Mark Anthony Productions (NSW) Pty Ltd v The University of Sydney Union
[2014] NSWSC 120
•14 February 2014
Supreme Court
New South Wales
Medium Neutral Citation: Mark Anthony Productions (NSW) Pty Ltd v The University of Sydney Union [2014] NSWSC 120 Hearing dates: 5 - 6 February 2014 Decision date: 14 February 2014 Jurisdiction: Equity Division - Expedition List Before: Stevenson J Decision: Estoppel by convention established; further submissions sought
Catchwords: REAL PROPERTY - licence to occupy space in defendant's premises - whether licence renewed
CONTRACT - formation - offer and acceptance - informal agreements - whether email communications formed a contract
ESTOPPEL - whether defendant estopped by representation from denying licence
ESTOPPEL - whether parties conducted themselves on basis of assumed facts as to their relationship - estoppel by conventionCases Cited: Commonwealth v Verwayen (1990) 170 CLR 394
Foran v Wight (1989) 168 CLR 385
Legione v Hately (1983) 152 CLR 406
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603
Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300Texts Cited: Young, Croft, Smith, On Equity, (2009) Thomson Reuters Category: Principal judgment Parties: Mark Anthony Productions (NSW) Pty Ltd (Plaintiff)
The University of Sydney Union (Defendant)Representation: Counsel:
B K Nolan (Plaintiff)
D C Price (Defendant)
Solicitors:
Toltz Lawyers (Plaintiff)
Kemp Strang (Defendant)
File Number(s): SC 2013/297112 Publication restriction: Nil
Judgment
Introduction
Since 1991 the plaintiff has operated a photography business in various rooms within the basement of the Holme Building at the University of Sydney. The nature of the business is a "Graduation Photography Studio". The plaintiff takes and produces photographic portraits, on Sydney University graduation days, of recently graduated students and their families. Currently, the plaintiff occupies a room known as "Area 1" ("the Area").
For the purpose of conducting that business the plaintiff has, since 1991, entered various written licence agreements with the defendant.
The sole principal of the plaintiff is Mr Mark Anthony. He is now 60 and has been in the commercial photography business all his working life.
Until 2007 the plaintiff did other commercial advertising and fashion photography from rented premises outside the University. At the moment, the only business conducted by the plaintiff is graduation photography at the University.
These proceedings were commenced on 2 October 2013 on which date Slattery J made an order restraining the defendant from removing or evicting the plaintiff from the Area until 3 October 2013. On 3 October 2013 the defendant appeared and undertook not to interfere with the plaintiff's possession of the Area for a further 7 days. Thereafter, the defendant has taken no steps to interfere with the plaintiff's possession. On 25 October 2013 Pembroke J ordered that the proceedings be expedited and listed for hearing on 5 and 6 February 2014.
The Licence Agreements
On 18 June 1991 the plaintiff executed a Licence Agreement in respect of a room in the Holme Building basement for a five-year term commencing 1 March 1991.
On 13 September 1995 the plaintiff executed a further Licence Agreement with the defendant in respect of a different room for a five-year term commencing 1 June 1995.
On 18 June 2009 the plaintiff executed the most recent licence agreement with the defendant, in respect of the Area, for a five-year term commencing 1 April 2007 ("the Current Licence Agreement").
The Current Licence Agreement expired on 31 March 2012 and:
(a) contained no option for renewal;
(b) provided that if, as happened, the plaintiff continued to occupy the Area beyond 31 March 2012, it would do so under a monthly licence terminable on one month's notice ending on any date.
The plaintiff's claims
In its Summons, the plaintiff claims that on 11 October 2011, that is prior to the expiry of the Current Licence Agreement, it entered into a "binding agreement to licence" with the defendant ("the Alleged Agreement") which included the following terms:
(a) "[t]hat, the Defendant would grant to the Plaintiff a licence to occupy [the Area] at the annual rental payable for the last year of the [Current Licence Agreement] increased as specified in [the Current Licence Agreement]"; and
(b) "[t]hat, the terms of the [Current Licence Agreement]... would continue until such time as a licence was executed".
The Summons does not specify any term for the Alleged Agreement. As developed in written and oral submissions before me, the plaintiff's case was that the term of the Alleged Agreement was five years from the expiry of the Current Licence Agreement; that is to 31 March 2017.
The Alleged Agreement is said to arise from emails exchanged between the plaintiff and the defendant's managing agent on 19 September 2011 and 11 October 2011, to which I shall return below.
The plaintiff seeks specific performance of the Alleged Agreement.
Alternatively the plaintiff seeks a declaration that the defendant is estopped from denying the Alleged Agreement.
As developed in final submissions, the estoppel is said to arise out of the 11 October 2011 email to which I have referred, which is said to convey a representation by the defendant to the plaintiff that there was an agreement to the effect of the Alleged Agreement.
Alternatively, the plaintiff alleges an estoppel by convention arising out of communications between the parties after 11 October 2011.
Alternatively the plaintiff sought an order that the defendant:
"...execute a licence with the plaintiff for the occupation of a substitute equivalent space within the Holme Building or other suitable premises within the University of Sydney".
During final submissions, Ms Nolan, who appeared for the plaintiff, informed me that the plaintiff did not press for the latter relief.
The witnesses
Three witnesses gave evidence before me. They were Mr Anthony, his partner Ms Susanne Mitchell, and Mr Andrew Woodward, the Chief Executive Officer of the defendant. The only controversy between the witnesses concerned certain aspects of what was said at a meeting that took place between them on 6 February 2013. I shall return to this below.
The course of events
On 22 August 2011 (some seven months prior to the expiry of the Current Licence Agreement) Mr Anthony wrote to Ms Katie Kypriotis, a property manager employed by Taylor Nicholas, the managing agents of the Holme Building, in terms including:
"I also need to know if I have to go through the [sic] lawyer to re-new my licence or is this something we can do between ourselves, as has happened in the past. I'm still reeling from the shock of the lawyers [sic] bill for finalizing the last contract so, Is [sic] this something we can do between ourselves or do I need to go through the lawyer again?"
On 14 September 2011 Ms Kypriotis sent an email to Mr Anthony discussing such matters as signage and repainting and stating:
"You will not be liable for costs associated with a new licence".
On 19 September 2011 Mr Anthony replied:
"[T]hank you for your response, I am pleased to note that we can go ahead with signage etc and also organize the license without the excessive costs this time. Would it be stretching the friendship to ask for a 5+5 with a further option to renew, at the end of the time period?
I note that I have to apply formally no later than 6 months before the expiry of the licence, though in the past we have always been on a rollover with a letter of intent to give us security of tenancy (so we can order stock etc) so perhaps you can advise me as to the procedure for this renewal".
On 11 October 2011 Ms Kypriotis replied:
"The USU [the defendant] are happy to offer you a new licence but are unable to offer a term past 2017".
These two emails are at the heart of the plaintiff's case, and I shall return to them below.
The evidence reveals no further written communication between the parties until shortly after the expiry of the Current Licence Agreement on 31 March 2012.
Mr Anthony suggested in cross-examination that he "would have" telephoned Ms Kypriotis "very soon after the receipt of the [11 October 2011] email saying I had a licence to 2017". I am not able to accept that evidence. It was clear to me when Mr Anthony gave this evidence that he was not speaking from an actual recollection of any conversation with Ms Kypriotis. Mr Anthony said that he and Ms Kypriotis "often talked and we would have had some telephone communication with regard to [the issue of the licence] and other matters going on at the time". In my opinion, that was the limit of Mr Anthony's actual recollection of his telephone communications with Ms Kypriotis. In his subsequent email communications with the defendant Mr Anthony did not at any time refer to any such telephone call or assert he "had a licence to 2017".
On 9 April 2012, shortly after expiry of the Current Licence Agreement, Mr Anthony sent an email to Ms Kypriotis:
"We spoke recently about my new license...
I would like to complete the paperwork as we are now past the deadline for renewal, please could you forward the agreement to me by return or update me on the reason for the delay".
On 11 April 2012 Ms Kypriotis replied:
"We are still waiting for instructions from the [defendant] with regards to a new licence. We have followed up and are waiting to hear back."
On 9 May 2012 Mr Anthony wrote to Ms Kypriotis:
"I tried to call you and left message at your office reception and your mobile on the 20th April 2012. You returned my call on the 23rd April 2012 and proceeded to tell me the [defendant] would not be issuing me with a new license, though I am their preferred tenant.
I asked you to put this in writing and you agreed to do this.
To date I have not heard from you.
I have reapplied for a new license giving fair warning and notice to [the defendant] via emails to you and a verbal communication starting from October 2011.
Could you please issue the new license as requested in October 2011."
On the same day Ms Kypriotis sent Mr Anthony's email to Mr Les Wark, an officer of the defendant, stating:
"Please see below email. Any further on renewing Mark Anthony's licence agreement?"
On the same day Mr Wark replied to Ms Kypriotis (with a copy to Mr Woodward):
"The whole Holme Building Precinct will be undergoing a space and design review in the near future.
At this stage the Mark Anthony area is not expected to be included in this planning. However until the overall plan has been finalised I can not commit to a new Licence".
Later on that day, Ms Kypriotis forwarded a copy of Mr Wark's email to Mr Anthony and wrote:
"You will remain on a month to month basis for the time being."
There the matter rested until February 2013.
The meeting of 6 February 2013
On 6 February 2013 Mr Anthony and Ms Mitchell met with Mr Woodward.
There is controversy between the witnesses as to some aspects of what was said at this meeting. Each witness was cross-examined. I gained the impression that each was doing his or her best to give an honest account of their recollection of what was said.
Only Ms Mitchell gave a detailed account of what was said at the meeting and only Ms Mitchell made a contemporaneous note of the meeting. Mr Anthony gave a brief account of some aspects of the meeting. Mr Woodward did not himself give an account of what was said but responded to the evidence of Mr Anthony and Ms Mitchell.
Mr Woodward said that:
"At that time, I knew that [the defendant's] licence to the plaintiff... was a month to month basis because Les Wark, an employee of [the defendant] had told me.
At that time [the defendant] was intending to renovate the Holme Building precinct, where [the plaintiff's] shop is located. The makeup of the renovated site had not been determined. [The defendant] was also considering different options for the provision of photography services to graduating students, including the feasibility of operating its own photography business from the renovated site.
For those reasons, I was very careful when speaking to Mr Anthony not to make any commitments that [the defendant] might not be able to keep."
I accept that evidence. Mr Woodward gave evidence before me in a careful and precise manner and I accept that it was probable that he behaved with like care during the 6 February 2013 meeting. I accept that his state of mind was as he described.
One entry in Ms Mitchell's note reads:
"SU tenure to 2016 - so affects giving 5 year lease [sic]".
Based on that note, Ms Mitchell deposed (and Mr Woodward did not dispute) that Mr Woodward said:
"Currently the [the defendant] only has tenure [in the Holme Building] to 2016 so this affects us not being able to give 5 year leases [sic] at the moment".
Thus, it is clear that the question of the granting of a further five year licence by the defendant to the plaintiff arose for discussion and that Mr Woodward made clear that the defendant could not then commit to any such licence.
According to Mr Anthony, at that meeting Mr Woodward said:
"[T]he only reason we have not renewed the licence is we are looking for somewhere to relocate you due to the poor access and exposure in the basement studio facility and the pending renovations".
Mr Woodward denied saying this and said:
"I would not have said those words or words to that effect because I knew that there was a good chance that [the defendant] would not issue a further licence to [the plaintiff]".
I accept this evidence. For a number of reasons, I think it improbable that Mr Woodward said that the "only reason" the defendant had not renewed the plaintiff's licence was difficulty in finding an alternative space for the plaintiff's activities within the Holme Building.
First, Mr Woodward knew that the defendant was considering "different options" for graduation photography services (including operating its own business) and knew that seven months earlier, on 9 May 2012, Mr Wark had said that "the Mark Anthony area is not expected to be included in the planning" of the Holme Building renovations. Knowing those matters, it would have been quite disingenuous of Mr Woodward to represent to Mr Anthony that the only thing standing in the way of a renewal of the plaintiff's licence was ascertainment of alternative space in the Holme Building. I am not prepared to conclude that Mr Woodward acted in that way.
Further, it is clear from Mr Woodward's undisputed statement at [40] that Mr Anthony was agitating for a five year licence and that Mr Woodward had told him that one reason a five year licence was not possible was the defendant's lack of tenure in the Holme Building beyond 2016. It is improbable, in that context, that Mr Woodward said that the "only" reason the licence was not being renewed was the lack of currently available alternative space.
What is agreed is that Mr Woodward said that:
"You'll have to stay on a month to month for the moment".
So far as the licence was concerned, that there is where the matter ended.
There was, however, discussion about various aspects of the plaintiff's business, including its possible relocation within the Holme Building and, for that purpose, how much space the plaintiff required.
During the meeting Mr Woodward informed Mr Anthony that on the following day, 7 February 2013, he would be attending a meeting with representatives of Sydney University.
Early on 7 February 2013 Mr Anthony sent an email to Mr Woodward:
"As requested, here are the details for you to take into your 11am meeting".
Mr Anthony's email made no reference to a licence or otherwise address the duration of the plaintiff's occupancy of the Area. Rather, the email addressed the plaintiff's concerns about such matters as its space requirements, the location currently allocated to the plaintiff's business, the time for gown returns (which Mr Anthony said was causing students to forego graduation photographs), possible pre-sales orders on the Union website "as you suggested" and an imminent increase in the licence fee. The email concluded:
"We are looking forward to working together with you to ensure the best possible for outcome for all of us involved in graduations. Please let us know if you need any further information and do feel free to spend some time with us on the next graduation day so you can see how we work and better understand our business to help your planning process".
On 14 March 2013 Mr Woodward replied:
"At this stage the development work in the Holme building is not likely to be commenced until June or late May at the earliest, with the expectation that Stage 1, Academic dress and retail store, will be complete in the July semester break. During this time we are not expecting any implication to your business.
I have considered your request re the CPI increase and on the understanding that there are likely to be some changes in the second half of the year I have approved that the CPI increase scheduled for April be waived for this year only.
I have also discussed your concerns regarding the impact that you feel our late rental return fee has on your business with my Director of Commercial Operations.
He has informed me that our Academic Dress coordinator, carries out several initiatives which I believe enhance your business opportunities on graduation days."
Mr Woodward then set out certain suggested initiatives.
Mr Woodward concluded:
"In terms of online ordering, this is expected to be part of our website upgrade which is due to be completed in July. At the appropriate time in the development schedule we will discuss any opportunity with you for inclusion in the ordering process."
On 3 April 2013 Mr Anthony replied raising various issues concerning the plaintiff's business in respect of which he was concerned and concluding:
"I'm looking forward to seeing the positive changes planned for the Holme Building and graduations this year and thank you for keeping me informed of the plans and changes."
The purported termination of the licence
On 4 September 2013 Taylor Nicholas wrote to the plaintiff:
"We regret to advise that the landlord of the premises you occupy has instructed us to terminate your lease [sic].
As such, please consider this formal notice terminating your lease [sic] by the issuance of 1 months notice effective today."
So far as the evidence reveals, that communication was unheralded; so far as Mr Anthony is concerned, it came out of the blue.
On 9 September 2013 Mr Anthony sent an email to Mr Woodward:
"It has come as quite a surprise to have received a letter of termination to the lease [sic] for my business.
At our meeting in March [sic: evidently the meeting of 6 February 2013] we discussed renewing the licence at the completion of the upgrade of the courtyard and academic dress facilities. I understood that we would be relocated upstairs within the new facilities.
I will be at the University tomorrow...and would appreciate it if we could meet to discuss."
On the same day Mr Woodward replied:
"I understand I have missed a call from you today and also last week. I apologise for not being available to take the calls.
I also understand that you have spoken to Les [Wark] about the notice and he has explained the basic reasons for the decision.
I am not sure there is anything further that I can add other than to reiterate that due to some pending changing circumstances at the University and our desire to be an integral part of these changes we needed to take a different direction with regard to photography.
I appreciate that this is a difficult outcome for you and your business however we had to balance the requirements of the University, the opportunities offered to [the defendant] and our future management of Graduation days to the best possible outcome for students, and as such this is how we arrived at this decision."
The defendant served a formal "Notice of Termination" of the Current Licence Agreement on the plaintiff on 8 October 2013.
Work to renovate the Holme Building commenced in late in 2013 and is currently in progress.
The Alleged Agreement
As I have mentioned (at [12] above), the Alleged Agreement is said to arise from the emails exchanged between the plaintiff and the defendant's managing agent on 19 September 2011 and 11 October 2011. Those emails are set out at [22] and [23] above.
Ms Nolan submitted that Mr Anthony's email of 19 September 2011 comprised an offer ("[w]ould it be stretching the friendship to ask for a 5+5 with a further option to re-new") and that Ms Kypriotis's reply ("the USU are happy to offer you a new licence but unable to offer a term past 2017") comprised an acceptance of that offer and that a legally binding arrangement resulted. Thus, Mr Nolan submitted that a legally binding arrangement came to exist between the parties on 11 October 2011.
I do not accept that submission. In my opinion, on no reading of the two emails can the second be construed as an acceptance of any offer made in the first.
Mr Anthony's 19 September 2011 email was no more than a polite enquiry as to the defendant's attitude.
Ms Kypriotis's response of 11 October 2011 was most certainly not an acceptance of any offer that might have been implicit in Mr Anthony's email. Ms Kypriotis's email did not address Mr Anthony's suggestion of a "5 + 5 with a further option to re-new" other than to implicitly reject it ("unable to offer a term beyond 2017").
Rather, in my opinion, Ms Kypriotis's email of 11 October 2011 was no more than an indication of the defendant's preparedness to offer a new licence, coupled with an indication that any such offer could not include a term beyond 2017.
I do not read Ms Kypriotis's email of 11 October 2011 as itself being an offer capable of acceptance so as to give rise to legally binding relations. It did not nominate a term or fee for any future licence.
Ms Nolan submitted that it was implicit in the email that the term was to be five years from the expiry of the Current Licence Agreement; that is to 31 March 2017. But the caveat in the email was that any future licence could not endure "past 2017"; suggesting a licence to 31 December 2017 was a possibility.
As to licence fee, Ms Nolan submitted that it was to be implied that the fee would be that in place at the expiry of the Current Licence Agreement, to be increased annually by 5 per cent (that being the arrangement in the Current Licence Agreement). I not accept this submission. For one thing, the parties were contemplating the possibility that the plaintiff's business might move from the Area to another location nearby; for instance in his email of 22 August 2011 Mr Anthony raised the possibility of the plaintiff's business being relocated to the "old CommBank premises". Whether the licence fee referable to any such premises would be the same as for the Area is, in my opinion, a matter of speculation.
The 11 October 2011 email was, in my opinion, no more than an invitation to treat.
In any event, it is clear that Mr Anthony did not regard Ms Kypriotis's 11 October 2011 email as being either an acceptance of any offer implicit in his email of 19 September 2011 or itself an offer. So much is clear from Mr Anthony's email of 9 May 2012 (see [29] above). In that email Mr Anthony said he had "reapplied for a new license" and that he had in October 2011 "requested" a "new license". It may be he was referring to his 19 September 2011 email, although that was not made clear in the evidence. What Mr Anthony did not say in his email of 9 May 2012 was that he had received any acceptance of his application or request, let alone that any legally binding agreement existed. Nor did Mr Anthony assert that the defendant had on 11 October 2011 made an offer which he had accepted, or wished to accept.
On 9 April 2012 he said no more than he would "like to complete the paperwork" for "my new license" (see [27] above). On 9 May 2012, faced with Ms Kypriotis's verbal intimation on 23 April 2012 that the defendant would not be issuing a new licence, Mr Anthony did not assert that the defendant had already offered a new licence, or that the plaintiff had accepted any such offer. Rather, he stated he was reapplying for a new licence (see [29] above).
I appreciate that Mr Anthony is not legally qualified and that there was some degree of informality in the tone of his email correspondence with the defendant and its representatives. However, Mr Anthony's emails were business communications, focused on the nature of the plaintiff's tenure in the Holme Building. Had Mr Anthony understood he had a binding agreement with the defendant, or that the defendant had made to his company an offer which he had accepted, or wished to accept, he would, in my opinion, have said so.
In my opinion no agreement arose from the emails of 19 September 2011 and 11 October 2011, nor from the conduct of the parties thereafter.
The alleged representation
The plaintiff's case of estoppel by representation also rests on Ms Kypriotis's email of 11 October 2011.
The plaintiff's submission, as developed in Ms Nolan's final submissions, was that, by that email, the defendant represented that the parties had agreed there would be a licence "through to 2017".
In my opinion, the email is incapable of giving rise to that conclusion; the email did not convey a representation that there was an existing agreement to grant a licence.
Nor, in my opinion, can the email be construed as a representation that the defendant would grant the plaintiff a licence, sufficient to ground an estoppel.
First, and as I have discussed above (at [69] to [71]), the email did not specify either the term or the fee of any future licence. For that reason the statement in the email was not sufficiently clear or unequivocal to give rise to an estoppel: Legione v Hately (1983) 152 CLR 406 at 435-7 per Deane J; Foran v Wight (1989) 168 CLR 385 at 410-11 per Mason CJ.
Second, and as I have also discussed above (at [73] and [74]) the evidence shows that, from at least April 2012, Mr Anthony did not rely on any representation in the email. Instead, and as Mr Price, who appeared for the defendant submitted, he continued to negotiate for a further licence.
It is true that in one of his affidavits, Mr Anthony said that "following" the 11 October 2011 email he abstained from looking for alternative contracts with other universities, and that:
"Due to the agreement for the extension of the licence until 2017 I refrained from re-establishment of connections to the advertising industry and other commercial photographic work".
That evidence, which was not challenged or explored in cross-examination, suggests he gained some comfort from the 11 October 2011 email that led him to abstain from taking the steps to which he referred.
However, whatever comfort Mr Anthony gained could not have continued after April 2012, when the defendant made clear it would not be issuing the plaintiff with a new licence.
In those circumstances, such equity as the plaintiff now has to remain in possession of the Area thereafter cannot, in my opinion, arise from Ms Kypriotis's 11 October 2011 email but must arise (if at all) from the subsequent dealings between the parties.
I shall now turn to that aspect of the case.
Conventional estoppel
Alternatively to the above claims, the plaintiff contends for a conventional estoppel. The relevant principal is summarised in Young, Croft, Smith, On Equity, (2009) Thomson Reuters at [12.100]:
"Estoppel by convention provides that where parties have conducted their relations with each other on the basis of agreed or assumed facts, they will both be estopped from denying those agreed or assumed facts. It is established where the parties adopt an assumption as to the terms of their legal relationship, they conduct themselves on the basis of that mutual assumption, each party knows or intends that the other will act on that basis, and departure from the assumption will cause detriment to one of them" (citing Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 at 322-323 and Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [200] per Tobias JA).
The particular estoppel contended for by Ms Nolan was:
"That a relationship involving a Licence to occupy space from which photographic services could be provided to graduands on graduation days would continue was assumed to be the case by the convention of the parties. By the parties' words and conduct there is nothing which can derogate from the imputed mutual understanding or common intention that this relationship would continue, from which it would be unjust to permit one party to resile because of the detriment to the other which would result."
Thus the plaintiff's case was that the plaintiff had conducted itself on the assumed fact that the plaintiff's licence would continue indefinitely, or perhaps until 2017.
In my opinion the evidence does not warrant this conclusion.
Neither party understood that the plaintiff's licence would endure indefinitely.
Mr Woodward's evidence (see [37] above) makes it clear that this was the defendant's position; it wished to keep its options open.
The evidence also suggests that Mr Anthony was not of this understanding. He was told on 23 April 2012 that the defendant would not be issuing him with a new licence (see [29] above). On 9 May 2012 he was told that the "Mark Anthony area is not expected to be included" in the proposed redevelopment of the Holme Building (see [31] above). He must have understood from these communications that the plaintiff's tenure was uncertain.
Further, neither party understood that the plaintiff's occupation would necessarily continue until 2017. Mr Woodward made clear on 6 February 2013 that the defendant's tenure (and thus, necessarily, that of the plaintiff) at the Holme Building might not extend beyond 2016 (see [39] and [40]).
However, the conclusion to which I have come is that a fair reading of the evidence is that the parties did conduct their relationship on the basis of the assumed fact that pending the defendant's consideration of its proposed use and development of the Holme Building, the plaintiff's occupation of the Area would not be disturbed without reasonable notice.
There are a number of factors pointing to this conclusion.
First, although, on 23 April 2012 Ms Kypriotis told Mr Anthony that the defendant would not be issuing the plaintiff with a new licence, she added that the plaintiff was the defendant's "preferred tenant [sic]"; suggesting an inclination on the defendant's part to permit the plaintiff's continued occupation if possible.
Second, although, on 9 May 2012 Ms Kypriotis told Mr Anthony that the plaintiff would remain "on a month to month basis" this was said to be "for the time being"; suggesting the possibility that a more secure basis of occupancy might be available in the future.
Third, at the meeting of 6 February 2013 Mr Woodward said that the defendant could not grant the plaintiff a five year licence agreement "at the moment", and then only because Mr Woodward understood that the defendant's tenure in the Holme Building was only until 2016. The clear implication of Mr Woodward's statement was that the situation might change.
At the same meeting Mr Woodward said the plaintiff would have to remain in occupation on a month to month basis "for the moment"; again suggesting the possibility that a more secure basis might be available in the future.
Finally, in his email of 14 March 2013 (see [53] above) Mr Woodward made a number of statements suggesting that the defendant understood that the plaintiff's occupation was not to be disturbed without due notice. First Mr Woodward said that "at this stage" the development work of the Holme Building was not likely to commence until May or June 2013 and that part of the redevelopment work to be conducted during the July semester break would not have "implications for your business"; suggesting that the plaintiff's occupation would not be disturbed during those works and would continue for some time thereafter. Second, Mr Woodward informed Mr Anthony that he had approved a waiver of the CPI increase scheduled for the licence fee payable by the plaintiff "for this year only"; suggesting that the defendant did not contemplate disturbing the plaintiff's occupation until the end of 2013 and bespeaking a contemplation that the relationship between the parties would extend beyond 2013. Third, Mr Woodward informed Mr Anthony of several "initiatives" that the defendant's Academic Dress Coordinator had carried out to "enhance your business opportunities on graduation days"; again bespeaking a contemplation of an ongoing relationship between the parties.
Mr Anthony must have had the same understanding. He must have understood, from the defendant's communications, that he had no assurance of a right to occupy the Area for any fixed period. But he was, in my opinion, entitled to conclude from the nature of those communications, and in my opinion must have assumed, that the plaintiff's occupancy of the Area was not to be disturbed without reasonable notice.
All of these circumstances, taken together, lead me to conclude that, by March 2013, the parties were conducting themselves on the basis of a mutually understood assumption that the plaintiff's occupation would not be disturbed without reasonable notice.
Nonetheless, on 4 September 2013, the defendant purported to terminate the plaintiff's licence on one month's notice. The defendant gave the plaintiff no indication or warning that it was minded peremptorily to terminate its right of occupation. I find that conduct to be "unreasonable and oppressive to an extent that affronts ordinary minimum standards of fair dealing" to adopt the words Deane J in Commonwealth v Verwayen (1990) 170 CLR 394 at 441 and to be, in all the circumstances, unconscionable.
Were the defendant permitted to depart from the mutually assumed state of affairs (namely that reasonable notice would be given) the plaintiff would, in my opinion, suffer detriment.
By September 2013 the plaintiff had been in occupation of a basement area in the Holme Building for 22 years. By 2013 the plaintiff had no other source of income than that generated by the graduation photography business it conducted from the Holme Building.
Mr Anthony gave this evidence in chief:
Q. "How long have you been taking the photographs in the 45 years of work that you have doing?
A. 35 years.
Q. So a photographer of that experience, how easy would it be for him to be able to obtain - or you, should I say, for you to obtain that advertising work again?
A. At my age, very hard to find.
Q. But not impossible?
A. Not impossible.
Q. If it be impossible [sic], how long would it take you, in your opinion?
A. If luck was on my side, two to three years."
Mr Anthony gave this evidence in response to my questions:
Q. "How does work come your way? Is it by word of mouth, is it a reputational basis?
A. It is both, and I have been out of the industry now for seven years. All the people I used to work for are all gone. And now I have to talk to 20, 22 year olds. And I walk through the door with grey hair, I am 60 years of age, I am seen as well as [sic] Methuselah...
Q. You say you have been out of the industry for seven years?
A. That's right.
Q. You mean since the studio closed?
A. That is correct.
Q. So what do you mean by being out of the industry, you mean practicing only at Sydney Uni?
A. Well, that is correct."
Mr Anthony will now have to commence the process of what Ms Nolan described as "reinventing himself" which may take, as Mr Anthony pessimistically predicted, two or three years. He will be disadvantaged if, as the defendant would have it, the plaintiff has only one month's notice to vacate the Area rather than reasonable notice.
As to what is reasonable notice in the circumstances in this case, I consider particularly important Mr Woodward's email of 14 March 2013. By agreeing to waive CPI increases "for this year only" Mr Woodward was signifying a contemplation on behalf of the defendant that it was not minded to interfere the plaintiff's occupation until, at the earliest, the end of 2013 (nine months from the email) and indeed that the licence arrangement would endure into 2014.
The defendant did not adduce any evidence as to why it needed peremptorily to terminate the plaintiff's occupation of the Area on one month's notice; or any evidence of the detriment the defendant would suffer were the plaintiff's occupation to continue for a reasonable period from the giving of notice.
However, the parties have not had an opportunity to make submissions as to what notice, in all the circumstances, would be reasonable.
Accordingly, I now propose to give the parties an opportunity to make submissions on that question.
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Decision last updated: 25 February 2014
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