DAMARO PTY LTD and HYDROX NOMINEES PTY LTD - [2020] WASAT 7

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
CITATION:   DAMARO PTY LTD and HYDROX NOMINEES PTY LTD [2020] WASAT 7
MEMBER:   MS D QUINLAN, MEMBER
MR S WILLEY, MEMBER

HEARD:   4 NOVEMBER 2019
DELIVERED          :   9 JANUARY 2020
FILE NO/S:   CC 1082 of 2019
BETWEEN:   DAMARO PTY LTD
Applicant
AND
HYDROX NOMINEES PTY LTD
Respondent

Catchwords:

Retail shop - Questions arising under a lease - Café - Whether lease grants tenant exclusivity to operate café in retail shopping centre - Whether landlord granted tenant exclusivity - Whether landlord can lease any part of centre to another café - Whether landlord made representations regarding exclusivity - Whether misleading and deceptive conduct

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 11(5), s 16, s 16C, s 16D, s 16D(1), s 16(1), s 16(1)(a), s 16(1)(b), s 16(2), s 25C, s 26

Result:

Matters dismissed

Category: B

Representation:

Counsel:

Applicant	:	Mr R Borberly (Director)
Respondent	:	Mr C Slater and Mr M Reid

Solicitors:

Applicant	:	N/A
Respondent	:	Jackson McDonald

Case(s) referred to in decision(s):

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Goldbreak Holdings Pty Ltd and Lendlease Real Estate Investments Ltd [2018] WASAT 51
Grainger v Williams [2009] WASCA 60
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357
Morton Seed & Grain Pty Ltd v Phillbourne Manufacturing Pty Ltd [2018] WASC 386
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268; (2008) 38 WAR 350
Watson v Foxman & Ors (1995) 49 NSWLR 315

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

These proceedings arise in the Tribunal pursuant to an application made under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (the Retail Shops Act) by Damaro Pty Ltd (applicant or tenant) referring a question arising under a retail shop lease where the tenant is the tenant operating a café under the café franchise 'Caffissimo'. The landlord is Hydrox Nominees Pty Ltd (respondent or landlord).
At a directions hearing in the Tribunal on 17 September 2019, the Tribunal amended the tenant's application to include an application in the alternative under s 16D of the Retail Shops Act alleging that the landlord had engaged in misleading and deceptive conduct.
The landlord is the registered proprietor of an estate in fee simple described as Lot 806 on Deposited Plan 71347, being the whole of the land comprised in Certificate of Title Volume 2790 Folio 976 (the land). The land is located at Lot 806 Joondalup Drive, Joondalup and is also known as 'The Quadrangle' which comprises a standalone main building and various smaller buildings as well as car parking areas. The Quadrangle includes a number of retail shops in a retail shopping centre as defined under the Retail Shops Act.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read DAMARO PTY LTD and HYDROX NOMINEES PTY LTD and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2020] WASAT 7
Decision Date: 9 JANUARY 2020

CaseChat Overview and Summary

The case involves Damaro Pty Ltd and Hydrox Nominees Pty Ltd, who are tenants of a retail shop in a shopping centre, and the landlord who owns the centre. The dispute centres on whether the lease grants Damaro Pty Ltd exclusivity to operate a café in the shopping centre, and whether the landlord can lease any part of the centre to another café. Additionally, the case examines whether the landlord made any representations regarding exclusivity and whether such representations were misleading and deceptive. The case was heard in the Supreme Court of Western Australia.

The court had to determine whether the lease granted Damaro Pty Ltd exclusivity to operate a café in the shopping centre. It also needed to examine whether the landlord made any representations regarding exclusivity and whether those representations were misleading and deceptive. The court had to consider the objective approach to determining the rights and liabilities of parties to a contract, as well as the test of whether conduct is misleading or deceptive. The court also had to consider the surrounding circumstances known to the parties and the commercial purpose or objects to be secured by the contract.

The court held that the lease did not grant Damaro Pty Ltd exclusivity to operate a café in the shopping centre. The court also found that the landlord did not make any representations regarding exclusivity. The court held that the landlord could lease any part of the centre to another café. The court found that the landlord's conduct was not misleading or deceptive, as it was not intended to mislead or deceive Damaro Pty Ltd. The court emphasised the objective approach to determining the meaning of the terms of a commercial contract and the test of whether conduct is misleading or deceptive.

The court ordered that the landlord could lease any part of the shopping centre to another café. The court also found that the landlord's conduct was not misleading or deceptive. The court did not order any further relief for Damaro Pty Ltd.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The above principles have recently been reaffirmed by the High Court in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 per French CJ, Hayne, Crennan, Kiefel and Gageler JJ at [35] as follows: … this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties … intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'.(footnotes omitted) The test of whether conduct is misleading or deceptive is an objective one. Conduct is misleading or deceptive, or is likely to mislead or deceive, if it has a tendency to lead a reasonable person in the position of the recipient of the information into error. Proof of an intention to mislead or deceive is not required. Even if the person making the representation is found to have acted honestly, the representation may still be found to be objectively misleading: Goldbreak Holdings Pty Ltd and Lendlease Real Estate Investments Ltd [2018] WASAT 51 at [102]. In Morton Seed & Grain Pty Ltd v Phillbourne Manufacturing Pty Ltd [2018] WASC 386 at [546] – [547], Pritchard J stated as follows:Whether particular conduct is misleading or deceptive is a question of fact that is to be objectively determined. In determining whether a contravention of s 18 has occurred, the task of the Court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the Court must determine for itself. Often that will involve two steps: first, making findings of fact about what was said and whether any pleaded representation is established; secondly, determining whether the proven representations (or other conduct) are misleading or deceptive. To determine whether particular conduct is misleading and deceptive the Tribunal must undertake a close analysis of all of the circumstances and consider the character of the particular conduct in question, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known: see Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [91] and Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [37].