Jonamill Pty Ltd v Alramon Pty Ltd (RLD)

[2009] NSWADTAP 59

Appeal Panel - Internal

CITATION:	Jonamill Pty Ltd v Alramon Pty Ltd (RLD) [2009] NSWADTAP 59
PARTIES:	APPELLANT Jonamill Pty Ltd RESPONDENT Alramon Pty Ltd
FILE NUMBER:	099028
HEARING DATES:	9 September 2009
SUBMISSIONS CLOSED:	9 September 2009
DATE OF DECISION:	16 October 2009
BEFORE:	Chesterman M - Deputy President; Higgins S - Judicial Member; Tyler T - Non-Judicial Member
CATCHWORDS:	Retail shop lease – notice of exercise of option – notice of change of address of lessor
DECISION UNDER APPEAL:	Alramon Pty Ltd v Jonamill Pty Ltd [2009] NSWADT 89
FILE NUMBER UNDER APPEAL:	085020
DATE OF DECISION UNDER APPEAL:	04/30/2009
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Conveyancing Act 1919 Retail Leases Act 1994
CASES CITED:	Alramon Pty Ltd v Jonamill Pty Ltd [2009] NSWADT 89 Bressan v Squires [1974] 2 NSWLR 460 Catley v Watson (1981) V Conv R 54-003 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 Robinson v Becata Pty Limited [2004] NSWSC 310
REPRESENTATION:	APPELLANT M Sneddon, barrister RESPONDENT K Oliver, barrister
ORDERS:	1. The appeal is dismissed 2. There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the opposing party is to file and serve submissions in response within a further 21 days. The question of costs will then be determined ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997, unless the Appeal Panel decides that a further hearing is required.

REASONS FOR DECISION

Introduction

1 The principal question to be decided in this appeal is whether the Tribunal was correct in holding that a notice of change of address sent to a lessee by a lessor complied with requirements for giving notices contained in a clause of a retail lease agreement (hereafter ‘the Lease’). Its decision on this question was of primary importance in determining whether an option of renewal contained in the Lease had been validly exercised.

2 The Applicant in the Tribunal proceedings (Alramon Pty Ltd – hereafter ‘Alramon’) is the lessor. In its Application it sought a declaration to the effect that it had the right not to grant a renewal of the Lease to the Respondent lessee (Jonamill Pty Ltd – hereafter ‘Jonamill’) and that it was entitled to vacant possession of the leased premises. It was common ground that the Lease was governed by the Retail Leases Act 1994.

3 The decision under appeal (Alramon Pty Ltd v Jonamill Pty Ltd [2009] NSWADT 89) was delivered on 30 April 2009. The Tribunal held in favour of Alramon. It made orders as follows:-

1. I declare that there has not been a valid exercise by the Respondent of the Respondent’s option to renew the lease of the subject premises at Shop 8A, 144-148 Cox’s Road North Ryde NSW pursuant to Clause 14.1 of the Lease agreement between the parties dated 1 February 2003.

2. I declare that the Lease agreement between the parties terminated on 31 January 2008.

4 In this appeal, heard by us on 9 September 2009, Jonamill claims that the Tribunal erred in law in a number of respects. It seeks an order setting aside the Tribunal’s decision. It also seeks orders (a) dismissing Alramon’s claim or, in the alternative, remitting the matter for a new trial and (b) that Alramon should pay its costs, both at first instance and on appeal.

The Tribunal’s decision

5 Paragraphs [1] – [6] of the Tribunal’s decision contains the following outline of relevant aspects of the Lease:-

1 The Applicant is the owner of a shopping centre located at 144 – 148 Cox’s Road, North Ryde. Pursuant to a retail lease agreement dated 1 February 2003, (“the Lease”), it leased shop 8A at that centre to the Respondent.

2 The Respondent is a franchisor operating a chain of retail food shops under the name “Michel’s Patisserie”.

3 In accordance with what would appear to be the normal business practice and requirement of the Respondent, clause 24.6 of the Lease confirmed the Applicant’s consent to the Respondent granting a licence to a franchisee to occupy the premises and to operate the business “Michel’s Patisserie” at the premises during the term of the Lease.

4 The name of the Applicant was set out as Lessor on the first page of the Lease without an address and the name of the Respondent was also set out on the first page, together with the address of its registered office as being at 9 Ferngrove Place, Granville NSW.

5 Clause 12.6 of the Lease provided as follows:-

“Notices:
A notice given by a party under this Lease shall be in writing and delivered or sent by ordinary pre-paid post to the other party at the address set out on Page 1 of this Lease unless and until either party gives notice to the other of another address for the giving of notices and any notice shall be deemed duly served at the expiration of three (3) days after the time of posting and in proving the giving of the same it shall be sufficient to prove the envelope containing the same was properly addressed, stamped and registered and put into a post office box in the Commonwealth of Australia. A notice may be signed by the Lessor or on its behalf by any manager, the secretary or other authorised officer, managing agent or solicitor for the time being of the Lessor.”

6 The term of the Lease commenced on 1 February 2003 and terminated on 31 January 2008, with an option to renew for a period of five years. The Lease also provided that if the Respondent wished to renew the Lease, then it could do so by forwarding notice to the Applicant no sooner than six months before the expiration of the term of the Lease and no later than three months prior to such date. Accordingly, the Respondent was required to give notice of its intention to renew the Lease no sooner than 31 July 2007 and no later than 31 October 2007.

6 Jonamill alleged that on 16 October 2007 it posted a letter purporting to exercise the option to a director of Alramon. It sent this letter to a post office box (PO Box 144 North Ryde NSW) that Alramon had used. The Tribunal stated at [16] that the terms of the letter clearly were sufficient to exercise the option.

7 Alramon asserted, however, that it never received this letter, because during March 2007 it ceased using this postal address. Material received under summons from Australia Post confirmed this.

8 Alramon further asserted that in a letter dated 18 March 2007 (hereafter ‘the change of address letter’), which was sent by prepaid post on that day, it notified Jonamill that its postal address had changed from PO Box 144 North Ryde to PO Box 6180 North Ryde. A copy of this letter, which was in evidence before the Tribunal, was handed up at the hearing of the appeal. The first two lines of the letterhead were as follows:-

SENA DEVELOPMENTS
A DIVISION OF ALRAMON PTY LTD ABN 71151896376

9 The next line of the letterhead set out the new postal address in the same printing style as the preceding line, followed by telephone/fax and mobile numbers (which were unchanged).

10 The text of the change of address letter was as follows:

18 March 2007

Michel’s Patisserie
Attention Directors
9 Ferngrove Place
South Granville NSW 2142

To Whom it May Concern:

RE: CHANGE OF POSTAL ADDRESS

Please note that the new postal address for the company is as follows:

PO BOX 6180
North Ryde NSW 2113


Please ensure all correspondence is forwarded to the above address.

Yours faithfully

Salvatore Cerreto
Director

11 The Tribunal gave consideration to evidence from employees of Jonamill to the effect that while it did not maintain any system for recording all incoming mail its practice was to sort such mail into two files: the ‘L’ file, relating to lease matters and the ‘F’ file, relating to franchise matters. One of these witnesses testified that while the change of address letter may have been received by Jonamill it was not specifically noticed or filed in either of these two files.

12 At [45], the Tribunal found that, on the balance of probabilities, this letter from Alramon was in fact received by Jonamill.

13 The Tribunal then posed the following question at [46]: ‘Given such finding, was this letter sufficient in its form and content to give to the Respondent notice of change of address for service of notices upon the Applicant, pursuant to the Lease?’

14 In its discussion of the letter at different points in the decision, the Tribunal made the following observations tending to support the proposition that the letter might not have been adequate to give notice to Jonamill of Alramon’s change of address in a manner complying with clause 12.6 of the Lease:-

It transpires that [the letter] was a standard letter sent to a number of parties with whom the Applicant did business… (at [20]).

Determination of [the question whether the letter constituted proper notice] must start with consideration of the fact that the Respondent conducted as its core business the leasing of approximately 350 shops which required communication with, and processing of information received from, a variety of lessors. The Respondent has understandably criticised the content and form of the letter… (at [42]).

…the reason for [the letter] not being specifically noticed or placed into either the L file or the F file was its lack of specificity (at [44]).

The Respondent… says that [the letter] fails to make any reference to the leased premises, to the registered lease, to the parties to the lease, especially the Respondent company, to the specific person responsible for putting in place the change of address or to the former contact address for the Applicant. A cursory reading of the 18 March 2007 letter shows that these assertions are factually correct (at [51]).

15 The Tribunal also recorded (at [50]) the following criticism of the letter advanced by Jonamill:-

The… letter was headed in capital letters “SENA DEVELOPMENTS” and then in smaller capital letters underneath, “ A DIVISION OF ALRAMON PTY LTD”. The Respondent argues that the purported notice given by this letter was misleading and therefore invalid because of the heading “SENA DEVELOPMENTS” which was a name unfamiliar to the Respondent, that there was only minimal reference in “fine print” to “Alramon Pty Ltd”, and further that this term was itself incorrect and misleading because in fact Sena Developments was not a “division” of Alramon Pty Ltd at all.

16 In deciding that, despite these alleged defects, the letter gave notice of Alramon’s change of address in a manner complying with clause 12.6, the Tribunal took account of principles set out in a majority judgment in the House of Lords in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749. At [47] and [48], it set out what it considered to be helpful aspects of this judgment:-

47… In deciding whether a commercial tenant had validly given notice of determination of lease where it had given an incorrect date on the notice in circumstances where the subject lease merely provided for not less than six months’ written notice to be given and to expire “on the third anniversary of the term commencement date”, Lord Justice Steyn at page 767 had this to say:

“This is not a case of a contractual right to determine which prescribes as an indispensable condition for its effective exercise that the notice must contain specific information………….. The principle is that that is certain which the context renders certain.”

In the present matter, Clause 12.6 of the Lease simply provides that:

“Notice given by a party shall be … delivered or sent by ordinary pre-paid post to the other party at the address set out on page 1 of this lease unless and until either party gives notice to the other of another address for the giving of notices …”

There is no prescribed form or content set out by the Lease in relation to such a notice.

48 Further, as also set out by Lord Justice Steyn in Mannai , the question to be addressed is not how the Respondent may have understood the 18 March 2007 letter, but how a reasonable recipient in the situation of the Respondent would have understood the letter taking into account the “relevant objective contextual scene”.

17 The Tribunal then observed:-

49 A significant component of the “relevant objective contextual scene” in the present matter is that the Respondent operates a specialised franchise system which involves the Respondent, amongst other things, being the lessee of approximately 350 retail shop premises, from which its business is then conducted through franchisees. Incoming correspondence to the Respondent should be considered within this particular context.

18 The Tribunal set out its reasons for holding in Alramon’s favour at [52 – 53]:-

52… other relevant features of the letter are that it was directed to “Michel’s Patisserie” for the attention of the “Directors” and was properly addressed to the Respondent’s nominated business address at 9 Ferngrove Place, South Granville 2142. The letter also goes on to notify that there is a “new” postal address for the “company” as and from 18 March 2007. A reasonable recipient of that letter, in a similar position to that of the Respondent, would, in my view, consider that a business by the name of “Sena Developments” which was conducted by a company by the name of Alramon Pty Ltd wished to notify Michel’s Patisserie that all further communications as and from 18 March 2007 were to be addressed to a new postal address.

53 The next important question which would necessarily arise in the mind of such reasonable recipient would be exactly what relationship the sender of the letter had to the Respondent’s business operations. It is arguable that, to take up one of the submissions made by the Respondent, without further information, the notice given within the 18 March 2007 letter may have had the initial appearance of perhaps having little or no apparent relevance or importance to the Respondent’s business. However, in my view, a reasonable recipient of this letter, standing in the place of the Respondent and with knowledge of its franchise and lease system and operations, would reasonably have considered that this letter was clearly giving notice of a change of future address for communications in relation to the conduct of the business “Michel’s Patisserie” by the Respondent and that the ultimate identity of the party giving such notice was Alramon Pty Ltd. Notwithstanding the lack of reference within the letter to the subject premises, a recipient with knowledge and conduct of the Respondent’s business would, in my view, based upon the special manner in which the business was conducted through a large chain of leased shop premises, have reasonably considered that this letter came from one of the owners of the shop premises leased by the Respondent. In the context of this matter, the terms of the 18 March 2007 letter are sufficiently clear and unambiguous to have led a reasonable recipient in the position of the Respondent and with knowledge of the identities of the various owners from whom the shops were leased, to identify Alramon Pty Ltd as the lessor of these particular shop premises from which the Respondent conducted one of its franchise retail outlets, and accordingly to have considered that the 18 March 2007 letter was in relation to those premises.

19 With reference to parts of the evidence that it had previously summarised, the Tribunal then observed:-

54 There were subsequent letters and invoices between the parties after March 2007 and before October 2007 involving both requests by the Applicant for payment of rent and payment for the pots and umbrellas outside the shop premises, and subsequent payment by the Respondent, which contained or used the new postal address for the Applicant. The Applicant does not argue that these communications of themselves constitute notice under Clause 12.6 of the Lease, but I accept that they support the contention that notice had properly been given by the Applicant to the Respondent of its new address for communications prior to 16 October 2007, being the date when the Respondent contends that it posted the notice of exercise of option to the original postal address of the Applicant.

20 A further component of the evidence, noted by the Tribunal at [11] but apparently not relied on by it in deciding the case, was an assertion by Alramon that 18 March 2007 it delivered a copy of its letter of that date to the franchisee operating the business at the leased premises.

21 At [55], the Tribunal summarised its substantive conclusions as follows:-

Given the above, I am satisfied that the Applicant did properly give notice of change of address for service of notices pursuant to clause 12.6 of the Lease prior to 16 October 2007. I am also satisfied that the Applicant did not receive the Respondent’s notice of exercise of option dated 16 October 2007. I accordingly find that the option to renew the lease was not validly exercised in that it was not received by the Applicant and was not delivered or sent to the proper address of the Applicant for the giving of notices, and that accordingly the Lease has not been validly renewed

The question whether the change of address letter complied with clause 12.6: law or fact?

22 Under sections 113(2) of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’), an appeal on a question of law against a Tribunal decision may be made as of right, but a review of the merits of the decision requires the leave of the Appeal Panel.

23 In its notice of appeal (an amended version of which was filed, with leave, on the day of the appeal hearing) and at the hearing, Jonamill claimed that the Tribunal’s decision contained a number of errors of law, but did not seek leave for the appeal to extend to the merits.

24 In a written outline of submissions filed before the hearing, Mr Oliver, counsel for Alramon, contended that the question whether the terms of the change of address letter answered the requirements of clause 12.6 regarding notices under the Lease was a question of fact, not of law. It followed, in his submission, that unless the Tribunal misstated the legal principles to be applied in determining whether the letter sufficiently conveyed the information that Alramon had changed its address for notices under the Lease, Jonamill could only succeed in this part of its appeal if it persuaded us that there was no evidence to support the Tribunal’s conclusion that the letter did in fact sufficiently convey this information.

25 In putting forward this contention, Mr Oliver relied on dicta of Isaacs J in Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 78. These were to the effect that while the ‘construction’ of words and phrases within a ‘legal document’ – that is, the ascertainment of their legal effect – was a question of law, the ‘interpretation’ of them – that is, the determination of their meaning – was a question of fact.

26 Mr Oliver further maintained that a notice such as clause 12.6 required was not a ‘legal document’ in the same sense as a contract, a deed or a statutory provision, because it did not have legal consequences ‘directly and of its own force’. The legal consequences flowing from the giving of a notice – such as a notice of change of address or indeed a notice of exercise of an option to renew – pursuant to clause 12.6 were attributable, he said, to the contractual stipulations set out in the Lease, not to the notice itself. The question whether a notice complying with a clause such as clause 12.6 had been given was, he said, a factual question. In a case such as the present it might have to be determined in order to ascertain whether legal consequences defined in the anterior document setting out the parties’ rights – in this case, the Lease – did or did not ensue.

27 In Mr Oliver’s submission, what clause 12.6 required was that ‘notice’, in the sense of communication of information, should be ‘given’ in written form and should be communicated in accordance with certain conditions. He relied on the following dictum of Bowen CJ in Eq in Bressan v Squires [1974] 2 NSWLR 460 at 462: ‘It is true the word “notice” generally imports the notion of communication of information.’

28 In essence, Mr Oliver’s contention on this matter was that the question whether the change of address letter gave ‘notice’ in conformity with clause 12.6 was the entirely factual question of whether its terms, according to their proper interpretation, sufficiently communicated the relevant information to Alramon.

29 In seeking to rebut this argument in written submissions also filed before the hearing, Mr Sneddon, counsel for Jonamill, pointed out that the dicta of Isaacs J in the Phillips case had been the subject of criticism in a passage in the joint judgment of the High Court in Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397. In that passage, the Court described Isaacs J’s distinction between ‘interpretation’ and ‘construction’ as ‘artificial, if not illusory’, indicating that the notions of ‘meaning’ and ‘construction’ were ‘interdependent’, because ‘the meaning of individual words in a phrase ultimately dictates the effect or construction that one gives to the phrase when taken as a whole’. The Court went on to state at 397, quoting a phrase from NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 at 511-512, that ‘the determination of whether an “Act uses [an] expression… in any other sense that which they have in ordinary speech” is always a question of law’.

30 Mr Sneddon pointed out that Lord Steyn, in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, used the term ‘construction’, not ‘interpretation’, in connection with a notice of exercise of an option to renew a lease. Mr Sneddon also argued that according to dicta of Lord Steyn (at 768) the validity of several other categories of notice that are served pursuant to a clause in a contract – for example, notices to quit, notices to determine licences, notices to complete and notices under section 129 of the Conveyancing Act 1919 – is a question of law. These dicta form part of the second passage quoted from Mannai at paragraph [36] below.

31 In endeavouring to resolve this matter, which did not receive a great deal of attention at the hearing itself, we have not been able to locate any cases bearing directly upon it. Our decision, based on such authority as appears to be available, is that Mr Oliver’s arguments are to be preferred.

32 We consider that the distinction drawn by Mr Oliver between a ‘legal document’, such as the Lease, and a document that affects the legal rights and obligations of parties solely because of provisions in a pre-existing ‘legal document’ is of significance in this context. Three compelling reasons why a ‘notice’ that is ‘given’ by a party under clause 12.6 should be treated as belonging to the latter class of document are (a) that the clause lays down minimal conditions for its validity – i.e., only that it should be in writing and should be delivered or sent by ordinary pre-paid post, (b) that no other clause in the Lease adds to these conditions and (c) that the matter that may be communicated in a ‘notice’ varies widely in nature depending upon which clause in the Lease is being invoked. As Mr Oliver argued, the function of clause 12.6 in the Lease is simply to specify how information is to be communicated by one party to the other party.

33 It follows, in our opinion, that while the question of what requirements must be satisfied by a notice purportedly given under clause 12.6 is a question of law, the question whether a particular notice satisfies those requirements is one of fact. The former question will require an examination or construing of the terms of clause 12.6, having regard to what the Lease elsewhere provides. The latter may call for the meaning of some or all of the terms of the notice to be ascertained, though as the ensuing discussion demonstrates it may in addition or instead require the resolution of other quite different kinds of factual issue.

34 With these propositions in mind, we turn now to the principal ground of Jonamill’s appeal.

Did the change of address letter constitute ‘notice’ under clause 12.6?

35 Jonamill’s submissions. The principal ground urged in the appeal by Mr Sneddon was that the Tribunal erred in holding that the change of address letter satisfied the requirements for giving ‘notice’ contained in clause 12.6 of the Lease.

36 Mr Sneddon did not question to any material extent the Tribunal’s reliance on Lord Steyn’s judgment in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, though he submitted that passages not quoted, or not quoted in full, by the Tribunal should also be taken into consideration. Those passages are as follows:-

The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene. (at 767)

There is no justification for placing notices under a break clause in leases in a unique category. Making due allowance for contextual differences, such notices belong to the general class of unilateral notices served under contractual rights reserved, e.g. notices to quit, notices to determine licences and notices to complete: Delta Vale Properties Ltd. v. Mills [1990] 1 W.L.R. 445, 454E-G. To those examples may be added notices under charter parties, contracts of affreightment, and so forth. Even if such notices under contractual rights reserved contain errors they may be valid if they are "sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate:" the Delta case, at p. 454E-G, per Slade L.J. and adopted by Stocker and Bingham L.JJ.; see also Carradine Properties Ltd. v. Aslam [1976] 1 W.L.R. 442, 444. That test postulates that the reasonable recipient is left in no doubt that the right reserved is being exercised. It acknowledges the importance of such notices. The application of that test is principled and cannot cause any injustice to a recipient of the notice. I would gratefully adopt it. (at 768)

In determining the meaning of the language of a commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. (at 771)

37 Mr Sneddon relied also on the judgment of Campbell J in Robinson v Becata Pty Limited [2004] NSWSC 310. This case principally concerned two letters written to the plaintiff, who was the purchaser under a contract of sale of land. The letters purported respectively to be a notice to complete and a notice of rescission of the contract. As is indicated in the judgment at [18] and [56], the outcome of the case depended on whether these letters were ‘letters of Becata’ – that is, letters written by the defendant company, which was the vendor, or on its behalf and with its authority. The Court held that although the letters were written on the letterhead of another company, Treloar Holdings Pty Ltd, and were signed by a director of this company, their terms, viewed in the light of background information known to the plaintiff, sufficiently indicated to him that they were ‘letters of Becata’. Mr Sneddon drew our attention to two paragraphs in this judgment.

38 In the first of these, at [31], the Court quoted with apparent approval the following two passages from the decision of Brooking J in a Victorian case, Catley v Watson (1981) V Conv R 54-003 at 62,115. These passages deal with notices comparable to those before the Court in Becata:-

[Such a notice] is not valid unless it is, in relation to its essential features as required by that condition, clear and unambiguous. By this I mean, not that its import must be clear beyond the slightest peradventure, but that its terms must be such that a reasonable person, having given it fair and proper consideration, would be left in no doubt as to its meaning. A notice is not unequivocal, in the sense in which such notices are required to be unequivocal in relation to their essential contents, if a reasonable person, having considered the notice as a whole, fairly and properly, might entertain a doubt as to its meaning in relation to some essential matter, even though he would form in his mind a preference for one view, rather than the other of what the notice was intended to convey. It must be possible to say that, after the appropriate consideration, any doubts that may have arisen would be quieted and the purchaser would not be left in any uncertainty as to the meaning of the notice…

The fact that a court finds itself able to resolve an ambiguity does not necessarily lead to the conclusion that the notice is valid in this respect.

39 Secondly, Mr Sneddon relied on paragraph [49] of the judgment in Becata:-

49 There are significant differences between the various types of unilateral notice which I have been considering. Those differences relate to what is the message a valid notice of the particular type needs to give. For instance, a notice to quit needs to convey the message that the giver determines a particular tenancy at a particular time; a notice of exercise of option needs to convey the message that the particular option in question is being exercised; a notice exercising a contractual power needs to convey the message that that particular contractual power is being exercised; and so on. However a common theme runs through the cases concerning these various types of unilateral notice, to do with the approach taken to construing the notices. For all of them, an effective notice is one which conveys its message (whatever that message might be) clearly and distinctly to a reasonable reader in the position of the recipient of the notice. Being “ in the position of the recipient ” involves, in particular, having the knowledge of the circumstances surrounding the transaction in which the notice is given which the recipient has or ought to have.

40 Mr Sneddon argued that the reasons why the change of address letter did not constitute ‘notice’ in accordance with clause 12.6 of the Lease included the existence of four significant defects in it, each of which prompted critical comments from the Tribunal. These comments are quoted above at [14]. They formed a significant component of Mr Sneddon’s attack on the Tribunal’s decision.

41 Two further arguments were given prominence in Mr Sneddon’s submissions. The first was that the letter was misleading for the following reasons: (a) it came from Sena Developments, a name with which Jonamill was unfamiliar; (b) while this name appeared at the top of the letterhead in large print, Alramon’s name appeared below it and was in ‘fine print’; and (c) Sena Developments was not a ‘division’ of Alramon but a registered business name with individuals as proprietors. The second was that since the letter was in the nature of a ‘leaflet’, it was not intended to be, and could not be viewed as, an official document sent pursuant to the Lease.

42 Relying on submissions summarised in the preceding section of this judgment, Mr Sneddon contended that the Tribunal’s erroneous conclusion that the change of address letter was a valid notice under clause 12.6 of the Lease was an error of law. The consequences, he maintained, were that the Tribunal’s decision should be set aside and that Alramon’s application to the Tribunal should be dismissed.

43 Alramon’s submissions. Mr Oliver pointed out that, as noted above at [36], Mr Sneddon did not allege any error on the Tribunal’s part in outlining and relying on the principles stated in Lord Steyn’s judgment in the Mannai case, for the purpose of determining whether the terms of the change of address letter were sufficient to constitute notice of a change of address under clause 12.6.

44 Proceeding from this starting-point and relying on his submissions on the distinction between questions of law and questions of fact (summarised above), Mr Oliver argued that since the question whether the letter did in fact comply with those principles was one of fact, we could only disturb the Tribunal’s decision if we decided that there was no evidence on which it could be properly based.

45 Mr Oliver submitted further that in any event the Tribunal reached the correct decision on the facts. With reference to the principles stated in Mannai at 768 and 771, he argued that they did not require that a notice in a case such as this should be ‘official’ or in any particular form, or that it should necessarily refer to specific factual matters, such as the existence of the relevant lease, the identity of the leased premises or the names of the parties. All that was required was that, having regard to ‘the relevant objective contextual scene’, the notice, when given a ‘commercially sensible construction’, should leave ‘the reasonable recipient… in no doubt that the right reserved is being exercised’.

46 In contending that this criterion had been satisfied, Mr Oliver relied on the following aspects of the change of address letter: (a) although Sena Developments was highlighted, Alramon was the only incorporated company to be named in the letterhead and the letter indicated unequivocally that the address being changed was the postal address ‘for the company’; (b) it was addressed specifically to the directors of ‘Michel’s Patisserie’, which was the name of the business conducted at the leased premises; and (c) the phrase ‘all correspondence’, as used in it, was entirely sufficient to include a notice of exercise of the option of renewal contained in the Lease.

47 With regard to the Tribunal’s own criticisms of the change of address letter, which are outlined above at [14], Mr Oliver argued that they were fully compatible with its conclusion. The Tribunal, he said, was quite correct in making the following rulings in its decision at [53]:-

(a) that ‘a reasonable recipient of this letter, standing in the place of the Respondent and with knowledge of its franchise and lease system and operations, would reasonably have considered that this letter was clearly giving notice of a change of future address for communications in relation to the conduct of the business “Michel’s Patisserie” by the Respondent and that the ultimate identity of the party giving such notice was Alramon Pty Ltd’;

(b) that despite the lack of reference within the letter to the subject premises, such a recipient would, ‘based upon the special manner in which the business was conducted through a large chain of leased shop premises, have reasonably considered that this letter came from one of the owners of the shop premises leased by the Respondent’; and

(c) that the terms of the letter, viewed ‘in the context of the matter’, were ‘sufficiently clear and unambiguous’ to have led ‘a reasonable recipient in the position of the Respondent and with knowledge of the identities of the various owners from whom the shops were leased, to identify Alramon Pty Ltd as the lessor of these particular shop premises from which the Respondent conducted one of its franchise retail outlets, and accordingly to have considered that the 18 March 2007 letter was in relation to those premises’.

48 Our conclusions. In our opinion, the submissions put by Mr Oliver must again be preferred. We agree in general terms with those submissions and would add only the following four observations.

49 First, it cannot be said that the content of the message being conveyed in the change of address letter was ambiguous or unclear. In a manner that is entirely familiar in commercial environments (and indeed in other environments), the message indicated in unequivocal terms that henceforth ‘all correspondence’ should be sent to the specified new address. It could not sensibly be argued that a notice of exercise of the option to renew the Lease, or indeed any other notice given under the Lease, fell outside the scope of the phrase ‘all correspondence’.

50 Secondly, the fact that the entity apparently responsible for the letter – Sena Developments – was not the same as the entity whose address was being changed – i.e., Alramon – is not enough of itself to prevent it being an effective notice under clause 12.6. This, in our opinion, is established by a case on which Jonamill itself relied. In Robinson v Becata Pty Limited [2004] NSWSC 310 (discussed above at [37 – 39]), the relevant notices were sent by Treloar Holdings Pty Ltd, but their terms clearly showed that this company was acting on behalf of Becata. At [54 – 57], the Court set out the reasons why the notices should be treated as notices ‘of Becata’ and should therefore be given their full effect:-

54 … in construing the alleged notice to complete, and notice of rescission, the background information known to the recipient of the notice can be used as an aid to its construction. In the present case, the addressee of the letters, Mr Robinson, was aware that he had agreed to purchase 58A Jones Street, Kingswood from Becata, and that Mr H Treloar was a director of Becata. The letters all clearly relate to 58A Jones Street, Kingswood. There is no suggestion that Mr Robinson had any other business transaction at all with Treloar Holdings Pty Ltd, or any other company in the Treloar group of Companies.

55 While the fourth and fifth letters in the series are the ones on which the validity of the rescission depends, those letters can be construed bearing in mind earlier letters in the series. The earlier letters in the series are themselves part of the relevant background information which the recipient would, by the time of the fourth and fifth letters, be taken to have…

56 The fourth and fifth letters are the letters which, if they were to be effective, would need to be written either by or with the authority of Becata. From the point of view of the recipient of a notice to complete, or a notice of rescission, it does not matter whether the notice is written actually by Becata, or on behalf of Becata – what matters is that, in one way or another, it is a letter of Becata.

57 In my view, a reasonable recipient of the series of letters, with the background information which Mr Robinson had, would fairly conclude the letters to be letters of Becata. Thus, given the basis on which the parties have fought this case, the contract has been effectively rescinded.

51 Thirdly, it seems to us that the strongest reason why the change of address letter might be held not to satisfy the requirements laid down by Lord Steyn in the Mannai case is the likelihood that the employee of Jonamill who received it would be required, in order to appreciate its significance, to retrieve relevant information from a substantial quantity of business records maintained by Jonamill. By investigating these records, containing particulars of about 350 leases of shops where businesses known as Michel’s Patisserie were being conducted by franchisees, he or she would have to obtain the information that Alramon was one of the lessors. This substantial number of leases held by Jonamill was treated by the Tribunal as forming part of the ‘relevant objective contextual scene’. But to quote from the Tribunal’s decision at [2], Jonamill’s business activity was that of a ‘franchisor operating a chain of retail food shops under the name of “Michel’s Patisserie”’. As the evidence of its business practices set out by the Tribunal at [26 – 37] demonstrates, dealing with lessors was a core component of this business. These matters also formed part of the ‘relevant objective contextual scene’. In these circumstances, we agree with the Tribunal that the terms of the letter were sufficient to lead ‘a reasonable recipient in the position of the Respondent and with knowledge of the identities of the various owners from whom the shops were leased, to identify Alramon Pty Ltd as the lessor of these particular shop premises from which the Respondent conducted one of its franchise retail outlets’.

52 Fourthly, because we held (at [33] above) that the question whether the change of address notice complied with the requirements of clause 12.6 is one of fact, our decision on this ground of appeal is not dependent on our agreeing with the Tribunal’s decision on the facts. It would have been sufficient for us to determine that the Tribunal did not misstate the relevant law – a matter which Mr Sneddon appeared to acknowledge – and that there was some evidence in support of its factual conclusion. Our concurrence with the Tribunal’s conclusion regarding compliance goes significantly further than a ruling that there was some evidence on which it could be based.

53 We accordingly reject this ground of appeal by Jonamill.

Other matters raised in the appeal

54 Taking irrelevant considerations into account. Mr Sneddon submitted that paragraph [54] of the Tribunal’s decision (quoted above at [19]) shows that the Tribunal took into account a wholly irrelevant consideration when determining that the change of address letter complied with clause 12.6 of the Lease: namely, that in certain correspondence between the parties during the period from March to October 2007 the new postal address for Jonamill was used.

55 Mr Oliver submitted that what the Tribunal really meant to say in this sentence was that the evidence of use of the new address reinforced its previous finding (at [45]) that the change of address letter was actually received by Jonamill.

56 We agree with Mr Sneddon, however, that in the final sentence of paragraph [54] the Tribunal was indicating that in its opinion this evidence provided support for the contention that the change of address letter complied with clause 12.6. This interpretation is strongly suggested by the phrase ‘notice had properly been given’, which is repeated in the next paragraph of the decision and in that context clearly constitutes a ruling on the issue of compliance.

57 In so saying, the Tribunal did, in our judgment, introduce an irrelevant consideration. But we do not think that this apparent error vitiates its decision, because this consideration, viewed in the light of the decision as a whole, did not play any significant role in inducing the Tribunal to decide the case in the manner that it did. Our reasons for so concluding are (a) that at an earlier stage in its reasons it had determined the question of compliance in Alramon’s favour, on grounds with which we agree, and (b) that it expressly pointed out, also within the final sentence of [54], that Alramon had not argued that its correspondence during the relevant period, using the new address, constituted notice under clause 12.6.

58 Inadequate reasons for decision. Mr Sneddon contended that the paragraph ([55]) in which the Tribunal set out its substantive conclusions was ‘so devoid of any or [any] adequate process of reasoning, so as of itself to constitute an error of law, warranting a retrial’. This paragraph is quoted above at [21]. Mr Sneddon relied particularly on what he called ‘the lack of specificity’ of the opening words (‘Given the above’).

59 We do not accept this argument. In view particularly of the detailed treatment given in the preceding paragraphs of the decision to the questions raised in the case, the natural meaning to be attributed to the phrase ‘Given the above’ is ‘For the foregoing reasons’ or something akin thereto. The Tribunal set out in its decision comprehensive and detailed reasons for the conclusions that it stated at paragraph [55].

60 Section 170 of the Conveyancing Act 1919. Since we have upheld the Tribunal’s decision regarding the change of address notice, we do not need to deal with a submission, put to us by Mr Sneddon, that by virtue of section 170 of the Conveyancing Act 1919, Jonamill could rely on its posting of the notice of exercise of option on 16 October 2007 to PO Box 144 North Ryde without having to show that Alramon actually received this notice.

Our orders

61 For the foregoing reasons, the appeal by Jonamill is dismissed.

62 Under section 77A of the Retail Leases Act 1994, costs in proceedings such as these are to be determined in accordance with section 88 of the ADT Act. Under the latter provision, parties bear their own costs unless the Tribunal decides under subsection (1A) that it is ‘fair’ to make a costs order. The matters to which the Tribunal must have regard in determining an application for costs are set out in that subsection.

63 We accordingly direct as follows. There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the opposing party is to file and serve submissions in response within a further 21 days. The question of costs will then be determined ‘on the papers’, pursuant to section 76 of the Administrative Decisions Tribunal Act 1997, unless we decide that a further hearing is required.