26 These principles are well established: see Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd[2015] HCA 37at [46] [52]:
The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context … and purpose. In determining the meaning of the terms … it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
Ordinarily, this process of construction is possible by reference to the contract alone. ... if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances … cannot be adduced to contradict its plain meaning.
… sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. It may be necessary in determining the proper construction where there is a constructional choice. …
…. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.
… Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption 'that the parties … intended to produce a commercial result'. … a commercial contract should be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'.
The parties' contentions 27 The applicant for joinder contends that the circumstances of this case are such as to attract both s 38(a) and s 38(b) of the SAT Act. It relies on the express words of the assignment in clause 3(c); namely, that what has been assigned to the applicant for joinder is'the full benefit and advantage of the Lease' and that consequently it ought to be bound by or have the benefit of the decision of the Tribunal in the substantive proceedings and that its interests are affected by the substantive proceedings.
28 The applicant for joinder submits that the respondent, by its execution of the assignment, expressly consented to the full benefit and advantage of the lease being assigned. This is so. The question is though, what, at the time of the assignment, was assigned? This is resolved by reference to the terms of the assignment. Clause 3(c) assigns the full benefit and advantage of the lease but this assignment is not at large. It is subject to the payment of the rent.
29 With regard to the issue of express consent to the full benefit and advantage of the lease being assigned, such consent has to be considered against, objectively, what it was that the respondent, by the terms of the assignment, was consenting to.
30 The applicant for joinder submits that by reason of s 38 of the SAT Act, the applicant for joinder ought to be bound by, or have the benefit of, any determination made by the Tribunal as to the appropriate 'rent' payable under the lease, and contends that a determination as to the appropriate rent payable under the lease informs the rent payable under the assignment.
31 This submission is made having regard to the definition of 'rent' under the assignment and having regard to the interpretation provisions in clause 1.2 of the assignment, particularly clause 1.2(k), and to Recital A.
32 An issue arises as to whether this submission is consistent with an objective reading of the entire assignment and, in particular, how the entire clause 3 is to be read with clause 4.3, which incorporates item 9 of the assignment such as to state an amount of rent as $307,993.20 per annum.
33 The applicant for joinder also contends that s 11(5) of the CTRSA Act allows parties to a retail shop lease to refer to the Tribunal for determination of a question as to the rent payable as a result of a review for the amount of rent payable in certain circumstances.
34 The applicant for joinder submits that there is no statutory prohibition under the CTRSA Act for an assignee under a lease that operates to prevent an assignee from referring such a question to the Tribunal for determination.
35 However, this submission raises an issue as to when that right is created or when it operates such as to allow a party to a lease by way of a later assignment to act to seek a question to be referred. Is it an unfettered right that applies universally to an assignee to refer a question to the Tribunal. In this instance, the Tribunal prefers a view that for a person to refer a question, the person who seeks to do so must be a party to a retail shop lease. A person may acquire the rights and standing of or become a party by reason of an assignment but the capacity to refer must be consistent with the term of the assignment.
36 The applicant for joinder submits that the rent payable by it under the assignment is subject to the same definition of 'rent' as that term is defined under the lease. It refers to Recital A of the assignment, which is in terms that '[t]his deed is supplemental to the Lease', and to clause 1.1 of the assignment, which is in terms that '[r]ent means the rent from time to time payable under the Lease'.
37 The applicant for joinder submits that the codefinition of 'rent' under the lease and the assignment results in a conclusion that whatever determination of rent payable under the lease is made by the Tribunal in the substantive proceedings then that determination must also directly affect the interests of the applicant for joinder and the amount of rent it will pay under the terms of the assignment.
38 The applicant for joinder relies on clause 3(c) of the assignment which, it says, when read with clause 4, assigns to the applicant for joinder any benefit or advantage of the lease which it says includes any determination by the Tribunal as to the rent payable under the substantive application, and says further that clause 4 is significant because it, by clause 4.3, expressly differentiates between the 'Rent' payable by the applicant for joinder (on the date of assignment) and the amount of 'Rent' to be paid by the applicant for joinder (pursuant to any rental review).
39 The effect of this submission is that the assignment operates in a sense retrospectively so that the words to be reviewed in clause 4.3(b) includes a review for a period that preceded the assignment if, according to the applicant for joinder, proper weight is placed on the words of clause 3(c) which deliver to the applicant for the joinder the full benefit and advantage of the lease.
40 This submission is ambitious. The Tribunal is yet to determine the question. There is at best only a potential of a benefit or an advantage and this depends upon a review that is favourable to the applicant and on an interpretation of the terms of the assignment contended for by the applicant for joinder.
41 The applicant for joinder refers to item 5 of the schedule to the lease, which provides for the methodology by which rent reviews will be undertaken in accordance with the lease. For the years ending 31 May 2017 and 31 May 2018, the rent reviews are CPI rent reviews of the market rent review as determined for the year commencing 1 June 2015 and expiring 31 May 2016.
42 The applicant for joinder asserts that the determination in the substantive application will impact upon the 'rent' reviews for these periods, periods in which the applicant for joinder will be responsible for paying the rent as reviewed, and that this strengthens the application for joinder.
43 The fact that entering into an agreement has consequences does not strengthen the application for joinder. This observation is not made without regard to s 38(1)(a) or (b) of the SAT Act, which requires the Tribunal to consider, in the course of the application, whether the applicant for joinder ought to be bound by or have the benefit of the decision in the substantive proceedings or whether the applicant for joinder's interests are affected by the substantive proceeding. However, the provision cannot operate to alter the terms of an agreement that the applicant for joinder voluntarily entered into.
44 The respondent contends that the purpose of the assignment is to affect an assignment of the lease from the applicant to the applicant for joinder, on reasonable terms and conditions acceptable to the respondent as landlord in accordance with clause 7 of the lease. This is clear.
45 The respondent submits that:
Having regard to the commercial purpose and object of the Assignment and the provisions of the Assignment as a whole, references to 'Rent' in the Assignment: (a) mean 'the rent payable from time to time under the Lease' as defined in clause 1.1 of the Assignment; and
(b) are subject to the express acknowledgements by [the applicant for joinder] in relation to the Rent, contained in clause 4.3 of the Assignment.
By clause 4.3(a) and Item 9 of the Assignment, [the applicant for joinder] specifically and expressly acknowledges that the Rent payable by it from the Date of Assignment is $307,993.20 per annum plus GST. …
46 The respondent further submitted, persuasively in the Tribunal's view, that:
Having regard to the commercial purpose and object of the Assignment, a reasonable businessperson would understand the meaning and effect of this provision as being to provide certainty as to the amount of the Rent payable by [the applicant for joinder] at and from the Date of Assignment. …
47 The respondent also submitted:
Clause 3 of the Assignment refers to the 'full benefit and advantage of the Lease' being assigned to [the applicant for joinder by the applicant]. [The applicant for joinder's submissions] contend that the 'full benefit and advantage of the Lease' referred to in this clause includes any determination by the Tribunal in the proceedings by [the applicant] under section 11(5) of the CTRSA Act as to the rent payable as a result of the review on 1 June 2015. However, this contention ignores and is inconsistent with the express proviso that the assignment of the benefit and advantage of the lease is stated to be 'subject to the payment of the Rent …'[.]
48 The respondent submits that the assignment was conditional upon payment of the rent, that being the rent acknowledged as being payable from the date of the assignment. 49 The applicant for joinder refers to the provisions of clause 4.3(b) of the assignment, which requires the rent 'must be reviewed in accordance with the terms of the Lease'. Clause 4.3 provides that the rent is the amount stated in Schedule 9 and 'to be reviewed in accordance with the terms of the Lease'. The Tribunal agrees with the respondent's submission that clause 4.3 imposes obligations upon the applicant for joinder by way of two acknowledgements by the applicant for joinder to the respondent, namely:
a) an initial acknowledgement that the rent payable from the date of assignment is the amount stated in item 9; and b) a separate and further acknowledgement that the rent payable from the date of assignment is 'to be reviewed in accordance with the terms of the Lease'.
50 The obligation to pay rent and for the amount payable as rent to be reviewed in accordance with the terms of the lease is prospective and not retrospective. The Tribunal is of the view that the interpretation contended for by the applicant for joinder is not consistent with the express terms of the assignment when those provisions are considered objectively and commercially. It would be a surprising result, having regard to commitments undertaken by the applicant for joinder under clause 4.3 of the assignment and having regard to the fact that the assignment was subject to the consent of the respondent, notwithstanding the limitations as noted previously on that consent, that the applicant for joinder were able, by reason of the assignment, to join in the substantive proceedings by reason of being considered a person who ought to be bound by the decision in the substantive proceedings or under the assignment considered a person to have an interest in the substantive proceedings or for any reason to be considered a desirable person to be joined as a party in those proceedings. 51 The Tribunal considers that to read clause 4.3 of the assignment in the way contended for by the applicant for joinder would be inconsistent with the express provisions of the clause, and that a reasonable businessperson would not understand clause 4.3(b) to work to allow for the possibility that the applicant for joinder might join the substantive proceeding. If permitted, clause 4.3 and item 9 would not serve the purpose that they were plainly intended to serve namely, to provide certainty to the respondent as to the amount of rent payable from the date of the assignment and to oblige the applicant for joinder to pay the rent from the date of the assignment and when the rent was reviewed. It might reasonably be expected that such certainty was a material consideration in the respondent's decision to consent to the assignment and while the respondent's actual intention and expectation is not material to the construction of the assignment this construction is one which, the Tribunal finds, an objectively reasonable businessperson would understand those terms to mean and is an interpretation that is consistent with a commercial result.
52 The applicant for joinder may not itself refer a question to the Tribunal under s 11(5) of the CTRSA Act. This is clear from the provisions of s 11, which mandate that the question as to the rent payable might be referred by a party to a retail shop lease. While the applicant for joinder received by the assignment the full benefit and advantage of the lease Clause 3 (c) of the Assignment. that assignment does not make the application for joinder a party to the lease in respect to a consideration of the benefits and advantages under the lease prior to the assignment in regard to the issue for joinder in this instance.
53 The Tribunal notes the respondent's submission that 'any determination by the Tribunal in these proceedings by the applicant in the substantive proceedings as to the rent payable as a result of the review on 1 June 2015 can apply only up to the date of assignment' but respectfully does endorse this submission and finds that in the event that there is a determination in the substantive proceedings the effect of this will fall to be dealt with in accordance with the terms of the Lease and the Assignment.
Conclusion
54 The Tribunal concludes that there is no basis for the applicant for joinder to be joined as a party to the proceedings under any of the criteria set out in s 38(1) of the SAT Act.
Orders