Doiho Pty Ltd v Waycity Pty Ltd

[2003] NSWSC 578

CITATION:

Doiho Pty Ltd v Waycity Pty Ltd & Anor [2003] NSWSC 578

HEARING DATE(S):

17 June 2003

JUDGMENT DATE:

30 June 2003

JURISDICTION:

Common Law

JUDGMENT OF:

Master Harrison

DECISION:

(1) The application for an extension of time to appeal is refused; (2) The summons is dimissed; (3) The plaintiff is to pay the defendant's costs as agreed or assessed.

CATCHWORDS:

Extension of time to appeal decision of Fair Trading Tribunal - lease - ostensible authority of real estate agent

LEGISLATION CITED:

Fair Trading Tribunal Act - s 60
Consumer Trader, Tenancy Tribunal Act 2001 - sch 6 cl 6

CASES CITED:

Crabtree Vickers Pty Ltd v Australian Direct Mail Advertising and Addressing Co Pty Ltd (1975) 133 CLR 72
Freeman and Lockyer v Buckhurst Park (Mangal) Ltd (1964) 2 QB 480
Gallo v Dawson [1990] ALR 479
House v The King (1936) 55 CLR 499

PARTIES :

Doiho Pty Ltd
(Plaintiff)

Waycity Pty Ltd
(First Defendant)

Venesh Harjeet Singh
(Second Defendant)

FILE NUMBER(S):

SC 12704/2002

COUNSEL:

Ms N Obrart
(Plaintiff)

Mr David Patch
(First Defendant)

SOLICITORS:

Mr Joe Ryan
(Plaintiff)

Mr L Hopper of
Lynden E Hopper & Co
(First Defendant)

LOWER COURTJURISDICTION:	Fair Trading Tribunal
LOWER COURT FILE NUMBER(S):	CM 1999/7470 & BU 1998/1106
LOWER COURT JUDICIAL OFFICER :	Member J Deamer and Member S Montgomery

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

MONDAY, 30 JUNE 2003

12704/2002 - DOIHO PTY LTD v WAYCITY PTY LTD &
ANOR
JUDGMENT (Extension of time to appeal decision of
Fair Trading Tribunal – lease – ostensible authority of real estate agent)

1 MASTER: By summons filed 30 September 2002, the plaintiff seeks orders, firstly, that an extension of time be granted pursuant to Part 51A r 3(3) for the institution of this appeal; secondly, that the whole of the decision of the Fair Trading Tribunal (FTT) dated 12 September 2000 be set aside; thirdly, that on 5 May 1998 the lease agreement between the plaintiff and the first defendant was the agreement of 15 September 1993 (the original lease); fourthly, that on 5 May 1998 the plaintiff validly terminated the first defendant’s occupation of the property known as shops 8 & 9 Newport Village 331-335 Barrenjoey Road, Newport (the property) pursuant to the original lease; fifthly, that the first defendant pay to the plaintiff moneys owing pursuant to the original lease; and sixthly, an order that the decision of the FTT be set aside insofar as it relates to the quantification of the first defendant’s damages. The plaintiff relied on two affidavits of Dianne Lakshmanan sworn 25 September 2002 and 9 December 2002. Ms Lakshmanan is a director of Waycity Pty Ltd.

2 The plaintiff, Doiho Pty Ltd (Doiho), was the respondent in the FTT proceedings. The first defendant, Waycity Pty Ltd (Waycity), was the applicant in the local court proceedings. The second defendant is Venesh Harjeet Singh. In this judgment I shall refer to Doiho as being the plaintiff and Waycity Pty Ltd as the defendant. The list Judge has referred this matter to a Master for hearing.

3 Section 60 of the Fair Trading Tribunal Act (FTT Act) provides that relief can be granted by way of a judgment or order in the nature of prohibition, mandamus, certiorari, and a declaratory judgment or an injunction if, in relation to the hearing or declaration of a matter where the Tribunal gave a ruling as to its jurisdiction, it was in error (s 60(2)) or a party had been denied procedural fairness.

4 The FTT Act has been repealed and replaced by the CTTT Act. However, Sch 6 cl 6 of the CTTT Act makes provision for proceedings in the former Tribunal, which were instituted before 25 February 2002 to be continued and determined as if the CTTT Act had not been enacted. The legislation specifically includes any proceedings that are the subject of an appeal to the Supreme Court. The FTT Act applies to these proceedings. In any event, both Acts contain similar provisions.

Whether an extension of time to appeal should be granted

5 Proceedings were required to be commenced within 28 days of the material date. The material date is 12 September 2000 – see Pt 51A r 2(b) SCR. The time to commence these proceedings expired on 12 October 2000. The proceedings were commenced on 30 September 2002 which is very close to being two years out of time.

6 In Gallo v Dawson [1990] ALR 479 the High Court stated that the discretion to grant an extension of time to appeal is not automatic. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties. To determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, the prospects of success, and the consequences for the parties of the grant or refusal of the application for extension of time.

7 The reasons that the plaintiff proffered for the delay in lodging this appeal is that, firstly, she was unaware of the specific time for lodging an appeal and, secondly, she understood that her legal representatives were attending to the lodgment of an appeal. Ms Lakshmanan deposed that some time in October 2000 she instructed her solicitor and barrister at this meeting that she wished to appeal the decision. The barrister said:

“I’ll look into it. I would like to be 90% sure. Can you go through the judgment and pinpoint specifically where they went wrong and then come back and see me. See What else you can find. Come back in January.”

8 Ms Lakshmanan was cross-examined in her belief that there was no time limit in which to appeal. She adhered to her view. There was nothing in the barrister’s file that suggested he advised her of a time limit.

9 Ms Lakshmanan provided an extract of the telephone calls by her to her former solicitor and barrister (Ex A). At the hearing she identified some documentation she forwarded to her barrister. Those telephone records show that there was constant telephone contact between Ms Lakshmanan and her solicitor between the time that judgment was handed down until 13 December 2000. On 13 December 2000, the plaintiff received advice from her barrister, Mr D E Andrews. This advice stated that she did not have reasonable prospects of success and concluded by requesting the solicitor to see if the plaintiff wished to go further with this matter. After that advice the telephone contact with her barrister tapered off. In fact there were no telephone calls to him until 17 October 2001. There were monthly calls to her solicitor. In June 2002, the plaintiff changed solicitors and the appeal was lodged in September 2002.

Merits of the appeal

10 The plaintiff appeals the whole of the decision of the Tribunal Members on the grounds that the Members made an error in law firstly, in finding that Bridge Real Estate as the plaintiff’s real estate agent had apparent or ostensible authority to bind the plaintiff to a lease with the defendant and did so bind the plaintiff to a lease on 25 June 1996; secondly, in finding that as at 5 May 1998 the agreement between the plaintiff and the defendant was the agreement signed by the plaintiff’s real estate agent and the defendant on 25 June 1996; thirdly, in finding that the plaintiff breached any lease agreement between itself and the defendant; and, fourthly, in the quantification of any damages suffered by the first defendant. The plaintiff did not make any submission in relation to grounds two and three but in any event they are factual findings and do not give rise to an appeal.

11 The principles according to which this court is to decide an appeal from the Tribunal’s decision are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

The reasons for judgment

12 The application in the Tribunal arose in relation to a dispute concerning the lease of premises known as shops 8 & 9 Newport Village, 331-335 Barrenjoey Road, Newport. The premises were used for the purposes of a restaurant known as “Rohans Indian Cuisine”. The critical issue before the Tribunal was whether or not, on 5 May 1998, a valid shop lease existed with respect to the property with Doiho Pty Ltd as lessor and Waycity Pty Ltd as lessee. Waycity alleged wrongful termination of a lease or agreement to lease between it and Doiho. Doiho denied the allegations and cross claimed against Waycity and claimed approximately $57,000 comprising expenses incurred in relation to the vacation of the property, amounts relating to outstanding outgoings and outstanding rent, and interest on these amounts.

13 The dispute was heard over a number of days. On 12 September 2000, the tribunal Members, J Deamer and S Montgomery delivered written reasons. The Tribunal ordered that the cross application be dismissed and the respondent pay to the applicant the sum of $169,381.52 within 28 days of the date of its decision.

14 The plaintiff submitted that the Tribunal erred in finding that Bridge Real Estate had the “apparent” or “ostensible” authority to agree to the terms of a new lease with the defendant, and did in fact cause a new lease agreement in terms of the document dated 25 June 1996 between the plaintiff and the defendant. The plaintiff submitted that ostensible authority arises when a principle is estopped from denying the actual authority of his or her agent to bind him/her to some act by reason that it was the principal who represented by words or conduct that the agent had authority to perform that act on his behalf and that representation was reasonably relied on by a third party – see Crabtree Vickers Pty Ltd v Australian Direct Mail Advertising and Addressing Co Pty Ltd (1975) 133 CLR 72 at 78-79. The plaintiff further submitted that the Tribunal erred in law in finding that the plaintiff made a representation to the defendant that Bridge Real Estate had authority to bind it to a new lease and the defendant reasonably relied on that representation.

15 On this topic the Tribunal referred to a passage from Freeman and Lockyer v Buckhurst Park (Mangal) Ltd (1964) 2 QB 480 where Diplock LJ said at 502-503:

“It is necessary at the outset to distinguish between an ‘actual’ authority of an agent on the one hand, and an ‘apparent’ or ‘ostensible’ authority on the other. Actual authority and apparent authority are quite independent of one another. Generally they co-exist and coincide, but either may exist without the other and their respective scopes may be different. …
An ‘actual’ authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. Its scope is to be ascertained by applying ordinary principles of construction of contracts, including any proper implications from the express words used, the usages of the trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent.
…
An ‘apparent’ or ‘ostensible’ authority, on the other hand, is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the ‘apparent’ authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger.”

16 Diplock LJ also continued:

“The contractor cannot rely on the agent’s own representation as to his actual authority. He can rely only on a representation by a person or persons who have actual authority to manage or conduct that part of the business of the corporation to which the contract relates.
…
“[t]he commonest form of representation by a principal creating an “apparent” authority of an agent is by conduct, viz., by permitting the agent to act in the management or conduct of the principal’s business.”

17 In relation to the issue of ostensible authority the Tribunal stated:

“Under cross-examination, Ms Lakshmanan stated that she instructed Bridge that it was not to enter into a lease arrangement with the Applicant. Bridge had authority to negotiate but not conclude the terms of a new lease. Ms Lakshmanan agreed that no mention of those instructions appears in her affidavit evidence.
The Applicant submitted that if Ms Lakshmanan’s evidence of these instructions to Bridge is accepted, it must also be accepted that Ms Lakshmanan subsequently allowed a situation to continue, where, to her knowledge, Bridge had repeatedly asserted to the Applicant it had the Respondent’s authority, and had made important agreements using that authority. In such a situation, there can be no doubt that the Applicant was reasonably entitled to assume that Bridge did, in fact, have the authority it said it did.
With respect to this issue, we prefer the Applicant’s submission. We have set out in detail above the series of events which are evidenced by the “document trail” referred to by the Applicant. In our view, these events demonstrate a course of conduct on the part of the Respondent which in effect represented to the Applicant that Bridge had the authority to both negotiate and conclude the terms of a new lease. The respondent allowed Bridge “to act in a position from which it can be inferred that [its] actual representation of authority in [it]self is in fact correct.”
It follows, in our view, that Bridge had the ‘apparent’ or ‘ostensible’ authority to agree the terms of a new lease with the Applicant.”

18 It is my view that the Tribunal did not err in law. It was entitled to find that the plaintiff’s course of conduct represented to Waycity that Bridge had authority to both negotiate and conclude the terms of the lease.

Quantum

19 The plaintiff also submitted that the Tribunal erred in its calculation of damages. The plaintiff submitted that the damages awarded by the Tribunal include $70,000 for the value of the business as a going concern plus $40,965 for the business’s plant and equipment and furniture. The plaintiff further submitted that the value of the plant, equipment and furniture used to run the business was part of the value of the business as a going concern such that the defendant was awarded the value of these items twice and the amount of the damages awarded should be reduced by $40,965 plus the interest component on that amount.

20 There was evidence before the Tribunal that the plaintiff seized the defendant’s property and sold it to a business which subsequently commenced operation of the property. Evidence was given that the goods that were seized subject to conversion were valued at $40,965. No evidence was called by the plaintiff on this topic.

21 The Tribunal stated that the wrongful termination of the lease deprived the applicant of the business as a going concern, the application is entitled to damages for the value of the business as a going concern. It rejected the respondent’s written submission with respect to the value of the business and the value of the property. The result is that the applicant’s damages are to be quantified at $70,000 for the value of the business.

22 The Tribunal stated that it also accepted the applicant’s evidence that the respondent wrongfully seized the applicant’s property. It also accepted the applicant’s evidence and that the value of the property is $40,965.00. The judgment does not record that the plaintiff submitted that the value of the business as a going concern included the value of an amount for plant and equipment. It is unlikely that this ground of appeal would be successful.

23 Taking into account the plaintiff’s explanation for the delay the long period of delay itself and the very limited chances of success on appeal, justice demands that the application for an extension of time to appeal be refused. The summons is dismissed.

24 Costs are normally follow the event. The plaintiff is to pay the defendant’s costs as agreed or assessed.

25 The court orders:

(1) The application for an extension of time to appeal is refused.

(2) The summons is dismissed.

(3) The plaintiff is to pay the defendant’s costs as agreed or assessed.
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Last Modified: 06/30/2003