Holden Tourism & Hospitality Pty Limited v Baldock

[2001] NSWADT 123

CITATION:	Holden Tourism & Hospitality Pty Limited -v- Baldock [2001] NSWADT 123
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Holden Tourism & Hospitality Pty Limited RESPONDENT Craig Richard Baldock
FILE NUMBER:	015074
HEARING DATES:	18/07/2001
SUBMISSIONS CLOSED:	07/23/2001
DATE OF DECISION:	07/31/2001
BEFORE:	Molloy GB - Judicial Member
APPLICATION:	Interim order
MATTER FOR DECISION:	Preliminary matter
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	IBM Australia Limited -v- National Distribution Services Limited (1991) 22 NSWLR 466
REPRESENTATION:	APPLICANT J S Drummond, barrister RESPONDENT J G Renwick, barrister
ORDERS:	1. The Respondent grant access to the Applicant to enable the Applicant to enter upon the premises known as "The Three Sisters Pavilion" situate 33-37 Echo Point Road, Katoomba and to remove therefrom goods and chattels owned by the Applicant; 2. The Respondent grant access to the Applicant to remove from the said premises the Non-Fixed Assets and the Point of Sale Equipment owned by Holden Management Pty Limited as referred to in the Deed made 27 September 1999 between the Respondent and Holden Management Pty. Limited; 3. Liberty to either party to restore this matter to the List for directions before me at a convenient time.

Background
1 The Applicant is Holden Tourism and Hospitality Pty Limited ("Holden Tourism") which is the Lessee of premises situate at 33-37 Echo Point Road Katoomba and known as "The Three Sisters Pavilion" being part of the land in Folio Identifier 1/833225, in which the Lessor is Craig Richard Baldock, the Respondent and pursuant to Lease registered 7228843.

2 The lease is for a term of five years commencing 28 September 1999, terminating 27 September 2004 with an option for a further period of five years.

3 The permitted use is specified as being "any one or more of or any combination of: Restaurant; Coffee Shop; Takeaway Foodshop; Bakery; Cake Shop; Icecreamery and catering". The rent is divided between certain specified areas in varying amounts, as is the share of outgoings.

4 The premises have lettable area of 734sqm approximately and otherwise I am informed by both counsel appearing for the parties that the Tribunal has jurisdiction to deal with the issues pursuant to the Retail Leases Act, 1994.

Other proceedings

5 I am informed by the parties that other proceedings between them have been commenced and not concluded in both the Supreme Court and the District Court. As I understand it the Supreme Court proceedings relate to a claim by the Respondent/Lessee as Plaintiff seeking declaratory relief and damages for failure to pay rent and outgoings allegedly due by the Applicant under the lease. Those proceedings were commenced on 14 June 2001. As I understand it it is proposed that those Supreme Court proceedings be either discontinued or transferred to this Tribunal to be heard in conjunction with the current proceedings. In this regard I note the Respondent has in fact filed in this Tribunal a Cross-Application seeking damages for arrears of rent, outgoings and electricity and the costs of taking possession of the premises.

6 The proceedings in the District Court are instituted by another company, Holden Management Pty Limited ("Holden Management"), against the Respondent which were commenced on 23 May 2001 and which Holden Management seeks payment of an alleged amount owing to a finance company relating to certain property allegedly (as I understand it) sold from the Respondent to Holden Management. The District Court proceedings are continuing.

Applications Before the Tribunal

7 As I understand it from the bar table there have been a number of prior applications to this Tribunal and/or references to the Retail Tenancy Unit. The current applications are, firstly an Application by the Lessee filed 2 July 2001 seeking delivery up of the stock and assets of Holden Tourism and Holden Management consequent upon the Respondent re-entering and taking possession of the premises (agreed/acknowledged to have taken place on 1 July, 2001); and secondly an application (perhaps a cross-application) by the Respondent seeking orders against the Applicant/Lessee for arrears of rent, outgoings and electricity and the costs of taking possession, damages, interests and costs, filed 11 July 2001.

8 The original Application 2 July 2001 firstly came on for hearing before me on 5 July, 2001 on an urgent application by the Applicant in which the Applicant sought orders that it be granted access to the premises to remove therefrom perishable goods, a cash float, business records, various goods owned by Holden Management and a child’s cot and various tools of trade.

9 After hearing argument I made an Order on 5 July 2001 as follows:
"1. Access granted to remove perishable and business records and child’s cot in respect to retail premises "The Pavilion" at The Three Sisters."

10 When the matter next came before me on 18 July 2001 there seemed to be some debate on whether all of the business records had been removed and ultimately the parties reached an agreement relating to access with respect to the business records, with respect to taking a stocktake and the Respondent gave to the Tribunal an undertaking not to remove or dispose of or encumber the goods of Holden Tourism and Holden Management.

Substantive Application 18 July 2001

11 The Applicant sought an order that the Respondent grant it access to the premises for the purposes of removing therefrom goods owned by Holden Tourism (the Applicant) and Holden Management.

12 The problem arises in this fashion: the lease between the parties commenced on 28 September 1999, being dated 27 September 1999. On the same day the Respondent and Holden Management entered into a Deed (dated 27 September 1999) which contained relevantly the following clauses:

"2. RECITALS
(a) The vendor is the owner of premises situate at 33-37 Echo Point Road Katoomba known as the "The Three Sisters Pavilion".
(b) The purchaser and Holden Tourism and Hospitality Pty Limited A.C.N. 086 599 402 (hereinafter referred to as "the Lessee") are under the same effective control and management.
(c) Holden Tourism and Hospitality Pty Limited and the vendor have entered into negotiations for the lease of part of the premises to the Lessee. As part of these negotiations the purchaser has indicated a desire to purchase certain chattels currently situated in that part of the premises sought to be leased by the Lessee.
(d) The vendor has agreed to sell to the purchaser the chattels as requested by the purchaser in accordance with the terms of this Deed.
4. NON FIXED ASSETS
4.1 The vendor agrees to sell and the purchaser agrees to purchase the non-fixed assets for a consideration of $19,451.00.
4.2 The vendor agrees to accept payment by six (6) equal monthly payments the first payment to be made upon the thirteenth day of the month following the commencement date of the lease.
5. POINT OF SALE EQUIPMENT
5.1 The vendor agrees to sell and the purchaser agrees to purchase the point of sale equipment for a consideration of $36,000.00.
5.2 The vendor agrees to accept payments by instalments and the purchaser agrees to pay simple interest on the consideration calculated at $6.00 per centum per annum (6%).
5.3 The consideration and interest for eighteen (18) months totals $39,240.00 and the purchaser agrees to pay this amount by eighteen (18) equal monthly instalments of $2,180.00 the first payment to be made upon the first day of the month following the commencement date of the lease.
6. FIXTURES AND FITTINGS
6.1 The vendor agrees to sell and the purchaser agrees to purchase the fixtures and fittings for a consideration of $150,000.00.
6.2 The vendor agrees to accept payment of and the purchaser must pay the consideration for Fixtures and Fittings at any time during the last three (3) months of the initial term of the lease with the last day for payment being the last day of the initial term of the lease.
6.3 In the event that the Lessee assigns all or part of the lease during the initial term then the purchaser and Lessee agree that as condition of the vendor consenting to such assignment that the assignee must enter into an agreement with the vendor upon the same terms as contained herein with respect to the sale of the Fixtures and Fittings.
7. GENERAL
7.1 Equitable title in and to the Non-Fixed Assets, the Fixtures and Fittings and the Point of Sale Equipment shall vest in the purchaser on the date of this Agreement but the legal title thereto shall not pass to the purchaser until the date of final payment of the respective considerations as provided for in this Deed.
7.2 Until the passing of legal title and possession to the purchaser, the purchaser is entitled to the use and control of all chattels covered by this Deed.
7.3 Until the legal title passes to the Purchaser, the Purchaser shall be responsible for the maintenance and repair of all non Fixed Assets, Fixtures and Fittings and Point of Sale Equipment that may be necessary due to breakages, breakdowns, losses and other acts however arising (excluding wilful acts or omissions or negligence of the Vendor its servants or agents) which necessitates maintenance or repairs. If any of the non-Fixed Assets, Fixtures and Fittings or Point of Sale Equipment require replacement due to wear and tear or loss or otherwise (excluding as a result of the wilful act omission or negligence of the Vendor its servants or agents) the Vendor is not liable for such replacement."

13 The Lease contained relevantly the following clauses:

12.2 The landlord can enter and take possession of the property or demand possession of the property if -
12.2.1
12.2.2 rent or any other money due under this lease is 14 days overdue for payment; or
12.2.3
12.2.4
12.3 When this lease ends, unless the tenant becomes a tenant of the property under a new lease the tenant must -
12.3.1 return the property to the landlord in the state and condition that this lease requires the tenant to keep it in; and
12.3.2 have removed any goods and anything that the tenant fixed to the property and have made good any damage caused by the removal Anything not removed becomes the property of the landlord who can keep it or remove and dispose of it and charge to the tenant the cost of removal making good and disposal.

14 The parties appear to have agreed that the Respondent has entered into and taken possession of the property. The Respondent contends that there is rent and other money due under the lease and that money is 14 days overdue for payment. The Respondent seeks by its Cross-Application inter alia those moneys.

15 As I understand it the parties have agreed that the provisions of clauses 4 and 5 of the Deed have been complied with in that Holden Management has paid for the Non-Fixed Assets and the Point of Sale Equipment. In those circumstances it must follow that property and title in those goods has passed to Holden Management as purchaser.

16 It was alleged from the bar table that there was a licence from Holden Management to Holden Tourism permitting (presumably) Holden Tourism (the Applicant) to use the Non-Fixed Assets and the Point of Sale Equipment. No evidence was placed before me as to any such licence. The Applicant contended however that Recital 2(c) was sufficient in the circumstances.

17 The nub of the case submitted by the Respondent was to the effect that because the goods are owned by Holden Management this Tribunal has no power to permit the Applicant Holden Tourism to take possession of those goods. Because, it is submitted, the Tribunal only has power in relation to the parties to a retail lease, and not in relation to persons who are not parties to a lease but have a separate and distinct claim. I note that it was not contended on behalf of the Respondent that even if the Applicant was found to be indebted to the Respondent at a final hearing the Respondent could exercise some sort of lien or some sort of charge over the goods owned by Holden Management. Rather the submission was that because the goods were owned by Holden Management which was not a party to the lease therefore this Tribunal had no jurisdiction over this aspect and therefore (so it must follow) the goods owned by Holden Management would simply remain in the premises now occupied by the Respondent.

18 Because this is a fundamental question which needs to be resolved at this early stage in the proceedings as a discrete question, I reserved Judgment.

Reasoning:
19 The Retail Leases Act 1994 contains relevantly the following provisions:

70: [dealing with the definition of a retail tenancy claim which is stated to mean any of relevantly:]
a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned being:
ix) a claim for a declaration of the rights, obligations and liabilities of the parties under a lease,
63: [which defines a "retail tenancy dispute" as meaning] "any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities which arose under the lease or former lease or which arose in connection with the use and occupation of the retail shop to which the lease or former lease relates".
72: [which deals with the power of this Tribunal relating to retail tenancy claims and which gives this Tribunal power to make orders relevantly:]
(c)(iv) do or perform, or refrain from doing or performing, any specified act, matter or thing.
(g) such other order, in the nature of an interlocutory order of a kind referred to in paragraphs (a)-(f), as the Tribunal considers proper to be made in order to resolve or assist resolution of the dispute between the parties.
(2) The Tribunal may make such ancillary orders as it considers necessary for the purpose of enabling an order under this section to have full effect.
(3) The Tribunal may impose such conditions as it considers appropriate when making an order under this section.
(4) The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so.
20 In the well known arbitration case of IBM Australia Limited -v- National Distribution Services Limited (1991) 22 NSWLR 466, in which the Court of Appeal upheld a decision of Rogers CJ Commercial Division, the Court gave a wide interpretation to a clause in an arbitration agreement which was expressed to govern "any controversy or claim arising out of or related to this agreement or the breach thereof". It is plain from this decision that words to the effect of "arising out of or in connection with" are to be interpreted very widely. They are "not to be narrowly construed". It was submitted by Mr Drummond for the Applicant that the words in Section 63 "which arose in connection with the use or occupation of the retail shop" ought to be given a similar interpretation. I must say that even without the assistance of the IBM Australia case I would have been inclined to have reached the same view. It is plain that the legislature intended this Tribunal to have, within the terms of Sections 70 and 72, a wide power to deal with matters arising out of retail leases which fall within the jurisdiction of the Retail Leases Act, but subject to the monetary limit set out in Section 73.

21 Of course each case depends upon its own peculiarities. This case is not particularly unusual in that the property sought to be released to the Applicant is property owned by another party (Holden Management)and clearly the evidence demonstrates is used in connection with the use or occupation of the retail shop as is plain from Recital 2(c) of the Deed. The words "currently situated" in that Recital make it plain that at the time of the grant of the lease itself the particular Non-Fixed Assets and Point of Sale Equipment were in fact in the premises, that the sale of that property was part of the negotiations and (from Recital 2(b)) it is plain that Holden Tourism and Holden Management are "under the same effective control and management". I have no difficulty in concluding that it was the intention of the parties to the lease that as part of the arrangement Holden Tourism would continue to have the use of the Non-Fixed Assets and Point of Sale Equipment in the premises although, presumably for commercial reasons, the ownership of those goods would be held by Holden Management.

22 Furthermore, Lease clause 12.3 must be of some concern to the Applicant but more importantly I cannot understand that the Respondent could have, even absent the concession that it could not exercise any lien or charge for unpaid rent and so on, any right or entitlement to continue to hold possession of the goods of Holden Management. Plainly the Respondent could not remove or dispose of any goods owned by another party other than the tenant (absent some contractual or statutory right). Neither could the Respondent exercise any lien or charge over those goods.

23 In these circumstances and having regard to what is plain from the Deed recitals that there is an arrangement of sorts between the Applicant and Holden Management with respect to the goods, and with the consent of the Respondent, and having regard to the sections of the Retail Leases Act to which I have made reference above, it seems to me that not only has this Tribunal power to make the orders sought by the Applicant in relation to the Holden Management goods but that in all the circumstances it should make that order.

24 This factual situation is not to be confused with a circumstance whereby upon the taking of possession of demised premises a Lessor finds in those demised premises goods not the property of a Lessee or over which the Lessee exercises any right or use. That is an entirely different situation and it may well be (although I express no concluded view on this aspect) that this Tribunal would have no power to deal with those goods. That is not the situation here where it is plain that the overall arrangement between the parties indicates clearly that the goods in question owned by Holden Management are goods which are used in the premises and are part of a dispute concerning the liabilities or obligations of the Applicant which arise in connection with the use or occupation of the retail shop.

25 Consequently, in all those circumstances in my judgment this Tribunal has the power to order that the Respondent grant access to the Applicant to remove from the premises the Non-Fixed Assets and the Point of Sale Equipment as specified in the Deed dated 27 September 1999 between the Respondent and Holden Management. If further power is required in this Tribunal then that power is within Section 72 in the sub-clauses to which reference has been made above.

26 The second part of the application is that access be granted to the Applicant to remove from the premises its goods and chattels. Again, in the absence of a lien or a charge or some other contractual right to retain those goods and chattels (and nothing has been drawn to my attention in this latter regard) then I cannot see any reason why I should not grant that application as well.

Written Submissions

27 Pursuant to leave granted the parties have made written submissions to me. On behalf of the Respondent it was submitted that when the Supreme Court proceedings are transferred to this Tribunal they ought to be consolidated with the current proceedings. Presumably that also includes the cross-application to which I have made reference above, so that all issues can proceed concurrently. It was submitted that if both parties succeeded in their causes of action the Respondent would be a net creditor and would receive Judgment for that net amount and the Applicant would not be given an order for delivery up of the goods because the only remedy available to the Applicant would be by way of the tort of conversion, and consequent damages, this Tribunal not having any power in relation to any claim for detinue. Consequently, it was submitted, that the award of damages to the Applicant would be an adequate remedy because there were essentially two competing damage claims such that if both parties succeeded in proving their causes of action the Respondent would be a net creditor, would receive Judgment for that net amount and the Applicant would not be given an order for delivery up of goods.

28 I confess I am unable to understand how it could be that a Respondent in the Tribunal could allege as an effective cause of action its own proposed tort. After all, a claim for detinue or conversion is effectively a claim for a wrongful action by the Respondent and it seems to me that this Tribunal ought not to be a party to permitting the tort of conversion or detinue in circumstances where there is an available remedy which would avoid that consequence.

29 In any event, the tort would not be available to the Respondent in respect of the goods unarguably owned by Holden Management. The tort would only be available in respect of the Applicant’s goods and for the reasons specified above in my view this Tribunal, in the absence of a lien, charge or some other encumbrance, has, and should, exercise its power to permit the Applicant to uplift those goods.

30 The Applicant has submitted that the issue is also governed by the Landlord and Tenant Amendment (Distress Abolition) Act, No 49 of 1930 which, by Section 2, provided that "no distress for rent shall be levied or made". I am not prepared to base my decision on this Section simply because there has not been sufficient argument advanced by either party to persuade me that this amending Act was intended to apply to commercial premises as distinct from residential premises. I am therefore content to base my reasoning as otherwise stated in this Judgment.

Further Directions

31 This Tribunal when it deals with retail leases is a commercial tribunal and exercises jurisdiction within the terms of the Retail Leases Act 1994 in a commercial fashion. Consequently it is my view that proceedings before this Tribunal ought to proceed by way of affidavit and prior discovery of all documents upon which each party would seek to rely. Consequently I give leave to either party to restore this matter to the List before me for such further directions as may be necessary to prepare this matter for hearing on the substantive issues. I suggest that the parties should liaise and bring forward short minutes so that orders can be made by consent.

Orders:

(1) The Respondent grant access to the Applicant to enable the Applicant to enter upon the premises known as "The Three Sisters Pavilion" situate 33-37 Echo Point Road, Katoomba and to remove therefrom goods and chattels owned by the Applicant.

(2) The Respondent grant access to the Applicant to remove from the said premises the Non-Fixed Assets and the Point of Sale Equipment owned by Holden Management Pty Limited as referred to in the Deed made 27 September 1999 between the Respondent and Holden Management Pty Limited.

(3) Liberty to either party to restore this matter to the List for directions before me at a convenient time.