McAULLAY and TOSCANA (WA) PTY LTD
[2005] WASAT 172
•11 JULY 2005
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
CITATION: McAULLAY and TOSCANA (WA) PTY LTD [2005] WASAT 172
MEMBER: MR M SPILLANE (MEMBER)
HEARD: 12 APRIL 2005
DELIVERED : 11 JULY 2005
FILE NO/S: CT 397 of 2004
BETWEEN: BEVERLEY ANN McAULLAY
Applicant
AND
TOSCANA (WA) PTY LTD
Respondent
FILE NO/S :CT 398 of 2004
BETWEEN :DEBBIE LEE McAULLAY
Applicant
AND
TOSCANA (WA) PTY LTD
Respondent
Catchwords:
Landlord and tenant - Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) s 27(3) - Whether application should be transferred to Local Court
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3(3), s 16, s 16(1)(a), s 19(1), s 22(b), s 26(1), s 27(1), s 27(2)(a), s 27(2)(b) and s 27(3)
Commercial Tenancy (Retail Shops) Agreements Amendment Act 1998 (WA)
State Administrative Tribunal Act 2004 (WA), s 7, s 9, s 32(2), s 32(6), s 32(7)(a) and s 167
State Administrative Tribunal Regulations 2004 (WA)
Result:
Application to remove to Local Court dismissed
Category: B
Representation:
CT 397 of 2004
Counsel:
Applicant: Self-represented
Respondent: Ms L Rowley
Solicitors:
Applicant: Self-represented
Respondent: Deacons
CT 398 of 2004
Counsel:
Applicant: Self-represented
Respondent: Ms L Rowley
Solicitors:
Applicant: Self-represented
Respondent: Deacons
Case(s) referred to in decision(s):
Black Swan Holdings Pty Ltd v Hurst (1993) 9 SR (WA)
Case(s) also cited:
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Application
By letter addressed to the Executive Manager, State Administrative Tribunal dated 17 February 2005, solicitors for the respondent stated:
"Please accept this letter as formal application on behalf of our client, Toscana (WA) Pty Ltd to remove Matter Nos CT 2004/397 and 2004/398 into the Perth Local Court pursuant to Section 27(3) of the Commercial Tenancy (Retail Shops) Agreements Act 1985."
Jurisdiction
Both matters were originally filed with the Commercial Tribunal of Western Australia, as it then was, on 13 April 2004. Matter No CT 2004/397 is an application by Beverley Ann McAullay and Matter No CT 2004/398 is an application by Debbie Lee McAullay.
On 1 January 2005, the State Administrative Tribunal ("the Tribunal") commenced pursuant to s 7 of the State Administrative Tribunal Act (WA) ("the SAT Act"). By virtue of s 167 of the SAT Act, this matter was transferred to the Tribunal.
On 12 April 2005, the respondent's application was heard and the parties were given until 6 May 2005 to file any final submissions.
The facts
At the time of their receipt by the Commercial Tribunal in April 2004, the application by Debbie Lee McAullay (Matter No CT 2004/398) contained 12 questions relating to matters in dispute, and the application by Beverley Ann McAullay (Matter No CT 2004/397) contained nine questions.
Both applications have been the subject of various meetings and mediations which have reduced the questions in dispute, and suffice to say that it was common cause that the questions that remained to be resolved in respect of both applications were as follows:
Matter No CT 2004/398 Debbie Lee McAullay
1.Can Paul Letari sue me even though he agreed for the matter to be dealt with by the Tribunal?
4.Is Paul Letari entitled to charge me for the lease even though he is not a licensed legal practitioner?
8.Does Paul Letari have to refund monies charged for preparing leases/am I entitled to charge interest for outstanding monies for lease documents?
Matter No CT 2004/397 Beverley Ann McAullay
6.As Paul Letari is not a licensed legal practitioner, is he legally allowed to charge for leases prepared by himself? Does he have to refund the lease money and can I charge interest?
7.Is Beverley McAullay entitled to recover legal costs incurred in exercising the statutory option to bring the lease in line with the existing lease including a two-year option?
8.Is Paul Letari entitled to interfere in the sale of the business by giving misleading information?
9.Am I entitled to seek damages for the loss of the previous sales of the business due to Paul Letari's actions?
It should be noted, in respect of the numbering set out above, I have retained the original numbers of the questions remaining.
There are several claims and counter-claims by the parties as to events that took place, but what appears to be agreed is as follows:
i.Beverley Ann McAullay and Debbie Lee McAullay are mother and daughter respectively;
ii.in or about April 1999, Debbie Lee McAullay took an assignment of a lease of premises from the respondent ("the first lease");
iii.on or about 31 March 2001, the first lease expired but the business which Beverley Ann McAullay had been running from the premises continued to operate;
iv.on or about 20 June 2002, a new lease was entered into between the respondent and Beverley Ann McAullay ("the second lease");
v.the applications before the Tribunal were filed on 13 April 2004; and
vi.on 19 April 2004, the respondent issued proceedings in Perth Local Court against Debbie Lee McAullay in respect of monies the respondent alleges are due and owing by Ms McAullay from dates prior to 20 June 2002 when the second lease was entered into by Beverley Ann McAullay.
Submissions
The respondent has applied to have both applications before the Tribunal transferred to the Local Court pursuant to s 27(3) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) ("the CTRSA Act") so that they can be dealt with together with the respondent's Local Court proceedings referred to above.
Section 27(3) states:
"(3)Where a question has been referred to the Tribunal under this Act and the question is one that a court also has jurisdiction to determine, the proceedings for the determination of the question shall
(a)if all the parties to the proceedings so agree; or
(b)if, on the application of a party or of its own motion, the Tribunal so directs,
be transferred to the court and shall be disposed of as if the proceedings had been instituted before the court."
The respondent submits that the matters which remain to be determined by the Tribunal are not questions which arise under a retail shop lease and that, in all the circumstances, the more appropriate forum to hear these matters is the Local Court, and the Tribunal should exercise its discretion and remove them to the Local Court.
The respondent also submits that there are significant issues of credibility and evidence which will be important in the determination of the matter, and as the Tribunal is not bound by the rules of evidence and there is no appeal on a point of fact from a decision of the Tribunal, failure to strictly apply the rules of evidence may deprive the respondent of an opportunity of an appeal on a point of fact which may result in a breach of natural justice.
The respondent made oral submissions on 12 April 2005 and filed written submissions in a document titled "Outline of Respondent's Submissions" filed with the Tribunal on 6 May 2005. I have had regard to all of the respondent's submissions in coming to my decision, even if I have not referred to each one in turn in my reasons.
Both Beverley Ann McAullay and Debbie Lee McAullay were present at the hearing on 12 April 2005, and Debbie Lee McAullay addressed the Tribunal on behalf of both parties. No written submissions were received on behalf of either applicant following the hearing of 12 April.
Debbie Lee McAullay, in her submission, stated that the respondent had made two previous applications to remove the matter to the Local Court, both of which were refused.
An examination of the file shows no formal application of that type previously being made or dealt with. However, several mediations and meetings were held, and it may well be that the matter was raised informally during one of those sessions and no record made on the file.
On this occasion, both applicants objected to the matters being transferred to the Local Court, as they believed the Tribunal was the proper venue.
Debbie Lee McAullay submitted:
"I feel that [to transfer the matter] would be detrimental to my mother and my case because we don't have the funds to have a lawyer, which is why we agreed for it to be dealt with at the Tribunal because people can deal with it themselves without bringing in lawyers. …
That's my belief. That's why the Commercial Tribunal was formed to assist if there's a dispute to limit costs."
And later:
"As I explained before I think the Tribunal has been set up to assist all parties, to keep it cost-effective and as smooth a flow. If it gets moved to the courts then, as I said, we will be at a detriment because we don't know the full extent so we won't be able to present our case to the best of our ability, …
So whereas if it gets transferred back to the court, it will be back to start, and we could be looking at 12 to 18 months down the track."
As to whether or not the questions remaining to be determined are questions that arise under a retail shop lease, Ms McAullay said simply "They are all to do with the lease".
Consideration
Section 16 of the CTRSA Act states:
"(1)Subject to section 11(5), a party to a retail shop lease may refer to the Tribunal any question between the parties which he believes to be a question arising under the lease and the Tribunal shall
(a)determine whether or not the question referred to him is a question arising under the lease; and
(b)if it is such a question, hear the question with a view to achieving a solution acceptable to the parties to the lease."
To clarify what a "question arising under the lease" means, s 3(3) of the CTRSA Act states:
"(3)A reference in this Act to a question arising under a retail shop lease includes a reference to
(a)a question whether or not a lease exists or has existed;
(b)a question whether or not a lease is or was a retail shop lease;
(c) a question arising
(i)in relation to any communication, including a disclosure statement under section 6, between the parties to the retail shop lease, prior to their entry into the retail shop lease, which communication was material to the terms and conditions of the retail shop lease; or
(ii)in relation to the retail shop lease under a provision of this Act;
(d)a matter that is in dispute between the landlord and the tenant under section 12 in relation to
(i)operating expenses of the landlord under the retail shop lease generally;
(ii)an allocation made under section 12(1)(b) of the proportion of those operating expenses; or
(iii)a determination of the relevant proportion for the purposes of section 12;
or
(e)any other matter that is in dispute between the landlord and the tenant in connection with the retail shop lease, whether or not that matter is dealt with by the provisions of the retail shop lease".
In light of the Local Court proceedings issued by the respondent, I should confirm that s 27(1) of the CTRSA Act states:
"(1) Where this Act provides for the reference of a question to the Tribunal and the question is one that a court also has jurisdiction to determine, proceedings may be instituted to determine the question either
(a)before the court; or
(b)by way of a reference to the Tribunal,
but not both."
The McAullays contend that the issues the subject of the Local Court proceedings, for all intents and purposes, cover the same issues as the matters before the Tribunal. The respondent, on the other hand, submits that the issues that remain before the Tribunal do not in any way seek to deal with any sum due and payable by the applicants to the respondent, which is the subject of the Local Court proceedings.
From the evidence that is currently before me, I would be inclined to the respondent's submission in respect of that issue. However, I have not been furnished with a copy of the Local Court proceedings and can therefore not finally determine whether that is, in fact, the case.
Questions under the lease
There are a number of issues to be considered in deciding this matter. The first of which is to determine, pursuant to s 16(1)(a) of the CTRSA Act, whether or not the remaining questions to be determined are "questions arising under the lease".
I stated such at the hearing on 12 April 2005 and the respondent, in its written submissions, also adopted that view.
I am further strengthened in that view by the decision of her Honour, Judge Yeats in Black Swan Holdings Pty Ltd v Hurst (1993) 9 SR (WA) at 289 where she stated:
"In determining whether a matter should be transferred, the Tribunal should have addressed its mind not merely to the question of whether it had jurisdiction but whether, due to the complicated legal issues, it was appropriate that it should exercise jurisdiction in the particular proceedings."
I will now therefore briefly deal with each of the questions remaining before the Tribunal.
Matter No CT 2004/398 Debbie Lee McAullay
Q1: This question can be answered by the application of s 27(1) of the CTRSA Act. As I have not sighted the Local Court proceedings, I am not in a position to make a final determination on this issue. However, if the respondent's claim in those proceedings arises from matters unrelated to the issues before this Tribunal, then there will be no bar to those proceedings continuing in the Local Court.
Q4 & Q8: Both of these questions arise out of the same issue, that is, the alleged payments sought by the respondent at the time Debbie Lee McAullay took on an assignment of the first lease.
If such payments were sought and paid, the factual circumstances surrounding them will need to be examined, particularly as the lease that was assigned to Ms McAullay does not appear to have any specific provision for the imposition of such payments.
The respondent, in its written submission in referring to these charges, states:
"The charges made by the Respondent for the administrative costs of its staff in processing the tenancy are the subject of a collateral oral agreement between the parties … "
If that is the case, it raises further questions such as whether the "charges made by the Respondent", if they were "administration costs of its staff", could or should be seen as management fees as defined in the CTRSA Act which, prior to the Commercial Tenancy (Retail Shops) Agreements Amendment Act1998 (WA), a landlord was entitled to charge and whether extrinsic evidence should be allowed to show that the lease and the assignment were not the entire and final documents and did not contain all of the terms of the agreement.
It is certainly not clear, on the evidence before me, that these questions could not be seen as questions that arise under a lease.
Matter CT 2004/397 Beverley Ann McAullay
Q6: This is a similar question to that raised in Q4 & Q8 by Debbie Lee McAullay, and the respondent states at par 14.2 of its written submission: "so far as Ms B McAullay's questions are concerned, the same points apply to issue 6".
If that is the case and the charges made by the respondent are not for legal costs under cl 6.3 of the second lease but rather are "charges made by the respondent for the administration costs of its staff in processing the tenancy", the question must arise: were those charges also the subject of a collateral oral agreement or were they raised pursuant to cl 6.8 of the second lease entitled "Management Charges" or cl 2.1,14 entitled "Variable Outgoings", and if they were, what is the position in view of s 12(1f) of the CTRSA Act?
In the circumstances, I am satisfied that Q6 is a question that can be classified as arising under a lease.
Questions 8 and 9 of Beverley Ann McAullay were described by the respondent as, in effect, actions or claims for damages, and question 7 could also be described as such.
However, although couched in layman's terms, they can, in my opinion, be viewed in the context of cl 10 of the second lease entitled "Dealings with the Lessee's Interest" and, in particular, cl 10.1.2 which states " … the lessor shall not unreasonably withhold or delay its consent to such assignment or subletting".
In my opinion, it is not unreasonable to argue that these questions arise out of the lessor's alleged breach of that clause, and in such circumstances, would clearly be questions arising under the lease.
Additional issues
Another significant issue which needs to be addressed when deciding the matter, is that of convenience and costs.
In Black Swan Holdings v Hurst (supra), her Honour Judge Yates stated:
"One matter that should have been addressed was the state of the proceedings in the Tribunal and the further costs or delay that would result from transfer. Those matters were not touched on in the reasons of the deputy registrar but often could be determinative of the issue …
… I would have, on the facts of this case, refused to grant leave because, by transferring the proceedings to the District Court, the tenant/applicant would have been put to the cost of refilling documents, be subjected to further pre-trial procedures in the District Court despite having had mediation and having pleaded their case in the Tribunal, and would then have experienced a 12-month delay in finding a trial date in the District Court. In these circumstances, I do not believe that the justice of the case would require a direction to transfer to the District Court."
The present case, having been before the Commercial Tribunal for some time and undergoing several mediations, would appear to be similar in many respects with her Honour's description in Black Swan Holdings v Hurst. As to possible delays, neither counsel for the respondent nor the applicants could enlighten me as to what that might be, although Debbie Lee McAullay stated she had spoken to the Local Court who explained there is roughly a wait between six to nine months just to get to a mediation.
Finally, it must also be noted that, as far back as 19 October 2004, the Registrar of the Commercial Tribunal as it then was, made the following orders:
Matter No CT/2004-000398 Applicant: Ms Debbie Lee McAullay
Pursuant to s 22(b) of the CTRSA Act, I refer to the Commercial Tribunal for determination, questions 1, 4 and 8 identified in the prescribed form under s 19(1).
Matter No CT/2005-000397 Applicant: Ms Beverley Ann McAullay
Pursuant to s 22(b) of the CTRSA Act, I refer to the Commercial Tribunal for determination, questions 6, 7, 8 and 9 identified in the prescribed form under s 19(1).
This Tribunal commenced on 1 January 2005, and these matters were transferred from the Commercial Tribunal to this Tribunal for hearing and determination. They have been before the Commercial Tribunal since 13 April 2004, and it would, in my opinion, be unreasonable to ask the applicants to, in effect, now start again in the Local Court.
Rules of evidence
Before concluding, however, the respondent raised squarely as an issue the fact that the Tribunal is not bound by the rules of evidence, and that because issues of credibility will be important in this case, the outcome may result in a breach of natural justice to the respondent if he is denied the opportunity of appealing on a point of fact. In the circumstances, it is important that I address this issue.
The Tribunal was established on 1 January 2005 with the following stated objectives (Section 9 of the SAT Act):
(a)to achieve the resolution of questions, complaints or disputes, and make or review decisions, fairly and according to the substantial merits of the case;
(b)to act as speedily and with as little formality and technicality as is practical, and minimize the cost to the parties; and
(c)to make appropriate use of the knowledge and experience of Tribunal members.
It is true the Tribunal is not a court of pleadings, but it must be acknowledged that Parliament has seen fit to provide for a Tribunal which need not adhere to the strict rules of pleading and evidence but which is bound by the rules of natural justice.
Section 32(2) of the SAT Act states that the Tribunal:
"(a)is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that it adopts those rules, practices or procedures … ; and
(b)is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms."
Furthermore, s 32(6) of the SAT Act states:
"The Tribunal is to take measures that are reasonably practicable
(a)to ensure that the parties to the proceeding before it understand the nature of the assertions made in the proceeding and the legal implications of those assertions;
(b)to explain to the parties, if requested to do so, any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceeding; and
(c)to ensure that the parties have the opportunity in the proceeding
(i)to call or give evidence;
(ii)to examine, cross-examine or re-examine witnesses; and
(iii)to be heard or otherwise have their submissions considered."
Finally, s 32(7)(a) of the SAT Act states:
"The Tribunal
(a)is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in a proceeding; … "
Forbes in his book "Justice in Tribunals" published in 2002 at par 12.44 under the heading "Rules of Evidence in Tribunals" states:
"The fact that the rules of evidence do not bind Tribunals does not mean a Tribunal cannot properly choose to follow them. The more important rules of evidence are procedures designed to achieve fairness and a Tribunal may be persuaded to follow them in that spirit. If they are not used strictly to exclude evidence they may be useful in assessing its weight."
The respondent should be satisfied, therefore, that as Parliament has seen fit to have questions such as are raised in this case determined by the Tribunal, the respondent will not in any way be prejudiced by the Tribunal hearing and determining the matter in its normal fashion.
Findings
In the circumstances, for all of the reasons outlined above, I am not prepared to direct that the matter be transferred to the Local Court.
Alternative proposal
At par 17 of its written submissions dated 6 May 2005, the respondent put an "Alternative Proposal" in the following terms:
"In the event that these arguments are not accepted, the Tribunal is asked to exercise its power to order the removal of the respondent's actions in the Local Court into the Tribunal so that all matters can be heard together."
Although, without seeing the proceedings, I cannot make a determination as to precisely what the proceedings in the Local Court relate to, I am satisfied, from the submissions from both parties, that the matters raised in those proceedings arise out of the same set of facts as the matters before the Tribunal and from the perspective of court resources and the parties' time and costs, it would appear to be preferable that all matters be heard together.
Section 26(1) of the CTRSA Act provides:
"Without limiting any power to make an order that is conferred by the State Administrative Tribunal Act 2004 but subject to this Act the Tribunal may make
(a)an order that requires a party to proceedings before it to pay money to a person specified in the order; … "
It seems to me, therefore, that, if an order to pay money is necessary and both claims were before the Tribunal, it would be in the interests of all parties that the proceedings be heard together, and if appropriate, a setoff could be considered when the matter is finally determined.
However, although I may believe such an order would be appropriate, I do not believe I have the power to make it.
Although not stated, I must assume that the respondent is referring to s 27(2) of the CTRSA Act which states:
"Where proceedings are instituted in, or are before, a court for the determination of a question that, but for subsection (1), could be referred to the Tribunal the question shall
(a) if all parties to the proceedings so agree; or
(b)if the court of its own motion or on the application of a party so directs,
be transferred to the Tribunal and shall be disposed of as if the question had been referred to the Tribunal under this Act."
Although s 27(3) of the CTRSA Act clearly empowers the Tribunal to make directions in respect of proceedings before it, s 27(2)(b) of the Act outlined above empowers a Court to direct that proceedings before it can be transferred to the Tribunal.
As the proceedings referred to in the respondent's Alternative Proposal are before the Local Court, this Tribunal has no jurisdiction to make any order that affects those proceedings, and it is solely in the hands of either of the parties to either agree pursuant to s 27(2)(a) of the CTRSA Act to transfer those proceedings to the Tribunal or for either of the parties to make an application to the Local Court, and for the Court to decide the issue.
Order
In the circumstances, I make the following order:
The respondent's application to transfer Matter Nos CT 2004/397 and CT 2004/398 to the Perth Local Court pursuant to s 27(3) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) is refused.
I certify that this and the preceding [64] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR M SPILLANE, MEMBER
I certify that this and the preceding [64] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR M SPILLANE, MEMBER
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