MURPHY and FREMANTLE MARKETS PTY LTD - [2009] WASAT 84

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION: MURPHY and FREMANTLE MARKETS PTY LTD [2009] WASAT 84

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: 7 AND 8 APRIL 2009

DELIVERED : 4 MAY 2009

FILE NO/S: CC 381 of 2009

BETWEEN: RICHARD MURPHY
Applicant
AND
FREMANTLE MARKETS PTY LTD
Respondent

Catchwords:

Commercial tenancy Whether notice of termination invalid Notice alleged not to comply with lease Question arising under lease whether landlord's conduct unconscionable

Legislation:

Administrative Decisions Tribunal Act 1997 (NSW)
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3(c)(ii), s 15C, s 15C(1), s 15C(2), s 15D, s 15D(1), s 15F, s 15F(1), s 16
Interpretation Act 1984 (WA), s 18
Retail Leases Act 1994 (NSW), s 62B
Retail Leases Act 2003 (VIC), s 77
Retail Shops and Fair Trading Legislation Amendment Bill 2005 (WA)
State Administrative Tribunal Act 2004 (WA), s 87(1)
Trade Practices Act 1974 (Cth), s 51AC, s 82, s 87(1A)

Result:

Proceeding dismissed
Respondent's application for costs of proceeding dismissed
Respondent awarded costs of adjournment

Category: A

Representation:

Counsel:

Applicant: Mr A McNeill
Respondent: Mr MC Hotchkin

Solicitors:

Applicant: Denning Deane
Respondent: Hotchkin Hanly

Case(s) referred to in decision(s):

Antonovic v Volker (1986) 7 NSWLR 151
Attorney General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261
Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51
Australian Competition and Consumer Commission v Simply No-Knead (Franchising) Pty Ltd (2000) 178 ALR 304
Automasters Australia Pty Ltd v Bruness Pty Ltd [2002] WASC 286
Barbcraft Pty Ltd v Geobel Pty Ltd [2003] VCAT 1700
ITQ Pty Ltd and Hyde Park Management Ltd [2008] WASAT 66
Pearce and Germain [2007] WASAT 291 (S)
Prudential Assurance Co Ltd v London Residuary Body [1992] 3 All ER 504

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant applied to the Tribunal on 13 March 2009 for an order setting aside a notice terminating a commercial tenancy lease, firstly, on the ground that the notice failed to comply with the lease terms, and secondly, on the basis that the landlord had allegedly acted unconscionably. Because the respondent had committed to re-lease the premises, subject to vacant possession being provided by 15 April 2009, the application was dealt with on an expedited basis by consent.
The application was originally brought under s 15F of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) which permits an application to be made to recover loss or damage suffered because of unconscionable conduct in contravention of s 15C or s 15D thereof. As the applicant had continued to trade and had suffered no loss or damage, the application was subsequently amended to reflect that the application was also based on the matters in issue being referred as a question arising under the lease under s 16 of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). The Tribunal concluded that on a proper construction of the legislation, it was open to refer as a question arising under the lease, a dispute concerning an alleged breach of s 15C of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA).
The Tribunal held that on a proper construction of the lease, which was a monthly tenancy, the respondent was entitled to give notice to terminate the lease as it had done at the end of a monthly term, without relying on any breach of the terms incorporated into the lease.
The Tribunal also held that under the unconscionability provisions of the legislation, 'unconscionability' had a wider meaning than the unconscionability doctrine of the law of equity. Nevertheless, the wider concept of unconscionability was intended to be applied with restraint to conduct which attracted a high level of moral obloquy: Attorney General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261 (11 August 2005) at [120].
On an analysis of the facts, the Tribunal held that the applicant had failed to establish that the landlord had acted in breach of s 15C of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) in that the landlord had not acted unconscionably, but in the protection of its own legitimate interests, in circumstances in which the applicant was aware that tenants who did not commit to a new relationship, aimed at facilitating the development of the Fremantle Markets and which provided tenants with a fixed term, would have their monthly tenancies terminated.
The application was therefore dismissed. The Tribunal refused the respondent's application for costs on the basis that the application was not entirely without merit, the landlord could have acted more fairly than it did, and the conduct may have been regarded as unconscionable if a different view had been reached on some factual issues. There was therefore no sufficient basis to move from the presumption that each party should bear its own costs. However, the respondent was awarded the costs of an application for an adjournment made by the applicant which was entirely unfounded and resulted in the respondent having to incur unnecessary legal costs.

The application

The tenant applicant (Mr Murphy) applied to the Tribunal on 13 March 2009 for an order setting aside a notice of termination of a commercial tenancy agreement requiring the applicant to give vacant possession of a stall occupied by the applicant at the Fremantle Markets on 31 March 2009.
The commercial tenancy agreement is expressed as a licence agreement, but it is common cause between the parties that the right to occupy constitutes a lease as defined under the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (Retail Shops Act). The application was brought under s 15F(1) of the Retail Shops Act and alleged that the landlord respondent (FMPL) had acted unconscionably in issuing the notice of termination without reason. At the initial directions hearing held on 19 March 2009, Mr Murphy was granted leave to amend the application generally. A timetable for the preparation of the matter was set to ensure that the hearing was expedited because FMPL had entered into an agreement to lease the stall to a third party, subject to vacant possession being provided by 15 April 2009. Mr Murphy duly filed an amended application in which orders were sought, firstly, for payment of an amount of $268,812 by way of compensation, and secondly, determining that FMPL had unlawfully terminated the licence agreement (tenancy agreement).
The orders as framed are confusing because the claim for compensation implies the valid termination of the tenancy agreement. The basis on which Mr Murphy had suffered the loss for which compensation was claimed was also not clear, given that Mr Murphy had continued in occupation pending the hearing of the matter. The situation was clarified during the course of an application for an adjournment made by Mr Murphy which was heard on 6 and 7 April 2009. The application for an adjournment was refused, in circumstances dealt with further below, but the Tribunal made an order on 7 April 2009 further amending the application to reflect that it is also brought under s 16 of the Retail Shops Act as a question arising under the lease and further reflecting that the claim for damages is withdrawn. Although the application, read with Mr Murphy's statement of issues, facts and contentions, remains far from clear, it is apparent that FMPL understood that the case being advanced was directed towards establishing that FMPL had acted unconscionably in terminating the tenancy agreement, because it was based on an ulterior motive which was to get rid of Mr Murphy because of his position as chairman of the Fremantle Stallholders Association Inc (the Stallholders' Association) and, alternatively, on the basis that the notice of termination failed to comply with the terms of the tenancy agreement.
The hearing of the merits of the application took place on 7 April 2009 and overlapped into the following day to enable closing submissions to be finalised. On 14 April 2009, the Tribunal issued an order in the following terms:
1.The proceeding is dismissed.
2.The respondent's application for the costs of the proceeding is dismissed.
3.The respondent's application for the costs of opposing the applicant's application for an adjournment, heard on 7 April 2009, is granted:
(a)in such amount as may be agreed between the parties, or failing agreement:
(b)as fixed by the Tribunal, provided that any application for costs to be fixed is made in writing within 14 days of the date of this order and which provides sufficient particulars of the costs claimed to enable the Tribunal to fix the costs.
When making the above order, the Tribunal indicated to the parties that it would endeavour to provide written reasons for decision as soon as possible. However, the order was issued because of the conditional tenancy agreement entered into with a third party, which was subject to Mr Murphy giving vacant possession of the stall by 15 April 2009.
The Tribunal's written reasons for its decision follow.

The basis of relief for unconscionable conduct

The unconscionability provisions of the Retail Shops Act were introduced through the Retail Shops and Fair Trading Legislation Amendment Bill 2005 (WA). Assent to the Bill was given on 4 October 2006, and the amendment came into effect on 11 May 2007 (Government Gazette, 11 May 2007 p 2017). The amendment introduced a new Pt IIA - Unconscionable Conduct. Section 15C and s 15D of the Retail Shops Act proscribe unconscionable conduct by landlords and tenants respectively. Relevantly, s 15C(1) of the Retail Shops Act provides that a landlord under a retail shop lease shall not, in connection with the lease, engage in conduct that is, in all the circumstances, unconscionable. Section 15C(2) of the Retail Shops Act provides that without in any way limiting the matters to which the Tribunal may have regard for the purposes of determining whether a landlord has contravened s 15C(1) of the Retail Shops Act, the Tribunal may have regard to a range of factors as set out in subsections (a) to (n).
Section 15F(1) of the Retail Shops Act provides that a landlord or tenant, or former landlord or tenant, under a retail shop lease or former retail shop lease who suffers loss or damage because of unconscionable conduct of another person that contravenes s 15C or s 15D of the Retail Shops Act may recover that loss or damage by applying in writing to the Tribunal.
On a literal reading of the various provisions referring to unconscionable conduct, it might be considered that the only event triggering the grant of relief for unconscionable conduct is an application under s 15F(1) of the Retail Shops Act for loss or damage already suffered. Compare, for instance, the distinction in remedies available under s 82 and s 87(1A) of the Trade Practices Act 1974 (Cth) (TP Act) as discussed in Millers and Trade Practices Act, Thomson's Lawbook Code 2005, 26th Ed at [1.82], [1.82.21], [1.87] and [1.87.15]. Neither party contended for any remedy being conditioned by an applicant first suffering loss and damage. Both parties submitted that it was open to an applicant to refer as a question arising under a lease, under s 16 of the Retail Shops Act, whether or not a landlord, or tenant, had acted unconscionably in breach of s 15C(1) or s 15D(1) of the Retail Shops Act, as the case might be. I accept those submissions.
A reference in the Retail Shops Act to a question arising under a retail shop lease has an expanded meaning which includes, under s 3(c)(ii) of the Retail Shops Act, a question arising in relation to the retail shop lease under a provision of the Retail Shops Act. It is therefore permissible to refer a question relating to whether or not there has been a breach of the prohibition in s 15C(1) or s 15D of the Retail Shops Act that a landlord, or tenant, respectively, shall not in connection with the lease, engage in conduct that is, in all the circumstances, unconscionable. While such a referral does not fall within the definition of an unconscionable conduct application, which is limited to an application under s 15F, that does not appear to be of any consequence. It may be that a different prescriptive time bar applies.
The ability to refer a question relating to unconscionable conduct to the Tribunal under s 16 of the Retail Shops Act is, in the Tribunal's view, consistent with the obvious intent of the legislation and complies with the direction under s 18 of the Interpretation Act 1984 (WA) to prefer a construction that would promote the purpose or object underlying the written law. In the second reading speech before the Legislative Assembly (Hansard, 9 November 2008, p 7007 - 7009) the Minister for Consumer and Employment Protection stated that the amendments were to provide tenants and landlords with access to unconscionable conduct provisions and that the provisions were based on s 51AC of the TP Act. Reference was made to the purpose of ensuring the effective resolution of disputes by giving the Tribunal power to make necessary orders and remedies in relation to unconscionable conduct disputes in the context of retail tenancies.
It is self-evident that conditioning all remedies to a requirement that a landlord or tenant first suffer loss or damage would provide inadequate powers to resolve unconscionable conduct disputes effectively. The circumstances of this case are sufficient to demonstrate that in many instances, the effective remedy is that which prevents the offending party from being able to rely on conduct which is unconscionable, such as by answering a question referred in terms reflecting that a notice of termination is of no effect. Relief of that nature would preserve the tenancy and avoid loss being suffered.
It is to be noted that in ITQ Pty Ltd and Hyde Park Management Ltd [2008] WASAT 66, Judge Chaney, as he then was, dealt with a dispute based on alleged unconscionable conduct which had been referred under s 16 of the Retail Shops Act. His Honour had no difficulty with the application being advanced on that basis.

The issues for determination

Resolution of the following principal issues will be determinative of the application:
1.Is FMPL's purported termination of the tenancy agreement invalid for failure to comply with the rules and regulations incorporated into the tenancy agreement?
2.Alternatively to 1 above, if the notice of termination is otherwise valid, has FMPL engaged in unconscionable conduct, such that the notice of termination should be set aside?

The factual matrix

The following facts either form a background which is not disputed, or where the facts are disputed, that will be indicated and any material dispute will be determined. The facts stated have been taken from the witness statements and documents filed by the parties, as well as from the oral evidence given at the hearing. It was agreed at the commencement of the hearing that the Tribunal would regard all documents which had been filed as being in evidence, subject to any objection which might be raised. No objection was raised to any of the documents.

The Fremantle Markets and conversion of monthly tenancies

Mr Murphy occupies Stall 22 at the well-known Fremantle Markets and has done so since November 1986. Mr Murphy had purchased an existing business operated at the stall and the price included $30,000 for goodwill. The vendors had operated the business for approximately five years. It is common cause that Mr Murphy currently occupies the stall under a commercial tenancy agreement with FMPL on the terms reflected in a licence agreement entered into with Donaldson and Murdoch Investments Pty Ltd (DMI), dated 16 June 1993.
The land upon which the Fremantle Markets operate is owned by the City of Fremantle. From 1975 to 1992, the City of Fremantle leased the Fremantle Markets land to DMI. In 1992, DMI entered into a further head lease in respect of the market lands, which lease was surrendered in June 2008 when FMPL, the current landlord, entered into a head lease with the City of Fremantle. FMPL commenced managing the Fremantle Markets for the previous head lessee DMI in 1986, at or about the time when Mr Murphy began operating his business from Stall 22. John Murdoch and James Murdoch, who gave evidence for FMPL, are both directors of FMPL. Their father was a director of DMI from 1976 to 1997 so that there has been a continuous involvement by the Murdoch family with the Fremantle Markets almost since its inception in 1975. The new head lease with the City of Fremantle was entered into on 10 June 2008 and is to expire on 31 October 2026.
The Fremantle Markets have 172 stalls which sell a variety of products. The large majority of the stallholders occupy the stalls pursuant to monthly licences.
FMPL has for some time had plans to redevelop and upgrade the Fremantle Markets. Mr James Murdoch undertook the responsibility for researching the manner of operation of other similar markets throughout Australia, with the intent of developing best practice methods of operation.
Clause 10 of the current head lease requires FMPL to comply with the Fremantle Markets' Operating Strategy Agreement (FMOS Agreement) and to maintain and develop the character of the Fremantle Markets by operating them in accordance with the FMOS Agreement.
The FMOS Agreement is a separate agreement between the City of Fremantle and FMPL. FMPL, referred to as the 'Market Manager' in the FMOS Agreement, is obliged to comply with the FMOS Agreement as amended from time to time. A working group, made up of representatives of the City of Fremantle and FMPL, has responsibility for reviewing the FMOS Agreement. The FMOS Agreement provides that the Fremantle Markets must be operated and managed according to operational guidelines designed to ensure that there is an interesting and diverse mix of stallholdings.
Stallholders are protected by a specific provision (cl 4.7 of the FMOS Agreement) to the effect that the rent charged for a stallholding is to be a fair market rent negotiated between the Market Manager and the stallholder, and rent review provisions in licence agreements (commercial tenancies) must be capped so that a stallholder's rent cannot increase through a rent review by proportionally more than any increase in the Market Manager's rent under the lease during the period between the stallholder's rent review and the stallholder's previous rent review. Further, cl 4.5 of the FMOS Agreement provides that the Market Manager may only let stallholdings under the terms and conditions provided for in the forms of sublease or licence agreements for casual and permanent stallholdings attached to the FMOS Agreement, or otherwise approved by the working group, except to the extent that any more favourable terms or conditions are negotiated by a stallholder.
The process of transferring the periodic tenancy agreements was described as an exhaustive one. FMPL engaged Mr Reece Edward Cocks, the principal of the real estate agency, Fremantle Property Services, to manage the process. This involved the preparation of what is referred to as an expression of interest (EOI) package. Each package included an invitation to either enter into a fixed term sublease, or if preferred by the stallholder, a licence agreement. Copies of the sublease or licence agreement were attached to a letter explaining the proposal and setting out the specific terms of agreement applying to the stallholder concerned. Those terms included a proposed licence fee (rental) which had been determined by an independent valuation. Also included was the Fremantle Market Health and Safety Policy and Rules and Regulations (shown to have been prepared as at October 2008). The packages also included disclosure statements to comply with the Retail Shops Act. It was also part of Mr Cocks' duties to ensure that the stalls were surveyed, to establish the area to which the rent applied, and to obtain sworn valuations to establish the rent for each stall.

As a result of the process which had to be followed, groups of stallholders were identified and EOI packages were sent to an identified group, on the basis that the process would be completed in respect of that group before EOI packages were sent to the next group.
In November 2008, EOI packages were sent to the first group of 23 stallholders. Mr Murphy was not included in that group. On or about 20 January 2009, the second tranche of EOI packages were sent to approximately 19 stallholders, including Mr Murphy.
The covering letter addressed to Mr Murphy, dated 20 January 2009, advised Mr Murphy that in order to standardise a new tenancy agreement, if he wished to continue to trade at the Fremantle Markets and enter into a licence agreement or sublease, he should complete the enclosed EOI application and return it to Fremantle Property Services by 3 February 2009. The letter further stated that if an agreement was not reached with respect to a new tenancy agreement, his monthly licence and the right to occupy his stall on the current terms would terminate with effect from 3 March 2009. The specific terms of the agreement proposed for Mr Murphy included that the term of the agreement be for a period of five years.
On 3 February 2009, Mr Murphy delivered to Fremantle Property Services an unsigned EOI form. Neither FMPL nor Mr Cocks regarded the EOI form as being satisfactorily completed. On the same day, Fremantle Property Services wrote to Mr Murphy giving an extension of the deadline to submit a proper completed and signed EOI prior to 5 pm on Friday, 6 February 2009. The letter identified deficiencies in the information provided. The letter also responded to some issues raised by Mr Murphy in the form. He was advised that FMPL would not agree to a proposal to remove the stall roof. In relation to concerns raised about the measured area of the stall, Mr Murphy was advised that he would be provided with the survey results and that Mr Murphy could, if he wished, have another survey carried out at his expense if he was not satisfied. A concern, which became a significant one in deciding to terminate Mr Murphy's agreement, was that Mr Murphy had not acknowledged reading and understanding the type of agreement selected and the proposed market rules and regulations.
The letter also noted that Mr Murphy had advised that he was awaiting his lawyer's advice. It was pointed out that he had sufficient opportunity to obtain advice, especially as the documents were made publicly available some months previously and before the EOI process started in November 2008. Mr Murphy had added to the EOI form a statement that he could not sign or agree to the terms and conditions:
while the legality of such has not been established - I will happily accept the umpire's decision which hopefully is close.
The reference to the umpire's decision was clarified during the hearing as being a reference to accepting the advice from Mr Murphy's lawyers, which he had been awaiting for some time. The evidence given was to the effect that Mr Murphy had mentioned over some months that he was awaiting legal advice.
Mr Murphy returned the form to Mr Cocks on 6 February 2009 and met with him. There is a dispute between Mr Cocks and Mr Murphy whether the form had been signed when returned. Mr Cocks said that he noticed that it had been signed, whereas Mr Murphy contended that he had been placed under pressure by Mr Cocks to sign it.
There is also a minor conflict in the evidence concerning the circumstances in which the form was first delivered to the offices of Fremantle Property Services on 3 February 2009. Mr Cocks said that he had come into the reception area when Mr Murphy delivered the form, had quickly flicked through it and had noticed that it was not signed, and that he had pointed this out to Mr Murphy, who had shrugged and left the office. This conflict is not of any significance. The evidence does not establish how obvious it would have been to Mr Murphy that Mr Cocks came to the reception area. It is possible that Mr Murphy did not hear any comment from Mr Cocks and that Mr Cocks interpreted the manner in which Mr Murphy left the office as indicating indifference to what had been said.
In any event, FMPL did not regard the EOI form as completed by Mr Murphy as satisfactory. On 17 February 2009, Fremantle Property Services, on instructions from FMPL, advised Mr Murphy that his EOI was not acceptable because Mr Murphy's position on the tenancy documents was not clear. Nevertheless, Mr Murphy was informed that he was not required to vacate his stall on 3 March 2009 as intimated in the letter of 20 January 2009. He was advised that as no new agreement had been reached, his occupancy of Stall 22 would continue on a monthly tenancy basis terminable by either him or by FMPL on one months' notice.
On 25 February 2009, FMPL gave formal notice of termination of the licence (tenancy agreement). The notice of termination gave no reason for termination. It reflected simply that Mr Murphy was the licensee of the stall under a licence agreement dated 16 June 1993 for a term of one calendar month commencing on 25 July 1993 and subsequent monthly renewals of that term; that the licensor (FMPL) had elected to terminate the licence and that the termination was to take effect at midnight on 31 March 2009.

Circumstances relevant to unconscionability

Mr Murphy's statement reflects that the Stallholders' Association was established in about 1991. Mr Murphy served as a treasurer of the Stallholders' Association from approximately 1994 to 1997. He was not part of the Stallholders' Association committee from 1998 to 2005 but remained a paying ordinary member of the Stallholders' Association. He rejoined the committee, firstly as secretary, then as chairman of the Stallholders' Association during 2006. Mr Murphy states that he was requested to do so by other stallholders because of what he referred to as continued problems with FMPL's recognition and adherence to the 1992 Rules and Regulations. No further particularity of this allegation was given, and Mr John Murdoch stated that he did not know what Mr Murphy was referring to in relation to the alleged continued problems concerning recognition and adherence to the 1992 Rules and Regulations. The 1992 Rules and Regulations were annexed to and its terms were incorporated by reference in the form of licence agreement entered into between Mr Murphy and DMI.
In August 2008, a meeting was held between stallholders and FMPL. While little detail has been given of what occurred at the meeting, there was a discussion about the establishment of a fair market rent being determined by valuation. At some time in November 2008, a further meeting with stallholders was held, and that was also attended by a representative of the City of Fremantle. Mr James Murdoch explained the need for the rent rises to help the redevelopment of the Fremantle Markets.
On 20 October 2008, another stallholder, Mr Phillip Dawson, sent an email to both John Murdoch and James Murdoch, which contained allegations of intimidation of stallholders by Mr Murphy. Mr Dawson alleged that he had numerous complaints made to him about Mr Murphy hounding stallholders during trading hours to provide him with funds 'to confront FMPL'.
Mr Murphy says that at some time during October 2008 prior to the above email, he had made a joking comment to Mr John Murdoch to the effect that he was taking up a collection to arrange for a valuation to be prepared regarding the establishment of a fair market rent. Mr John Murdoch's recollection is that this comment was made shortly prior to, but on the same day as, a meeting between him and Mr Murphy on 24 October 2008. It is not material as to who is correct concerning the timing of the comment.
On 24 October 2008, Mr John Murdoch had a discussion with Mr Murphy. He informed Mr Murphy that two or three other stallholders had complained to him, earlier that morning, about Mr Murphy. Mr Murphy says that he was advised that complaints had been made by five or six stallholders about him allegedly harassing and intimidating them on the previous weekend by trying to collect extra funds for the Stallholders' Association to pay for the costs of a valuer to challenge an impending rent increase.
Mr Murphy prepared a note of what had occurred during the meeting. He testified that the note was prepared shortly after the meeting. Similarly, Mr John Murdoch, in a letter dated 20 November 2008, addressed to Mr Murphy, indicated that he had made notes immediately after the meeting. Neither party tendered the actual notes which had been made. Mr Murphy prepared a complaint against Mr John Murdoch and the complaint reflected his version of what had occurred at the meeting. That complaint was lodged on or about 7 November 2008.
The complaint recorded that Mr John Murdoch had told Mr Murphy that if he wanted to keep his stall in the Fremantle Markets 'then I should really cease my Association activities and just mind my own little business'. In Mr Murphy's witness statement, he said that Mr John Murdoch had informed him that 'if I wanted to keep my stall in the markets then I should cease acting for the Association; not help other stallholders; and just mind my own business'. It will be noted that in the more contemporaneous complaint document, no reference was made to not helping other stallholders. The complaint also suggests that the reference to Mr Murphy ceasing his activities was interpreted by him to mean the activities of the Stallholders' Association.
Mr John Murdoch's version of what occurred was that he conveyed to Mr Murphy that the complaint was that Mr Murphy was causing disharmony among stallholders and that he was 'up to his old tricks again'; that he had not said anything about trying to collect funds for a valuation and that he informed Mr Murphy that people were fed up and he needed to improve his behaviour; that he could not understand why Mr Murphy just did not get on and run his business and look after himself.
Mr Murphy stated that Mr John Murdoch told him that he should realise that he was only on a 30 day tenancy agreement and that Mr Murdoch could terminate that at any time, and that Mr Murphy must stop making trouble at the Fremantle Markets. Mr John Murdoch admits having advised Mr Murphy that he was only on a 30 day tenancy, but denied talking about termination or that he had made any threat to Mr Murphy.
Another stallholder, Mr Nicholas Saunders, provided a short statement. Mr Saunders witnessed the discussion between Mr Murphy and Mr John Murdoch on, he believed, 24 October 2008. He stated that Mr Murphy had said in an aggressive tone 'I'm not kidding Richard, I will through [sic] you out if you try to help them, don't just stand there with a big smile on your face - say something'.
Mr Saunders did not witness any other part of the discussion. Having heard the above statement, he had returned to his stall.
Mr Murphy stated that he asked Mr John Murdoch to put in writing what he, Mr Murphy, had done wrong; Mr Murdoch reacted angrily, and told him that he would be kicked out of the Fremantle Markets and that he was on his final warning, that his tenure would be terminated if he continued with what he was doing 'which I understood to mean he wanted me to resign from the [Stallholders'] Association'. Mr John Murdoch said that he did not advise Mr Murphy that he was on his final warning, but did say words to the effect that 'this was the last time I would be advising him about complaints I received about his actions'.
A further incident occurred on 26 October 2008 when Mr John Murdoch came to Mr Murphy's stall and informed him that he had received another complaint about him intimidating a stallholder 'which made it really easy for him to enforce his decision'. Mr Murphy responded to indicate that it was not an appropriate time to discuss the matter, because he was with customers. Mr Murdoch left. Mr John Murdoch stated that all he had said was 'I can't believe I've received another complaint about you' when Mr Murphy indicated it was not appropriate to discuss the matter. He stated that he did not get a chance to tell Mr Murphy what the complaint was about.
The incidents on 24 and 26 October 2008 resulted in Mr Murphy lodging a complaint against Mr John Murdoch who responded to the complaint by the letter referred to above dated 20 November 2008.
There is no evidence of any other incident between 26 October 2008 and the receipt by Mr Murphy of the letter of 20 January 2009 requiring him to respond to the EOI document and terms of agreement proposed to him.
Prior to the EOI package being sent to the second tranche of stallholders, Mr Cocks had a discussion with Mr James Murdoch and Mr John Murdoch about the second tranche of stallholders. There was a discussion concerning Mr Murphy. Both Mr James Murdoch and Mr John Murdoch indicated that although he had caused them some difficulties in the past in their management of the Fremantle Markets, they wanted him as a stallholder, and that Mr Cocks should provide him with the EOI package.
Mr Cocks revealed, in response to a question from the Tribunal, that on the occasion when he met with Mr James Murdoch and Mr John Murdoch to discuss the provision of EOIs to the second tranche of stallholders, it was he who made mention of Mr Murphy. While there had been a general discussion of the stallholders to whom the EOI package was to be sent, the only person in relation to whom there was any particular discussion was Mr Murphy. The discussion had otherwise been about the tenancy mix, stall sizes, the respective product mixes and the position of the stalls in the market. Mr Cocks said he just brought up Mr Murphy and noted that there had been some words said about him, which was a reference to the email from Mr Dawson.

Findings on disputed facts

Mr John Murdoch was extremely slow to acknowledge that the discussion which occurred between him and Mr Murphy on 25 October 2008 could be construed as a warning or threat. That aspect of his evidence was not impressive.
There were some inconsistencies in the evidence of Mr Murphy. In his written statement, at [32], he gave evidence to the effect that he had only talked to two other stallholders recently (that is understood to be recent to the 24 October 2008 discussion), and that was about them not paying the $20 annual membership fee to the Stallholders' Association. In his oral evidence, he testified that Stallholders' Association members had paid the annual subscription at his stall and that he had more money than names recorded of those who had made payment. He had therefore been making enquiries of stall owners to ascertain whether they had already paid. He was not pressing them for payment.
Further, as noted above, in the complaint made against Mr John Murdoch relating to the meeting on 24 October 2008, there was no reference made to Mr John Murdoch having said that he was to not help other stallholders. Yet, a statement to that effect was included in Mr Murphy's written statement dated 25 March 2009. It is observed that Mr Saunders' statement was made the previous day, 24 March 2009, and that Mr Saunders' recollection was that Mr Murdoch had said in an aggressive tone that Mr Murphy would be thrown out [of the Fremantle Markets] if he tried to help them (clearly a reference to other stallholders). These inconsistencies are, in themselves, minor, but they do cast some doubt on the accuracy of Mr Murphy's evidence, where there are differences between him and Mr John Murdoch concerning what was said during the meeting on 24 October 2008.
Mr Saunders gave evidence in an impressive manner and he was not at all shaken in cross-examination. I accept that he genuinely believes that he heard the words which he attributes to Mr John Murdoch. However, the complaint made by Mr Dawson by email was of harassment of stallholders, and Mr Murphy does not dispute that was the subject matter of complaint which Mr John Murdoch raised with him. Given the content of Mr Murphy's complaint made in early November 2008, which reflects that there was no direct reference to Mr Murphy ceasing to help Stallholders' Association members, and that in both the complaint and his witness statement Mr Murphy states his tenure would be terminated if he did not cease his activities or what he was doing (which he interpreted to mean Stallholders' Association activities) I find it is more probably that Mr John Murdoch's version on this aspect is correct. Because Mr Saunders heard only part of the discussion, it is understandable that he may have understood Mr Murdoch to be warning Mr Murphy to cease his giving of assistance to stallholders when, in fact, he was being told to cease his activities - which was a reference to the complaint about harassing stallholders.
There is an obvious risk that the reference in Mr Saunders' statement to Mr Murphy being told that if he tried to help stallholders, he would be thrown out, has contaminated Mr Murphy's recollection. In any event, I find that Mr Murphy's record of events closer to the time is likely to be more accurate, and there was then no reference to the provision of help to stallholders.
I do, however, find that Mr John Murdoch warned or threatened Mr Murphy that if he continued his activities, which was a reference to his harassing stallholders, he held only a 30 day tenancy and it would be terminated. Mr Dawson's email complaint concerning Mr Murphy's conduct suggests that not all stallholders supported the approach being taken by Mr Murphy in his capacity as chairman of the Stallholders' Association.
Mr Murphy did refer, in his evidence, to he and Mr Dawson having had difficulties in the past. He went so far as to suggest that there was a conspiracy between FMPL and Mr Dawson to undermine him. There was no evidence produced to support that assertion, which is also a factor causing Mr Murphy's evidence, at least where it differs from that of FMPL's witnesses, to be approached with caution.
In relation to the conflict in the evidence between Mr Cocks and Mr Murphy relating to the signature of the EOI document, I find that the EOI form was signed prior to delivery by Mr Murphy on that day. Mr Cocks, although having a commercial relationship with FMPL, impressed me with the manner in which he gave his evidence. He answered questions in a forthright manner, and there was no indication of an attempt by him to produce evidence favourable to FMPL. For instance, it was only as a result of a question from the Tribunal that Mr Cocks indicated, as mentioned above, that it was he who mentioned Mr Murphy, while discussing the stallholders to be included in the second tranche of stallholders to whom EOI packages were to be sent. It would have made no material difference if it was the case that Mr Cocks had said something to Mr Murphy along the lines that he would have to sign the EOI form if he wished to have a stall under the new scheme. But, his evidence was that he noticed that the form had already been signed by Mr Murphy. No doubt, Mr Murphy felt pressured by the whole process to commit, and was concerned that by signing the form, he was binding himself to accept the new regime, but, for the reasons given, I do not accept that Mr Cocks forced Mr Murphy to sign the form during the short meeting which occurred on 6 February 2009.
Based on the above background and the facts found in relation to conflicting evidence, I turn to the issues identified above which will be determinative of the proceeding.

Is FMPL's termination of the tenancy agreement invalid for non-compliance with the Rules and Regulations?

The Licence Agreement provides relevantly as follows:
2.TERM OF LICENCE
The Licence shall commence on 25 July 1993 for a period of one (1) calendar month and shall be renewed each month upon payment of the Licence Fee in advance or until such earlier determination of the Licence by one (1) month's notice in writing by either party hereto to the other or such sooner determination as hereinafter provided.
…
8.DEFAULT
The Licensor may terminate this Licence during its term by giving the notice required as set down in the Market Rules and Regulations which provide for various notice periods in differing circumstances.
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10.RULES AND REGULATIONS
The Licensee hereby covenants to observe and perform the Rules and Regulations annexed hereto and incorporated herein and identified by the reference JWD 1.6.92 and all other Rules and Regulations as may from time to time be made by the Licensor for the management and control of the Market.

The attached Rules and Regulations provide relevantly as follows:
Definition
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'Stallholder' means a Permanent Stallholder or a Casual Stallholder.
'Permanent Stallholder' means a Licensee who commenced business at the Fremantle Markets in 1975 or who has acquired his or her business by purchase of goodwill from a previous 'Permanent' Licensee of the Licensor and who in all cases presently continues that business at the Fremantle Markets as a Permanent Stallholder.
'Casual Stallholder' means a Stallholder who is not a Permanent Stallholder.
...
15.Default of Payment
Stallholders in default of payment of any moneys due for fourteen (14) days or otherwise in breach of any of the above Market Rules and who do not promptly remedy that breach on demand then:
(i)his/her Licence shall terminate immediately upon notice in writing from the Market Manager.
(ii)the Stallholder shall vacate the stall upon receipt of the notice and remove his/her goods, and fixtures and fittings belonging to them. If such removal is not carried out forthwith, the Market Manager or his staff may remove all goods in the Stall area to storage at the Stallholder's expense. If the goods, fixtures and fittings are not removed by the ex-Stallholder from storage within One (1) calendar month the Market Manager may offer the same for sale by auction and remit the net proceeds to the ex-Stallholder at his/her last known address.
(iii)the Market Manager shall repay to the Stallholder any unexpired Licence fee.
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18.Termination
A permanent Stallholder may terminate the Deed of Licence by giving One (1) month's notice in writing to the Market Manager. The Market Manager may terminate the Deed of Licence by giving One (1) month's notice in writing to the permanent Stallholder stating the reasons under the Rules for giving termination. Should the permanent Stallholder not be in agreement with the reason given the permanent Stallholder may request the termination to be put to Arbitration, pursuant to clause 25.
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25.Arbitration
In the event of a dispute arising between a Permanent Stallholder and the Market Manager, which cannot be amicably resolved, the City of Fremantle, with the delegated authority granted by the Stallholders' Association and the Market Manager, will appoint a person considered appropriate to act as an independent Arbitrator, the decision of whom is to be accepted by both parties as final. The Council shall require the Arbitrator to communicate a decision within ten working days.
It is contended for Mr Murphy that he is a permanent stallholder and that under r 18, FMPL was obliged to provide reasons for the notice of termination, which it did not do, and therefore that the notice is invalid. FMPL disputes that Mr Murphy is a permanent stallholder, within the above definition, and in any event submits that r 18 only applies where there has been a breach under the Rules. Most of the Rules and Regulations prescribe the manner in which stallholders are required to operate their stalls, such as the trading hours to be observed, the avoidance of conduct which might constitute a nuisance, the keeping of the stall area in a clean state, the parking of motor vehicles and the like.
Clause 2 of the licence agreement clearly provides for a recurring term of one calendar month, that is, in the context of the Retail Shops Act, it is a periodic monthly tenancy commencing on the first day of and terminating on the last day of each calendar month. It provides for the automatic renewal of the term upon payment of the licence fee or rental in advance 'or until such earlier determination of the licence by one month's notice in writing by either party'. This terminology is not as clear as it might be but in my view it amounts to a provision to the effect, in context, that the lease is renewed each month upon payment of the licence fee unless one month's written notice of termination is given. Clause 2 then goes on to further provide 'or such sooner determination as hereinafter provided' which in my view, is a reference to the ability to terminate under cl 8 in accordance with the market rules and regulations. Rule 15 permits immediate termination of the licence agreement for failure to remedy promptly upon demand any default of payment of monies overdue for a period of 14 days, or other breach of any of the market rules.
There is a tension between r 15 and r 18. Rule 15 appears to contemplate that any stallholder can be given immediate notice of termination for failure to promptly remedy the breach relied upon, on demand. It applies to any breach of the Rules.
Rule 18 requires that one month's notice of termination be given and that the notice state 'the reasons under the Rules for giving termination'. That must mean that the reasons detail the breach of the Rules relied upon for termination. In order for r 18 to be given any effective operation, it must be read as qualifying the meaning of 'terminate immediately' as used in r 15(i). In my view, it means that a permanent stallholder, who fails to promptly remedy a breach on demand, may immediately be given one month's notice of termination of the licence, stating the reasons under the Rules for that termination.
In this case, no demand was made upon Mr Murphy in accordance with r 15, no reliance was placed upon any breach of the Rules for termination and notice was given in accordance with r 18. The notice of termination relied upon no more than that the licence operated on a monthly basis and that more than one month's notice was given for the term of the licence to expire on 31 March 2009. FMPL contends it was entitled to give notice in this manner by virtue of cl 2 of the licence agreement. As I understand the submissions made on behalf of Mr Murphy, it is contended that the only manner in which the licence of a permanent stallholder may be terminated is by giving one month's notice in writing, stating the reasons under the Rules for giving the termination. It was submitted that this did not provide Mr Murphy with any perpetual tenancy but simply meant that when the tenancy was terminated pursuant to r 18, there was a right to dispute the basis of termination.
I am unable to accept the submissions made for Mr Murphy. Firstly, it is clear that r 18 requires that reasons under the Rules be provided for termination. There is no provision of the Rules which is relied on by FMPL for the termination. Secondly, if the licence could only be terminated for a breach of the Rules, it would mean that the term would be uncertain: see Prudential Assurance Co Ltd v London Residuary Body [1992] 3 All ER 504 (HHL) at 509 - 510 and the discussion in Commercial Tenancy Law in Australia, Bradbrook and Croft, Butterworths, Second Ed at para 2.13.
In my view, FMPL's termination of the licence agreement, and therefore the commercial tenancy under the Retail Shops Act, was in accordance with the terms of the licence agreement and is valid, subject to consideration of the unconscionability issues raised by the application.
It is therefore not necessary to determine whether or not Mr Murphy is a Permanent Stallholder. But if it were necessary to do so, there is no evidence to establish the standing of the vendors from whom Mr Murphy purchased the business. Mr Murphy has therefore failed to establish that he is a Permanent Stallholder as defined.

Has FMPL engaged in unconscionable conduct, such that the notice of termination is invalid?

It is first necessary to address the concept of unconscionable conduct as that term is used in s 15C(1) and s 15D(1) of the Retail Shops Act.
Unconscionability is a well established equitable doctrine which has been applied by the courts for centuries. Yet the concept of unconscionable conduct is difficult to define and it has been said that it is 'better described than defined': Antonovic Volker (1986) 7 NSWLR 151 at 165. As discussed in the High Court decision in Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 72 and following:
The term 'unconscionable' is used as a description of various grounds of equitable intervention to refuse enforcement of or to set aside transactions which offend equity and good conscience. The term is used across a broad range of the equity jurisdiction.
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It offers a standard determined by judicial decision making rather than a rule, albeit it may for the present be subject to limitation in its actual field of operation by the existence of specific doctrines (quoting from the decision by French J (as he then was) at first instance ) [para 44].
The question is whether Parliament intended that unconscionable conduct be confined to that which was recognised in equity, or whether it has a broader application.
The second reading speech to which reference has already been made (Hansard, 9 November 2007, p 7007) in respect of the Retail Shops and Fair Trading Legislation Amendment Bill 2005 which provided for the insertion of the unconscionability provisions in the Retail Shops Act reflects that the provisions are based on s 51AC of the TP Act. In Automasters Australia Pty Ltd v Bruness Pty Ltd [2002] WASC 286 (Automasters), Hasluck J had cause to consider the meaning of 'unconscionable' as referred to in s 51AC of the TP Act. His Honour stated at 87:
359It is noted in Millers Annotated Trade Practices Act 2002 (23 ed) that the meaning of the term 'unconscionable' in the shorter Oxford Dictionary is 'showing no regard for conscience; irreconcilable with what is right or reasonable.' The Macquarie Dictionary defines the term as follows: '1. Unreasonable excessive 2. Not in accordance with what is just or reasonable: unconscionable behaviour. 3. Not guided by conscience; unscrupulous.'
360The Federal Court relied on the Shorter Oxford Dictionary's definition of 'unconscionable' in Qantas Airways Ltd v Cameron (1996) 66 FCR 246 and ACCC v CG Berbatis Holdings Pty Ltd(No 2) (2000) 96 FCR 491.
361It is apparent, then, that because s 51AC is a relatively new provision, there is scant authority on the exact interpretation to be given to the term 'unconscionable' in the context of the relevant provision. It seems, however, that the section imports the common law concepts of unconscionability albeit beyond the usual bounds of the concept of equity. That is, s 51AC is not limited to the prohibition of Amadio type unconscionability. The wording of the section is clearly intended to prohibit broadly unconscionable conduct in the range of transactions to which it applies.
This wider meaning of 'unconscionable' conduct as referred to in s 51AC of the TP Act was also accepted in Australian Competition and Consumer Commission v Simply No-Knead (Franchising) Pty Ltd (2000) 178 ALR 304 (Simply No-Knead) and Barbcraft Pty Ltd v Geobel Pty Ltd [2003] VCAT 1700 (3 November 2003) (Barbcraft).
These judicial interpretations of similar provisions to s 15C and s 15F of the Retail Shops Act, prior to amendment of the Retail Shops Act by the insertion of the unconscionable conduct provisions, are a strong indication that the unconscionable conduct is to be given the broader meaning referred to in those decisions: see the discussion in Statutory Interpretation in Australia, Pearce and Geddes, LexisNexis, Australia, 6th Ed at [1.8] and [3.43].
In Attorney General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261 (11 August 2005) (World Best Holdings) the Court of Appeal traced the basis upon which the Administrative Decisions Tribunal of New South Wales was given an unconscionable conduct jurisdiction as a result of amendments to both the Administrative Decisions Tribunal Act 1997 (NSW) and the Retail Leases Act 1994 (NSW). The amendments to this legislation were affected in 1998 and the provisions of s 62B of the Retail Leases Act 1994 (NSW) are identical to those set out in s 15C(2) of the Retail Shops Act, save that the latter includes s (l), (m) and (n) which are not to be found in the New South Wales legislation. The court outlined that the unconscionable conduct scheme found its origin in the TP Act which was amended by the introduction of s 51AC and was the model for s 62B of the Retail Leases Act 1994 (NSW). Further, that a statutory jurisdiction was given of a character that it appears is not necessarily confined by traditional equitable doctrines [at para 22]. The court went on to state:
[112]It is recognised that as the unconscionable conduct provisions established through this bill are based on the Trade Practices Act their application is, to a certain extent, dependent on issues in relation to coverage within the ambit of the Commonwealth [quoting from the second reading speech].
[113]The Minister expressly recognised that the difficult, indeed novel, issues that would arise under the new regime, applying as it was to do as a national benchmark, should be determined or adjudicated upon by a person with experience and qualifications of a higher order than appropriate in other retail tenancy claims. Furthermore, a national benchmark should lead to the same decision being made irrespective of the Court or Tribunal in which proceedings are brought. The Parliament was well aware that cases involving retail tenancy disputes can almost always be brought in the Federal Court as readily as in the Tribunal.
…
[124]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.
The points made about a national benchmark and consistency in decision making are important. As mentioned, s 62B of the Retail Leases Act 1994 (NSW) is almost identical to s 15C of the Retail Shops Act. Section 77 of the Retail Leases Act 2003 (VIC) is in identical terms to s 15C(2) of the Retail Shops Act. The explanatory memorandum to the Retail Shops and Fair Trading Legislation Amendment Bill 2005 specifically states that s 15C replicates s 77 of the Retail Leases Act 1994 (NSW) with certain limited exceptions and variations and that s 77 of the Retail Leases Act 2003 (VIC) is based on s 51AC of the TP Act. The restraint to be applied in the application of an unconscionable conduct jurisdiction, evident in World Best Holdings, is also reflected in the decision of Deputy President Macnamara of the Victorian Civil and Administrative Tribunal in Barbcraft.
The second reading speech reflects that the amendments would assist small businesses to take appropriate action when they had been acted against in an unconscionable or harsh manner. Further, that the provisions would help reduce the balance and the potential for more powerful businesses to take unfair advantage of small business. There is, however, no reference in the legislation to harsh conduct. Under s 15C(2)(d), there is provision for the Tribunal to have regard to undue influence or pressure or unfair tactics. That reference is insufficient to convey any intent that unconscionable conduct under the Retail Shops Act is to have any wider meaning than under either s 77 of the Retail Leases Act 2003 (VIC), s 62B of the Retail Leases Act 1994 (NSW), or s 51AC of the TP Act, all of which permit regard to be had to any undue influence or pressure or unfair tactics used in determining whether or not unconscionable conduct has occurred.
In my view, the determination of whether or not unconscionable conduct has occurred must be assessed having regard to the views expressed in World Best Holdings; unconscionability will be established where what has occurred attracts a high standard of moral obloquy. As stated in Barbcraft at para 87, it is a concept which cannot be simply and exhaustively defined but which will be easily recognised when it presents itself. The example referred to by the court in that case was the conduct in Simply No-Knead in which it was held that the Commission had established an overwhelming case of unreasonable, unfair, bullying and thuggish behaviour by the respondent with respect to its franchisee. Similarly, in Automasters, also a franchise case, Hasluck J found that the franchisor had acted capriciously and unreasonably in circumstances where there was not a sufficient basis to terminate the contract. Further, that there was an element of oppression in the franchisors conduct, referrable to a conscious determination to bring the franchise agreement to an end, notwithstanding an awareness that there was a degree of ambiguity surrounding the allegations of default to be relied upon [at para 396]. His Honour also specifically noted that for conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable must be demonstrated; that it is not necessarily unconscionable to terminate a relationship where trust and confidence has been undermined and that a number of the decided cases suggest that a party to a contract is entitled to insist upon strict enforcement of the relevant obligations and to drive a hard bargain [395].

Conclusions on unconscionable conduct allegations

The head lease between the City of Fremantle and FMPL required FMPL to comply with the FMOS Agreement. The FMOS Agreement, in turn, required FMPL to move from its current arrangement with stallholders, who were occupying under monthly licences, to a form of fixed term sub-lease or licence agreement. Mr Murphy was not treated differently to any of the other stallholders included in the first two tranches of stallholder who were provided with the EOI packages. If Mr Murphy was being targeted, and if the process of change over to the new system was being used as a means by which to get rid of him because his activities as chairman of the association were annoying, he might have been included in the first tranche who were provided with the EOI packages in November 2008, rather than the second tranche, who were provided with the EOI packages in January 2009.
After the events of 24 and 26 October 2008, nothing occurred between Mr John Murdoch and Mr Murphy, or any other representative of FMPL, to suggest that any crisis point had been reached in the relationship between the parties. Allegations of a conspiracy between FMPL and Mr Dawson are unsupported by any evidence.
When the EOI packages were sent out to stallholders all recipients were advised that if they did not commit to the new structure by completing the EOI application, notice was given that the monthly licence would cease six weeks later. During the period between November 2008 and January 2009, Mr Murphy had indicated on a number of occasions that he (which must be understood to mean in his capacity of chairman of the Stallholders' Association) was obtaining advice on the legality of the proposed changes. Mr Murphy had a more than adequate opportunity prior to receipt of the EOI package to obtain that advice and it could not be expected that FMPL would hold the matter over indefinitely while he obtained advice, whenever that advice might be given.
The allegations that the specific discussions about him, when all stallholders to be included in the second tranche were discussed, suggested that he was singled out for special treatment because he was the chairman of the association, are simply not made out. Neither Mr John Murdoch nor Mr James Murdoch raised the reference to Mr Murphy. It was purely a matter of chance that Mr Cocks made reference to him. The response on behalf of FMPL was that Mr Murphy should be included in the second tranche because they wished to retain him as a tenant.

Looked at objectively, there are many positives for stallholders in the new leasing or licensing structure. The security of tenure which is given must inevitably add to goodwill value. Mr Murphy's views that somehow stallholders could resist a licence fee or rental increase to a market value, on an argument that the Rules and Regulations could not be amended except by agreement between the Market Manager and the Stallholders' Association is wrong. As I have held, FMPL is entitled to terminate the monthly licence. If the licence is terminated, then it is obvious that the incorporated Rules and Regulations, which only have a contractual standing, have no application.
It has not been demonstrated that FMPL has acted with the ulterior motive of removing Mr Murphy from the markets because of his activities as chairman of the association. That is the case which Mr Murphy is understood to have advanced by his application and statement of issues, facts and contentions.
There are aspects of the matter which reflect that FMPL had taken a tough stance in relation to Mr Murphy's failure to commit to the new regime. It would have been fairer if Mr Murphy had been put on very clear written terms that unless any issues he had about the proposed new terms, based on legal advice, were debated and resolved in a manner satisfactory to FMPL within a lengthier timeframe than the three days allowed by the letter of 3 February 2009, they would have no alternative but to terminate his licence.
But, in the context of what occurred, viewed as a whole, I find that FMPL did not engage in unconscionable conduct. FMPL was entitled to act in the protection of its own legitimate interests to insist on a clear commitment to the new fixed term regime in order to advance the process of change in the tenancy structure at the Fremantle Markets. Mr Murphy should have been alerted to the risk of termination having regard to the content of the letters of 20 January 2009 and 3 February 2009. He had enough time within which to get legal advice because the transfer process had commenced in November 2008. The complaint is, in any event, not that the time allowed to address the proposed tenancy terms was insufficient, but that FMPL acted as it did upon an ulterior motive to remove Mr Murphy from the Fremantle Markets because he is the chairman of the Stallholders' Association. The application, insofar as it is based on alleged unconscionable conduct, fails.

Costs

FMPL applied, firstly, for the costs of an adjournment hearing on 6 April 2009, which was carried over to the next day, the first day of the hearing, and the costs of the proceeding.
In relation to the costs of the proceeding, the applicable principles are as set out in Pearce and Germain [2007] WASAT 291 (S) at [18] ‑ [24] inclusive. In my view, the matter is not to be regarded as one in which costs should be ordered because FMPL had to incur legal costs in defending an obviously unmeritorious claim. The claim had some merit. There are aspects of the case which suggest that FMPL could have dealt with Mr Murphy more fairly, and the discussion which took place on 24 October 2008 might have supported an overall view that FMPL had acted unconscionably if a different view had been taken of Mr Cocks' dealings with Mr Murphy and the discussion between Mr Cocks and John Murdoch and James Murdoch prior to sending out the EOI packages. In my view there is insufficient reason to move from the starting position in the Tribunal prescribed by s 87(1) of the State Administrative Tribunal Act 2004 (WA) that each party bear their own costs of the proceeding.
In relation to the adjournment application, I consider that Mr Murphy should be ordered to pay FMPL's costs of opposing the application. The application for adjournment was brought on the ground that further discovery was necessary to enable Mr Murphy's solicitors to identify other stallholders who had complained to Mr John Murdoch of Mr Murphy's conduct. During the course of the application a further ground was advanced, and that was that it had come to Mr Murphy's attention that the third party, who had entered into a conditional licence or lease arrangement with FMPL, was actually an existing stallholder. Both bases of the application proved to be entirely unfounded. Proof was provided that the proposed stallholder was not a current stall operator, although she had operated a stall until 14 June 2007. In relation to the complaints by other stallholders, it was plain from Mr John Murdoch's witness statement filed on 2 April 2009 that the complaints made to Mr John Murdoch on 24 October 2008 had been conveyed to him orally.
Once these matters had been clarified in debate, counsel for Mr Murphy conceded that there was no reason for delaying the hearing. As the application was ill-conceived from the outset and put FMPL to additional legal costs, which were completely unnecessary, I consider that Mr Murphy should bear those costs.
For the above reasons, the Tribunal issued the orders which it did on 14 April 2009, as set out in para 10 above.

I certify that this and the preceding [98] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER