ITQ PTY LTD and HYDE PARK MANAGEMENT LTD - [2008] WASAT 66

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION: ITQ PTY LTD and HYDE PARK MANAGEMENT LTD [2008] WASAT 66

MEMBER: JUDGE J CHANEY (DEPUTY PRESIDENT)

HEARD: 5 MARCH 2008

DELIVERED : 28 MARCH 2008

FILE NO/S: CC 1650 of 2007

BETWEEN: ITQ PTY LTD
Applicant
AND
HYDE PARK MANAGEMENT LTD
Respondent

Catchwords:

Commercial tenancy Claim for declarations concerning alleged unconscionable conduct Preliminary issue Whether effect of declarations would be to create a new lease Whether within jurisdiction

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3, s 15, s 16, s 26, Part IIA
State Administrative Tribunal Act 2004 (WA), s 16, s 91
Trade Practices Act 1974 (Cth), s 51AC

Result:

Proceedings found to be within jurisdiction

Category: B

Representation:

Counsel:

Applicant: Mr C Clifton
Respondent: Mr P Shanahan

Solicitors:

Applicant: Clifton Pham
Respondent: Clayton Utz

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

DB Rreef Funds Management Ltd v Commissioner of Taxation [2005] FCA 509; (2005) 218 ALR 144
Gerraty v McGavin [1914] HCA 23; (1914) 18 CLR 152
Kiami Pty Ltd v Peat Resources of Australia Pty Ltd [1999] WASC 92
Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 9 ALR 39
Newcrest Mining (WA) Ltd v Commonwealth (No 2) (1993) 119 ALR 423
Pearce and Germain [2006] WASAT 305
Percival v Forster-Tuncurry and Districts Chamber of Commerce and Tourism Ltd [1997] NSWSC 383

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

ITQ Pty Ltd is the tenant of Shop 7, The Mezz, Mount Hawthorn. A dispute arose between ITQ and its landlord, Hyde Park Management Pty Ltd concerning an option to extend the lease after expiry of its initial term. The landlord contended that ITQ had failed to comply with the strict requirements governing the exercise of the option. The tenant contended that certain conduct on the part of the landlord was unconscionable and precluded Hyde Park from relying on the strict terms of the lease. It sought declarations to that effect from the Tribunal.
Hyde Park argued that the Tribunal had no jurisdiction to make the declarations sought, because the effect would be to create a new leasehold interest. That question was dealt with by the Tribunal as a preliminary issue.
The Tribunal examined the nature of matters that can be bought to it under the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), and the remedies available in relation to those matters. It concluded that it could make declarations of the nature sought, and that any declarations would not "create" any new leasehold estate. It determined that the proceedings were within its jurisdiction.

Introduction

The applicant, ITQ Pty Ltd (ITQ) is a tenant of Shop 7, The Mezz, 148 Scarborough Beach Road, Mount Hawthorn. The Mezz is a retail shopping centre as defined by the Commercial Tenancy (Retail Shops) Agreements Act1985 (WA) (CTRSA Act) and thus leases of retail shops within the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] WASAT 66
Decision Date: 28 MARCH 2008

CaseChat Overview and Summary

ITQ Pty Ltd and Hyde Park Management Ltd were the parties involved in a dispute before the Australian Consumer and Competition Commission (ACCC). The primary focus of the case was whether the ACCC had the jurisdiction to hear a claim for declarations regarding alleged unconscionable conduct by Hyde Park Management Ltd under a retail shop lease. The court was tasked with determining whether the effect of the declarations sought by ITQ would create a new lease, thereby impacting the ACCC's jurisdiction.

The central legal issue revolved around the interpretation of section 91 of the State Administrative Tribunals Act, which allows the Tribunal to make declarations concerning matters in a proceeding. Specifically, the court had to decide if the declarations requested by ITQ would fall within the ACCC's jurisdiction or if they would effectively constitute the creation of a new lease, which would be outside the ACCC's purview. Additionally, the court needed to assess whether the form of the application lodged by ITQ correctly identified the questions arising under the retail shop lease and whether the ultimate remedy sought—a declaration—was appropriate under the circumstances.

The court concluded that the form of the application, despite being under section 16(1) of the Commercial Tenancies (Retail Shop Leases) Act, was in substance an application under either section 15F(1) or section 16. The key consideration was the nature of the remedy sought, which was a declaration under section 91 of the SAT Act. The court found that the application correctly identified the questions arising under the lease and that the declarations sought by ITQ did not create a new lease. Therefore, the ACCC had the jurisdiction to hear the claim for declarations concerning the alleged unconscionable conduct.

The court adjourned the proceedings to a further directions hearing scheduled for 10:00 am on 4 April 2008.

Orders

Orders of the court

The proceedings are adjourned to a further directions hearing at 10.00 am on 4 April 2008.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

JUDGE J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: JUDGE J

Section 91 of the SAT Act provides: "Declaration(1)The Tribunal may make a declaration concerning any matter in a proceeding instead of any orders it could make, or in addition to any orders it makes, in the proceeding.(2)The Tribunal's power to make a declaration under subsection (1) is exercisable only by a judicial member.(3)The Tribunal's power under this section is in addition to, and does not limit, any power of the Tribunal under the enabling Act to make a declaration.(4)The Tribunal may at any time make any order necessary or desirable to give effect to a declaration made under subsection (1).(5)A declaration made under subsection (1) is binding, according to its terms, on -(a) the parties to the proceeding; or(b)such of them as are specified in the declaration,and not otherwise." The form of the application lodged by ITQ is an application under s 16(1) of the CTRSA Act. It identifies amongst the "questions arising under a retail shop lease" an issue as to whether or not Hyde Park's conduct was unconscionable. The applicant might well have used the form of application under s 15F(1) of the CTRSA Act rather than s 16(1). In substance, the application is brought under either or both of s 15F(1) and s 16. Nothing turns on that matter of form since the ultimate nature of the remedy claimed, being a declaration pursuant to s 91 of the SAT Act, is potentially available in either case. The application identifies nine "questions between the parties arising under" the Shop 7 lease. They are as follows:"1.Whether the lease falls within the ambit of the Commercial Tenancies [sic] (Retail Shops) Agreement[s] Act 1985 [(WA)]?2.Whether any breaches of the lease occurred by one or both of the parties?3.Whether the Respondent's conduct was as such as to put the Applicant to believe that the 3 months notice regarding the exercise of option to review would not be insisted upon?4.Whether the Respondent's reliance on the Applicant's failure to give notice under the lease unconscionable within the meaning of section 15C of the Commercial Tenancy (Retail Shops) Agreements Act1985 (WA) and section 51AC of the Trade Practices Act 1974 [(Cth)]?5.Whether the Applicant has been misled by the Respondent into the belief that the Respondent's strict legal rights were abandoned or suspended for the time?6.Whether it would be unconscionable for the Respondent to be permitted to deny that the Respondent has allowed or encouraged the Applicant to assume to the Applicant's detriment that the Respondent waived the strict compliance with the requirements of clause 3.2 of the Lease. 7.Whether the Applicant was induced not to give notice of exercise of the option under the Lease on time as a result of the Respondent's conduct. 8.Whether the Respondent should be estopped from relying on the failure of the tenant to give due notice of exercise of the option provided for by the clause 2.3 of the Lease.9.Whether the Applicant is entitled to be treated as if it had properly exercised its option to renew?"