Effis Pty Ltd v Oriental Rain Forest Pty Ltd - [2021] WASC 343

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   EFFIS PTY LTD -v- ORIENTAL RAIN FOREST PTY LTD [2021] WASC 343
CORAM:   KENNETH MARTIN J
HEARD:   17 JUNE 2021 & ON THE PAPERS
DELIVERED          :   11 OCTOBER 2021
FILE NO/S:   GDA 2 of 2021
BETWEEN:   EFFIS PTY LTD
Appellant
AND
ORIENTAL RAIN FOREST PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :   STATE ADMINISTRATIVE TRIBUNAL
Coram:   MEMBER QUINLAN
File Number            :   CC 538 of 2020

Catchwords:

Appeal - Small scale rent dispute - Tenancy at an end - Landlord's outgoings apportioned to tenant - COVID-19 relief legislation against rent claimed - Deductions from security deposit of tenant - Turns on own facts

Legislation:

Commercial Tenancies (COVID-19 Response) Act 2020 (WA)
Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA)
Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA)
State Administrative Tribunal Act 2004 (WA)

Result:

Appeal by reference to ground 2 is allowed
Appeal otherwise dismissed

Category: B

Representation:

Counsel:

Appellant	:	No appearance
Respondent	:	No appearance

Solicitors:

Appellant	:	George Papamihail Barristers & Solicitors
Respondent	:	No appearance

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

David Securities v Commonwealth Bank of Australia (1992) 175 CLR 353
Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221
Trimat Holdings Pty Ltd v Investment Club Pty Ltd [2020] WASCA 63
Trimat Holdings Pty Ltd v Investment Club Pty Ltd [No 2] [2021] WADC 26

KENNETH MARTIN J:

Introduction

I am dealing with an appeal sought to be made to the general division of this court from a decision of the State Administrative Tribunal (SAT). The decision of Member Quinlan, dated 20 January 2021, concerns a very low economic value money dispute between a landlord and a tenant.
An important aspect of the appeal concerns the implications of s 12(1d) of the Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA). That section (relating to a tenant's obligation to make payment for operating expenses), was recently the subject of extensive discussion by the Court of Appeal of Western Australia in Trimat Holdings Pty Ltd v Investment Club Pty Ltd [2020] WASCA 63.
This dispute concerned a premises leased by the appellant landlord (Effis Pty Ltd) to the respondent tenant (Oriental Rain Forest Pty Ltd) at the Belmont District Shopping Centre - the premises being used for day spa or massage purposes. For ease of reference, I will refer to the appellant landlord and respondent tenant simply as 'landlord' and 'tenant' throughout these reasons.
On 20 January 2021, after a hearing before SAT on 7 October and 24 November 2020, Member Quinlan issued an order that obliged the tenant (ie, the applicant in the SAT proceedings) to pay to the landlord (ie, the respondent in the SAT proceedings) the amount of $11,213.35. At the time of the SAT decision, the landlord held the sum of $18,399.18 as a security deposit from the tenant.
With the tenancy having come to an end, the SAT determination entitled the tenant, in effect, to receive the balance of its paid security deposit in the net sum of $7,186.83. The landlord is unhappy with some aspects of that decision and seeks to pursue them to this court.
Pursuant to s 105(2) of the State Administrative Tribunal Act 2004 (WA) an appeal to this court can only be brought on a question of law.
To that end, the appellant landlord is pursuing two grounds of appeal to this Court under an amended Form 83 - Appeal Notice filed on 9 June 2021 (folio 7).
Given what are the paltry, uneconomic amounts at issue, the parties eventually agreed to the matter being determined wholly on the papers after an exchange of written submissions.

Programming orders

The respondent tenant corporation is not represented by lawyers of record in this court. Nevertheless, after being served with the appellant's materials (under my directions), the company secretary of the respondent corporation, Mr Barry Jones, attended court at a directions hearing on 17 June 2021 and sought to be heard.

At the directions hearing, I gave leave for Mr Jones to appear on behalf of the respondent and to be heard. That order was, in effect, made out of necessity - so there would at least be a contradictor to assist in the Supreme Court. At that time, I also issued certain further programming orders - providing for an exchange of written submissions between the parties and, as was then agreed, for the matter to be decided upon the papers, after the Court's receipt of those written materials (see my orders of 17 June 2021 ((folio 9)).
Subsequently, I received the as filed appellant's written submissions of 8 July 2021 (folio 11). In response to those submissions, I have duly received from Mr Jones, on behalf of the respondent corporation, his written submissions dated 4 August 2021 (non-folio document).

Underlying dispute

In broad terms, the underlying dispute between the parties concerned a rent relief claim in respect of a commercial tenancy at the Belmont District Shopping Centre.
The respondent was the tenant of a retail shop lease. The appellant was the trustee for the landlord of the lease, the Papamihail Discretionary Trust.
Under the retail shop lease, the respondent operated the retail business 'Natures Earth Day Spa' at Shop 6 at Belmont District Shopping Centre in Cloverdale.
The retail shop lease in question commenced on 1 August 2010 for a period of five years with an option to renew. The lease was renewed in due course and would then have expired by the effluxion of time on 31 July 2020, other things aside.
Pursuant to legislative measures enacted to respond to the impact of the COVID-19 pandemic, the respondent applied to SAT for rent relief under s 17(3)(c)(i) of the Commercial Tenancies (COVID-19 Response) Act 2020 (WA) (COVID Act), for the period 31 March 2020 to 31 July 2020.
The tenant also sought in their application to SAT a refund for certain operating expenses that it had paid to the appellant. The respondent argued that it was entitled to the refund because the appellant did not provide operating expenses statements at the end of each financial year - pursuant to s 12(1)(a) of the Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA) (Retail Shops Act).

SAT proceedings

The SAT proceedings came to be heard before Member D Quinlan on 7 October and 24 November 2020, with Member Quinlan delivering her reserved reasons verbally on 20 January 2021. To that end, I refer to a transcript of Member Quinlan's verbal reasons for decision (uncorrected) which was enclosed in a letter to the landlord by the executive officer of the SAT on 22 January 2021 (folio 4).
By her reasons, Member Quinlan identified, in effect, five issues that had emerged on the tenant's application. These were:
1.Is the tenant entitled to rent relief from 31 March 2020 to 31 July 2020 under the COVID Act and the COVID Regulations?
2.Whether the landlord was entitled to charge for operating expenses for the five years ending 30 June 2016 through to 2020 under s 12 of the Retail Shops Act in circumstances where operating expenses statements were not provided and, correlative thereto, whether any refund was due to the tenant.
3.Pursuant to s 16 of the Retail Shops Act what are the tenant's obligations to 'make good' the retail shop premises?
4.Whether the retail shop lease had been terminated earlier than 31 July 2020 by the landlord changing the locks on or about 15 May 2020.
5.By reference to the aforementioned issues, whether the landlord or the tenant was entitled to all or any of the tenant's security deposit of $18,399.18.

Legislation

It is convenient at this early stage to mention s 17(3)(c)(i) of the COVID Act, which says:
17.Tribunal's powers to make orders
...
(3)Without limitation, the orders that can be made by the Tribunal include the following -
...
(c)if the proceedings relate to a code of conduct - any order that the Tribunal considers appropriate to give effect to the approved code of conduct including, without limitation, 1 or both of the following -
(i)an order that a specified amount of rent payable under the lease to which the dispute relates be waived for a specified period;
Pursuant to this section, SAT can make any order it considers appropriate to give effect to the approved code of conduct, if the proceedings relate to a code of conduct dispute. This includes making an order that a specified amount of rent otherwise payable under a lease that the dispute relates to, be waived for a specified period.
Schedule 1 of the Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA) (COVID Regulations) is entitled 'Code of Conduct'. Tenants in small commercial leases can claim rent relief from a landlord pursuant to cl 5 of this Schedule.
I specifically discuss cl 5(2)(c) of the COVID Regulations later in these reasons.
I also mention s 12(1)(a) of the Retail Shops Act, regarding:
12.Landlord's operating expenses etc., effect of provision in lease for payment by tenant of
(1)If provision is made in a retail shop lease for payment by the tenant, in addition to rent, of all or any of the operating expenses of the landlord -
(a)the amount payable by the tenant under the retail shop lease is limited to the items of operating expenses that the retail shop lease specifies are to be paid wholly or in part by the tenant and does not include an amount in respect of which the retail shop lease does not specify both -
(i)how that amount is to be determined and, when applicable, apportionment to the tenant; and
(ii)how and when that amount is to be paid by the tenant;
Having now exposed some relevant legislative provisions in the present dispute, I turn now to a discussion of Member Quinlan's reasons as it came to delivered following the SAT proceedings.

Member Quinlan's reasons for decision

Member Quinlan essentially concluded that the tenancy had, in fact, ended on 14 July 2020, when the landlord had re-entered the premises. In this court, there appears to be no challenge to this termination of lease conclusion at that date.
Member Quinlan had observed (see primary court ts 11):
The real substantive issue in these proceedings is the determination of what money may be owed by either party to each other under the terms of the lease, the claims under the Retail Shops Act and any rent relief under the COVID Act and COVID Regulations.
She continued (ts 11):
As to rent relief, the tribunal has found that the tenant is entitled to 100 per cent rent relief for April and May 2020 and 50 per cent rent relief for the six or so weeks of June and half of July ... 2020. Therefore, the tenant owes the landlord [ie, for rent] $3905.83.
Towards the discrete topic of some operating expenses recoupment by the tenant, Member Quinlan said (ts 11):
As to operating expenses, the tribunal has found that the tenant is entitled to a partial refund of $2,000.
On the present grounds of appeal, this conclusion is challenged by the two grounds of the landlord, as I will explain.
Member Quinlan continued to resolve (ts 11) on another issue:
As to the costs incurred by the landlord to "make good", the tribunal has found that the tenant owes the landlord the amount of $5280.
There appears to be no challenge to that liability determination made against the tenant.
Referring to s 26 of the Retail Shops Act, Member Quinlan had reasoned towards the operating expenses recoupment amount and the net entitlement of the tenant, as follows (ts 11):
In accordance with these reasons, the tenant is entitled to a refund of $2000 for operating expenses and owes the landlord $9185.83 for both "make good" costs and unpaid rent. Therefore, if the refund is taken off that amount, the tenant owes the landlord $7185.83.
The landlord holds $18,399.18 for the tenant as a security deposit. The landlord will be ordered to return that deposit to the tenant minus the amount owed of $7185.83, that being $11,213.35 of the security deposit is to be returned to the tenant.
Orders implementing those reasons followed.
Before returning to discuss further aspects of Member Quinlan's reasons in more depth, I will record the two grounds of appeal as put to this Court under the appellant landlord's amended appeal notice, filed on 9 June 2021 (folio 7).

Grounds of appeal of Effis Pty Ltd

As amended, the landlord's first ground of appeal read in the following terms.
1.The Tribunal erred in construing its powers to order rent relief under section 17(4) of the Commercial Tenancies (COVID-19 Response) Act 2020 (WA) ... as the matter was not a 'code of conduct dispute' as defined under section 14(1) of the Act, where the tenant had failed to invoke the adopted code of conduct in relation to rent relief by failing to request rent relief under Schedule 1 clause 5(2) of the Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA).
I must observe upon two key things concerning ground 1. First, the expressed grievance seen in the ground over whether the matter was a 'code of conduct' dispute or not, does not look to be addressed at all by Member Quinlan's reasons. This is because the point (as now sought to be raised in this court) was not taken, or at least was not taken in that form, before the Tribunal.
Second, the economic ramifications of the landlord's ground 1 go towards the landlord's claim for extra rent. This is a ground that challenges Member Quinlan finding that the COVID response relief legislation had been engaged in the tenant's favour, as to 100% for April and May 2020, and as to 50% for June and for half of July 2020.
If the landlord is successful on ground 1, then it would be entitled to the additional rent that was disallowed by the Tribunal over those months. The additional rent would amount to the sum of $13,507.37.
The landlord's proposed second ground of appeal to this Court was:
2.The tribunal erred in concluding that s 12(1d) of the Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA) applied to previously paid outgoings by the respondent in which the appellant was bound to provide a "notional refund" from an amount charged for outgoings that had been paid by the respondent.
This ground 2 grievance, if it is legitimately a point of law, is worth the amount of $2,000. This was the general sum which Member Quinlan allowed the tenant in respect of the recoupment of operating expenses under the ultimate conclusion and orders.
I turn now to an evaluation of each of the appellant's as articulated grounds of appeal.

Ground 1

In its written submissions of 8 July 2021, the landlord (referencing s 13 of the COVID Act and reg 3 of the COVID Regulations), refers in particular to the 'Code of Conduct' established by the COVID Regulations (see par 15 of the appellant's written submissions).
As mentioned, the WA Code of Conduct is found at Schedule 1 to the COVID Regulations.
In its written submissions reference is made by the landlord to cl 5(2)(c) of the Code under the heading 'Requesting Rent Relief', which provides:
The request must be in writing and be accompanied by the following -
(a)...
(b)...
(c)sufficient and accurate information that evidences the reduction in the tenant's turnover that -
(i)is associated with the business conducted at the land or premises that are subject of the small commercial lease, and
(ii)the tenant has experienced during the emergency period or a relevant part of the emergency period. (my emphasis in bold)
The landlord's written submissions then reference cl 6(1) of the Code of Conduct, which says:
On receipt of a request for rent relief from an eligible tenant that meets the requirements of clause 5(2), a landlord must offer rent relief to the eligible tenant within [a certain time frame as explained].
Explaining ground 1, the landlord's written submissions say:
19.The sole basis for Ground 1 is that the respondent did not submit to the appellant 'sufficient and accurate information that evidences the reduction in turnover' as required by cl 5(2)(c) of the Code of Conduct. Therefore, the appellant's obligation under cl 6 to offer rent relief was not invoked.
20.The appellant accepts that there were requests for rent relief before the Tribunal, however, it is submitted that they did not comply with cl 5(2)(c). The respondent provided to the appellant only its bank account statements for March and April 2020.
21.In effect, it is submitted that a compliant request under cl 5(2) of the Code of Conduct is a jurisdictional pre‑requisite for the Tribunal to make orders with respect to a 'code of conduct dispute', and that pre-requisite was not satisfied. If that submission is not accepted, the appellant accepts that ground 1 must fail.

Determination on ground 1

Requesting rent relief from the landlord on 29 June 2020 (document 60 in the respondent's bundle before SAT and at page 5 of the respondent tenant's submissions) the tenant had then said:
I'm advised that the tenant company has only the one bank account and that the bank statements which have been emailed to you are for that account. The profit and loss for the 2019/20 financial year and the current quarter's BAS will both be compiled from the information contained in those statements. I suggest that it's very obvious that, as Nature's Earth Day Spa has been closed by government decree since 27 March [ie, 2020, due to the COVID epidemic which had emerged just shortly before and the emergency governmental responses to that epidemic], the tenant hasn't earned any revenue from the leased premises since that date, so don't understand why you appear to believe that the P and L statement and BAS would show anything different. Nevertheless, Ms Su [the director of the respondent tenant] has undertaken to provide you with a copy of these documents once she's received them from the accountant.
Bank statements show the tenant's turnover ceased entirely for the period 1 April 2020 to 30 June 2020, compared with the period 1 April 2019 to 30 June 2019. That was because its business was closed due to COVID-19.
Whilst considering the issue of rent relief under the COVID Act and COVID Regulations, Member Quinlan observed of the respondent tenant's case (see primary court ts 3 - 4) that:
The tenant provided extensive documentary evidence as well as two witness statements dated 26 August 2020 and 13 November 2020 from its director, Ms Fangfang Su. On 24 November, Ms Su attended the tribunal for cross-examination on her evidence as well as answer questions from the tribunal. The tenant also provided extensive written submissions which cross-reference the documentary evidence.
Towards the landlord's rival case opposing rent relief, Member Quinlan had observed that, essentially, the case had been documentary only (ts 4). The landlord did not make any argument to SAT addressing the issue of whether or not there was a 'code of conduct' dispute for the purposes of the COVID Act s 14(1) and by ongoing reference to the COVID Regulations. Yet such an argument is sought to be asserted under ground 1 to this Court. That is not a permissible course in this Court if the issue is not raised below.
Under the learned Member's consideration of the issues (see ts 4), Member Quinlan, referring to the claimed relief or rent relief, said:
Clause 5 of schedule 1 of the COVID Regulations provides that an eligible tenant under a small commercial lease may during the emergency period request rent relief from the landlord. There was no dispute that the period from 1 April to 30 July 2020 relevant to these proceedings was during the emergency period or that the applicant was a tenant under a small commercial lease.
After observing the tenant was an 'eligible tenant' (since it had less than the required 2019 turnover and later had qualified for the Commonwealth's Jobkeeper scheme) Member Quinlan addressed cl 5(2) of the Code of Conduct, observing (ts 4 - 5):
Clause 5(2) requires a request for rent relief to be in writing and be accompanied by a statement by the tenant that the lease is a small commercial lease and the tenant is an eligible tenant in relation to that lease. The request must also include sufficient and accurate information that evidences the tenant is an eligible tenant and the reduction in the tenant's turnover experienced during the emergency period. (my emphasis in bold)

She continued:
Whilst the tenant may not have qualified to be an eligible tenant at the time of first commencing the request for rent relief and prior to being able to provide the relevant and sufficient information, the simple fact is the tribunal is satisfied that the tenant is now an eligible tenant and has been since that information was provided to the landlord in June 2020 and the JobKeeper payments were first made in July 2020. Indeed, the landlord conceded in submissions at final hearing the tenant was (now) an eligible tenant under the COVID Act and COVID Regulations. (my emphasis in bold)
Member Quinlan then addressed cl 6 of the Code of Conduct, regarding the offering and negotiating of rent relief (ts 5). She proceeded to consider s 16 and s 17 of the COVID Act. In particular, s 17(3)(c) allows the Tribunal to issue any order that the Tribunal considers appropriate to give effect to the approved Code of Conduct. In relation to s 17(4) of the COVID Act, she concluded (see ts 5 - 6):
The tribunal accepts the tenant's evidence and so finds that the tenant had zero turnover from 26 March to 6 June 2020 when businesses were forced to shut and then were permitted to reopen. The tribunal also accepts the evidence of Ms Su that the tenant made all reasonable efforts to recommence its business after reopening was permitted on 6 June 2020, however was unable to reopen due to the COVID-19 pandemic affecting the availability of her staff who had returned to their countries of origin and also at that time many staff were frightened to return to work in a job that required such close contact. The tribunal also finds that the impending end date of release [at] 31 July 2020 affected Ms Su's ability to reopen which was unrelated to the COVID-19 pandemic. (my emphasis in bold)
After rendering some negative observations concerning the landlord's case, Member Quinlan concluded (ts 6):
Taking into account all the evidence provided and the provisions of the COVID Act and COVID Regulations, the tribunal finds that any deferral of rent is inappropriate as the tenancy has now ended [ie, at 14 July 2020 - upon re-entry by the landlord]. The tribunal finds that the apprpriate order is for the rent due on 1 April and 1 May 2020 to be 100 per cent waived, that being $5205.77 per month, and the remaining six weeks of the lease until 14 July 2020 to be 50 per cent waived. This means the rent due on 1 June for the whole month and 1 July 2020 for half the month as the lease has been found to be terminated from 14 July 2020. This equates to the tenant owing the landlord the amount of $3095.83.
Member Quinlan's references to cl 5(2) of the Code of Conduct reveal that the tribunal was aware a request in writing for relief must be accompanied by sufficient and accurate information evidencing the reduction in the tenant's turnover, pursuant to cl 5(2)(c). It is also evident that the Tribunal was in the end fully satisfied that 'relevant and sufficient information had been provided to the landlord'. This is apparent from her observation 'and has been since that information was provided to the landlord in June 2020' (ts 5).
In any case, the question of whether the required information provided was sufficient or not vis-à-vis business turnover, is ultimately a quantitative factual question of degree. The assessment is inherently a matter of fact, not of law. This does not raise any point of law to legitimately bring by way of appeal to this Court.
From a jurisdictional perspective, this is not a situation where no required information at all was provided by the tenant to engage with the threshold requirements of cl 5(2)(c)(i) and (ii) of the Code of Conduct. Nor is there any basis to question in this Court as an issue of fact the accuracy of the factual business turnover information provided by the tenant. Ground 1 must therefore fail.
As a matter of interest, the tenant's written submissions answering ground 1, effectively progressed towards being an attempted cross‑appeal. The tenant said it sought a 100% waiver of the rent payable over the entire six‑week period from 1 June to 14 July 2020, rather than merely the SAT ordered 50% waiver. A cross-appeal course is not open in this court to the tenant on ground 1.
There is no cross-appeal brought on behalf of the tenant. In any event, this would only raise another question of disputed fact, rather than a question of law. Ground 1 fails and is dismissed.

Ground 2

I pause to observe that when considering Member Quinlan's reasons, it does not appear that any party referred the learned Member to an important decision of the Court of Appeal delivered in Trimat Holdings Pty Ltd v Investment Club Pty Ltd [2020] WASCA 63, on 28 April 2020 (Trimat Holdings).
Those Court of Appeal reasons extensively canvass the operating expenses obligation provisions of the Retail Shops Act, including, in particular, s 12(1)(d). Shortly below, I set out the terms of s 12(1d) of the Retail Shops Act. But in order to understand the provision, I need also to set out s 12(1)(d)(ii) - to which it refers.
In the Retail Shops Act, under the heading, 'Landlord's operating expenses etc, effect or provisions in lease for payment by tenant of', s 12(1)(d)(ii) says:
(1)If provision is made in a retail shop lease for payment by the tenant, in addition to rent, of all or any of the operating expenses of the landlord -
...
(d)the retail shop lease shall be taken to provide that -
(i)...
(ii)the landlord is required to give to the tenant a written statement in accordance with subsection (1a) (an operating expenses statement) that details all expenditure by the landlord in each accounting period of the landlord during the term of the lease on account of operating expenses to which the tenant is required to contribute.
...
Then, s 12(1d) adds:
If a landlord does not comply with the requirement referred to in subsection (1)(d)(ii), the tenant is not obliged to pay, and the landlord is not entitled to recover, operating expenses from the date of that noncompliance until the landlord complies with that requirement.
In Trimat Holdings, the Court of Appeal remitted a restitutionary issue (which was not resolved) back to the District Court. There it was addressed in a further hearing by Gething DCJ from 10 March 2021 to 12 March 2021 (see Trimat Holdings Pty Ltd v Investment Club Pty Ltd [No 2] [2021] WADC 26 per Gething DCJ). That decision in turn is noted to be presently under appeal.
By Member Quinlan's reasons in the SAT, the tenant's recoupment of operating expenses was issue 2 between the parties. Member Quinlan commenced her observations on this issue in the following terms (ts 6):
It was common ground that operating expenses statements as required under s 12(1a) of the Retail Shops Act had not been provided for the four end of financial years from 2016 to 2019. As part of these proceedings, the landlord provided a one page summary said to be the operating expenses for each of the five years from 2016 to 2020 said to be prepared by an accountant; however, the accountant was not called to provide evidence regarding the operating expenses summaries ...
As previously discussed, the tenant had argued in SAT that it had duly paid all of the landlord's invoices for operating expenses over, in effect, a financial year period of four years. This is, it argued, when it was 'not obliged to pay' and the landlord was 'not entitled to recover'.
It is clear from the Court of Appeal's reasons in Trimat Holdings that this same point is no straightforward issue. A tenant would be seeking, in effect, restitutionary relief against a landlord for moneys paid under a mistake of law: see generally the High Court's observations in David Securities v Commonwealth Bank of Australia (1992) 175 CLR 353.
It will also be remembered that in Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 (Pavey & Matthews) the High Court clarified the law around quasi contract, explaining that the underlying rationale for obtaining restitutionary relief was not implied contract. Rather, it was the legal notion of an unjust enrichment: see generally the observations of Deane J in Pavey & Matthews at pages 244 - 269 (whose observations were agreed with by Mason and Wilson JJ).
In discussing restitutionary relief under circumstances where that appeal was partly allowed, but also was partly remitted to the District Court in Trimat Holdings, the Court of Appeal had observed at [79]:
However, as the appellant accepted, that partial success does not necessarily mean that the appellant will ultimately succeed in its claim for restitution of money paid. It will remain necessary for the primary court to determine whether the Lease is actually a retail shop lease and the other defences to the appellant's restitutionary claim pleaded by the respondent. It is therefore appropriate that the matter be remitted to the District Court.
The essential issue at the heart of a restitutionary claim by the tenant for an operating expenses recoupment paid under a mistake of law, would address the landlord's unjust enrichment by the receipt and retention of those funds. Essentially, the fundamental question is whether the tenant would be entitled to (some) restitution against the landlord under circumstances where they have received some benefit(s) from the subject matter of the operating expenses so paid.
There are accepted to be a number of potential restitutionary defences open to a person in the position of a landlord obtaining funds mistakenly by a tenant's payment. For instance, could the landlord show that its position had changed to its detriment, in good faith, after receiving and utilising the funds.
None of these potentially difficult questions were discussed by the parties and, understandably, therefore, not raised before SAT in January 2021.
In the end, on the operating expenses recoupment issue, Member Quinlan had observed in terms (see ts 7 - 8):
It could be argued that once the operating expenses are paid, s 12(1d) of the Retail Shops Act has no application as presumably when Parliament enacted that section of the Retail Shops Act, it took the view that if the tenant pays the operating expenses, then they are taken to have accepted the liability to pay and acknowledged the benefit the tenant had received from those operating expenses.
The tribunal finds that the tenant has paid for the years 2016, 2017, 2018, 2019 and part of 2020. The tribunal finds that the tenant is not entitled to a full refund of those operating expenses under s 12(1d) of the Retail Shops Act as the tenant should have raised the issue much earlier by exercising its right to refuse to pay. However, the tribunal does take the view that a partial refund is appropriate by distinguishing and taking a slightly different approach than the tribunal took in [an earlier decision of the Tribunal referred to as Wilde & Smith [2010] WASAT 9 at [147]]. (my emphasis in bold)
After rendering further observations concerning the landlord's so-called operating expenses statements given to the tenant as being insufficient to comply with s 12(1a) of the Retail Shops Act (in particular s 12(1a)(c) and s 12(1a)(e)), Member Quinlan had concluded (at ts 8):
The tribunal understands that the 2020 operating expenses have been invoiced at $1399.61 per month and that whilst April 2020 was paid by the tenant, May, June and July 2020 have not been paid. Accordingly, the tribunal finds that the tenant is not obliged to pay and the landlord is not entitled to recover any of the remaining unpaid operating expenses for April, May and June 2020.
I did not understand the landlord to be presently seeking to challenge that aspect of the determination concerning its as ascertained non‑compliance with s 12(1a).
Problematically, however, Member Quinlan continued (ts 8):
The tribunal also finds that the tenant is due a refund of a proportionate amount which recognises that the tenant has had the benefit of the services associated with the operating expenses; however, it is also clear that some operating expenses were incorrectly charged to the tenant which means the tribunal is not satisfied that all of the operating expenses were correctly charged.
The tenant has paid something in the region of $15,000 per annum for operating expenses across the term of the lease. The tribunal considers that a notional refund of $2000 in total is appropriate in the circumstances for the reasons stated above. (my emphasis in bold)
From that concluding paragraph of the Tribunal's reasons, there presents to be no empirical basis for a derived amount of $2,000

- awarded to the tenant as a 'notional refund'. A rationale for that $2,000 amount certainly does not appear to be derived from any principled assessment of an entitlement to restitutionary relief. As seen, the rationale seems to be related by reference to 'reasons stated above' - to being to some operating expenses not being 'correctly charged'. No further basis was provided for the notional $2,000 sum ultimately awarded to the tenant.
The question then is whether this determination carries with it any issue of law. Ground 2, as seen, challenges the 'notional refund amount' of $2,000.

Determination on ground 2

On my assessment, ground 2 of the appeal must be upheld. An error law is demonstrated.
Whilst s 12(1d) of the Retail Shops Act was concluded not to be engaged, there is nothing in that legislative provision to support an awarding of any 'notional amount' on my assessment.
If some other provision of the Act was relied upon to derive a notional amount for the tenant, then it is simply not mentioned. There was also no mention of any other provision in the SAT Act that would allow SAT to award a nominal amount.
My conclusion in the end is that there was no power in SAT to render a notional amount determination upon this issue.
The tenant's written submissions not only sought to resist this ground. They also sought to, in effect, again, cross‑appeal so as to claim a larger proportion of the $125,694.56 in operating expenses recovered from it by the landlord over the term of the lease - going beyond the $2,000 notional amount (see page 6 of the tenant's outline of submissions). By reference to Annexure A to the tenant's submissions, it says it would claim $9,526.38.
Again, there is no cross-appeal under present circumstances by the tenant. Nor, as I would observe, has it advanced any real argument by reference to an entitlement to restitutionary relief on a basis that the landlord has been unjustly enriched by its receipt of the operating expenses amounts as paid, in circumstances extending back (by reference to Annexure A) to August 2010.

Conclusion

Upon ground 2, the landlord has established an error of law and, to that extent, has succeeded. Accordingly, the amount of $2,000 must be reduced from the landlord's repayment amount obligation of $11,213.35 - as ordered by reference to the balance of its security bond by the Tribunal.
In relation to costs, the landlord has ultimately partly succeeded on the papers upon one of its two grounds. It is, in all the circumstances, an economically insignificant sum in this Court. The SAT, of course, is generally a no costs jurisdiction.
As the landlord's submissions suggest, there should be no order as to costs for this matter in the Supreme Court. This is because the matter was ultimately capable of being determined on the papers, based on the parties' exchanged written submissions. However, an exception to this is the filing fee for the landlord's application in the amount of $1,450. This disimbursement amount ought be recovered as well from the tenant for the landlord's costs and be deducted from the funds otherwise repayable to the tenant.
Consequently, the net amount that is ultimately repayable to the tenant from out of its security deposit is $7,763.35.
Accordingly, there will be orders that will issue upon the publication of these reasons in terms that:
1.The landlord's appeal by reference to its ground 2 is allowed. Otherwise its appeal is dismissed.
2.The landlord is awarded costs by way of reimbursement of its disbursement filing fee in this Court in the amount of $1,450 only.
3.The orders of the Tribunal are varied to provide:
Within 14 days of the orders allowing this appeal, the appellant is to pay to the respondent the amount of $7,763.35.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DM
Research Associate to the Honourable Justice Martin
11 OCTOBER 2021