JV Idola Pty Limited v Lovecek

[2009] NSWADT 258

CITATION:	JV Idola Pty Limited v Lovecek [2009] NSWADT 258
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT JV Idola Pty Limited RESPONDENT Patricia Mary Lovecek
FILE NUMBER:	085144
HEARING DATES:	3 September 2009
DATE OF DECISION:	2 October 2009
BEFORE:	Fox R - Judicial Member
LEGISLATION CITED:	Retail Leases Act 2004
CASES CITED:	Attorney General of New South Wales v World Best Holdings Limited & Ors [2005] NSWCA 261
REPRESENTATION:	APPLICANT In person RESPONDENT J Webb, solicitor
ORDERS:	1. Unconscionable conduct claim dismissed, matter to proceed as retail tenancy claim 2. Costs reserved.

Preliminary Decision – Unconscionable Conduct Claim

1 It is the practice of this Tribunal to conduct a preliminary examination of the evidence proposed to be relied upon by those who seek relief pursuant to s62B (unconscionable conduct). The reason for that practice is obvious – unconscionable conduct claims can only be adjudicated upon by Judicial Members holding the rank of Deputy President, sitting with a panel of two industry qualified advisers, whilst Retail Lease claims are dealt with by Judicial Members sitting alone. The waste of resources involved in dealing with a matter alleged to involve unconscionable conduct, which turns out to have never had a reasonable prospect of establishing that particular kind of activity, will be obvious.

2 Yet another basis for the practice of “screening” is found in the comments of the Chief Justice in Attorney General of New South Wales v World Best Holdings Limited & Ors [2005] NSWCA 261:-

“The matters to be considered under a retail tenancy claim, turning on the contract and well-established doctrine, were intended by Parliament to continue to have considerable scope. The Parliament was careful to ensure that the amorphous and ambiguous term, “unconscionability”, did not come to completely override the legal rights and obligations created by the lease relationship. Parliament did not intend that “unconscionability” claims could be made so readily as to virtually take the place of retail tenancy claims. They needed to meet a high standard of moral obloquy.”

3 I take these comments to mean that if the Retail Leases Act gives a remedy for a retail tenancy claim then that is how it ought to be dealt with, and it should not be allowed to venture into the more rarefied atmosphere of unconscionability.

4 I make these preliminary observations because Ms Medway, as Director of the Lessor has at all times claimed that she has been unconscionably dealt with by her former Lessor.

5 S24A(2) of the Administrative Decisions Tribunal Act empowers a judicial member to exercise the interlocutory functions of the Tribunal, despite the fact that such exercise may involve a matter which, on final hearing, will have to be dealt with by a panel as above indicated.

6 The matter first before the Tribunal was Ms Lovecek’s (the Lessor) claim for release to her of the security bond in the sum of $2,383.34, together with outstanding rent of $5,680.02. The Lessee responded in what is in effect the Cross Claim, claiming return of the same bond, termination of the Lease, refund of $3,483.00 in rent and claiming damages of $142,662.00, but of course that was not raised as a retail tenancy claim, it was raised as a combined claim averring unconscionable conduct.

7 The premises in question are a shop in a heritage listed building known as 83 Keppel Street, Bathurst. The issue between the parties relates to the condition of the fabric of the building, which is alleged to have suffered serious rainwater leakage, presumably as a result of defects either in the roofing or guttering, resulting in one or two internal rooms being damp and mouldy.

8 Ms Medway’s Affidavit of 6 May 2009 runs to 9 pages with perhaps 50 pages of annexures. A brief perusal of that (on 9 July 2009) lead me to the preliminary view that it shows no reasonable prospect of establishing the necessary highly unethical conduct identified in the passage above quoted from the World Best Holdings Judgment. I formed the view that the evidence related to the conduct of the Lessor after the Lessee occupied the premises and that it was the Applicant’s thesis that the Lessor’s failure to render the premises fit for occupation amounted to unconscionable conduct. I disagree, the conduct in question, if proven, does not amount to unconscionable conduct, although it may well establish that the Lessor is in breach of obligations set by the Lease.

9 Mindful of the fact that Ms Medway has chosen not to be legally represented, wishing to give her every opportunity to raise matters which might assist in making out the claim which she wishes to pursue, I gave her leave to file further evidence aimed at establishing that the Lessor knew or ought to have known of the allegedly damp and mouldy condition of the premises and had taken some steps to hide that fact before they were held out to the prospective Lessee as suitable for use as a bridal salon. That, in my preliminary view, offered the only prospect of establishing a course of conduct which might fall within s62B.

10 In response to that leave, the Applicant filed the Affidavits of Mandy Woods, the florist who occupied the premises previously, Morris W. McMillan, who occupied the premises next door, and Valerie Persson, the Lessee’s some time partner in business.

11 The latter Affidavit only establishes that leakage commenced soon after entry, and that the Lessor has indicated that there had been a recent attempt at repairing a previous leak by cleaning the gutters.

12 The Affidavit of Mr McMillan establishes two instances of rainwater leakage in the year 2006 (perhaps 6 or 8 months before the Lessee’s occupancy commenced) and that there was a further instance some 3 months before the occupancy commenced. One of these two instances may have affected the wall common to the premises in issue.

13 The Affidavit of Mandy Woods establishes that one of the internal rooms of the premises had some signs of dampness.

14 In my view there is nothing in any of these Affidavits which could, on any view of the matter give any indication of conduct by the Lessor which could in any way be described as unethical. There is no evidence of any representation, nor is there any evidence of any activity which was designed to mislead or deceive the Lessee, or which might be described as designed to inappropriately induce her to take occupation of the premises.

15 I am satisfied that the Applicant’s evidence now in view, if fully proven, will do nothing more than establish a persistent failure about the Lessor to repair the premises or address the condition of the premises. I stress that I make no finding in this regard, I merely observe that might be the effect of the evidence if put at its highest and so proven. Whatever that course of conduct may amount to, does not amount to unconscionable conduct. Whatever remedy may accrue to the Applicant as a result of the conduct which may be proven will be fully addressed and realised as a retail tenancy claim made pursuant to s71 and addressed by the very wide range of orders enabled by s72. There is absolutely no need to engage s62B.

16 Lastly, to return to S24A of the Administrative Decisions Tribunal Act, I repeat what I said in my decision in Keighery v Nodnarb Investments Pty Ltd [2005] NSW ADT 241. Despite the fact that my decision ends the Applicant’s claim as regards unconscionable conduct, I am satisfied that it is an interlocutory matter, because the Applicant is not prevented from proceeding with her claim. She has, in effect, merely been directed not to pursue an aspect of her claim which is untenable.

17 I direct that the matter proceed as a retail tenancy claim.