Centralcon Pty Limited v Toga Pty Limited

[2019] NSWCATCD 50

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Centralcon Pty Limited v Toga Pty Limited [2019] NSWCATCD 50

Hearing dates:

22 January 2019

Date of orders:

11 June 2019

Decision date:

11 June 2019

Jurisdiction:

Consumer and Commercial Division

Before:

D Bluth, Senior Member

Decision:

1. Application is dismissed

 

2. The Certificate dated 16 January 2017 pursuant to s16(3) of Retail Leases Act 1984 (NSW) is effective to waive the term of 5 years.

 

3. Centralcon Pty Limited has no right of occupation of the premises, Shop X, XXX XXX Plaza, XXX Street, Sydney.

 

4. The respondent is entitled to possession of the premises Shop X, XXX XXX Plaza, XXX Street, Sydney three days after the publication of these orders.

 

Direction for Costs

 

4. The respondent is to provide to the Tribunal and the applicant, either in person or by post, submissions and documents in relation to the application for costs within 28 days of publication of this judgment;

 

5. The applicant is to provide to the Tribunal and the respondent, either in person or by post, submissions and documents in relation to costs 28 days after receipt of the submissions from the respondent;

6. The Tribunal intends to hear the costs application on the papers and dispense with a hearing under s50(2) of the Civil and Administrative Tribunal Act, 2013 (NSW) and the matter is to be heard on the papers. If either party seeks to be heard in person, they should advise the Registry prior to 14 days after publication of this judgment setting out their reasons why and the Registry will advise of the outcome in due course.

Catchwords:

Certificate pursuant to s16(3), Orders pursuant to s72(1) of the Retail Leases Act 1984

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)
Retail Leases Act 1994 (NSW)

Cases Cited:

FCT v Comber (1986) 10 FCR 88
Heard McEwan Pty Ltd v G Zanetti Pty Ltd [2017] NSWCATAP213
Inness v Waterson [2006] QCA 155
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355
Sargent v ASL Developments (1974) 131 CLR 634
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
203 Castlereagh St Pty Ltd v Skybloo Holdings Pty Ltd [2016] NSWCATAP 172

Texts Cited:

Pearce and Geddes, Statutory Interpretation in Australia, 7th Ed

Category:

Principal judgment

Parties:

Centracon Pty Limited (applicant)
Toga Pty Limited ((respondent)

Representation:

Retail Leases Doctor (applicant)
Minter Ellison (respondent
Haney Soltan, Lay Advocate (applicant)
Clifford Ireland, Counsel (respondent)

File Number(s):

COM 15/55691

Publication restriction:

Nil

REASONS FOR DECISION

1. Centralcon Pty Ltd (the applicant) is the sublessee from Toga Pty Ltd (the respondent) of Shop X, XXX XXX Plaza, XXX Street, Sydney (the premises) under registered Sublease AN401928 (the Lease).

2. The term of the Lease is for 12 months ending on 8 September 2017.

3. This matter has come before this Tribunal because a dispute has arisen between the parties regarding the term of the Lease and the continued occupation of the premises by the applicant.

4. The applicant has lodged a Retail Lease Application seeking the following declarations or orders:

1. a declaration under s72(1)(f)(iii) of the Retail Leases Act 1994 (NSW) (RLA) that the Lease is extended to the statutory terminating date of 8 September 2021 with its term of 12 months altered to 5 years;

2. an order under s72(1)(c)(iv) of the RLA restraining the respondent from terminating the applicant's tenancy of the premises or interfering with the applicant's quiet enjoyment of the premises until 8 September 2021;

3. an order under s72(1)(c)(iv) of the RLA that the respondent execute and lodge for registration with LPMA (the registering authority) a Variation of Lease document to reflect the statutory variation to the registered Lease;

4. a declaration under s72(1)(f)(iii) of the RLA that the respondent engaged in conduct against the applicant in relation to the Lease that is, in all circumstances, unconscionable contrary to s62B of the RLA;

5. an order pursuant to s60 of the Civil & Administrative Tribunal Act 2013 (NCAT Act) that the respondent pay the applicant's costs of and incidental to these proceedings in a fixed sum, or alternatively to be assessed under the Legal Profession Act 2004.

5. Mr Soltan in his opening address to the Tribunal at the hearing and as later confirmed in his written submissions in chief, confirmed that the main issue for determination by the Tribunal is whether a certificate dated 16 January 2017 and signed by Mr David Balog, the former solicitor for the applicant (the certificate), accords with the requirements of s16(3) of the RLA to waive the mandatory minimum five year term for a retail shop lease mandated by ss16(1) & (2) of the RLA at the time the Lease was entered into.

6. The applicant contends that the Certificate is ineffective in waiving the provision of s16(1) of the RLA and consequently, the term of the Lease is for five years. The applicant contends that the Certificate did not certify the matters required by s16(3)(a) of the RLA to be certified.

7. The respondent says that such contention misconstrues both the Certificate and the section and cannot succeed as a matter of law. Consequently the continued occupation of the premises by the applicant is without legal foundation.

8. Prior to commencement of the hearing, the applicant withdrew its request for a declaration (item no. 4 in paragraph 4 of these Reasons) relating to whether the respondent engaged in unconscionable conduct.

History of the leasing relationship between the parties

9. The applicant and the respondent entered into the following Sub‑Leases for the premises:

1. sublease for a 5 year term commencing on 9 March 2011 and terminating on 8  March 2016;

2. a further sublease for a 6 month term commencing on 9 March 2016 and terminating on 8 September 2016; and

3. a further sublease for a 12 month term commencing on 9 September 2016 and terminating on 8 September 2017 (being the Lease).

10. Since 8 September 2017 the applicant, with the respondent's consent, continued in occupation of the premises as a monthly tenant in holdover under the terms of the Lease until the Lease was terminated by the respondent.

11. The respondent served on the applicant a Notice to Quit dated 26 July 2018 giving the applicant two months' notice to vacate the premises. The applicant did not so vacate the premises after the expiry of the two month period and continues to occupy the premises maintaining its right to do so pursuant to a statutory lease under s16(1) of the RLA.

12. The Lease was issued by the respondent's then lawyers on 15 November 2016 confirming that the respondent will require for the Lease to be granted, the return of the Lease duly executed in duplicate, a cheque made out to the LPMA, certificates of currency, the bank guarantee as required under the Lease and a signed certificate pursuant to s16(3).

13. Under cover of letter dated 23 January 2017, the applicant's then lawyers, DCB, sent to the respondent's lawyers the executed Lease in duplicate, the Certificate and a cheque payable to the LPMA. DCB then said 'Please advise of any outstanding documents'. There appeared to be nothing further required and the Lease proceeded to be granted.

Section 16 of the RLA

14. s16 relevantly stated as at 9 September 2016.

1. Minimum 5-year term

2. The term for which a retail shop lease is entered into, together with any further term or terms provided for by any agreement or option for the acquisition by the lessee of a further term as an extension or renewal of the lease, must not be less than 5 years. An agreement or option is not taken into account if it were entered into or conferred after the lease was entered into.

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

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

1. the lessee or prospective lessee requested the lawyer or conveyancer to give the certificate and;

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

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

(3A)   The regulations may prescribe matters that must be included in a certificate under subsection (3) and procedures that must be complied with in connection with the giving or handling of such a certificate.

15. The Tribunal notes that in fact no matters have been prescribed by the Regulations pursuant to s16(3A).

The Certificate

16. The Certificate, the subject of this dispute, states as follows:

NSW GOVERNMENT

SERVICES

TECHNOLOGY

ADMINISTRATION

Retail Tenancy Unit

Certificate Under Section 16

Retail Leases Act 1994 (NSW)

Section 16(1) of the Retail Leases Act 1994 (NSW) sets the term of a retail shop lease (including extensions or options) as not less than 5 years. Shorter lease terms are allowed if a lawyer or licensed conveyancer, not acting for the lessor (landlord), at the request of the prospective lessee (tenant) certifies in writing that they have explained subsections (1) and (2) of section 16 and that giving this certificate will result in those subsections not applying to the lease.

Prospective Lessee

_____________________Centralcon Pty Ltd ( Handwritten) ____________

Premises: Shop X, XXX XXX Plaza, XXX Street, Central Sydney (handwritten),

I David Charles Balog (handwritten) being a lawyer/licensed conveyancer (crossed out) certify that, at the request of the prospective lessee, I have explained subsections (1) and (2) of section 16 and that giving this certificate will result in those subsections not applying to the lease.

I have explained the above before/within 6 months after the Lease was entered into (ruled out) dated

Dated: 16/01/2017 (handwritten)

Signature (signed by Mr Balog)

David Charles Balog (handwritten)

Hearing

17. The hearing took place on 22 January 2019. Mr Haney Soltan of the Retail Leases Doctor acted as agent for the applicant and Mr Clifford Ireland of Counsel acted on behalf of the respondent. I determined that pursuant to s68(1) of the RLA that mediation was not necessary.

18. At the commencement of the hearing, there were two preliminary issues to be resolved and I made certain determinations. By letter dated 19 February 2019 after the hearing, the lay advocate Mr Haney Soltan requested that the Tribunal provide reasons within its Reserved Decision for its refusal to adjourn the hearing on 22 January 2019 as requested by the applicant and for the striking out of part of the applicant's evidence.

19. I will now deal with the two preliminary issues.

Adjournment of the hearing

20. At the commencement of the hearing, the lay advocate on behalf of the applicant requested an adjournment of the hearing as the respondent had only just recently served a further Affidavit of Ms Jody Barnes as part of its evidence. Ms Barnes is the Asset Manager for the respondent.

21. On perusal of that Affidavit, it appeared to me that it set out the history of the relationship between the parties and annexed further documents none of which would have been new to the respondent being within the knowledge of the respondent. However, Mr Soltan was most adamant that he required an adjournment so that he could take further instructions in relation to the matters that were now being put before the Tribunal in the affidavit and no doubt take further instructions generally in relation to the disputation between the parties, that is, whether the Certificate complied with s16(3) of the RLA.

22. However, I noted from the opening address of Mr Soltan, which accords with the applicant's written submissions in chief subsequently made, that the sole issue for determination, as far as the applicant was concerned was whether the Certificate was valid and effective.

23. I was not prepared to adjourn the hearing to another day. There seemed to me to be no pressing need to have a long adjournment and the burden of inconvenience weighed heavily upon the respondent, waiting to obtain vacant possession of the premises and delayed by the argument that, in fact, the Certificate did not comply and therefore the applicant is entitled a 5 year term.

24. It was not clear to me what further instructions Mr Soltan required from the directors of his client in respect of the running of the case, as it would appear to be basically a question of statutory interpretation. Both directors Mr Hosny Sayed and his daughter Ms Nora Sayed were present sitting with Mr Soltan so I allowed Mr Soltan and the directors an adjournment of one hour so Mr Soltan could obtain further instructions on the matters that he believed he required such instructions.

Enquiry behind the giving of the Certificate

25. The second issue raised by Mr Soltan at the hearing and subsequently sought to be introduced into evidence through the statements provided by the two directors, Mr Hosny Sayed and his daughter Ms Nora Sayed, related to the circumstances surrounding the signing of the Lease and the discussions with Mr Balog, in particular, regarding the provision of the Certificate. Mr Balog's file was subpoenaed and produced to the Tribunal. Also, Mr Balog was asked to attend the hearing and was waiting outside the courtroom to give evidence, and no doubt to be cross‑examined.

26. An enquiry, as pursued by the applicant, would have the Tribunal enter into examination of the relationship between a solicitor and the solicitor's client and consequently render the reliance on the certificate pursuant to s16(3) to be inoperable. It is the Tribunal's view that there are other avenues for a client to dispute whether or not its solicitor was properly instructed or whether in fact the solicitor acted outside the instructions given by the client. A similar situation arises in relation to the provision of a s66W certificate under the Conveyancing Act 1919 which is so commonly used by lawyers and conveyancers in a conveyancing transaction relating to the purchase of residential properties and the cooling off period. A purchaser is entitled to a cooling off period of five business days but this cooling off period can be waived by the giving of a solicitor's certificate under s66W. No enquiry behind the giving of the certificate is appropriate in relation to the actual effectiveness of the waiver of the cooling off period by the Certificate. Any such investigation would undermine the effectiveness of the certificate and render the whole cooling off procedure unworkable and defeat the purpose of allowing certainty in conveyancing transactions.

27. The same applies here. The purpose of giving a certificate under s16(1) is to provide certainty to a leasing transaction. It seemed to me that the Tribunal was being asked to investigate the circumstances behind the giving of the Certificate. I was not minded to undertake this task because it was not appropriate to go behind the giving of the Certificate. Such an enquiry would undermine the purpose of s16(3), such purpose being the reliance upon the certificate to allow a tenant or landlord to avoid the deeming effect of ss16(1) and (2) by the presentation of the certificate so both parties know the exact term of the Lease.

28. Mr Ireland, in written submissions on behalf of the respondent raised two further reasons why my ruling that the applicant should be precluded from asking the Tribunal to go behind the giving of the Certificate was correct. The first reason is that the Certificate was, as a matter of law, within the ostensible authority of a solicitor acting for the applicant in a property transaction (such as this one involving the granting of a lease) to issue. A solicitor acting on such a transaction has authority to do all things reasonably necessary to complete the agreed transaction. The evidence, which is not in dispute, is that the respondent offered the applicant a lease for one year commencing on 9 September 2016 and, as part of the granting of that lease, the respondent requested that a certificate under s16(3) be provided waiving the five year period.

29. Mr Ireland referred the Tribunal to the case of Inness v Waterson [2006] QCA 155 which established the applicable principle concerning the ostensible authority of a solicitor in a conveyancing transaction. It is quite clear that a solicitor has such ostensible authority and this is further supported by the decision of the High Court in Sargent v ASL Developments (1974) 131 CLR 634 where it was held that the unequivocal acts of a solicitor affirming a contractor rather than rescinding it, performed at a time when a solicitor had knowledge of the relevant facts and the client did not, still bound the client. In the present matter, the applicant knew full well that the lease was only for 12 months and that there would be the giving of the certificate under s16 of the RLA which the applicant's solicitor of course did so to ensure that the lease transaction proceeded.

30. The second reason propounded by Mr Ireland in relation to not going behind the Certificate is based on the actions of Mr Balog, the applicant's then solicitor, by serving the Certificate with his return of the Lease and in so doing, confirmed that the applicant had elected to proceed with the one-year short-term lease (rather than not providing the Certificate and thereby seeking to hold out for a five year statutory lease under s16 of the RLA).

31. Consequently, the respondent was acting on the basis that a particular legal relationship then existed between the parties that a one year lease was in operation and the deeming provisions of s16 were ousted by the provision of the Certificate. This amounted to a representation by the applicant that the Certificate, which was issued with the knowledge and authority of the applicant, created a promissory estoppel based on Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.

32. As pointed out by Mr Ireland, the respondent acted in reliance upon the representation and assumption thus created by entering into and registering the one year lease. In doing so, the respondent would now suffer significant loss if the assumption was proved to be incorrect upon which the parties have based their relationship. The respondent would now be burdened with a five-year lease when it was clear to the respondent that the only basis upon which it was allowing the applicant to enter into the lease and remain in possession for a further 12 months was the fact that the lease would end after 12 months. Further, the evidence as stated by Ms Barnes is that the respondent agreed to a lower rental for these 12 months and the respondent could have secured a higher rental from another incoming tenant if it so wished to.

Validity of the Certificate

Submissions by the applicant

33. Mr Soltan, on behalf of the applicant, argued that the Certificate is not in conformity with s16(3) of the RLA. The prime reason propounded by Mr Soltan that the Certificate is invalid is that the Certificate does not on its face state that it was given at the request of the lessee. He relies on these words in 16(3)(a) specifically that 'the lessee or prospective lessee requested the lawyer or conveyancer to give the certificate'. Mr Soltan propounds the proposition that it is mandatory for the certificate to comply with s16(3)(a) and that the words 'the lawyer certifies that the lessee or prospective lessee requested the lawyer to give the Certificate' should appear in the Certificate. He further states that whether or not the Certificate was requested by or explained to the applicant is not for the respondent to confirm (I might add this seems to be contrary to his earlier proposition that the Tribunal should go behind the giving of the Certificate). He continues that the Certificate merely needs to include this statement in writing for it to satisfy the section and be effectively relied on its face by the respondent to shorten the mandatory five-year lease term. However, he pointed out that there was no mention of this request by the lessee as stated in the introductory paragraph or in the certifying statement of the lawyer, Mr Balog.

33. As noted the Certificate reads: 'I David Charles Balog, being a lawyer certify that, at the request of the respective lessee, I have explained subsections (1) and (2) of s16 and that giving this Certificate will result in those subsections not applying to the lease'. The words at the request of the lessee I have explained in the Certificate used and refer to the same words in the opening paragraph of the Certificate being the words in the old s16(3) not the words appearing in the new s16(3) which should be 'The lessee or prospective lessee requested the lawyer or conveyancer to give the Certificate'.

34. Further Mr Soltan surmises that because the Certificate was possibly based on the previous s16(3) and did not specifically use the words that the lessee requested the lawyer to give the certificate, the Certificate is deficient in that Mr Balog was certifying something different to the requirement of the new s16(3)(a) of the RLA.

35. Mr Soltan states that the statute mandates that unless the Certificate itself certifies in writing that: 'before or within six months after the lease was entered into, the lessee or prospective lessee requested the lawyer to give the Certificate', there will be no waiver of the five year term. A further argument by Mr Soltan is that Mr Balog gave the Certificate in January 2017 some five months after the Lease commenced. There would have been some issue as to whether the applicant would have given instructions to Mr Balog to give the Certificate. Mr Soltan, then puts forward the proposition that the applicant had good reason not to request Mr Balog to give the Certificate on 17 January 2017 as the applicant may have then had the benefit of a statutory five-year lease.

Submissions by the respondent

37. Mr Ireland refers to the principles of statutory construction that a deeming provision be construed strictly is applicable here. He refers to the text of Pearce and Geddes Statutory Interpretation in Australia, 7th Ed at (4.43) citing Fisher J in FCT v Comber (1986) 10 FCR 88 at 96. The applicant seeks to read the exception or language giving a means by which the deeming provisions of ss16(1) and (2) of the RLA are not to apply with (absurd) strictness. This is a total reversal of what this principle of statutory construction requires. Mr Ireland points out that the applicant is basing its arguments on a form of certificate that did not apply at the relevant time (namely January 2017) based on a form of s16(3) Certificate that was last in force in 2005 (12 years before the Certificate in issue was given and amended to the present form on 1 January 2006). In any event, Mr Ireland says that the Certificate complies with all forms of s16 whether in 2005, 2006 or 2017.

38. Mr Ireland points out that the requirement to certify that the Certificate was given at the request of the lessee or prospective lessee is not a new one. The previous form of s16(3) also required certification at the request of the lessee. What s16(3)(a) actually requires is a statement that the Certificate is given by the solicitor or conveyancer at the request of the lessee. Mr Ireland says it does so. This can be done in more than one way or by more than one form of words provided the meaning required by s16(3)(a) is so expressed such as by statement that it was issued at the lessee's request or by a statement that the certification is at the lessee's request (as is the case here). It is irrelevant according to Mr Ireland whether the certification was based on a template prepared under the old s16(3) or not. It is not relevant also as to whether the Certificate was obtained from the Regulator being the Department administering the Act. Mr Ireland points out the submissions made by Mr Soltan do not give effect to the ordinary English meaning of the words: 'I certify that, at the request of X' which is merely another, more concise and compendious, grammatical form of 'I certify that I was requested to give the Certificate at the request of X'.

Resolution by the Tribunal

39. The applicant seeks to state that the Certificate does not comply with s16(3) to remove the 5 year period and restrict the term of the Lease to that which was agreed between the parties and to that upon which the respondent agreed to allow the applicant to continue occupancy of the premises. Mr Soltan is correct that the main issue for determination is whether the Certificate in effect waives the mandatory minimum 5 year term.

40. It is quite clear from the way the Lease transactions between the parties have transpired that in each instance where there was a lease for less than five years being granted, the respondent required a certificate pursuant to s16(3). This would have come as no surprise to the applicant. Further, in accordance with the correspondence from the respondent's then lawyers, the respondent would not grant the Lease, the subject of this dispute, unless it was accompanied by the s16 Certificate.

41. It is mischievous of Mr Soltan to put forward a proposition that at some stage subsequent to the execution of the Lease and a meeting with Mr Balog with the directors of the applicant, that Mr Balog's instructions may have altered from the applicant to not submit the executed Lease and the Certificate. Mr Soltan appears to be of the view that the transaction could be separated and the Lease only be submitted without the Certificate. This is obviously incorrect. Alternatively, Mr Soltan ignores the fact that the respondent would only allow the applicant to occupy the premises on the basis that a valid Certificate would be provided. Thus, it was a conditional offer of lease and presumably, if the condition of providing the Certificate was not met, then the respondent would not proceed with the lease arrangement.

42. Further, Mr Soltan argues that the change in wording in s16 from 'lessee' to 'lessee or prospective lessee' and the fact that the Certificate provided by Mr Balog only refers to 'prospective lessee' is of such importance to in fact invalidate the Certificate. Another argument put by Mr Soltan is that Mr Balog should have certified that he was in fact certifying that the Certificate was being granted at the request of the applicant.

43. The purpose of the certificate is to oust the deeming provisions pursuant to ss16 (1) & (2) for a five year term. Fisher J in FCT v Comber (1986) 10 FCR 88 at [96]

I find the Commissioner's construction unacceptable. In my opinion deeming provisions are required by their nature to be construed strictly and only for the purpose for which they are resorted to: Re Levy; Ex parte Walton (1881) 17 Ch D 746 per James LJ at 756.

It is improper in my view to extend by implication the express application of such a statutory fiction. It is even more improper so to do if such an extension is unnecessary, the express provision being capable by itself of sensible and rational application.

44. On a plain reading of the Certificate, which is what is required, particularly as no form has been prescribed by the Parliament, it is abundantly clear that it matters not whether the explanation regarding the effect of ss16(1) & (2) of the RLA was provided to either a lessee or a prospective lessee, provided the lawyer certifies that the explanation has been given. Also, the Certificate is quite clear on the face of it, that Mr Balog certified that he has done so at the request of the applicant and further that the giving of the Certificate is also at the request of the applicant. The second comma after the word 'lessee' associated with the word certified leads the reader to come to that logical conclusion.

45. Such an interpretation is in accordance with the approach to statutory construction in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at [91] and [92]

46. [91]   An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of withholding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.

47. [92]   Traditionally, the courts have distinguished between acts done in breach of an essential preliminary to the exercise of a statutory power or authority and acts done in breach of a procedural condition for the exercise of a statutory power or authority. Cases falling within the first category are regarded as going to the jurisdiction of the person or body exercising the power or authority. Compliance with the condition is regarded as mandatory, and failure to comply with the condition will result in the invalidity of an act done in breach of the condition. Cases falling within the second category are traditionally classified as directory rather than mandatory. In Pearse v Morrice (1834) 2 Ad & E 84 at 96, Taunton J said "a clause is directory where the provisions contain mere matter of direction and nothing more".

48. Consequently, if the statutory condition is regarded as directory, an act done in non-compliance of it does not result on invalidity provided there has been substantial compliance.

49. Therefore in the certificate a 'failure' to repeat the exact words in the statutory power in the sequence that they so appear, for example, by slavishly repeating the provisions of ss16(3)(a) and (b) would not render the certificate invalid. The certificate need only say what is required, that is, that the solicitor so certifies in those matters as required - this being the substantial compliance that is required. This also follows the principles applied by Fisher J in FCT v Comber.

50. Mr Soltan's whole approach is to ignore the words in the certificate 'at the request of the prospective lessee'. His argument is that only Part s16(3)(b) has been complied with, namely the certification that the explanation has been given. And if that were all that was required under s16(3), then the Certificate would be effective because Mr Balog certified that he gave the explanation as required. However by insertion of the words 'at the request of the prospective lessee' next to the word 'certified', the Tribunal takes the view that it is an endeavour by the certifier to comply with the provisions of both s16(3)(a) and (b). As there is no prescribed form, then the compliance with the provisions of s16(3)(a) and (b) can be done in many ways and this is just one such way. There is no requirement for a strict repetition of the provision of 16(3)(a) and (b) within the body of the certificate.

51. Consequently the Tribunal rules that the Certificate is valid and effective. If it is given within six months after the Lease was entered into and in accordance with s16(3), then s16(2) ceases to apply to the Lease and the extension of the term of the Lease effected by that subsection accordingly ceases to be operative.

Orders sought by the parties

52. As noted in the Retail Leases Application the applicant seeks declarations under s72 of the RLA. Section 72(1) states as follows:

In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate:

1. (c)   An order that a party to the proceedings:

1. do any specified work or perform any specified service or any obligation arising under this Act or the terms of the Lease; or

2. surrender possession of specified premises to another person; or

3. do or perform, or refrain from doing or performing, any specified act, matter or thing;

2. (f)   An order:

1. (iii)   declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not.

53. In turn the respondent seeks an order for possession of the premises without having filed a Retail Application.

54. Mr Soltan takes issue with the respondent seeking an order granting the respondent possession of the premises. Mr Soltan states that the Tribunal is unable to grant such an order because the respondent must make its own retail leases claim application for the Tribunal to have jurisdiction to make any order under s72(1). Mr Soltan cites 203 Castlereagh St Pty Ltd v Skybloo Holdings Pty Ltd [2016] NSWCATAP172 where the Appeal Panel agreed that the proposition that there was a jurisdictional issue concerning whether the Tribunal can make an award in favour of a respondent for damages and/or a money order in the applicant's application. To the extent necessary, the Tribunal granted leave to the respondent in that case to file any application seeking orders in its favour and directs that evidence and submissions in the present application be evidence and submissions in the new application.

55. Accordingly, Mr Soltan's proposition is that the respondent should have made its own application and should have raised it at the first directions hearing before Thode SM on 22 October 2018 that it was seeking an order for possession. Mr Soltan also cites the Appeal Panel decision recently in Heard McEwan Pty Ltd v G Zanetti Pty Ltd [2017] NSWCATAP213 where the Appeal Panel said at [69]:

Whilst s81 of the NCAT Act gives the Appeal Panel broad powers to make various orders, or do various things, on determining an internal appeal, we do not think that such powers extend to making declarations that had not been sought in the proceedings and were not the subject of the decision below. To make the declaration sought by the appellant would not be varying, setting aside or making a decision in substitution for the decision below as the Tribunal was not asked to make that decision or any decision by the lessee. Nor would it be exercising the functions conferred or imposed by the NCAT Act or RLA on the Tribunal below in respect to the application before it. That is because in the Tribunal below there was no application before it by the lessee and it was not asked to consider whether to make the declaration sought but only whether to appoint a specialist retail valuer.

56. Further Mr Soltan says that an order for possession will deny the applicant procedural fairness. Mr Soltan says that the applicant did not have the opportunity to put any arguments to the Tribunal regarding the application for possession by the respondent.

57. Finally Mr Soltan says that in case the Tribunal does not accept the applicant's submissions that it is unable to make a possession order in the respondent's favour, the applicant notes that the Notice to Quit served by the respondent on the applicant provided a 2 month notice to vacate the premises. Accordingly, Mr Soltan asks that if the Tribunal is to make an order, this order is to be accompanied by another order staying it for a period of 2 months. The applicant will continue to pay rent during the stay period.

58. In response, Mr Ireland says that an order on the applicant to give up vacant possession of the premises has been necessitated by the applicant's conduct. No evidence was given nor was the Tribunal asked to investigate the conduct and accordingly, the Tribunal will not consider any argument or submission in respect of the conduct of the applicant.

59. Mr Ireland distinguishes the cases of 203 Castlereagh St Pty Ltd v Skybloo Holding Pty Ltd and Heard McEwan Pty Ltd v G Zanetti Pty Ltd on the basis that these cases were based on entirely different factual circumstances and relate to applications for damages in the first case and in relation to the second case, the Appeal Panel was dealing with an appeal relating to a valuation issue when further orders were sought at the appeal - such orders not even sought or discussed in the case at first instance in the Tribunal. In the present proceedings, the exact opposite has occurred with the respondent agitating before and during the proceedings for an order for possession of the premises.

60. Mr Ireland points to the clear words of s72 that state that the Tribunal can make an order that a party to the proceedings do certain things or an order that declares the rights and liabilities of the party under law (s72(1)(c)(iv) and s72(1)(f)(iii)). Further, Mr Ireland points directly to s72(1)(c)(ii) regarding the power of the Tribunal to order the surrender possession of specified premises. The desire of the respondent for possession of its premises has always been apparent to the applicant in these proceedings and beforehand - especially by the fact that it was served a Notice to Quit the premises. The respondent has always been clear about its position that the term of the Lease expired on 8 September 2017. This is not new to the applicant. The applicant has been resisting the respondent's efforts to obtain vacant possession, particularly by the commencement of these proceedings.

Resolution by the Tribunal

61. The two cases referred to by Mr Soltan are clearly distinguishable. The question of the respondent seeking vacant possession of the premises has been central to the dispute between the parties and has been ventilated before the Tribunal. In those cases the orders sought were not originally argued before the Tribunal and the jurisdiction of s72(1) could not be invoked.

62. Here the proceedings between the parties is for a retail leases claim and the Tribunal can make any one or more orders as specified under s72(1) particularly s71(f)(iii) declaring the rights and liabilities of the parties, which the Tribunal is being asked to do by both parties. There should be no question that the Tribunal can exercise such powers. The objections by the applicant to an order granting the respondent vacant possession are noted. However, once the term of the lease has been decided, that is not the five years sought by the applicant, then the question of continued occupancy by the applicant is straightforward.

63. The Tribunal will exercise its jurisdiction under s72(1)(f)(iii) to declare that the Lease terminated on 8 September 2017. The Certificate provided by the applicant and signed by Mr Balog is effective to waive the 5 year statutory term. Consequently, after service of the Notice to Quit, the applicant has no right of occupation to the premises.

64. The Tribunal rejects the counter-plea of Mr Soltan for a further two months delay in any order for possession. The Tribunal can find no reason why such a delay should be granted. The respondent is entitled to possession three days after the publication of these orders.

Costs

65. Both parties seek costs. The applicant, in its application, seeks an order pursuant to s60 of NCAT Act. The respondent in turn seeks its costs.

66. The Tribunal believes that it is more appropriate to have the costs resolved pursuant to submissions and to dispense with the hearing. The directions are:

1. The respondent is to provide to the Tribunal and the applicant, either in person or by post, submissions and documents in relation to the application for costs within 28 days of publication of this judgment;

2. The applicant is to provide to the Tribunal and the respondent, either in person or by post, submissions and documents in relation to costs 28 days after receipt of the submissions from the respondent;

3. The Tribunal intends to hear the costs application on the papers and dispense with a hearing under s50(2) of the NCAT and the matter is to be heard on the papers. If either party seeks to be heard in person, they should advise the Registry prior to 14 days after publication of this judgment setting out their reasons why and the Registry will advise of the outcome in due course.

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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: 30 July 2019