641 [8], Windeyer J said:-
When a word is said in an interpretation section or clause to "include" certain objects some of them may be objects which according to its ordinary connotation would not be within its denotation. But thus giving a term an enlarged denotation, as "a device to avoid repetition", does not thereby result in all objects brought within the enlarged denotation gaining all the characteristics which the term in its ordinary usage connotes. I am therefore unable to accept the view that, because the word "dividend" is made to comprehend bonus shares, and because dividends are ordinarily income, the proceeds of the sale by Gibbsons of its bonus shares are made income for the purposes of s 47.
64 These quotations from the judgments show that the question to be resolved was the effect of a definition clause, which extended the normal meaning of the defined term (‘dividend’), upon the scope of operation of provisions within the relevant statute that employed a related concept (‘income’). By contrast, the question confronting us is the extent, if any, to which a statutory definition, which also extends the normal meaning of the defined term, should be brought to bear when interpreting a particular provision within the statute in which that term is used.
65 These quotations are, however, useful in reminding us that the effect of a definition clause must always be closely analysed and should not be over-estimated. Such clauses are, as Barwick CJ and McTiernan and Taylor JJ said in Gibb, ‘no more than an aid to the construction of the statute’, and they ‘do not operate in any other way’.
66 Mr Gray referred us to the recent decision of the Court of Appeal in Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150. Here the relevant definition provision, contained in Schedule 1 of the Consumer Credit Code, defined the term ‘contract’ as including ‘a series or combination of contracts or contracts and arrangements’. Under section 11(2), a declaration that credit under a contract of loan was being provided ‘wholly or predominantly’ for business and/or investment purposes would have the effect, subject to defined exceptions, of putting the relevant credit contract outside the scope of the Code.
67 In the course of determining the date on which a contract of loan that was claimed to be a ‘credit contract’ under the Code had been entered into, Tobias JA (with whom Giles and Campbell JJA agreed) made the following observations at [160 – 162]:-
[160] There can be no doubt that the “credit contract” must be one to which the credit provider, against whom relief is sought under the Code, is a party. But that does not require that where the extended definition of “contract” applies, the credit provider, in this case Conway, must have been a party to each and every contract or arrangement that formed the relevant series.
[162] It is apparent that one mischief to which the extended definition of “contract” was directed was the necessity to avoid a situation where the requirements of the Code could be avoided by having a last minute switch of credit provider or lender. In other words, the legislature could not have intended that the provisions of the Code could be rendered inapplicable in circumstances where a credit contract had been entered into between a borrower and Lender A without first obtaining a s 11(2) declaration but then the identity of the credit provider or lender was changed to one which, although related to Lender A, was a different legal entity and before the change, a s 11(2) declaration was obtained.[161] As was pointed out during the course of argument, there is much to be said for the view that where the relevant credit contract is comprised of a series or combination of contracts or contracts and arrangements which have closely connected parties, it matters not that each of those contracts or arrangements must involve the ultimate credit provider so long as, at the end of the day, it can be said that that credit provider is a party to the credit contract.
68 Mr Gray submitted that this decision showed that a definition provision may have a significant impact on the scope of substantive provisions in the same statute and may, indeed, create ‘significant practical difficulties’.
69 We agree that in this part of his judgment Tobias JA gave full effect to what he perceived to be the impact of the extended definition of ‘contract’ in the Consumer Credit Code and that in so doing he took account of what he perceived to be a significant policy objective of the Code. But in contrast to the present appeal, this was not a case in which the Court had to determine whether the terms of a particular substantive provision rendered inapplicable, wholly or in part, the statutory definition of a term appearing within the provision.
70 The purposes of the RL Act. In ruling that considerable weight should be attached to what it perceived to be the policy objectives of the RL Act, the Tribunal placed strong reliance on the judgment of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. In addition to the passage at 382 [71] already reproduced in these reasons, it quoted (at [53 – 55) all or part of paragraphs [69], [70], [78] and [91] (194 CLR at 381-382, 384, 389). The passages quoted were as follows (footnotes omitted):-
[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v. Agalianos Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be elevated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court to “determine which is the leading provision and which the subordinate provision, and which must give way to the other”. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
[78] … the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation , Mr Francis Bennion points out:
“The distinction between literal and legal meaning lies at the heart of the problem of statutory interpretation. An enactment consists of a verbal formula. Unless defectively worded, this has a grammatical meaning in itself. The unwary reader of this formula (particularly if not a lawyer) may mistakenly conclude that the grammatical meaning is all that is of concern. If that were right, there would be little need for books on statutory interpretation. Indeed, so far as concerns law embodied in statute, there would scarcely be a need for law books of any kind. Unhappily this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor it is likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example, the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with”.
[91]… The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and its objects…
71 An important feature of these statements of principle is their emphasis on the importance of ‘examining the context of the provision that is being construed’. In similar vein, Spigelman CJ observed as follows in Repatriation Commission v Vietnam Veterans’ Association of Australia NSW Branch Inc (2000) 48 NSWLR 548; [2000] NSWCA 65 at 575 [107]: ‘The Australian law of statutory interpretation requires a court to consider context in the first instance, not merely after “ambiguity” is identified.’
72 As used in these judgments, the concept of ‘context’ is a broad one. It comprises ‘the language and purpose of all the provisions of the statute’. The purposes or policy objectives of the statute are only one aspect of the broader notion of ‘context’.
73 For this reason, we have concerns about the Tribunal’s statement that its ‘starting point’ was a passage in the Second Reading Speech of the Minister for Small Business relating to the Bill which became the RL Act, given also that it inferred from this speech that because the Act was intended to be ‘remedial legislation’ it should be interpreted with ‘generosity of spirit’. Under section 34 of the Interpretation Act 1987, extrinsic material such as a ministerial speech to Parliament may be used in interpreting a legislative provision in the circumstances outlined in subsection (1). These are (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text, or (b) to determine the meaning of the provision if it is ambiguous or obscure or if the ordinary meaning conveyed by the text would produce a result that is ‘manifestly absurd or unreasonable’. Nowhere in section 34 is there authorisation for treating a ministerial speech as a ‘starting point’.
74 Although it is accepted that ‘beneficial’ legislation should be interpreted liberally and with due regard to its aims and objectives, this principle does not override all other considerations. As Brennan CJ said in IW v City of Perth (1997) 191 CLR 1 at 12, ‘Although a provision of [such an] Act must be given a liberal and beneficial construction, a court or tribunal is not at liberty to give it a construction that is unreasonable or unnatural’. In Minister for Immigration and Multicultural and Indigenous Affairs v SZAYW [2005] FCAFC 154, Weinberger J said:-
It goes without saying that this focus upon a purposive approach does not authorise the courts to legislate a meaning to promote the purpose or object underlying a statute unless that meaning can properly be discerned from the words of the Act itself.
75 We are troubled also by the Tribunal’s opinion that to hold assignees from a lessor or a lessee liable under section 10(1) for harm caused by a pre-lease misrepresentation necessarily accords with the purposes of the RL Act. This opinion seemed to be based in part on the fact that the Act strengthened the obligations of disclosure governing prospective lessors and lessees and stipulated in section 7 that the rights and liabilities of lessors and lessees for which it made provision should override, where necessary, the terms of the lease.
76 We would point out, however, that (a) the other provisions of the RL Act which bear significantly upon pre-lease disclosure – namely, sections 11 and 12 – set out in express terms, as does section 10, what remedy or remedies should apply in the event of their being breached, and (b) because none of these provisions relate directly to the content of the contractual rights and liabilities established by the lease, section 7 has no role to play with respect to them.
77 A further consideration advanced by the Tribunal in support of its view was that ‘as a matter of commercial reality/contract, any assignee of the person making the false or misleading representation can protect himself from that liability by contract’ (see the Tribunal’s decision at [30]). The Tribunal also said (at [79]) that if its view were not correct, the Act could be ‘easily circumvented by an unscrupulous lessor’, through the strategy of making pre-lease misrepresentations with knowledge that they are false and misleading, then transferring its interests to a purchaser and going into liquidation. The lessee, it said, would remain liable to the assignee for rent and other money due under the lease, but would have no remedy under section 10 or section 72.
78 Our view of these suggestions made by the Tribunal is as follows. We agree that an assignee of a reversion can insist that the assignor should indemnify it against any unforeseen liability asserted by the lessee, for which the assignor alone should bear responsibility. But if, as in the situation envisaged by the Tribunal, the assignor goes into liquidation after the assignment, the indemnity will be of no benefit to the assignee. The assignee will be in the same unfortunate position as the lessee would be under the interpretation of section 10 that we consider to be correct.
79 In this classic situation, where one of two innocent parties must suffer because of ‘unscrupulous’ behaviour by a third, we do not discern in the terms of the Act any implicit policy that the assignee, rather than the lessee, should be required to bear the loss.
80 The Tribunal stated at [80] that a right to compensation under section 10 was ‘meaningless’ if, ‘coupled with s.72 rights, it cannot be pleaded as a set-off or contra against a claim by a lessor for, for example, rent’. In our opinion, this proposition is unduly broad. It may be inconvenient for a deceived lessee to have to claim compensation from the former lessor while also maintaining rent payments to the current lessor. But it may well succeed in obtaining the compensation due to it. To describe its rights under section 10 as necessarily ‘meaningless’ is, with respect, a significant overstatement.
81 We take a similar view of another proposition stated by the Tribunal in support of its conclusion regarding the scope of liability under section 10. At [85], the Tribunal said that ‘if a lessor suffered damage as a result of a false or misleading statement of representation, an assignee of that lessor also suffers that damage’ (emphasis added). In our opinion, this is by no means universally true. Even if the assignee suffered some damage as a result of the lessee’s pre-lease misrepresentation (which would not necessarily be the case), there is no reason to believe that it would always be the same damage as that suffered by the original lessor.
82 We would summarise as follows the conclusions that we have reached in this part of our reasons. First, in construing section 10, the Tribunal placed undue emphasis on what it believed to be the purposes and policies underlying the Act. Secondly, these purposes and policies do not necessarily mandate the construction of section 10(1) that found favour with the Tribunal.
83 The significance of sections 70 and 72. The Tribunal derived support for its conclusions from the terms of sections 70 and 72 of the RL Act. It relied particularly upon what it understood to be the role of section 72.
84 We do not see, however, how either section can be said to provide guidance on the particular question to be determined in this appeal.
85 The role of section 70 is to define the two types of claim under the RL Act – retail tenancy claims and unconscionable conduct claims – that can be lodged in the Tribunal under sections 71 and 71A respectively. In its definition of a ‘retail tenancy claim’, section 70 refers to another statutory definition – that of ‘retail tenancy dispute’ – in section 63(1). In that definition, one matter made clear is that such a dispute may involve former parties to a lease as well as current parties. But neither of these provisions purports to confer rights or impose liabilities upon parties, or indeed former parties, to a retail shop lease. They are concerned solely with the scope of the Tribunal’s jurisdiction over disputes connected with such leases.
86 Likewise, the role of section 72 is not to confer rights or impose liabilities, but to set out the types of order that the Tribunal may make when determining retail tenancy claims. Even if (as Mr Gray submitted) the range of orders available to the Tribunal goes beyond any order that a court may make, it does not follow that the section affects their substantive rights and liabilities.
87 In the course of what we described (at [40] above) as the Tribunal’s ‘commentary’ on section 72(1), the Tribunal observed that a number of the types of order listed in section 72(1) could not ‘usefully’ be made in Red Roll’s favour against Multiplex Latitude, since Multiplex Latitude was no longer the lessor. It referred specifically to an order that a specified sum was not owing, an order that a specified ‘act, matter or thing’ be done, a grant of relief against forfeiture and a declaration of the parties’ rights and liabilities. It acknowledged however that an order for the payment of damages could be made against Multiplex Latitude.
88 It was by virtue of considerations such as these that the Tribunal arrived at the conclusion that the ‘real’ respondents to the proceedings instituted by Red Roll were the two assignees of the reversion, Multiplex WS and AWPF.
89 To reason in this way is, in our respectful opinion, to misconceive the task that section 72 performs within the RL Act. In a case brought against three respondents, the fact that a larger range of orders may be made, or ‘usefully’ made, against two of them than against the third does not provide grounds, or even strengthen the argument, for inferring that a particular type of order should be made against any of them.
90 The relevance of the Real Property Act 1900. Although the Tribunal and counsel for both parties made reference to the principle of indefeasibility of title enshrined in the Real Property Act, there was, we believe, a mutual acceptance of the proposition that the question in this appeal turns on the proper interpretation of section 10 of the RL Act in its statutory context. We agree with that proposition. Whatever result emerges from that exercise is not affected by the Real Property Act.
Our orders
91 For reasons set out above at [22 – 26], our decision in favour of Multiplex WS and AWPF regarding the question of interpretation of section 10 of the RL Act raised in this appeal does not rule out the possibility that these two parties might be liable to Red Roll for unconscionable conduct under section 62B. It follows that we should not make the order sought by these parties: namely, an order dismissing them from these proceedings.
92 The Tribunal (at [14] and [92]) indicated its willingness to grant leave to Red Roll to make further amendments to its unconscionable conduct claim against all three respondents to the proceedings. We agree with Mr Gray that it was reasonable for Red Roll to delay making amendments until the outcome of this appeal. It is for the Tribunal, on remitter from us, to make appropriate directions regarding this and other interlocutory aspects of the proceedings.
93 In these circumstances, we consider that the appropriate orders for us to make are as follows:-
1. Leave to appeal is granted
2. The appeal is allowed in part
3. The orders made by the Tribunal on 21 July 2008 are set aside
4. In so far as these Tribunal proceedings comprise retail tenancy claims by the First Respondent to the Appeal against the Appellant and the Third Respondent, alleging liability on their part under section 10 of the Retail Leases Act 1994, the proceedings are dismissed
5. Subject to order 4, the proceedings are remitted to the Tribunal as appropriately constituted
6. There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the other parties are to file and serve submissions in response within a further 21 days. The question of costs will then be determined ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997
7. The proceedings are set down for further directions at 12 noon on 29 January 2009. At that directions hearing, all parties (not merely the parties involved in the hearing of the appeal) should attend.
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