Davis v Sydney Harbour Foreshore Authority - [2010] NSWADTAP 43

No judgment structure available for this case.

Appeal Panel - Internal

CITATION: Davis v Sydney Harbour Foreshore Authority [2010] NSWADTAP 43

PARTIES:
APPELLANT
Evan Davis
RESPONDENT
Sydney Harbour Foreshore Authority

FILE NUMBER: 99072

HEARING DATES: 12 February 2010

SUBMISSIONS CLOSED: 12 February 2010

DATE OF DECISION:
16 June 2010

BEFORE: Chesterman M - Deputy President; Bluth D - Judicial Member; Tyler T - Non-Judicial Member

CATCHWORDS: Retail lease – holding-over – misleading and deceptive conduct – unconscionable conduct

DECISION UNDER APPEAL: Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276

FILE NUMBER UNDER APPEAL: 075019

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994

CASES CITED: Attorney General of NSW v World Best Holdings Ltd (2005) 63 NSWLR 557
Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276
Hornsby Building Information Centre Pty Ltd v Sydney Building Sydney Information Centre (1978) 140 CLR 216
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Satchithanantham v Zeaiter Corporate Holdings Pty Ltd [2009] NSWADTAP 53

REPRESENTATION:
APPELLANT
Evan Davis
RESPONDENT
Sydney Harbour Foreshore Authority

ORDERS: 1.The appeal is dismissed
2. Unless within 21 days the Appellant files and serves submissions showing why costs should not be awarded against him, the Appellant is to pay on a party-party basis the Respondent’s costs of and incidental to this appeal
3. If submissions are filed pursuant to Order 2, the Respondent must file and serve submissions in response within a further 21 days
4. The Appeal Panel will determine the matter of costs without a hearing, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.

REASONS FOR DECISION

1 On 4 November 2009 the Tribunal dismissed an application by Mr Evan Davis against the Sydney Harbour Foreshore Authority (‘SHFA’).

2 This is an internal appeal against that dismissal, made under Chapter 7 of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’). The appeal was made on questions of law by the applicant Davis. He also sought leave to extend the appeal to the merits of the Tribunal’s decision.

3 The appeal on questions of law is based on claims that the Tribunal:

1) did not apply the relevant statutory provisions to the facts of the case;

Retail Leases Act NSW

3) misinterpreted the words and statutory requirements of the RLA;

4) made findings of facts where there was no evidence to support such findings;

5) did not make findings of fact were there was conclusive evidence to support a finding;

6) did not give the applicant an adequate opportunity to present his case;

7) only referred to two of the allegations out of the applicant’s alleged six grounds of misleading and deceptive conduct;

8) did not make a finding in favour of the applicant when the applicant’s case had been proved; and

4 In giving reasons for asking the Appeal Tribunal to extend the appeal to the merits, the applicant made the following submissions in his Notice of Appeal:

[The Tribunal] has not exposed (the) reasoning by which points critical to this matter between the parties had being resolved. The applicant claims significant financial loss and allegations of false representations made to the ADT and the applicant during a previous hearing. The respondent is a Government Statutory Agency.

The allegations and the Retail Tenancy claim are of a very serious nature. [The Tribunal] must take into account the gravity of the matters alleged and do justice to the evidence the applicant has submitted. [The Tribunal] has failed to do this. [The Tribunal] did “enter into” the issues canvassed during the hearing.

[The Tribunal] in its decision does not refer to any of the declarations or statements the Tribunal made during the hearing.

The Tribunal in its decision has not referred to evidence which is critical to this matter. The Tribunal has not referred to any of the applicant’s 896 page bundle of documents, excepting a few lines.
Speaking of the written decision the applicant cannot find any reference to any of the documentary evidence called during the hearing, except a few lines. The Tribunal in its decision does not refer to any of the admissions made by the Respondent during the hearing nor does it refer to any of the oral evidence given during the hearing…

The Tribunal in its decision has not explained why certain evidence of the respondent was accepted but not that of the applicant …

The case before the Appeal Panel

5 As a result of the allegations contained in the submissions, this Appeal Panel viewed the issues raised by the applicant seriously and examined the issues with an endeavour to ascertain whether the appeal is to be allowed on its merits.

6 This has been a vexed lease transaction between the applicant and SHFA, relating to retail shop premises known as Shop 4, 86-88 George Street, The Rocks, Sydney (‘Shop 4’).

7 On 20 February 2001 the applicant entered into a lease with SHFA for the shop for a term of five years commencing on 1 November 2000 and terminating on 31 October 2005 (‘the Lease’). The Lease was governed by the RLA. It did not contain an option of renewal.

8 The Lease was registered number 7623136W. It incorporated the terms of memorandum 5923916V (‘the Memorandum’).

9 The Lease was signed on behalf of SHFA by Peter Alward, the Director of Property.

10 During the term of the Lease there was communication between the applicant and representatives of SHFA regarding matters usually discussed between a tenant and the landlord, such as some outstanding rent payments and other issues.

11 However, prior to the terminating date there occurred a conversation between the applicant and a representative of SHFA, Richard Peachey, the senior property manager for SHFA. The terms of that conversation are found at paragraph [8] of the judgment of the Tribunal (Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276). Whilst there was a great deal of discussion before us regarding the exact meaning of that conversation and its consequences, there was no challenge by the applicant nor the respondent as to the accuracy of the recording of it. Paragraph [8] states:

12 SHFA did forward a letter to the applicant dated 21 March 2005. Again, there was no dispute as to the terms of the letter, although there was a lot of discussion before the Tribunal and this Appeal Panel as to its significance and consequences. The letter said, inter alia:

13 On 3 July 2006, SHFA served a Notice to Quit on the applicant, requiring him to vacate Shop 4 by 30 September 2006. On 21 September 2006, an application by him to the Tribunal for an urgent interim order deferring the operation of the Notice to Quit was heard before Judicial Member Higgins (‘the preliminary hearing’). The application was opposed by SHFA. The Tribunal stood the matter over because the applicant did not tender any evidence. On or before 30 September 2006, he vacated the shop.

14 As noted by the Tribunal, the circumstances leading to the vacation of the shop and the way in which the occupation of the shop between the terminating date of the Lease 31 October 2005, and 30 September 2006 is to be properly characterised are at the centre of the dispute between the parties. Also involved are the allegations of misleading or deceptive conduct and unconscionable conduct on the part of SHFA.

15 The applicant’s case before the Tribunal and before this Appeal Panel was basically the same. First, the applicant’s occupancy of Shop 4 was not pursuant to a holding over, but under a fresh lease which sprang up as a consequence of the conversation held on 17 March 2005. Because no certificate under section 16(3) of the RLA was provided, this became a lease for five years consequent upon the operation of section 16. Secondly, the applicant vacated Shop 4 in consequence of conduct by SHFA, occurring during the preliminary hearing, that was misleading or deceptive, and was also unconscionable. The applicant was therefore entitled to damages.

16 SHFA argued before the Tribunal and before the Appeal Panel that the occupancy by the applicant of the shop after 31 October 2005 was under the holding over provisions in the Lease – namely, clause 3.5 – and that no conduct that was misleading or deceptive or was unconscionable had induced the applicant to vacate Shop 4. Consequently the applicant had no right to compensation.

17 It is helpful here to pause and recite exactly what was the alleged misleading and deceptive conduct of SHFA. It took the form of six representations made by its legal representative to the Tribunal at the preliminary hearing. The applicant described them as follows in paragraphs (i) to (vi) of Ground 9 of his Further Amended Application for an Original Decision:

(i) That SHFA would commence in October 2006 building works that would involve the redevelopment of Shop 4.

(ii) That the applicant would be the only tenant left in the building of which Shop 4 was located if he did not vacate by 30 September 2006.

(iii) That every other tenant in the building in which Shop 4 was located had vacated or would vacate by 30 September 2006.

(iv) That SHFA was unable to relocate the applicant to an alternative building/premises because one potential site was not vacant and the other potential site was vacant but was subject to a signed offer to lease between SHFA and another tenant.

(v) That to allow the applicant to have occupation of the alternative site which was vacant would cause SHFA to be in breach of a binding agreement in relation to those premises and would expose SHFA to being sued.
(vi) That the continuance of the applicant in possession of the shop would occasion significant damage to SHFA.

18 Further in relation to unconscionable conduct, the applicant alleged that the making of the representations above and each of them constituted unconscionable conduct on the part of SHFA in connection with a retail shop lease, for the following reasons:

(a) Such conduct constituted undue pressure or unfair tactics, in that it was directed towards, or had the effect of, pressuring the applicant to abandon possession of the premises and the proceedings he had brought before the Tribunal, with the loss of any rights he may have established therein.

(b) The applicant was in an inferior bargaining position to the respondent by virtue of the fact that he was a sole trader and one tenant in a building owned by the respondent (which was a large statutory corporation) which was leased to a number of tenants, and the representations were designed or had the effect of taking advantage of his inferior bargaining position by threatening the likelihood of him being the only tenant in the building, with the consequence that it was not worthwhile for him to remain in possession, particularly if he might be exposed to proceedings for damages for any loss that the respondent might suffer if his continued presence delayed the building works.

19 The applicant claimed that this alleged unconscionable conduct by SHFA contravened sections 62B of the RLA and that he had suffered loss and damage, for which he was entitled to claim compensation under section 62B(8).

20 There is and has been without doubt an unsatisfactory relationship between the applicant and SHFA. The applicant feels aggrieved as a result of actions by SHFA, particularly in so far as they caused him to vacate Shop 4 in anticipation of the substantial works to be undertaken by SHFA with respect to the building.

21 In the decision under appeal, the Tribunal dismissed the applicant’s application.

22 The applicant was aggrieved by this decision of the Tribunal. He claimed that not only was the decision wrong in law, but also that he had not been provided with a fair opportunity to present his case, or alternatively that the Tribunal had not given sufficient weight to his arguments and his evidence.

23 Having reviewed the applicant’s submissions both at first instance and in the appeal, we allowed the application to extend the appeal to the merits. The parties were advised accordingly during the hearing of the appeal. The result of this ruling by us is that we are required to determine the appeal in accordance with section 115 of the ADT Act, which states:-

115 Appeals on the merits
(1) If an appeal under this Part extends to a review of the merits of an appealable decision, the Appeal Panel is to decide what the correct and preferable decision is having regard to the material then before it, including the following:

(a) any relevant factual material,

(b) any applicable written or unwritten law.

(2) The Appeal Panel may exercise all the functions that are conferred or imposed by or under any relevant enactment or this Act on the Tribunal at first instance to make the appealable decision concerned.

(a) to affirm the decision, or

(b) to vary the decision, or

24 We will now give separate consideration to each of the issues raised in the appeal.

The conversation on 17 March 2005

25 The applicant remained convinced that as a result of the conversation on 17 March 2005, there immediately sprang up a lease of Shop 4, or alternatively an agreement for lease of the shop, and that the letter from SHFA on 21 March 2005 was of no consequence and was to be ignored.

26 Virtually all of the applicant’s case was based on this proposition. Consequently, we must give very careful consideration to the terms of the conversation and its legal effect, as well as to any surrounding material.

27 In his submissions to us, the applicant stated:

28 He maintained that he reached an agreement to this effect with the senior property manager of SHFA, Richard Peachey, and that Mr Peachey said to him:

29 The applicant’s case is that as a result of this conversation there sprung up a lease. But this prompts several questions. What are the terms of this lease? A commencing date is certain, but is it absolutely clear what the terminating date is? Given that the rent will stay the same, then the rent is certain. But what about the other terms of the lease? What about the use of the premises, the indemnities from each party, the rights of the tenant, the rights of the landlord, the provision of some security, guarantee or bond?

30 All of these matters (except the rent) were not mentioned in the conversation. Yet the applicant asserted that a lease had sprung up, because the intention of the parties was to create a binding lease.

31 The applicant in his submissions was highly critical of the Tribunal for not coming to the view that this conversation constituted a lease. At the hearing of the appeal, it was pointed out to him that the conversation comprised not just what Mr Peachey said, but also what he, the applicant said. It is significant that the applicant asked Mr Peachey to ‘send me a letter confirming what has been agreed’. This could be taken to indicate that there might have been some uncertainty in the applicant’s mind as to what precisely had been agreed.

32 Furthermore, the conversation of 17 March 2005 was between the applicant and a senior property manager of SHFA. The question may be asked: under what authority could such an officer bind SHFA and enter into a binding lease with the applicant? As was in evidence before the Tribunal and the Appeal Panel, the applicant had many dealings with his landlord, SHFA. These were presumably through property officers during the period of his occupancy. But the Lease itself was executed by a Director of Property on behalf of SHFA.

33 As was noted by the applicant in his submissions, SHFA is a statutory authority. The applicant made some issue of this in relation to the tenders for the building work. However, formal documents were executed on its behalf by a Director of Property. The applicant has not established that Mr Peachey held the requisite authority to bind SHFA in the manner claimed by the applicant.

The letter of 21 March 2005 and the subsequent correspondence

34 The written memorandum that the applicant sought from SHFA and which came on 21 March 2005 did not confirm what he claims to have been agreed. It in fact stated the opposite. Its contents, to the extent that they were replicated in the Tribunal’s judgment at [9], may be summarised as follows:

-It points out that the works to the building, involving demolition of the premises leased to the applicant, were ‘not anticipated to commence’ until September 2006.
-It states that for this reason the applicant may exercise the holding-over provisions in the Lease at his discretion.
-It invites the applicant to discuss a short-term lease with SHFA.
-It states that if the parties do enter into a short-term lease, that lease must be subject to compliance with section 16(3) of the RLA and the approval of the authority’s delegated officer.
-Referring to section 44 of the RLA, it confirms that SHFA will not be offering a renewal of the Lease.

35 The applicant in his submissions to us conceded that he did not challenge this letter by writing back to SHFA and stating that it was contrary to the discussions that had been held.

36 On 6 July 2005 the applicant sent an email to SHFA, which stated: ‘I have been offered a holdover until the end of September 2006, which I have accepted.’ The applicant claimed before the Tribunal and in the appeal that being a lay person, he did not understand the concept of holding over.

37 On 8 July 2005, SHFA sent a letter to the applicant. Although this letter is mentioned in the Tribunal’s judgment at [18], its contents are not described. After acknowledging receipt of the applicant’s email of 6 July 2005, it stated that an agreement reached between the parties during mediation in October 2004 did not guarantee the offer by SHFA of a new lease of new premises, but merely committed SHFA to conduct negotiations for such a lease. It then stated:

Accordingly, we are unable to confirm that you will be offered a new lease on any premises, however we remain committed to entering into negotiations with you on a ( sic ) new premises.

38 The Tribunal’s judgment (Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276) contains the following observations on this correspondence at [17] and [19]:

17 To my mind the written evidence is compelling. The letter of 21 March expressly provided that the Applicant’s continued occupation would be on the basis of a holding over of the registered lease and suggested no more than that the Respondent would be prepared to enter into discussions regarding a short term lease…
19 Accordingly, I do not accept that Mr Davis could have held the view that the arrangement he was being offered was a lease. His own correspondence makes it abundantly clear that he knew what he was being offered (and which he accepted) was a holding over of the expiring lease.

39 We agree with these observations. We accordingly conclude, as did the Tribunal, that the conversation of 17 March 2005 did not create a new lease. Instead, the letter of 21 March 2005 from SHFA clearly set out the terms to which it would agree. Crucially, it did not state or imply that the applicant would be permitted to remain in the premises until September 2006. Its only statement relating to September 2006 was that the works to the building were ‘not anticipated’ to commence until this month. On a sensible reading, this left open the possibility that the works might in fact commence earlier than this month, rather than later (as in fact happened). The letter offered instead a holding-over arrangement, governed by provisions in the Lease, which SHFA could terminate (as indeed the applicant could also) on one month’s notice. It accordingly reserved to SHFA the right to terminate this arrangement at any time before, during or after September 2006. Unless later negotiations led to the creation of a new short-term lease that fell within section 16(3) of the RLA (thereby requiring a certificate waiving the five-year stipulation in section 16(1)) and had been approved by the Authority’s delegated officer, this would be the basis on which the applicant could remain in occupation.

40 In this letter, SHFA made it totally clear that it did not accept that an agreement along the lines alleged by the applicant had been concluded at the meeting on 17 March 2005.

41 Furthermore, the claim by the applicant, in his email of 6 July 2005, that he had been offered, and had accepted, ‘a holdover until the end of September 2006’ misstated the nature of the offer that had been made to him. He was indeed offered a ‘hold-over’, but it was on the terms set out in clause 3.5 of the Lease. He was told also that SHFA ‘anticipated’ that it might not wish to exercise its right to terminate the ‘holdover’ until September 2006, or some time shortly before then.

42 The terms that the applicant purported to accept in his email– i.e., a tenancy, not a holdover, until September 2006 – were accordingly not the terms that SHFA had offered. What the applicant communicated in this email was, at most, a counter-offer. Neither in its reply on 8 July 2005 nor at any other time did SHFA accept this counter-offer.

43 Two further aspects of the applicant’s claim to have entered into a new lease remain for discussion. These are (a) the legal effect of a discrepancy between the rent that became due from him under clause 3.5 and the rent that he actually paid and (b) the fact that SHFA remitted the applicant’s security bond to the Retail Tenancy Unit (‘the RTU’) in March 2006.

The rent discrepancy

44 The applicant maintained that he could not be holding over under the Lease as the facts of his occupancy after 31 October 2005 did not comply with the terms of clause 3.5 of the Memorandum. These terms were as follows:

3.5 Holding over

(a) Subject to clause 3.7, if the Lessee holds over after the expiration of the Term with the consent of the Lessor, it will be as a monthly tenant at a monthly rental equivalent to a monthly proportion of the Rent and other payments payable by the Lessee at the expiration or sooner determination of the term multiplied by 110% but otherwise on the same terms and conditions as the Lease.

45 The applicant argued that the holding over provisions could not apply to his occupation of shop 4, because it was agreed in the conversation of 17 March 2005 that the rent was not increased by 10%, but would stay the same.

46 We observe that the relationship between landlord and tenant, although governed by the terms of a written lease, is often fluid with respect to day-to-day matters falling outside these terms. Various concessions and arrangements are made between the parties.

47 We also note clause 5.5 of the Memorandum, which stated:

48 The next clause in the Memorandum is clause 5.6, which deals with interest on overdue money. It provides the lessor a right to add interest to any unpaid rent.

49 There was evidence before the Tribunal, not disputed by the applicant, that on some occasions rent was not paid. Further the evidence was that SHFA had never sought to claim interest. In choosing to waive its right to claim interest, it was presumably cognisant of the fact that by virtue of this clause its waiver did not extend to any breaches of other covenants by the applicant.

50 We note further in this context that clause 2.22 of the Memorandum required the applicant to paint or paper the premises every three years and in the last year of the term. The applicant, as we understand it, was not required to comply with this provision. SHFA’s decision not to enforce this requirement would also have fallen within the scope of clause 5.5.

51 Accordingly, the fact that SHFA chose to accept less rent during the holding over period than was stipulated by clause 3.5 did not preclude it from maintaining that the applicant was occupying the premises pursuant to this clause. SHFA could do this knowing that its waiver of its right to call for the additional rent would not constitute a waiver of all breaches of the Lease by the applicant.

52 We accordingly conclude that the applicant remained in possession pursuant to a holding over arrangement even though all the terms of clause 3.5 were not observed.

The security bond

53 The applicant argued that SHFA’s action in forwarding to the RTU during March 2006 the security bond that had been paid by him under the terms of the Lease constituted evidence that a new tenancy had been created at the expiration of the Lease.

54 In a letter dated 17 March 2006, however, SHFA stated that the reason why it was forwarding the bond to the RTU was that amendments to the RLA, which had come into effect on 1 January 2006, required all rental bonds held by landlords to be deposited with the RTU.

55 As we have already pointed out, however, there was no discussion of any bond or guarantee in the conversation of 17 March 2005. Since under clause 3.5 of the Lease the provisions in it relating to a bond remained in force, SHFA’s action in remitting the bond money to the RTU constituted no more than compliance with its obligations as a landlord under the new provisions of the RLA.

56 This brief consideration of the implications of SHFA’s payment of the bond to the RTU leaves undisturbed our conclusion, in line with that of the Tribunal, that after the expiry of the Lease the applicant’s occupancy of Shop 4 was under a holding-over arrangement as provided for in clause 3.5 of the Lease. This, in our judgment, is ‘the correct and preferable decision’ as required by section 115 of the ADT Act.

57 We turn now to the matters of misleading and deceptive conduct and unconscionable conduct under section 62D and section 62B of the RLA. We note that a great deal of what the applicant alleged in these contexts was coloured by his mistaken belief that he was entitled to a lease with a minimum term of five years, under section 16 of the RLA.

Misleading or deceptive conduct

58 Relevantly, s.62D of the RLA states:

Misleading or deceptive conduct in connection with retail leases

59 As noted in the Tribunal’s judgment at [28], the test whether one party acted in a misleading or deceptive manner is an objective test: see Hornsby Building Information Centre Pty Ltd v Sydney Building Sydney Information Centre (1978) 140 CLR 216.

60 The applicant claimed to be a former party to a retail shop lease who had suffered loss or damage on account of misleading or deceptive conduct by the other party, and therefore entitled to an award of damages under section 62E of the RLA.

61 The Tribunal’s judgment included the following findings at [24] and [25]:

24 The Respondent served a Notice to Quit on 3 July 2006 requiring vacation of the premises by 30 September 2006.
25 The Applicant vacated the premises by that date but not before entering into negotiations with the Respondent for alternative accommodation. There was evidence for example that the parties attended mediation with respect to alternative accommodation and considered Shop 4, The Rocks Centre as well as Shop 25 Playfair Street, The Rocks. The Respondent offered to assist the tenants ( sic ) in finding alternative accommodation. In my view, it had an obligation to do so but to the extent that it undertook to do so, I am satisfied on the evidence that it discharged that undertaking. In the case of the Applicant, it was unsuccessful in finding accommodation but that fact alone does not amount to proof of the Respondent’s failure to make reasonable efforts to do so.

62 The applicant alleged that he was not offered a lease at 25 Playfair Street, The Rocks, and that he was only offered one alternate shop, at the Rocks Centre. He contended that it was false and misleading of SHFA to offer a lease at The Rocks Centre, since that Centre was trading poorly to the knowledge of SHFA. However, according to his own evidence, the applicant determined that The Rocks Centre was unsuitable. Since he was able to determine the issue on his inspection and investigation and therefore did not rely on any express or implied representation of SHFA as to trading prospects at the Centre, SHFA cannot be liable for damages on the alleged ground of acting in a misleading or deceptive manner.

63 Further contentions of the applicant regarding misleading and deceptive conduct were set out in the Tribunal’s judgment at [26]:

… the Applicant contended that the representations made by the Respondent and its representatives at, inter alia, a directions hearing at the Tribunal amounted to conduct which would breach section 62D of the RLA. He said that he was told that building work and demolition work would be commencing in October 2006, that other tenants had or would be moving out by then and that he would or might be forced out of the shop. He said that after he vacated the premises he had occasion to return to collect some items and observed that some other tenants were trading and that the works had not commenced in October and November. He said that he later discovered that building approvals were not finalized at the time the representations were made and that the Respondent had misled him in relation to the occupancy of other tenants.

64 The six alleged misrepresentations formulated by the applicant in his Further Amended Application (see [17] above) were made on behalf of SHFA during what we have called the preliminary hearing, on 21 September 2006.

65 The first of these alleged misrepresentations was a statement that in October 2006 SHFA would commence building works, involving redevelopment of the building of which Shop 4 formed part. According to the applicant, at the substantive hearing of this case, it was revealed during cross-examination of Mr Peters, an employee of SHFA, that at the time of the preliminary hearing, SHFA believed that preparatory work and the building project would not in fact start in October 2006. This evidence emerged when counsel for the applicant was asking Mr Peters about various exhibits, particularly the minutes of a meeting of the project control group of SHFA held on 7 September 2006. There was apparently a four-week delay in relation to the procurement of modifying documents and the settlement of arrangements for tender for the works.

66 However, while it was contended before the Tribunal and in the appeal that the refurbishment work did not commence in October or November 2006, there was also evidence that preparatory works by the builder were undertaken, particularly in relation to Shop 4, in the latter part of October 2006. At the hearing of the appeal, Mr Sneddon, counsel for SHFA, referred us to the transcript of the substantive hearing on 5 December 2008. At page 15, lines 24 to 46, in the course of his evidence in chief, Mr Peters testified that although the principal works under the ‘main contract’ did not commence until 21 December 2006, it was his ‘understanding’ was that ‘preliminary works commenced on 2 October 2006’. After he had explained what these works ‘consisted of’, he was asked when they started. He replied: ‘I believe they started in the second week of October.’ He was then asked whether these works included the ground floor. He answered: ‘Most certainly.’

67 In its judgment at [31], the Tribunal gave its assessment of Mr Peters’ reliability as a witness:

Mr Peters gave evidence about these representations. Dealing with the allegations seriatim, he said (paragraph 28 ff of his affidavit of 10 July 2007) that each of the representations (to the extent that he could find them in the transcript) were true. In most cases, his comments were supported by reference to documents. He was not shaken in his testimony in cross-examination and I accept his evidence. Although I accept that in the context of a hearing before the Tribunal the comments might have had some emotional force in the ear of the listener, they were not, in my view representations (that) were not (sic) misleading or likely to mislead within the meaning of Section 62D of the RLA.

68 In our opinion, this disposes of the applicant’s claim that a misrepresentation occurred. We would add only that it is not inconsistent that preliminary works, amounting to preparation for the major works, should have taken place in the second week of October 2006 even though the substantial project and refurbishment work did not begin until December 2006.

69 The second and third misrepresentations alleged by the applicant were the same in substance. They were statements by SHFA at the preliminary hearing, to the effect that the applicant would be the only tenant left in the building in which Shop 4 was located if he did not vacate by 30 September 2006. The representative of SHFA told the hearing that ‘what I can tell you is that every other tenant in the premises has vacated or will vacate by the 30th’. Subsequently, there was a great deal of discussion at both the directions hearing and the substantive hearing at first instance regarding the neighbouring premises occupied by the Society of Arts & Crafts. This organisation was also to move to premises at 86-88 George Street, but because of problems with the development application its move was postponed for some time. It is not clear whether at the time of the directions hearing SHFA was fully aware of the development application issues.

70 The applicant’s contention that this and other statements at the preliminary hearing were false received some support from questions asked and opinions expressed by Deputy President Olsson, who constituted the Tribunal at first instance, during the substantive hearing. Yet ultimately, as we have just indicated, the Tribunal accepted Mr Peters’ evidence about this and other statements made at the directions hearing. Paragraph [31], which we have just reproduced, immediately followed the Tribunal’s quoting of the statement that ‘every other tenant in the premises has vacated or will vacate by the 30th’.

71 The fourth and fifth misrepresentations alleged by the applicant were virtually the same in substance. They were statements by SHFA to the Tribunal at the preliminary hearing, to the effect that it could not relocate the applicant to an alternative building or premises because one potential site was not vacant and the other potential site was vacant but was subject to a signed offer to lease between SHFA and another tenant, breach of which would expose SHFA to liability. At the preliminary hearing, the legal representative for SHFA stated to the Tribunal: ‘But Member there was an agreement to lease that premises. How many breaches do you want us to commit?’ Again, the applicant’s position received some support from comments by Deputy President Olsson at the substantive hearing, as follows:

The highest you can put it is that the Authority was in deep negotiations and it was a lease that was going to be executed and they just have not sorted out the final terms. That is the highest you could put it? You certainly can’t say it was a binding agreement…

You could not say that as at 21 September that would have exposed the Authority to being sued if they had given it to someone else…
That allegation about that being wrong is correct, isn’t it?

72 The sixth alleged misrepresentation was a further statement by the legal representative for SHFA at the preliminary hearing. As quoted in the Tribunal’s judgment at [29], it was in these terms:

73 At the substantive hearing, Deputy President Olsson made the following comments about this statement:

74 The conclusions of the Tribunal about these alleged misrepresentations, as stated particularly in paragraph [31], were very different to what the applicant anticipated, due to his understanding of the proceedings and his reading of the transcript. Essentially, the Tribunal, after considering the evidence and submissions, formed the view that Mr Peters’ evidence should be preferred, on the grounds that he was able to substantiate what he said by reference to documents and that he was not shaken in his testimony on cross-examination.

75 Because these conclusions of the Tribunal were at odds with Deputy President Olsson’s comments during the course of the hearing, the applicant, in his lengthy submissions, invited us to redetermine these matters ourselves.

76 In support of this submission, the applicant relied on a passage in the judgment of McColl JA in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [58 – 66]. This passage, which was quoted by an Appeal Panel of this Tribunal in Satchithanantham v Zeaiter Corporate Holdings Pty Ltd [2009] NSWADTAP 53 at [37], contains a formulation of the standards to be observed by trial judges when making findings on disputed questions of fact.

77 We are in sympathy with the applicant’s submissions to the following extent. The Tribunal at [31] explained only briefly why it believed Mr Peters’ evidence to the effect that the statements at the preliminary hearing claimed by the applicant to have been untrue were in fact true. In the light of the passage cited by the applicant from McColl JA’s judgment in Pollard, a fuller account of the reasons why doubts raised at the substantive hearing were put to one side in the judgment should have been given.

78 This conclusion by us does not, however, avail the applicant. We are not in a position to question the Tribunal’s assessment of Mr Peters’ credit. Furthermore, having rejected (at paragraph [31]) his claim under section 62D of the RLA, on the ground that the alleged misrepresentations were not misleading or likely to mislead, the Tribunal at [32] outlined a further ground of rejection, with which we are in substantial agreement. It said:

32 Even if this were not my view, a breach of section 62D gives rise to a right to damages pursuant to section 62E for loss sustained as a result of the misleading conduct. In my view, the Applicant had not suffered loss at the time of the representations. As early as March 2005 he was told that the lease would not be renewed and that he could only stay in the premises until the end of September 2006. He appeared to accept that situation and acted in accordance with it. The proceedings appear to have been precipitated by reason of the difficulty in finding him alternative accommodation.

79 Although, as just stated, we agree with the substance of this ruling by the Tribunal, it would have been more appropriately formulated if the second sentence of paragraph [32] had been to the effect that the applicant did not suffer loss through relying on the alleged misrepresentations. As the applicant submitted to us, the question whether a person to whom misrepresentations were made had suffered loss ‘at the time of’ these misrepresentations is irrelevant to any claim made under sections 62D and 62E.

80 In dismissing the applicant’s unconscionable claim, the Tribunal repeated, at [40 – 41], its ruling that the alleged misrepresentations did not cause any damage to the applicant:

40 The Applicant argued that because of the representations and conduct, he lost the ability to remain in possession of the premises and suffered lost sales and profit opportunity. I reject this argument. The Respondent was consistent, from March 2005 onwards, in its categorization of the circumstances in which it was prepared to permit the Applicant to continue to occupy the premises after the expiration of the registered lease as a holding over of the lease at the discretion of the lessee and lessor…
41… I find that at all material times the Applicant knew and acquiesced in the fact that he would be required to vacate the premises by the end of September 2006 and that he did so, not because of any representations which were made during an interlocutory hearing in the Tribunal in a related matter but because he accepted that his right to occupy terminated at that time.

81 For the foregoing reasons, the applicant’s challenge to the Tribunal’s dismissal of his claim for damages for misleading or deceptive conduct must fail. This, in our judgment, is the correct and preferable decision.

Unconscionable Conduct

82 The three specific grounds on which the applicant contended that SHFA’s conduct was unconscionable are set out above at [18]. The first two of them employ terminology to be found in section 62B(3)(a) and (d) of the RLA.

83 So far as relevant, section 62B states

62B Unconscionable conduct in retail shop lease transactions

(1) A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable.
(3) Without in any way limiting the matters to which the Tribunal may have regard for the purpose of determining whether a lessor has contravened subsection (1) in connection with a retail shop lease, the Tribunal may have regard to:

(a) the relative strengths of the bargaining positions of the lessor and the lessee, and…

(c) whether the lessee was able to understand any documents relating to the lease, and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the lessee or a person acting on behalf of the lessee by the lessor or a person acting on behalf of the lessor in relation to the lease, and…

(f) the extent to which the lessor’s conduct towards the lessee was consistent with the lessor’s conduct in similar transactions between the lessor and other like lessees, and…
(k) the extent to which the lessor and the lessee acted in good faith.

84 In its judgment at [34], the Tribunal referred appropriately to the leading authority on unconscionability under section 62B:

The application was also framed as a claim of unconscionable conduct. For the conduct to be unconscionable requires a high degree of moral obloquy ( Attorney General of NSW v World Best Holdings Ltd (2005) 63 NSWLR 557) and the section is not to be used as a panacea for adjusting any contract which offends concepts of what is fair or just. The section requires an examination of all the circumstances of the lease relationship…

85 The judgment continued as follows in paragraphs [34] to [37]:

34 …[SHFA] made it abundantly clear that vacant possession would be required to be given by the end of September 2006 because it anticipated that building works would commence then.

35 It seems reasonable to infer that the Respondent nominated that date because (i) it believed the works would commence on or about that date and (ii) it needed some certainty about the vacation of the building of its tenants so as to be able to entertain contracts for the possession of the site to the refurbishing builders.

36 By 21 September 2006, when the first Application was before the Tribunal (and as already noted, it was a complaint not about the fact of vacating the premises but about the lack of alternative accommodation) the evidence disclosed that the Applicant was already in the process of packing up the shop and preparing to vacate.
37 In my view the conduct in the circumstances falls short of being unconscionable within the meaning of section 62B. The representations were not untrue and at the time they were made, the Applicant had had more than 12 months to contemplate alternative premises. The parties were not in the process of bargaining or negotiating a renewal of the lease or a new lease in the same premises. The relationship was at an end and unequivocally so, on all the evidence. That this was so was known to both parties as well as the reason why it was so. This was not a case where the Respondent was in a position to bargain any more than the Applicant. It wanted vacant possession to refurbish the building and it had given notice in respect of the same.

86 In our opinion, these reasons are cogent, and we would add only four observations.

87 First, a fundamental problem with the applicant’s claim that he was put under undue pressure by the statements made at the preliminary hearing is that it was pressure to do what SHFA, having permitted him to remain in possession under a holding-over arrangement only, was entitled to require of him, by virtue of having served a Notice to Quit giving him more than the requisite period of notice.

88 Secondly, the applicant appeared before us to be claiming entitlement to special consideration by SHFA, that is, to be the last tenant to leave the building before works were commenced. There is nothing in the evidence put before the Tribunal to suggest that this should have been the case. The applicant was entitled to be treated lawfully and properly, but not to have greater rights than any other tenant. Subject to this overriding consideration, it was for SHFA, in the management of its building, to determine how best to obtain vacant possession when it was required for the building works. Nothing in section 62B(3)(f) required it to obtain possession from all its tenants at precisely the same time.

89 Thirdly, there is little significance in the claim by the applicant in his submissions to us that, despite what the Tribunal indicated at [36], he was not ‘packing up the shop’ at the time of the preliminary hearing. What mattered was that he vacated the shop on or before 30 September 2006, as he was bound to do in accordance with the holding-over arrangement and the Notice to Quit.

90 Fourthly, our ruling that the applicant’s claim to damages for misleading or deceptive conduct is undermined by his inability to establish any loss (see [78 – 80] above) applies equally to his claim for damages for unconscionable conduct. The Tribunal recognised this in the passages from paragraphs [40] and [41] that we have quoted above at [80].

Conclusion

91 For the foregoing reasons, the appeal fails and must be dismissed.

92 The written submissions of SHFA included a claim for costs.

93 Under section 77A of the RLA and section 88(1) of the ADT Act, the general rule is that each party pays its own costs. But the Tribunal may award costs if, taking into account matters listed in section 88(1A), it is satisfied that it is ‘fair’ to do so. Under subparagraph (c) of section 88(1A), a factor to be taken into account in determining whether it is ‘fair’ to award costs is ‘the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law’. In recent Appeal Panel decisions under section 88, it has been said more than once that costs should generally be awarded against an appellant if the appeal had no reasonable prospects of success.

94 Although, in ways indicated above, the decision under appeal was open to criticism, our provisional opinion is that the substantive grounds urged by the applicant were distinctly weak. It appears to us to have indeed been an appeal with no reasonable prospects of success.

95 These conclusions are provisional only. Directions set out below provide an opportunity for them to be reconsidered.

96 The Tribunal orders as follows:-

1. The appeal is dismissed.

2. Unless within 21 days the Appellant files and serves submissions showing why costs should not be awarded against him, the Appellant is to pay on a party-party basis the Respondent’s costs of and incidental to this appeal.

3. If submissions are filed pursuant to Order 2, the Respondent must file and serve submissions in response within a further 21 days.
4. The Appeal Panel will determine the matter of costs without a hearing, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.

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Citations

Davis v Sydney Harbour Foreshore Authority [2010] NSWADTAP 43

Most Recent Citation

Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152

Cases Citing This Decision

2

Dover v Lewkovitz (No 2) (RLD) [2013] NSWADTAP 35

Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152

Cases Cited

5

Statutory Material Cited

2

Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11

CITATION:	Davis v Sydney Harbour Foreshore Authority [2010] NSWADTAP 43
PARTIES:	APPELLANT Evan Davis RESPONDENT Sydney Harbour Foreshore Authority
FILE NUMBER:	99072
HEARING DATES:	12 February 2010
SUBMISSIONS CLOSED:	12 February 2010
DATE OF DECISION:	16 June 2010
BEFORE:	Chesterman M - Deputy President; Bluth D - Judicial Member; Tyler T - Non-Judicial Member
CATCHWORDS:	Retail lease – holding-over – misleading and deceptive conduct – unconscionable conduct
DECISION UNDER APPEAL:	Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276
FILE NUMBER UNDER APPEAL:	075019
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
CASES CITED:	Attorney General of NSW v World Best Holdings Ltd (2005) 63 NSWLR 557 Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276 Hornsby Building Information Centre Pty Ltd v Sydney Building Sydney Information Centre (1978) 140 CLR 216 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Satchithanantham v Zeaiter Corporate Holdings Pty Ltd [2009] NSWADTAP 53
REPRESENTATION:	APPELLANT Evan Davis RESPONDENT Sydney Harbour Foreshore Authority
ORDERS:	1.The appeal is dismissed 2. Unless within 21 days the Appellant files and serves submissions showing why costs should not be awarded against him, the Appellant is to pay on a party-party basis the Respondent’s costs of and incidental to this appeal 3. If submissions are filed pursuant to Order 2, the Respondent must file and serve submissions in response within a further 21 days 4. The Appeal Panel will determine the matter of costs without a hearing, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.