CCS 251 Elizabeth Street Sydney Pty Ltd v Hellenic Club Ltd

[2016] NSWCATCD 88

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

CCS 251 Elizabeth Street Sydney Pty Ltd v Hellenic Club Ltd [2016] NSWCATCD 88

Hearing dates:

3 November 2016

Decision date:

08 November 2016

Jurisdiction:

Consumer and Commercial Division

Before:

M Harrowell, Principal Member

Decision:

The Tribunal makes the following orders:

(1) That the respondent is to deliver up to the applicant possession of the premises known as Shop 2, Ground Floor, 251-253 Elizabeth Street, Sydney on or before 5:00pm on 9 November 2016 and is to permit the applicant to operate a convenience store at the premises until the earlier of the resolution of proceedings COM 16/45810 or further order of the Tribunal, whichever is the earlier.

(2) Order 1 is subject to the following conditions that:

(a) Compliance with order 1 by the respondent is without admission that a “retail shop lease” arose to the applicant and the respondent;
(b) The applicant prosecute its claim with due diligence;
(c) The applicant pays the respondent and occupation fee at the monthly rate of $8708.33 inclusive of GST from the time the applicant takes possession of the premises until the time of the determination of the original application, such amount payable monthly in advance; and
(d) The applicant provides to the Tribunal, by its Counsel Mr Nathan, an undertaking as to damages (which undertaking the Tribunal notes was given at the hearing of this application), such undertaking to be in the form specified in Reg 25.8 of the Uniform Civil Procedures Rules 2005.

(3) Any party seeking costs (costs applicant) is to file and serve an application and submissions on the other party (costs respondent) on or before 16 November 2016.

(4) The costs respondent is to file and serve any evidence and submissions in reply by 23 November 2016.

(5) The costs applicant is to file and serve submissions in reply by 30 November 2016.

(6) The submissions are to include submissions as to whether an order should be made dispensing with a hearing.

Catchwords:

Retail Leases Act- Interim orders, considerations as to strength of case and balance of convenience, requirement for undertaking as to damages.

Legislation Cited:

Civil and Administrative Tribunal Act, 2013
Civil Procedures Rules, 2005
Retail Lease Act, 1994

Cases Cited:

Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208
Australian Broadcasting Corporation v O'Neill [2006] HCA 46
CAC Pty Ltd v Diamond Hill International Pty Ltd, BC9602665
Lineablu Pty Ltd v St George Sailing Club Ltd [2004] NSWSC 1199
Masters v Cameron 91 CLR 353
Nam & Anr v Commonwealth Funds Management Limited & Anr [2002] NSWADT 80
Nam & Anr v Commonwealth Funds Management Limited & Anr (No 2) [2002] NSWADT 120
Perhauz & Anr v SAF Properties Pty Ltd & Ors [2007] NSWADT 122

Texts Cited:

Ritchie’s Uniform Civil Procedure (NSW)

Category:

Procedural and other rulings

Parties:

Applicant: CCS 251 Elizabeth Street Sydney Pty Ltd
Respondent: Hellenic Club Ltd

Representation:

Counsel:
Applicant: Mr J Nathan
Respondent: Mr F Salama

  Solicitors:
Respondent: Sparke Helmore
Agent for Applicant: The Retail Leases Doctor

File Number(s):

COM 16/45807 and COM 16/45810

Publication restriction:

Unrestricted

reasons for decision

1. These reasons relate to application COM 16/45807 in which the applicant seeks interlocutory orders in a retail lease claim pending a determination of substantive application COM 16/45810.

2. The applicant, CCS 251 Elizabeth Street Pty Ltd, has commenced proceedings against the respondent by way of application dated 18 October 2016 in respect of a convenience store located at 251 Elizabeth Street, which property is owned by the respondent.

3. The applicant claims it is the lessee pursuant to a retail tenancy lease to which the Retail Leases Act, 1994 (RL Act) applies. The respondent denies these claims.

4. Up until 17 October 2016, a convenience store was operated at this site under the banner “City Convenience Stores”. On that day the respondent retook possession of the premises having asserted it had a right to do so following a notice of termination issued to a company called City Convenience Store Pty Ltd (CCS), a company different to the applicant. The rights granted to CCS were pursuant to a document entitled “lease” being Annexure A to the respondent’s material filed in this application, which lease commenced on 15 December 2015 (original lease). There is a dispute in these proceedings about when and in what circumstances this lease came to an end.

History

5. It is convenient to set out a short history of what has occurred as asserted by each party.

6. It is common ground in this application that CCS entered into possession of the premises and carried on a convenience food store from about the date the original lease commenced.

7. There is evidence provided in an affidavit of Mr Gebara sworn 26 October 2016 and Mr Soltan sworn 3 November 2016 which asserts the following:

1. In about March 2016 Mr Sameer Al-Amayreh took over the operation of the store. It is asserted that the applicant became the operator at that time in place of CCS. However, it has not been suggested there was any assignment of the lease by CCS to applicant at this time.

2. From about May 2016, Mr Soltan, an agent for CCS and applicant commenced negotiations with the respondent for the purpose of securing a further lease of the premises. The original lease held by CCS was for a fixed term which expired on 15 June 2016.

3. The negotiations apparently took the form of various conversations and an exchange of emails. These emails are found in various evidence provided by each of the parties for the purpose of this application. It is sufficient to identify the relevant emails that need to be considered for the purpose of this application as being contained in Annexure D to the respondent’s bundle.

4. By reference to these emails the applicant asserts that a new retail lease was entered into between the parties in consequence of the negotiations referred to above. The applicant asserts that an agreement was entered into on one of three dates: namely 6 June 2016, 15 June 2016 or 30 August 2016.

8. In relation to the allegation that an agreement was entered into on 6 June 2016, the applicant said that it made an offer by email dated 3 June 2016 sent at 19:23 (Annexure D page 1 of 8) which was accepted by the respondent through its agent Mr Skufris by email dated 6 June 2016 sent at 6:44pm.

9. The applicant then asserts that if a retail lease was not entered into on that day, nonetheless there was a completed contract in consequence of the email sent by Mr Soltan to Mr Skufris on 15 June 2016 at 11:46 (Annexure D page 1 of 8) when Mr Soltan advised the name of the proposed lessee. In that email Mr Soltan said:

“John,

The company is CCS 251 Elizabeth Street Pty Ltd.

Kind regards,

Haney Soltan”

10. The third alternative circumstance which the applicant contends gave rise to a binding agreement was by the applicant signing and returning to the respondent a document entitled “lease proposal – shop 2/ground floor, 251 – 253 Elizabeth Street Sydney. That document, which is found at Annexure E of the respondent’s bundle was apparently forwarded by Mr Skufris (a Ray White agent) to the applicant on about 17 June 2016. That document was subsequently signed by Mr Al-Amayreh, the director of the applicant, on 30 August 2016 and was returned on about that date. The applicant says that it also paid rent and or entered into possession of the premises no later than 1 September 2016 and therefore has an enforceable retail lease by reason of the operation of section 8 of the RL Act.

11. It is relevant to note at this point that the lease proposal dated 17 June 2016 had the following introductory words:

“We are pleased to set out terms of lease for the above premises subject to the Lessor’s final board approval and availability of the premises”.

12. The proposal also required a deposit of one month’s rent to be paid (see send page of the proposal). It is not in dispute this amount was in fact paid.

13. The respondent denied that any of these circumstances gave rise to a binding retail lease by operation of s8 of the RL Act or otherwise. Rather the respondent says that the original lease with CCS was terminated by the respondent in consequence of a notice of termination dated 15 September 2016 (part of Annexure B of the respondent’s bundle) which provided for termination to take effect on 15 October 2016. The respondent says that, upon expiry of the notice, it validly retook possession of the premises. In this regard, the respondent’s contention is that CCS was at all times in possession of the premises and not the applicant.

Submissions

14. The parties filed written submissions and made oral submissions in relation to the application.

15. As indicated above, the applicant asserted that a binding agreement was entered into on 6 June, 15 June or alternatively 30 August 2016 and that the applicant had paid rent and/or entered into possession of the premises.

16. The applicant relied on section 3 of the RL Act and of the decisions of young J in CAC Pty Ltd v Diamond Hill International Pty Ltd, BC9602665 and Chesterman ADCJ/DP in Perhauz & Anr v SAF Properties Pty Ltd & Ors [2007] NSWADT 122 and says that these decisions support the view a binding contract was entered into between the parties.

17. Secondly, the applicant relies on the fact that the respondent “knew, at least by 26 August 2016, that the applicant had taken possession of the premises and the respondent did not object to this”. The applicant says it relied on the conduct of the respondent to its detriment in continuing to operate the business from the premises.

18. The applicant says that the balance of convenience favours the grant of an interim restraining order. The applicant referred to the decision of Palmer J in Lineablu Pty Ltd v St George Sailing Club Ltd [2004] NSWSC 1199 at [23]-[25].

19. In reply, the respondent said there was no binding agreement. The respondent relied on the decision of the High Court of Australia in Masters v Cameron 91 CLR 353 and submitted that the present situation was a case described as the “third class” in Masters v Cameron, namely “the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own.”

20. In this regard, the respondent says that the course of the correspondence needs to be considered as does the whole of the content of the email of 6 June 2016. In relation to this email the respondent points to the fact that it sought confirmation of the name of the lessee and that a proposal was then to be sent to the applicant for its completion. The respondent says that the proposal ultimately sent on 17 June 2016 was not capable of being accepted by the applicant, that proposal being qualified by the words “subject to final Board approval and availability of premises”.

21. As to the submission that the applicant had entered into possession, the respondent pointed to the history of the original lease with CCS and said at no time did the respondent consent to an assignment of this earlier lease or the taking over of possession by the applicant from CCS. Consequently, the respondent says that any position which the applicant had in operating the convenience store could only have been as agent for CCS.

22. The respondent says that the only notice that brought the earlier lease with CCS to an end was its notice of termination dated 15 September 2016 which provided for termination on 15 October 2016. At this stage the fixed term of the original lease had expired and CCS was allegedly holding over.

23. In summary, the respondent says there was no agreement reached between the parties, the applicant was not capable of taking legal possession of the premises until the expiry of the original lease with CCS, which subsisted until the respondent retook possession on 17 October 2016 and no consent has otherwise been granted by the respondent to the applicant granting a right of possession. The respondent also says that for these reasons know estoppel could arise.

24. As to the balance of convenience and the decision in Lineablu, the respondent says that there is no evidence that the applicant commenced or conducted its own business on the premises. Rather any business conducted was on behalf of and belong to CCS under the original lease.

25. The respondent submits that the applicant has no arguable case on the facts as put forward in support of the application and, in any event, damages would be an adequate remedy. The respondent said it may be liable to CCS for any claims arising from the original lease and the ownership of fit out and chattels which belong to that company.

26. The respondent said that it had provided its undertaking not to part with possession pending final determination of the application and therefore the applicant’s position was adequately protected. In the event the proceedings were determined in favour of the applicant, the respondent said that possession could be quickly delivered up if it was ordered to do so.

27. Lastly, the respondent says it is entitled to costs, that special circumstances exist under s60 of the Civil and Administrative Tribunal Act, 2013 (NCAT Act) and that the application for interim relief should be dismissed.

Consideration

28. The applicant seeks the following interim orders:

1. that the respondent is to grant the applicant immediate interim possession of the subject premises pending determination of the original application without admission that a “retail shop lease” arose to the applicant; and

2. The applicant is to pay the respondent and occupation fee at the monthly rate of $8708.33 inclusive of GST from the time the applicant takes possession of the premises until the time of the determination of the original application.

29. These orders are in the nature of a mandatory injunction said by the applicant to be necessary to maintain the status quo pending a final hearing of the application.

30. The application is fixed for final hearing on 10 November 2016. To date, the only arrangements in place to preserve the status quo are an undertaking by the respondent not to part with possession of the property to any third party pending a final hearing. This undertaking was previously given to the Tribunal when the proceedings were first listed for directions.

31. As made clear by the various authorities and texts (see eg Ritchie’s Uniform Civil Procedure (NSW) at SCA s66.10), the exercise of a discretion in favour of the applicant to grant interim relief requires a consideration of:

1. the nature of the applicant’s case;

2. the apparent strength of that case; and

3. the balance of convenience.

32. In Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208, at 215 and following, McLelland J said:

It is to be noted that in considering the question of the “balance of convenience” as contemplated in the Eng Mee Yong case And the American Cyanamid case, the relative apparent strength of each party’s case may be a relevant matter… This accords with what the Supreme Court of Victoria said in Magna Alloys & Research v Coffey (at 27) in the following passage relating to the High Court judgement in Beecham Group Case:

“… the reference in Beecham’s Case… to a probability of success should not be understood as meaning that the plaintiff must show that at trial it is more probable than not that he will succeed. Indeed, the High Court made it clear that is not the issue for the judge to determine, for in the passage already cited the Court said ‘... the Court does not … give or withhold interlocutory relief upon a forecast as to the ultimate result of the case’.

Rather, the High Court should be understood as referring to the degree of probability which may be high or low. No doubt the strength or weakness of the plaintiff’s case will be relevant when the judge comes to the question of the balance of convenience, if he ever does.”

33. McLelland J went on to say at 216:

“The court must of course keep in mind the purpose for which the power is conferred. The purpose of a power to grant interlocutory injunctions is explained in the following terms by Lord Diplock in the American Cyanamid case (at 406):

“My Lord’s, when an application for an interlocutory injunction to restrain a defendant on doing acts alleged to be in violation of the plaintiff’s legal rights is made upon contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex-hypothesi the existence of the right or the violation of it, or both, is uncertain and will remain until final judgement is given in the action…. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiffs need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiffs undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial.”

It is the task of the court on an application for an interlocutory injunction to seek to fulfil this purpose in a manner best calculated to achieve justice between the parties in the circumstances of the particular case…

34. In Australian Broadcasting Corporation v O'Neill [2006] HCA 46 at [65] and following the High Court said in relation to the grant of an interlocutory injunction:

65   The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd [69]. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued [70]:

"The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted."

By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [71]. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [72]:

"How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks."

66 For example, special considerations apply where injunctive relief is sought to interfere with the decision of the executive branch of government to prosecute offences [73]. Again, in Castlemaine Tooheys Ltd v South Australia [74], Mason ACJ, in the original jurisdiction of this Court, said that "[i]n the absence of compelling grounds" it is the duty of the judicial branch to defer to the enactment of the legislature until that enactment is adjudged ultra vires, and dismissed applications for interlocutory injunctions to restrain enforcement of the law under challenge.

67   Various views have been expressed and assumptions made [75] respecting the relationship between the judgment of this Court in Beecham and the speech of Lord Diplock in the subsequent decision, American Cyanamid Co v Ethicon Ltd[76]. It should be noted that both were cases of patent infringement and the outcome on each appeal was the grant of an interlocutory injunction to restrain infringement. Each of the judgments appealed from had placed too high the bar for the obtaining of interlocutory injunctive relief.

68   Lord Diplock was at pains to dispel the notion, which apparently had persuaded the Court of Appeal to refuse interlocutory relief, that to establish a prima face case of infringement it was necessary for the plaintiff to demonstrate more than a 50 per cent chance of ultimate success. Thus Lord Diplock remarked [77]:

"The purpose sought to be achieved by giving to the court discretion to grant such injunctions would be stultified if the discretion were clogged by a technical rule forbidding its exercise if upon that incomplete untested evidence the court evaluated the chances of the plaintiff's ultimate success in the action at 50 per cent or less, but permitting its exercise if the court evaluated his chances at more than 50 per cent."

69   In Beecham, the primary judge, McTiernan J, had refused interlocutory relief on the footing that, while he could not dismiss the possibility that the defendant might not fail at trial, the plaintiff had not made out a strong enough case on the question of infringement [78]. Hence the statement by Kitto J in the course of argument in the Full Court that it was not necessary for the plaintiff to show that it was more probable than not that the plaintiff would succeed at trial.

70   When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase "serious question" if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham.

71   However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is

"[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried"[79]. That was followed by a proposition which appears to reverse matters of onus[80]:

"So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought." (emphasis added)

Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.

72 The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application [81]. The first consideration mentioned in Beecham, the nature of the rights asserted by the plaintiff, redirects attention to the present appeal.

35. As to other matters which affect the balance of convenience, these include a consideration of:

1. whether the interlocutory relief sought would overturn, or merely maintain, the status quo;

2. the effect of the grant or refusal of the injunction on the parties’ trade;

3. the existence and sufficiency of alternative remedies

36. The claims made by the applicant could not said to be strong. For example, the applicant asserts that a binding agreement came into existence because of an exchange of emails, one said to be an offer from the applicant’s representative Mr Soltan dated 3 June 2016 seen at 19:23 hours and a reply from Mr Skufris, the agent for the respondent sent on 6 June 2016 at 6:44 PM said to be acceptance of that offer.

37. Mr Soltan’s email was in the following terms:

“Dear John,

I refer to our conversation. As discussed here is the revised offer:

Rent: $95,000 per annum gross plus GST

Term: 3 years

Option: 7 years option

Demolition clause: to apply in the option with 6 months minimum written notice

Annual rent increase: 4% pa

Bank Guarantee: 3 months

Rent Free Period: 3 months from commencement

Lease commencement date: 1 September 2016

I trust you will try your best

Kind Regards,

Haney Soltan”

38. The reply from Mr Skufris was in the following terms:

“Haney,

Good news. This is acceptable to the Lessor. We will prepare a leasing proposal for you to complete tomorrow.

Can you please confirm the name of the Lessee?

I can then forward to you to complete.

Thank you.

39. The language used by the parties, the fact the proposed lessee had not been confirmed and the fact the email from Mr Skufris contemplated a document would be sent to Mr Soltan “to complete” tend to suggest that no agreement was concluded at this time. The subsequent execution on 30 August 2016 of the lease proposal sent by the respondent on 17 June 2016 with its qualification that it is “subject to final board approval and availability of the premises” also counts against any binding agreement having been formed on a later date.

40. The evidence presently before the Tribunal that representatives of the applicant were in possession of the premises and may have paid rent can give rise to the entry of the retail shop lease depending on the circumstances that have occurred: see s8 of the RL Act. However, the applicant has not yet explained, by reference to the evidence, how and in what circumstances any occupation by the applicant or its representatives occurred, that is whether the applicant and its representatives occupied the shop as agent for CCS or had otherwise been granted a right of possession in respect of a proposed new lease.

41. If these were the only matters to be considered, the balance of convenience would not favour the making of the orders now sought.

42. However, as the High Court said in O’Neill, in determining whether interlocutory orders should be made “the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought”.

43. In this regard, the following matters count in favour of exercising a discretion to grant the interim relief despite the relative weakness of the applicant’s case:

1. CCS was previously in possession of the premises pursuant to the earlier lease and conducting a convenience store on the site. The evidence presently before the Tribunal indicates that the applicant has continued that trade, although the circumstances in which that has occurred are matters to be considered at the final hearing;

2. while the respondent says a new lease has been entered into with a third party, there is no evidence as to the terms of that lease, when it commences or whether the respondent has any liability to the third party if it fails to deliver up possession. Further, there is no evidence that the third party is entitled to immediate possession or otherwise has a right which might be interfered with by the grant of an interlocutory order;

3. Up until the respondent effected a re-entry to the premises, a convenience store was being operated under the banner of “City Convenience Stores”. The evidence in this application is that the applicant operated that business. Presently, there are goods left on the premises being the trading stock and equipment for the convenience store business. Correspondence received from CCS suggests that the goods, fit out and equipment belong to and/or can be used by the applicant for the purpose of operating the convenience store business. It also seems that some of the goods in the store are perishable.

44. The respondent submitted that damages would be an adequate remedy, particularly as it had undertaken not to part with possession. On the other hand the applicant submitted that any damages would be difficult to calculate. Further, the applicant submitted that any loss and damage to both parties would be ameliorated in that the applicant would pay an occupation fee to the respondent during the period it occupies the premises as permitted by the interlocutory order. Consequently, any loss to the respondent would be minimised by the payment of an amount equivalent to rent and the applicant’s prospective liability to the respondent would be reduced by an amount equivalent to these payments if its claim failed. Also, if the applicant was successful, it would have had possession in the intervening time and its loss (and liability of the respondent) would thereby be minimised.

45. A final matter to consider is that a final hearing is fixed to commence on 10 November 2016, although it is likely any decision may be reserved.

46. Having regard to the proximity of the hearing, and notwithstanding the apparent weakness of the applicant’s case, the ultimate success of which is unnecessary to resolve in this application, the Tribunal is satisfied that interim orders should be made allowing the applicant possession of the premises until determination of these proceedings or further order of the Tribunal, whichever is the earlier. This will allow the continued operation of the convenience store until final hearing and preserve the existing business on an interim basis.

47. On the other hand, any such order should be on the basis that the applicant gives the usual undertaking as to damages, an undertaking which the applicant has offered through its Counsel if that is required by the Tribunal.

48. In its submissions in chief at paragraph 2.14 the applicant referred to a decision of the Administrative Decisions Tribunal in Nam & Anr v Commonwealth Funds Management Limited & Anr [2002] NSWADT 80 and said that an undertaking as to damages is not a precondition to the grant of interim statutory relief under s 72(4) of the RL Act. In that case the Tribunal said at [92]:

“Retail leases law also has a public policy setting, they no doubt not seen by many as being as significant as the place occupied by environmental protection laws. The relationship between retail shop tenants and lessors is no longer a matter of private contract. The Act introduces binding, minimum standards. The Tribunal is not prepared to indoors as a precondition to the grant of interim statutory relief under the Act the giving of an undertaking as to damages.”

49. Section 72 (4) of the RL Act provides:

“(4)   The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so

50. The applicant appears to submit that Nam is authority for the proposition that undertakings as to damages can never be required as a condition of the grant of interlocutory relief under the RL Act.

51. Section 72(4) does not prevent the Tribunal from imposing conditions in relation to any order it might make, including an interim order. On the other hand, s58 of the NCAT Act expressly authorises the Tribunal to impose conditions when exercising “a power of the Tribunal to make an order or other decision”.

52. In Nam & Anr v Commonwealth Funds Management Limited & Anr (No 2) [2002] NSWADT 120, while the Tribunal again refused to require an undertaking to damages, it said at [56]:

“The Tribunal remains of the view previously expressed that an undertaking as to damages should not be insisted upon; though close regard must always be given to the economic impact on the respondents of any orders.”

53. In my view this passage in Nam (No 2) makes clear that the Tribunal was not saying in the original Nam decision that undertakings could not be required in appropriate cases but rather that an undertaking as to damages should not be required in that particular case by reason of the facts.

54. To the extent that Nam decides to the contrary, I do not agree. Rather, having regard to the authorities referred to above, in my opinion the making of orders in the nature of interlocutory injunctions as permitted by the RL Act must be done in “in a manner best calculated to achieve justice between the parties in the circumstances of the particular case”. While there may be circumstances in which an undertaking as to damages should not be required, in my opinion there is no universal rule that applies to retail lease claims and the making of interim orders under the RL Act that would prevent the Tribunal from requiring an undertaking for damages.

55. The present case is one where an undertaking as to damages should be required. The reasons why are as follows.

56. There are competing interests and competing claims as to who is entitled to possession of the premises. It seems clear that on any view the original lease to CCS has come to an end, neither party contending to the contrary. The circumstances in which that has occurred are unclear and they are matters for resolution at the final hearing. In so far as the effect of the orders will be to keep the respondent from possession of its premises and prevent it from delivering up possession to any new lawful tenant, the payment of rent by the applicant in the intervening period may not sufficiently compensate the respondent in the event the applicant’s claim fails. Further, having regard to the relative strengths of the case and the other factors outlined above, in my opinion it is appropriate as a condition of granting the interim relief to require an undertaking.

Orders

57. The Tribunal makes the following orders:

1. that the respondent is to deliver up to the applicant possession of the premises known as Shop 2, Ground Floor, 251-253 Elisabeth Street, Sydney on or before 5:00pm on 9 November 2016 and is to permit the applicant to operate a convenience store at the premises until the resolution of proceedings COM 16/45810 or further order of the Tribunal, whichever is the earlier.

2. Order 1 is subject to the following conditions that:

1. Compliance with order 1 by the respondent is without admission that a “retail shop lease” arose to the applicant and the respondent;

2. The applicant prosecute its claim with due diligence;

3. The applicant pays the respondent and occupation fee at the monthly rate of $8708.33 inclusive of GST from the time the applicant takes possession of the premises until the time of the determination of the original application, such amount payable monthly in advance; and

4. The applicant provides to the Tribunal, by its Counsel Mr Nathan, an undertaking as to damages (which undertaking the Tribunal notes was given at the hearing of this application), such undertaking to be in the form specified in Reg 25.8 of the Uniform Civil Procedures Rules 2005.

3. Any party seeking costs (costs applicant) is to file and serve an application and submissions on the other party (costs respondent) on or before 16 November 2016.

4. The costs respondent is to file and serve any evidence and submissions in reply by 23 November 2016.

5. The costs applicant is to file and serve submissions in reply by 30 November 2016.

6. The submissions are to include submissions as to whether an order should be made dispensing with a hearing.

M Harrowell

Principal Member

Civil and Administrative Tribunal of New South Wales

8 November 2016

Amended 9 November 2016

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 05 January 2017