Ellaz Pty Ltd as Trustee for the Ripper Family Trust v Browne - [2022] WADC 54

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   ELLAZ PTY LTD as Trustee for THE RIPPER FAMILY TRUST -v- BROWNE [2022] WADC 54
CORAM:   WHITBY DCJ
HEARD:   8 APRIL 2022
DELIVERED          :   7 JUNE 2022
FILE NO/S:   CIV 3245 of 2020
BETWEEN:   ELLAZ PTY LTD as Trustee for THE RIPPER FAMILY TRUST
Plaintiff
AND
ROBERT HARRY BROWNE
First Defendant
SARAH BROWNE
Second Defendant
ROBERT HARRY BROWNE
SARAH BROWNE
Plaintiff by counterclaim
ELLAZ PTY LTD as Trustee for THE RIPPER FAMILY TRUST
Defendant by counterclaim

Catchwords:

Practice and procedure - Summary judgment application by plaintiff - Refusal of extension of time to appeal

Legislation:

Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA)
District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Appeal dismissed

Representation:

Counsel:

Plaintiff	:	Mr M C Hotchkin
First Defendant	:	Mr A J Aristei
Second Defendant	:	Mr A J Aristei
Plaintiff by counterclaim	:	Mr A J Aristei
Defendant by counterclaim	:	Mr M C Hotchkin

Solicitors:

Plaintiff	:	Hotchkin Hanly
First Defendant	:	In person
Second Defendant	:	In person
Plaintiff by counterclaim	:	In person
Defendant by counterclaim	:	Hotchkin Hanly

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
Bynon v Atma Nominees Pty Ltd as trustee for the Badjyn Investment Trust and the H & B Farm Trust [2017] WASC 30
Cheney v Moore [2020] WASC 227
Christie v Harvey (1900) 2 WALR 146
City of Canning v Avon Capital Estates (Aust) Ltd [2009] WASCA 120
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 96 ALJR 89
Decmil Australia Pty Ltd v Avid Australia Holdings Pty Ltd [2022] WASC 183
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Everswell Pty Ltd v Beeliar Management Pty Ltd as Trustee for Beeliar Development Trust [2022] WASC 74
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gel Custodians Pty Ltd v Dewar [2014] WASC 177
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Kezic v St John of God Health Care Inc [2015] WASCA 220
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Narich Pty Ltd v Commissioner of Pay‑roll Tax [1983] 2 NSWLR 597
Webster v Lampard (1993) 177 CLR 598
Westpac Banking Corporation v Anderson [2017] WASC 106

WHITBY DCJ:

This is an appeal from a decision of Deputy Registrar Harman on 2 September 2021 dismissing the plaintiff's application for summary judgment. This appeal is made pursuant to r 15 of the District Court Rules 2005 (WA) (DCR).
For the reasons that follow, I am satisfied that the defendants have established an arguable defence and I refuse to grant an extension of time to appeal.

Overview

The plaintiff (Ellaz) owns a commercial property unit in Clarkson (Premises).
In October 2011, Ellaz entered into a lease of part of the Premises with the West Coast 4WD Pty Ltd (West Coast) (2011 Lease). In January 2013 the 2011 Lease was surrendered, prior to the expiry of its term, when Ellaz entered into a lease of the whole of the Premises with West Coast (2013 Lease). The first and second defendants (the Brownes) guaranteed West Coast's obligations under the 2013 Lease.
On or about 6 October 2015, Ellaz and West Coast entered into an extension of the 2013 Lease (2015 Extension). The Brownes continued to guarantee West Coast's obligations under the 2015 Extension.
On or about 25 July 2018, Ellaz and West Coast entered into a further extension of the 2013 Lease (2018 Extension). The Brownes continued to guarantee West Coast's obligations under the 2018 Extension.
On 18 November 2018, Ellaz issued West Coast and the Brownes with a Notice of Default in relation to outstanding rent and other monies which were payable under the 2013 Lease, the 2015 Extension and the 2018 Extension (collectively the Lease).
On 5 October 2018, Ellaz issued a notice of termination of the Lease to West Coast which was effective from 12 October 2018.
Ellaz entered into a new lease for the Premises with a third party commencing on 1 October 2020. The Premises were vacant between the time that West Coast vacated the Premises on 12 October 2018 and 30 September 2020.
On 4 September 2020, Ellaz commenced this action in the District Court by writ of summons. Ellaz filed a statement of claim on 6 October 2020 (SOC). Mr and Ms Browne filed a defence and counterclaim on 24 November 2020 (Defence).
In the SOC, Ellaz claims a total of $177,583.90 comprising of the following:
(a)$14,179.90 in rent for the months of September and October 2018;
(b)$768.95 for solicitor's costs for the notice of default;
(c)$155,978.90 being the amount of rent that would have been payable to Ellaz by West Coast under the Lease from 1 November 2018 to 30 September 2020; and
(d)$6,656.15 for the costs incurred by Ellaz as a result of West Coast's breaches of the Lease.
By their defence, the Brownes say that:
(a)West Coast carried on business as a 'retail shop' making the Lease a 'retail shop lease' pursuant to s 3 of the Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA) (Retail Shops Act);
(b)Mr Francesco Scullino, the director of Ellaz, represented to the Brownes that the Lease was not a 'retail shop lease' and that all outgoings were payable by West Coast. West Coast entered into the Lease induced by, and in reliance upon, these representations;
(c)these representations were misleading and deceptive because the Lease was, in fact, a 'retail shop lease' as defined by the Retail Shops Act;
(d)Ellaz was therefore, required to comply with the requirements of the Retail Shops Act, including a requirement, pursuant to s 12 of the Retail Shops Act, that it provide estimates of expenditure of outgoings or operating expense statements to Ellaz throughout the term of the Lease;
(e)Ellaz did not comply with s 12 of the Retail Shops Act. As a result, West Coast was not legally obliged to pay outgoings to Ellaz under the Lease;
(f)West Coast did however, pay outgoings to Ellaz and did so under a mistake of law; and
(g)the guarantees signed by the Brownes in respect of the 2013 Lease, the 2015 Extension and the 2018 Extension (collectively the Guarantees) should be set aside by reason of Ellaz's misleading and deceptive conduct, as a matter of proper construction of the Lease and/or on the basis that the notice of default was invalid because it included amounts which West Coast was not legally obliged to pay.
On 21 May 2021, Ellaz made an application by chamber summons for summary judgment against the Brownes pursuant to O 14 r 3 of the Rules of the Supreme Court 1971 (WA). Ellaz also required leave to make the summary judgment application out of time.
Ellaz relied upon the following in support of its application for summary judgment:
(a)affidavit of Francesco Scullino sworn on 21 May 2021 (First Scullino Affidavit); and
(b)affidavit of Stephanie Lauren Angela Di Virgilio sworn on 21 May 2021 (Di Virgilio Affidavit).
In opposing the summary judgment application, the Brownes relied upon the affidavits of Robert Harry Browne and Sarah Browne both sworn on 8 July 2021 (First Browne Affidavits).
On 2 September 2021, Deputy Registrar Harman dismissed the summary judgment application and ordered Ellaz to pay the Brownes' costs in any event.
On 10 November 2021, Ellaz filed a chamber summons seeking leave to appeal the deputy registrar's decision out of time and a notice of appeal (Chamber Summons).
Ellaz relies upon the following additional material in support of the Chamber Summons:
(a)affidavit of Ms Di Virgilio sworn on 5 November 2021 (Second Di Virgilio Affidavit);
(b)affidavit of Michael Charles Hotchkin sworn on 5 November 2021 (Hotchkin Affidavit); and
(c)affidavit of Francesco Scullino sworn on 10 November 2021 (Second Scullino Affidavit).
Ellaz also seeks leave to amend the application for summary judgment to include a claim for outgoings and to take into account a further payment made by West Coast. The total amended amount claimed by Ellaz is $186,808.82.
The Brownes rely upon the following additional affidavits in opposition to the application for summary judgment:
(a)affidavit of Sarah Browne sworn on 25 February 2022 (Second Browne Affidavit);
(b)affidavit of Robert Harry Browne sworn on 9 March 2022 (Third Browne Affidavit); and
(c)affidavit of Sarah Browne sworn on 1 April 2022 (Fourth Browne Affidavit).

Issues

I propose to deal with the merits of the application for summary judgment at the outset of these reasons. I will then consider, having regard to my assessment of the merits, the issue of whether leave to appeal the decision of the deputy registrar out of time should be granted.
In determining the merits of the summary judgment application, the central issue is whether it is arguable that the Lease is classified as a 'retail shop lease'. The defences raised by the Brownes depend upon the Lease being characterised as a 'retail shop lease' and therefore, being subject to the provisions of the Retail Shops Act.
I will first outline the legal principles applicable to an appeal from a registrar and to a summary judgment application before considering the merits of the summary judgment application.

Legal principles applicable to the appeal

Rule 15(6) of the DCR provides that an appeal from a registrar 'is to be by way of a new hearing of the matter that was before the registrar'.
A new hearing means that the judge hearing the appeal must treat the application as if it was before the court for the first time: Kezic v St John of God Health Care Inc [2015] WASCA 220 [42].
The plaintiffs, as the party who has appealed, are not required to show that the registrar made an error in the decision the subject of the appeal: Cheney v Moore [2020] WASC 227 [9].
The court may rely upon additional evidence on the hearing of an appeal by way of a new hearing, subject to the court having a discretion to exclude such evidence: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, 28.
In essence, I am required to determine Ellaz's application for summary judgment afresh, having regard to all the evidence that was before the deputy registrar, together with any additional evidence relied upon by the parties on the appeal.

Summary judgment - legal principles

The legal principles governing the power to order summary judgment are uncontroversial. In summary:
(a)summary judgment should be exercised with great care and will not be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99;
(b)the onus is on a plaintiff to persuade the court that it is an appropriate case to award summary judgment: Gel Custodians Pty Ltd v Dewar [2014] WASC 177;
(c)once a plaintiff has established a prima facie right to judgment, the onus is on the defendant to satisfy the court why judgment should not be given: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110;
(d)the defendant does not have to show a defence on the balance of probabilities, only to show cause as to why there is an arguable defence: Westpac Banking Corporation v Anderson [2017] WASC 106;
(e)the court should not dispose of an action summarily where there is a conflict on the facts. Summary judgment must only be granted where the court has a high degree of certainty of the outcome of the proceedings if they went to a trial: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57];
(f)summary judgment is appropriate where the defence is so obviously untenable that it cannot possibly succeed or where it would be manifest that to allow the defence to stand would involve useless expense: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129;
(g)in determining whether there is an issue in dispute which ought to be tried, the version of facts put forward by the defendant should be accepted, assuming they are not inherently incredible: Webster v Lampard (1993) 177 CLR 598;
(h)the court is not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents: Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28];
(i)if defending a summary judgment application on the basis of factual issues, the defendant must file an affidavit/s which provide particulars of the facts upon which he asserts that summary judgment should not be given: Westpac Banking Corporation v Anderson [2017] WASC 106; and
(j)summary judgment is not only given where a case is so hopeless as to not require argument. Extensive argument may sometimes be necessary to demonstrate that there is no question which ought to be tried: Bynon v Atma Nominees Pty Ltd as trustee for the Badjyn Investment Trust and the H & B Farm Trust [2017] WASC 30 [16].

Has Ellaz established a prima facie right to judgment?

Ellaz must first establish a prima facie right to judgment against the Brownes. If that is established, the onus is on the Brownes to satisfy the court why judgment should not be given.
Pursuant to the terms of the Lease, West Coast was required to pay Ellaz amounts which included:
(a)rent of $85,628.40 (plus GST) per annum payable in equal monthly instalments in advance of $7,135.70 (plus GST) (Lease, Items 6 and 7 of sch 1);
(b)rent to be reviewed to the current market rent on 1 January 2016 and 1 January 2019 (Lease, sch 2);
(c)rent to be reviewed and adjusted on each anniversary of the commencement date (except for a date which is a market review date) (Lease, cl 5.2); and
(d)the Outgoings that were attributable solely in respect of the Premises and West Coast's proportion of any outgoings that are not attributable solely in respect of the Premises (Lease, cl 6.1).[1]
[1] First Scullino Affidavit; annexure FS4 - Items 6 and 7 of sch 1, sch 2 and cl 5.2 of the 2013 Lease; Statement of claim, dated 6 October 2020, par 6(d).
Ellaz was entitled to terminate the Lease and re-enter the Premises if, amongst other things, West Coast failed to pay rent or any other amounts owing under the Lease within seven days of those amounts being due (Lease, cl 11.1).
West Coast agreed to pay interest calculated on a daily basis on any amounts which were not paid within seven days of the due date, at the rate of interest charged by the Commonwealth Bank of Australia from time to time on overdraft facilities in excess of $100,000 plus 3% (Lease, cl 11.5 and Item 10 of sch 1).
West Coast was required to pay Ellaz's reasonable legal and other costs, charges and expenses associated with any default by West Coast (Lease, cl 14).
The Brownes guaranteed payment of rent and all other monies payable by West Coast under the Lease (Lease, cl 22.1(a)).
The Brownes agreed to indemnify and keep Ellaz indemnified against all liability, claims, costs or actions whatsoever caused by a breach of the Lease by West Coast (Lease, cl 22.1(b)).
The Guarantees were irrevocable and continuing guarantee and extended to each new lease or other right to occupy the Premises granted to West Coast (Lease, cl 22.1 and cl 22.2(b)).
The Guarantees extended to Ellaz's loss or damage in the event that Ellaz elected to re-enter the Premises or terminate the Lease (Lease, cl 22.2(d)).
The Guarantees are not discharged, released or affected by any variation, extension or renewal of the Lease (Lease, cl 22.2(g)).
Ellaz alleges that West Coast failed to pay rent and outgoings for the period 1 September to 30 September 2018.[2]
[2] Statement of claim, dated 6 October 2020, par 13.
On 5 October 2018, Ellaz terminated the Lease and re-entered the Premises.[3]
[3] Statement of claim, dated 6 October 2020, par 15.
Ellaz entered into a new lease with a third party with a commencement date of 1 October 2020.[4]
[4] Statement of claim, dated 6 October 2020, par 22.
Ellaz pleads that, pursuant to the Guarantees, the Brownes are liable to pay Ellaz the amounts owing by West Coast under the Lease and indemnify Ellaz for the loss and damage it suffered as a result of West Coast's breach of the Lease and the termination of the Lease.[5]
[5] Statement of claim, dated 6 October 2020, par 25.
The amounts claimed by Ellaz for the breaches of the Lease and the termination of the Lease, for which it seeks summary judgment total $186,808.82 and comprise the following:
(a)$16,735.59 (inc. GST) for outstanding rent and outgoings (including $768.95 of legal fees, up to and including the Termination Date and less a payment of $2,000 made by the defendants on or about 28 September 2018);[6]
(b)$163,068.85 (inc. GST) for damages being the amount of rent that would have been payable to Ellaz by West Coast from 1 November 2018 to 30 September 2020, calculated as $7,089.95 of rent per month x 23 months;
(c)$33,633.91 (inc. GST) for damages being the amount of outgoings that would have been payable to Ellaz by West Coast, from 1 November 2018 to 30 September 2020, including water, strata levies and council rates in accordance with the Lease;
(d)$6,656.15 for costs incurred by Ellaz as a result of the Brownes' breaches of the Lease;[7] and
(e)a credit totalling $33,285.68 being a payment of $6,000, original bond of $17,726.84 and a security bond of $9,558.84.[8]
[6] First Scullino Affidavit, annexures FS7, FS9 and FS10.
[7] Scullino Affidavit, annexure FS13.
[8] First Browne Affidavit, par 58.
I find that Ellaz has established a prima facie right to judgment in the amount of $186,808.82. The onus shifts to the Brownes to establish that they have an arguable defence.

Do the Brownes have an arguable defence?

The Brownes plead that West Coast entered into the Lease on the basis of Ellaz's representations (made by its director, Mr Scullino) that:
(a)all outgoings would be lawfully payable by West Coast from the date they were incurred;
(b)the Lease was not a retail shop lease for the purposes of the Retail Shops Act; and
(c)Ellaz did not need to comply with s 12 of the Retail Shops Act;[9]
(Representations).
[9] Defence and counterclaim, dated 24 November 2020, par 32.
The Brownes say that West Coast were not obliged to pay outgoings in circumstances where Ellaz had not complied with s 12 of Retail Shops Act and, to the extent that West Coast did pay outgoings, Ellaz was unjustly enriched and is liable to make restitution to West Coast.[10]
[10] Defence and counterclaim, dated 24 November 2020, par 33.
The Brownes say that West Coast was induced to enter into the Lease in reliance upon the Representations, that the Representations were misleading and deceptive, and therefore West Coast is entitled to set aside the Lease, thereby discharging any liability the Brownes may have under the Guarantee.[11]
[11] Defence and counterclaim, dated 24 November 2020, pars 34 - 37.
Counsel for the Brownes submits that the 'key' factual issue is whether Ellaz was actually required to comply with s 12 of the Retail Shops Act.[12] Therefore, the defence is dependent upon the Lease being classified as a 'retail shop lease' pursuant to the Retail Shops Act.

Is the lease a 'retail shop lease'?

[12] Defendants' outline of submissions, dated 31 March 2022, par 8.

The relevant provisions of the Retail Shops Act are as follows:
Section 3 provides that a 'retail shop lease' means a lease that provides for the occupation of a retail shop (emphasis added).
Section 3 defines a 'retail shop' as:
(a)any premises situated in a retail shopping centre that are used wholly or predominately for the carrying on of a business; or
(b)any premises not situated in a retail shopping centre that are used predominantly for the carrying on of a retail business.
Section 3 defines a 'retail shopping centre' as a cluster of premises where:
(a)5 or more of which are used for the carrying on of a retail business …
Section 3 defines a 'retail business' as:
(a)a business that wholly or predominantly involves the sale of goods by retail; or
(b)a specified business.

Neither 'predominantly' or 'retail' are defined in the Retail Shops Act. According to the Concise Oxford English Dictionary:
'Predominantly' is defined as 'mainly; for the most part'; and
'Retail' is defined as 'the sale to the public of goods in relatively small quantities, and usually not for resale'.
The first limb of the definition of a 'retail shop' refers to premises that are situated in a group of five or more shops (as defined in 'retail shopping centre') that are wholly or predominantly used for the carrying on of a business where five or more of those businesses are used for the carrying on of a retail business.
It is not in dispute that the Premises are located within a six‑unit complex. Ellaz submits that it not arguable that any of the other units in the complex were used wholly or predominantly for the carrying on of a retail business. The other businesses operating from the units were:
(a)Unit 1 was leased to Mindarie Workshop & Auto Electrical - this is a mechanic's garage. The permitted use in the lease for Unit 1 was for 'vehicle inspections, light mechanical repairs, automotive electrical and air-conditioning sales and services, and the sale of automotive batteries';[13]
(b)Unit 3 was vacant for approximately two years until on or about 21 March 2019 when CES Electrical Wholesalers leased the unit under an industrial lease. The permitted use was for 'the wholesale of electrical supplies';[14]
(c)Unit 4 was leased to Tint a Car. The permitted use under the lease was for 'motor vehicle and house window tinting';[15]
(d)Unit 5 was leased to Tyrepower. The permitted use of the leased premises was 'a tyre outlet and associated automotive uses';[16] and
(e)Unit 6 was leased to Automasters - a service and repair centre.[17]
[13] Further Scullino Affidavit, par 16 and annexure FS15.
[14] Further Scullino Affidavit, par 17 and annexure FS18.
[15] Further Scullino Affidavit, par 16 and annexure FS17.
[16] Further Scullino Affidavit, par 16 and annexure FS17.
[17] Ellaz was unable to obtain a copy of the Lease for Unit 6 however, submitted that it was evident from their website that they provide car servicing and repairs: Outline of submissions, dated 16 March 2022, par 34(e).
In their outline of submissions, the Brownes assert that there is a factual issue that has been raised in relation the classification of the businesses that are in the unit complex and that the issue cannot be dismissed as unarguable.
At the hearing, counsel for the Brownes did not pursue the argument that the Premises were part of a retail shopping centre any further than that espoused in the written submissions.
The only evidence before the court clearly demonstrates it is not arguable that the unit complex falls within the definition of a retail shopping centre. Even at its highest, that being in the event that Units 4, 5 and 6, together with Unit 2 which West Coast occupied, were considered to be in the business of wholly or predominantly retail sales, there is no factual basis upon which it is arguable that the mechanic's garage (Unit 1) and the electrical wholesaler (Unit 6) are wholly or predominantly in the business of retail sales. In those circumstances, I find that it is not arguable that the Premises are situated within a retail shopping centre. What remains to be determined is whether the Premises are used predominantly for the carrying on of a retail business within the definition of limb (b) of 'retail shop' in the Retail Shops Act.
Essentially, in combining the definitions found within cl 3 of the Retail Shops Act (as they are relevant to the facts), in order to be subject to the Retail Shops Act, the Lease must be a lease that provides for the occupation of premises that are used for the carrying on of a business that predominantly involves the sale of goods by retail.
The provisions of the Lease and the 2018 Extension that specify the permitted use of the Premises:
(a)In the 2013 Lease:
Clause 7.1(a)[18]
[18] First Scullino Affidavit, annexure FS4 at page 30.
The lessee must only use the premises for the permitted use.
Item 8 Permitted Use[19]
[19] First Scullino Affidavit, annexure FS4 at page 61.
Fitting and servicing 4WD accessories.
(b)In the 2018 Extension:[20]
Item 5 Terms of Variation
The Lease is varied by:
(a)inserting the following after the text of Item 8 of the Lease:
including the retail sale of parts provided that any such retail sale is not the whole or predominant use of the Premises and does not bring this Lease within the scope of the Commercial Tenancy (Retail Shops) Agreements Act (WA).
[20] First Scullino Affidavit, annexure FS6 at page 91.
Counsel for Ellaz submits that the terms of the Lease must provide for the carrying on of a business that predominantly involves the sale of goods by retail from the Premises. The substance of this submission is that the Lease did not provide for West Coast to carry on the business of predominantly retail sales, in fact, pursuant to the 2018 Extension, such use of the Premises was expressly prohibited. It is irrelevant therefore, what business West Coast was actually carrying on from the Premises.
In Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 96 ALJR 89, the plurality of Kiefel CJ, Keane and Edelman JJ considered the proper characterisation of the relationship between parties to a contract. The issue in that case was whether the contract was properly characterised as a contract of service (employee) or a contract for services (independent contractor). The plurality said, at [43]:
In cases such as the present, where the terms of the parties' relationship are comprehensively committed to a written contract, the validity of which is not challenged as a sham, nor the terms of which are otherwise varied, waived, or the subject of an estoppel, there is no reason why the legal rights and obligations so established should not be decisive of the character of the relationship.
Likewise, in Narich Pty Ltd v Commissioner of Pay‑roll Tax[1983] 2 NSWLR 597, 600 - 601, Lord Brandon of Oakbrook said that:
… where there is a written contract between the parties whose relationship is in issue, a court is confined, in determining the nature of that relationship, to a consideration of the terms, express or implied, of that contract in the light of the circumstances surrounding the making of it; and it is not entitled to consider also the manner in which the parties subsequently acted in pursuance of such contract.
Although the cases to which I have referred are concerned with employment type relationships, the statements of principle concerning the focus on the terms of contract to determine the rights, obligations and duties of the parties are universally applicable to contracts concerned with other relationships between parties, such as the one in issue in this case, being that of lessor/lessee.
Counsel for Ellaz submits that the terms of the 2013 Lease and the 2018 Extension are clear and unambiguous - West Coast is not permitted to predominantly use the Premises for retail sales.
There is no basis, Ellaz says, for West Coast to avoid liability for the unpaid rent and outgoings due under the Lease and/or the damages as a result of its breach of the Lease. The Brownes, as guarantors are therefore, unable to avoid the Guarantees.
There is certainly merit in this submission made by Ellaz. However, the issue to be determined on a summary judgment application is whether it is arguable that the Lease provided for the occupation of premises that are used for the carrying on of a business that predominantly involves the sale of goods by retail.
Counsel for the Brownes says that whether or not the predominant sale of retail goods was permitted under the Lease is not determinative of the issue. In order to resist the summary judgment application, the Brownes say they are only required to establish it is arguable that the Premises were used predominantly for retail sales and therefore, that it is arguable that the Lease can be construed in a manner that provides for the occupation of the Premises for that purpose.
The Brownes say that what is determinative of the issue of whether the Lease is a 'retail shop lease' is what business was actually conducted by West Coast at the Premises. Mr Browne deposes that West Coast was predominantly in the business of retail sales and fitting of 4WD accessories. He deposes that more than half the Premises were used by West Coast as a retail store. He also deposes that all of the employees of West Coast were employed under the retail trades award.[21]
[21] First Browne Affidavit, par 16.
Ms Browne provides evidence in the form of purported business records of West Coast in support of the contention that West Coast used the Premises for predominantly selling retail goods.[22]
[22] Second Browne Affidavit, annexures SB 22 - 26.
Counsel for the Brownes submits that there is sufficient evidence before the court to find that the Brownes have an arguable defence on the basis that:
(a)West Coast was engaged in the business of predominantly retail sales from the Premises;
(b)therefore, the Lease was a 'retail shop lease' because it provided for the occupation of those Premises;
(c)Ellaz was required to comply with s 12 of the Retail Shops Act by providing annual estimates of operating expenses and annual expenditure statements to West Coast;
(d)Ellaz did not comply with these requirements and therefore West Coast was not legally obliged to pay outgoings;
(e)Ellaz, through Mr Scullino, made the Representations and therefore, engaged in misleading and deceptive conduct;
(f)induced by and in reliance upon the Representations, West Coast paid the outgoings; and
(g)as a result of the misleading and deceptive conduct, the Lease is invalid and, by extension, the Guarantees are invalid.
The Brownes plead that the 2011 Lease expressly permitted the retail sale of 4WD parts and accessories[23] and that West Coast carried on business predominantly for the sale of 4WD parts and accessories during the term of the 2011 Lease.[24]
[23] Defence and counterclaim, dated 24 November 2020, par 16.
[24] Defence and counterclaim, dated 24 November 2020, par 17.
Counsel for the Brownes submitted that there is a plethora of evidence upon which it could be inferred that the Lease permitted West Coast to sell 4WD accessories so that it could fit and service them - most compelling being that West Coast were expressly permitted to do so under the 2011 Lease, and did in fact do so.
It appears that the Brownes are asserting that West Coast simply continued to conduct the business it had conducted under the 2011 Lease, that is predominantly selling 4WD parts and accessories, and that the provisions of the 2013 Lease and the 2018 Extension that specified the permitted use of the Premises are not, in fact, determinative of the permitted use of the Premises.
While the Brownes do not plead that Ellaz is estopped from relying upon the Lease or that Ellaz was aware and acquiesced to the predominant use of the Premises for retail sales, they are permitted to raise these issues in opposition to the summary judgment application. They may do so even if these issues catch Ellaz by surprise: Everswell Pty Ltd v Beeliar Management Pty Ltd as Trustee for Beeliar Development Trust [2022] WASC 74.
The Brownes are only required to provide particulars of an arguable defence and a statement of facts which go to show it is arguable, not the facts that would be necessary to prove the defence at trial: Decmil Australia Pty Ltd v Avid Australia Holdings Pty Ltd [2022] WASC 183.
While it is not appropriate that I express a view about the merits of these defences, I do find that there are particulars before the court which give rise to an arguable defence on the basis that Ellaz is estopped from relying upon the permitted use clauses in the Lease and/or that Ellaz was aware and acquiesced to the predominant use of the Premises for retail sales.
I also find that there are alternative interpretations of the definition of 'retail shop lease' in the Retail Shops Act. According to Ellaz, the Lease must provide for the Premises to be used predominantly for retail sales. Accordingly, to the Brownes, the Lease must for provide for the occupation of the Premises from which a business is being carried for predominantly retail sales. My emphasis is on the alternative interpretations - each of which are available. Accordingly, this is an issue which ought not be determined on a summary basis.
I am also satisfied that there is sufficient material before the court to establish a conflict on the facts as to whether West Coast was, in fact, carrying on the business of predominantly retail sales from the Premises throughout the term of the Lease.[25] Where such a conflict exists, I cannot have a high degree of certainty of the outcome of these proceedings if they went to trial.
[25] Third Browne Affidavit, pars 47 - 48.
I find that it is arguable that the Lease was a 'retail shop lease' and therefore, arguable that it was subject to the provisions of the Retail Shops Act. In my view, it is open for the Brownes to argue, by way of defence, that the Lease and Guarantees are invalid by virtue of misleading and deceptive conduct on the part of Ellaz. I do not accept that such a defence is dependent upon the Brownes establishing that Ellaz owed it a duty to provide legal advice, as was submitted by counsel for Ellaz. Rather it is misleading and deceptive conduct founded upon the Representations - being representations as to fact.
In summary, I find that the Brownes do have an arguable defence as a result of the alleged failure of Ellaz to comply with the provisions of the Retail Shops Act. I stress that, although I have found the Brownes do have an arguable defence, they should in no way interpret this finding as any reflection upon the merits of such a defence. In order to oppose a summary judgment application, the Brownes need only to have demonstrated that their defence is not so obviously untenable and that their version of the facts is not inherently incredible. It is not a high bar that the Brownes have had to overcome.

Extension of time to appeal

Given that I have determined that the Brownes have an arguable defence, whether or not I grant leave for an extension of time to appeal is not determinative of the application for summary judgment. However, I find that the application for an extension of time to appeal should be refused in any event.
Any appeal of Deputy Registrar Harman's decision to dismiss the summary application on 2 September 2021 was required to be filed by 13 September 2021. The notice of appeal was filed approximately two months out of time on 10 November 2021.
The principles relating to applications for leave to appeal out of time are well settled. Generally speaking, there are four major factors to be considered in the exercise of the discretion which is conferred upon the court. They are, first, the length of the delay, secondly, the reasons for the delay, thirdly, whether there is an arguable case and, fourthly, the extent of any prejudice to the respondent: Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196, 198 (Kennedy J).
As to the reason for the delay, Mr Hotchkin deposed that the delay in appealing the deputy registrar's decision was due to Ellaz not receiving the legal advice it ought to have received. Specifically, Mr Hotchkin deposes that a partner of Hotchkin Hanly advised Mr Scullino that he had a right of appeal which had to be lodged within 10 days of the deputy registrar's decision but did not advise him that it was a hearing de novo, nor give any explanation as to what was involved nor that the appeal had good prospects of success if filed within time.[26]
[26] Hotchkin affidavit, par 8.
In the context of a 10‑day time limit for an appeal from an interlocutory decision of a registrar, I consider that a delay of almost two months is significant.
Where the reason for delay is attributable to the actions of a solicitor, this is one factor to take into account. In Christie v Harvey (1900) 2 WALR 146, 150, Hensman J found it was 'very hard that a party should suffer because of the blunder of a solicitor, his client or counsel'.
However, in this case, the purported 'blunder' by the solicitor was to advise the plaintiff that it had a right of appeal and that it was required to file the appeal within 10 days. Upon reviewing the matter, a different solicitor formed the view that Ellaz ought to have been advised that it was an appeal de novo and had strong prospects of success. I do not consider that, given the fact that Ellaz was advised of its right to appeal and the time within which to appeal, that this is a compelling explanation for the delay. A different solicitor simply revisited the matter and formed a different view about the merits of filing an appeal.
In the case of the City of Canning v Avon Capital Estates (Aust) Ltd [2009] WASCA 120, the City of Canning appealed a decision of the State Administrative Tribunal four months after the decision, thereby three months out of time. The reason given for the delay was that the City of Canning had received legal advice from the partner of the firm of solicitors acting for it that an appeal was unlikely to succeed. It was belated receipt of different advice from senior counsel that prompted the City of Canning to apply for an extension of time to appeal.
In deciding against the City of Canning, Acting President Wheeler of the Court of Appeal said the following:
12As I noted in Willoughby v Clayton Utz [2007] WASCA 5 at [8], an application which is four months out of time, the delay being explained upon the basis that different advice has caused the appellants to change their minds about whether they wish to appeal is 'not a promising basis' upon which to seek an extension of time. In that case, I would have refused an extension of time on that basis alone. That is because, as I noted in that case, if a party's fresh advice or change of mind were good reason to extend time, there would be little point in having time limits at all. There may be some particular disadvantage (such perhaps as an appellant being unrepresented and unaware of the right to appeal), or some other special or unusual circumstances (such as an advising solicitor simply overlooking some important fact or question of law) which might justify an extension of time even if the basis of the application was simply that the party had received fresh or different advice.
13However, in the absence of additional factors of that kind, I remain of the view that it is not possible to regard a desire to act upon fresh advice as a justification for any significant extension of time.
14I would add, to what I said in Willoughby v Clayton Utz, the observation that it is well understood that, in many areas of life, significant delay may have significant consequences; students who miss examinations may be deemed to have failed them; aeroplanes leave without passengers who fail to check in (however important their journey); patients who do not attend promptly to medical investigations may regret the delay. It does not seem to me to be unjust, as a general rule, that consequences, which may be severe, will sometimes flow from a litigant's failure to comply with time limits. That is particularly so where, as here, the failure to comply is as a result of a deliberate choice.
This reasoning resonates in this case. Ellaz made a decision, based upon advice from its experienced solicitor at the time, not to appeal the decision. It was advised of the right to appeal and the time within it was required to appeal. There is no evidence before me as to whether Ellaz was advised that the appeal did not have strong prospects of success, only evidence that there was an absence of advice that it did in fact have strong prospects of success. It is only upon receiving advice to the latter effect from a different solicitor that it decided to appeal. The failure to comply with the time limit for the appeal was the result of a choice exercised with the benefit of legal advice. This factor alone causes me to refuse an extension of time to appeal.

Final orders

I propose to order that the plaintiff's chamber summons for leave to appeal out of time dated 10 November 2021 be dismissed. I will hear from the parties as to any further orders, including costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
CB
Associate to her Honour Judge Whitby
7 JUNE 2022