OAKSIDE GROUP PTY LTD (ACN 614 634 605) AS TRUSTEE FOR OAK FAMILY TRUST and CARLO GENOVESI AS EXECUTOR OF THE ESTATE OF FELICE GENOVESI

[2021] WASAT 55

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: COMMERCIAL TENANCIES (COVID-19 RESPONSE) ACT 2020 (WA)

CITATION:   OAKSIDE GROUP PTY LTD (ACN 614 634 605) AS TRUSTEE FOR OAK FAMILY TRUST and CARLO GENOVESI AS EXECUTOR OF THE ESTATE OF FELICE GENOVESI [2021] WASAT 55

MEMBER:   JUDGE K GLANCY, DEPUTY PRESIDENT

MS C BARTON, MEMBER

HEARD:   22 FEBRUARY 2021

DELIVERED          :   23 APRIL 2021

FILE NO/S:   CC 1217 of 2020

BETWEEN:   OAKSIDE GROUP PTY LTD (ACN 614 634 605) AS TRUSTEE FOR OAK FAMILY TRUST

Applicant

AND

CARLO GENOVESI AS EXECUTOR OF THE ESTATE OF FELICE GENOVESI

Respondent

Catchwords:

Commercial Tenancies (COVID­19 Response) Act 2020 (WA) - Application to prohibit termination of lease - Whether termination related to default arising as a result of effects of COVID­19 pandemic - Requirement in lease that the property be used for 'post office' - Meaning of 'post office' - Application for rent relief - Whether applicant has established it is an 'eligible tenant' - Whether the applicant has established financial hardship - Entitlement to compensation for certain losses said to have occurred as a result of actions to terminate and re-enter taken by landlord

Legislation:

Australian Postal Corporation Act 1989 (Cth), s 3, s 4, s 29, s 29(1), s 29(2), s 30
Commercial Tenancies (COVID-19 Response) Act 2020 (WA), s 8, s 9, s 9(a), s 9(b), s 9(c), s 10, s 14, s 14(1), s 14(2), s 16(1), s 16(2), s 16(3), s 18, s 19
Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA), reg 2B, reg 2D, Sch 1, cl 1, cl 2, cl 2(1)(a), cl 5
Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), s 16(1), s 16(1)(a), s 16(2)
Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020 (Cth)
Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth), r 7, r 8, r 8(1), r 8(2)(c)
Post and Telegraph Act 1901-1973 (Cth)
State Administrative Tribunal Act 2004 (WA), s 32

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Applicant	:	Ms L Diao (Director, acting as Agent)
Respondent	:	Mr AP Hershowitz and Ms C Ma

Solicitors:

Applicant	:	N/A
Respondent	:	James Chong Lawyers

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

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337

Glew v Frank Jasper Pty Ltd [2010] WASCA 87

Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338

International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151

Smart v Prisoner Review Board (WA) [2012] WASC 48

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1. The applicant, Oakside Group Pty Ltd as Trustee for the Oak Family Trust, has applied to the Tribunal for orders pursuant to the Commercial Tenancies (COVID­19 Response) Act 2020 (WA) (COVID Response Act).  Ms Ying Diao is Oakside's sole director. [1]  She appeared for Oakside in these proceedings.

   [1] ts 64, 22 February 2021.

2. The respondent is Carlo Genovesi as executor of the estate of Felice Genovesi.  Felice Genovesi was the owner of a property at 429 Fitzgerald Street North Perth (the Premises).  The respondent was represented by counsel at the hearing. 

3. Oakside occupies the Premises as lessee.  The terms of the lease permit the Premises to be used for 'post office'.  They also permit alternative uses provided prior written approval is given by the landlord.  Oakside is behind in the payment of rent and outgoings due under the lease.  The respondent is taking steps to re-enter the Premises.  Indeed, it issued a notice of termination as recently as 15 December 2020.  The respondent says it is doing so because Oakside has been in breach of the lease because since 30 April 2020 it has not used the Premises as a post office and since 1 September 2020 it has used the Premises for the primary purpose of pet supply store, a purpose for which no prior written approval was given by the respondent. 

4. The applicant says that the Premises are being used primarily as a post office. 

5. In June 2020 the respondent took steps to re-enter the Premises which included changing the locks.  It is alleged by the applicant that in the course of doing so one lock was not replaced and that allowed third parties to enter the Premises.  The applicant alleges that items of jewellery belonging to Ms Diao which were kept at the Premises were stolen before she was able to have the locks changed again. 

6. Though inelegantly expressed, we have taken from the application and the applicant's submissions, that the applicant was seeking the following:

   1)relief which would entitle it to stay on as the tenant;

   2)rent relief for all of the emergency period;

   3)compensation for losses it says were suffered as a result of the respondent's re-entry of the Premises on 23 June 2020; being compensation for the value of lost jewellery, and compensation for the cost of legal advice provided to it about the matter; and

   4)compensation for the cost of security guards which were engaged by the applicant in December to prevent what it says would have been unlawful entry had the respondent sought to re-enter as it had done following the earlier attempt to compel it to vacate.   

Referral of question arising under the lease ­ s 16 of the Commercial Tenancy (Retail Shops) Agreement Act

1. Pursuant to s 16(1) of the Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA) (Retail Shops Act), a party to a retail shop lease may refer to the Tribunal any question between the parties which he or she believes to be a question arising under the lease and the Tribunal shall ­

   (a)determine whether or not the question referred to the Tribunal is a question arising under the lease; and

   (b)if it is such a question, hear and determine it.

2. At the hearing on 22 February 2021 we gave the respondent leave to refer the question of whether the applicant has, since 1 April 2020, used the Premises for the purpose of a post office as a question arising under the lease.

3. Section 16(2) of the Retail Shops Act provides that the matter for determination referred to it under s 16(1)(a) may be determined by the Tribunal in such manner as it thinks fit, subject to each party being given an opportunity to make a written submission.

4. We were satisfied that the question referred is a matter arising under the lease.  We were also satisfied that the matter was already squarely before us in these proceedings because the applicant's basis for resisting the termination of its lease rests on its assertion that the Premises are being used as a post office such that there has been no breach by it of the lease.

5. After the hearing of the evidence on 22 February 2021 we made orders for the filing of written closing submissions including submissions in relation to this issue. Accordingly we are satisfied that we have ensured that the parties have been afforded with the opportunity to provide written submissions in respect of the question referred to us as required by s 16(2) of the Retail Shops Act.

Conclusion

1. For the reasons set out below the Tribunal has found:

   1)that since 1 April 2020 the applicant has not used the Premises for the purposes of a post office;

   2)the action taken by the respondent to terminate the lease is not prohibited by the COVID Response Act;

   3)the applicant has not established an entitlement to any rent relief under the COVID Response Act;

   4)the Tribunal has no power to make any orders for compensation for losses said to have been suffered by the applicant as a consequence of the respondent's re­entry of the Premises in June 2020 under either the COVID Response Act or the Retail Shops Act; and

   5)the Tribunal has no power to make orders for the costs of the security guards engaged by the applicant in December 2020.

Applicant effectively a self-represented litigant

1. As we have already noted the applicant was represented at the hearing by its sole director, Ms Diao.  That means that it was effectively self­represented.  In hearing and determining this matter the Tribunal has been cognizant of its obligation to deal with self-represented litigants appropriately.  The following principles governed our approach in this case:

   1)a litigant in person is to be afforded some latitude and the documents in which he or she articulates his or her case should be approached with some flexibility:  Smart v Prisoner Review Board (WA) [2012] WASC 48 at [10] (Pritchard J);

   2)the decision­maker must be careful to ensure that if a litigant in person  has a case, it is not denied because of a poorly expressed document or submission:  Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338 at [21] (Beech J); and

   3)at the same time, the Tribunal  must ensure that any latitude given does not work an injustice to the other party:  Glew v Frank Jasper Pty Ltd [2010] WASCA 87 at [10] (judgment of the court).

Additional evidentiary material filed by the applicant with its written submissions

1. The written submissions which were filed by the applicant was accompanied by a 43 page bundle of additional material (Bundle) upon which it sought to rely to establish its case. 

2. For the most part, the documents in the Bundle were photographs of parcels which it has received in the Premises and of items which it says are for sale at the Premises.  There were photos of letters with stamps on them and photographs of tax invoices for courier services provided to third parties.  One document was an agent agreement entered into between Oakside and HUBBED dated 8 May 2020.  Pages 18 ­ 20 of the Bundle was a financial record for 1 ­ 21 January 2021.  Pages 21 ­ 22 of the Bundle was another form of financial documents for that same time period.  Pages 23 ­ 25 of the Bundle was the same kind of financial record as that at pages 19 - 20 but for the period of 1 ­ 28 February 2021.  Page 26 of the Bundle is a financial record which is in the same form as that at pages 21 - 22 but this one was for the month of February 2021. 

3. These documents are not part of the evidence which was tendered in the applicant's case.  The applicant gave no evidence about the documents in the Bundle and the respondent had no opportunity to cross-examine a witness about their contents or to make submissions in respect of them.  In those circumstances, in the interests of fairness we have had no regard to those documents in the Bundle in determining the application.[2]  

   [2] Section 32 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) provides that the Tribunal is bound by the rules of natural justice except to the extent that the SAT Act or the relevant enabling Act authorises a departure from those rules.

4. That said, we note that:

   a)given the reasons for the conclusion we have reached that the applicant is not operating a post office; and

   b)given the finding we reach that the applicant has not established that it is an eligible tenant,

   the additional material in that Bundle would not have altered the outcome of this application.

Tribunal's jurisdiction to determine the application

1. Section 16(1) of the COVID Response Act provides that a party to a dispute may apply to the Tribunal to have the dispute determined.

2. Section 16(2) of the COVID Response Act conditions or limits the entitlement in s 16(1) by requiring that an application to determine a dispute must be made to the Tribunal during the emergency period unless the Commissioner has issued a certificate under s 19 in respect of the dispute. The emergency period commenced on 30 March 2020 and is presently due to end on 28 March 2021.[3]  It is not in dispute and we find that the application, having been made on 28 September 2020, was made within the requisite period.

   [3] Section 3 of the COVID Response Act and reg 2B of the Commercial Tenancies (COVID Response) Regulations 2020 (WA).

3. The word 'dispute' is found in s 14 of the COVID Response Act. Section 14 provides that for the purposes of the COVID Response Act 'dispute' ­

   (a)means a dispute between the parties to a lease, or 1 or more parties to a lease and a person who has given a guarantee in respect of the lease, that arises out of, or in relation to, the operation of this Act; and

   (b)includes ­

   (i)a code of conduct dispute; and

   (ii)a financial hardship dispute[.]

4. The expression 'financial hardship', is also defined in s 14 of the COVID Response Act. Its definition is:

   … in relation to a tenant, financial hardship suffered by the tenant as a result of 1 or more of the following ­

   (a)a restriction imposed under a written law in response to the COVID-19 pandemic;

   (b)changes in societal behaviour in response to the COVID-19 pandemic;

   (c)any other consequences of the COVID-19 pandemic[.]

5. The expression 'financial hardship dispute' is defined in s 14(2) of the COVID Response Act as follows:

   .. a financial hardship dispute is a dispute between the parties to a small commercial lease in the following situation ­

   (a)during the emergency period, the tenant has breached the small commercial lease by failing to pay rent or any other amount of money payable by the tenant to the landlord under the small commercial lease (including, without limitation, a requirement under the lease to pay all or any of the landlord’s operating expenses); and

   (b)the landlord claims that the breach was not a result of the tenant suffering financial hardship; and

   (c)the landlord has not granted the tenant a waiver, deferral or reduction in respect of the unpaid rent or other unpaid amount of money.

6. The expression 'code of conduct dispute' is also defined in s 14 of the COVID Response Act. The definition is:

   … a dispute that arises out of, or in relation to, the application of the adopted code of conduct in relation to a lease (including, without limitation, a dispute about the waiver or deferral of rent payable under a lease);

7. In this case both parties accept and we are satisfied that there is a 'financial hardship dispute' for the purposes of the COVID Response Act between them.  It was not in dispute that:

   a)the applicant is not up to date with all rent and outgoings due under the lease;

   b)the respondent contends that the failure to pay the rent and outgoings is not the result of the applicant having suffered financial hardship as defined in s 14 of the COVID Response Act; and

   c)the respondent has not granted any waiver or deferral of the rent and outgoings owned under the lease. 

8. We are also satisfied that there is a 'code of conduct' dispute between the parties as that term is defined in the COVID Response Act.  This is because there is a dispute between the parties about whether the applicant is entitled to any waiver or deferral of rent payable under the lease for any or all of the emergency period.

9. We are also satisfied that there is a further dispute between the parties. It concerns whether the landlord is able to take action to terminate the lease and re-enter the Premises during the emergency period or whether it is precluded from doing so by s 9 of the COVID Response Act.

Prohibited action/issue arising under the lease

1. We turn to deal with the inter-related issues of whether the applicant is in breach of its lease by using the Premises for something other than a post office and whether s 9 of the COVID Response Act precludes the respondent from terminating and re-entering the lease.

2. The expression 'prohibited action' is defined in s 8 of the COVID Response Act as follows:

   prohibited action means action under, or in respect of, a small commercial lease (including seeking orders, or commencing proceedings, in a court or tribunal) for any of the following ­

   (a)eviction of the tenant from the land or premises that are the subject of the small commercial lease;

   (b)exercising a right of re-entry to the land or premises that are the subject of the small commercial lease;

   (c)possession;

   (d)recovery of land;

   (e)distraint of goods;

   (f)forfeiture;

   (g)termination of the small commercial lease;

   (h)damages;

   (i)requiring a payment of interest on unpaid rent or on any other unpaid amount of money payable by the tenant to the landlord under the small commercial lease (including, without limitation, operating expenses);

   (j)recovery of the whole or part of any security for the performance of the tenant’s obligations under the small commercial lease (including, without limitation, a security bond);

   (k)performance of obligations by the tenant or any other person under a guarantee given in respect of the small commercial lease (including, without limitation, making a demand on a bank guarantee);

   (l)any other remedy otherwise available to the landlord against the tenant at common law or under a written law.

3. It was not in dispute between the parties and we find that the lease between the applicant and the respondent is a 'small commercial lease' to which the COVID Response Act applies.  

4. It is accepted by the respondent and we find that its actions to terminate and re-enter the lease come within the definition of 'prohibited action'. The respondent however submits that s 9 of the COVID Response Act does not prevent it from taking that action on the grounds of breach by the applicant of the lease during the emergency period because the grounds for the breach does not consist of any of the matters set out in s 9(a), (b) or (c) of the COVID Response Act.

5. Section 9 of the COVID Response Act operates to prevent a landlord from taking prohibited action in the emergency period where the breach of the lease consists of:

   (a)a failure to pay rent or any other amount of money payable by the tenant to the landlord under the small commercial lease (including, without limitation, a requirement under the lease to pay all or any of the landlord’s operating expenses); or

   (b)the land or premises that are the subject of the small commercial lease, or the business carried on there, not being open for business at hours or times specified in the small commercial lease; or

   (c)any act or omission of a kind prescribed by regulations for the purposes of this paragraph.

6. Section 2D of the Commercial Tenancies (COVID-19 Response) Regulations 2020 (WA) (COVID Response Regulations) sets out the prescribed circumstances as follows:

   For the purposes of s 9 of the COVID Response Act, on and after 30 September 2020, the following circumstances are prescribed ­

   (a)the tenant under the small commercial lease is insolvent when the prohibited action is taken;

   (b)a case where ­

   (i)the tenant under the small commercial lease is not an eligible tenant in relation to the small commercial lease when the prohibited action is taken; and

   (ii)the prohibited action is taken on the grounds of a breach by the tenant of the small commercial lease that occurs during the emergency period (whether before, on or after 30 September 2020); and

   (iii)the breach is of a kind referred to in section 9(a) of the Act; and

   (iv)the breach is not the subject of a dispute that is being dealt with, but is not yet resolved, under Part 5 of the Act; and

   (v)the tenant has not made a request, under the adopted code of conduct, for rent relief from the landlord in relation to any unpaid rent to which the breach relates; and

   (vi)the landlord has not granted the tenant a waiver, deferral or reduction in respect of any unpaid rent, or other unpaid amount of money payable by the tenant to the landlord under the small commercial lease, to which the breach relates;

   (c)a case where ­

   (i)the tenant under the small commercial lease is not an eligible tenant in relation to the small commercial lease when the prohibited action is taken; and

   (ii)the prohibited action is taken on the grounds of a breach by the tenant of the small commercial lease that occurs during the emergency period on or after 30 September 2020; and

   (iii)the tenant is not an eligible tenant in relation to the small commercial lease when the breach occurs; and

   (iv)the breach is of a kind referred to in section 9(b) of the Act.

1. Neither party contended that any of the prescribed circumstances apply in this case.

2. The respondent says that the prohibited action is being taken not because of the applicant's failure to pay rent or because the Premises were not open at times required by the lease but because after reopening following the termination of the Australia Post licence the applicant has used the Premises for a purpose of a pet supply store which was not a use permitted under the lease and was not a purpose to which the respondent had given its prior written consent.

Relevant findings of fact

1. Certain relevant factual matters were not in dispute between the parties.  The Tribunal makes the findings set out in this paragraph in relation to those matters.

   1)The respondent is the registered proprietor of the Premises.

   2)The applicant occupies the Premises pursuant to a deed of lease dated 11 June 1996 and a Deed of Assignment and Variation of Lease dated 10 August 2017 (together, the Lease).[4] 

   [4] A copy of the Lease is found at Exhibit G pages 51-78 (HB page 51-78).  A copy of the Deed of Assignment and Variation dated 10 August 2017 is Exhibit G pages 79-97 (HB page 79-97). 

   3)The original lessee under the lease of 11 June 1996 was the Australian Postal Corporation.[5]  

   [5] Exhibit G page 71 (HB page 71).

   4)On 20 December 2006 by Deed of Assignment of Lease the Australian Postal Corporation assigned its rights and obligations under the lease.  Under that Deed the use of the Premises was expressed to be 'licensed post office'.[6]   

   [6] Exhibit A page 59 (HB page 405).

   5)The Deed of Assignment and Variation of Lease entered into by Oakside dated 10 August 2017 defines the business permitted to be conducted under the Lease to be '[T]he business of post office'.[7] Clause 12.1 of the Lease provides that the lessor will not use the Premises for any purpose other than the Permitted Use or for any other purpose to which the lessor has not given its consent in writing.

   [7] Exhibit A page 97 (HB page 443).

   6)Clause 19.2 of the Lease provides that the covenant not to use the Premises for a purpose other than the Permitted Use is an essential term of the Lease and a breach shall be deemed to be a fundamental breach of a provision of the Lease.

   7)Item 13 of Schedule to the Lease provides that the Permitted Use of the Premises is 'Post Office'. 

   8)Clause 19.1.3 of the Lease provides that where the lessee fails to perform or observe a covenant, condition or agreement and that neglect or failure continues for a period of 28 days after the lessor has given written notice to the lessee to remedy the neglect or failure, the Lessor may re-enter the Premises and the Lease will thereupon be determined but without prejudice to any claims for damages which may have accrued to either party. 

   9)At the same time as it entered into the Lease the applicant had purchased the Australia Post franchise from a third party and became the licensee under the licence agreement which permitted it to operate the Australia Post business in North Perth.[8]  

   10)From approximately 14 August 2017 to 30 April 2020 the applicant traded at the premises as an Australia Post licensee.[9]

   11)The Australia Post licence was terminated on 30 April 2020.[10]

   12)On 30 April 2020 Australia Post turned off Oakside's computer system remotely.[11]

   13)The applicant and Australia Post were in dispute for a period of time prior to 30 April 2020.

   14)The Premises were closed from 1 May 2020 until they reopened in September 2020 and no business was carried on from the Premises during that time.

   15)Oakside has not paid rent to the respondent for the period April 2020 to February 2021. 

   16)As at February 2021 Oakside owed to the respondent $75,362.92 for rent and outgoings.[12]

   17)Oakside has not applied for benefits under the jobkeeper programme.[13]

   [8] Exhibit G, witness statement of Ms Diao para 2 (HB page 239-240).

   [9] The applicant's written submissions dated 10 March 2021 indicate at para 2 that the Licensed Post Office Agreement between the applicant and Australia Post was dated 14 August 2017.  The licence was not tendered in evidence in these proceedings.   

   [10] Exhibit G, witness statement of Ms Diao para 1 (HB page 239).

   [11] Exhibit G, witness statement of Ms Diao para 1 (HB page 239).

   [12] Exhibit B page 236 supp. (HB page 63).

   [13] ts 94-95, 22 February 2021. 

2. The applicant gave evidence that the licence simply came to an end by the effluxion of time.  The respondent's evidence was that the licence was terminated by Australia Post.  While it is not strictly necessary to resolve that issue in order to determine the dispute between the parties, the Tribunal finds that the licence was terminated by Australia Post and rejects the applicant's evidence that the licence merely came to an end.  There are two reasons for reaching that conclusion.

3. First, that the licence was terminated is consistent with the communication from Oakside's lawyer to the respondent's solicitor dated 18 September 2020 which the applicant submitted as part of its application, which reads, in part:

   It is outside of our client's power and control to remedy the alleged default by recommencing the carrying on of a post office.  This is because, during the early part of the COVID-19 pandemic, on 30 April 2020 Australia Post terminated our client's post office licence without cause pursuant to clause 22 of the attached November 2016 Licensed Post Office Agreement North Perth LPO (Australia Post Licence) and switched off all of the computer systems for the Premises.[14]  

   [14] Exhibit G (HB page 32).

4. Second, we are unable to accept that all of Ms Diao's evidence was credible.  She was argumentative, evasive and unwilling to accept even the most obvious of contentions that did not assist her.  Examples of conduct which lead the Tribunal to that conclusion in respect of her evidence include:

   a)In cross-examination a photograph of the Premises showing signage indicating that it was a pet supply business was shown to her[15] and she was asked to identify the photograph as being of the Premises.  Ms Diao refused to accept that it was a photograph of the Premises saying she could not tell what was shown in the photograph[16] despite the photograph clearly being able to be identified as a photo of the Premises, it being a photograph taken at a different angle from one she had earlier identified as the Premises,[17] which Premises had a distinct green coloured wall which could be seen in both photographs. 

   b)We reject Ms Diao's evidence that she did not recognise the photographs annexed to Ms Cindy Ma's witness statement[18]  which show the Premises set up for the sale of pet supplies as photos of the Premises.  Ms Diao was clearly giving self-serving answers in this regard, preferring to debate whether the photographer had consent to take the photographs.[19]

   c)Ms Diao gave evidence that she arranged for the new sign 'North Perth Post' to be erected.  She was asked whether the sign had been there before 16 February 2021.  Ms Diao's answer was that she was unable to say when it was erected because she did not erect it, it having been erected by a company engaged to do that work.  We considered that in her answers to questions regarding when the sign was erected Ms Diao was being unnecessarily argumentative and indeed, disingenuous.  We do not accept that she was unable to say whether the sign had been in place for only the last couple of weeks.[20]  

   [15] Exhibit B page 221 (supp. HB page 48).

   [16] ts 74-75, 22 February 2021.

   [17] ts 73-74, 22 February 2021 where she identifies the photograph at Exhibit B page 218 (supp. HB page 45).

   [18] Exhibit I CM1 (supp. HB page 72-81).

   [19] ts 76, 78 and 82, 22 February 2021.

   [20] ts 77-78, 22 February 2021 (CM1 to Exhibit 1, witness statement of Cindy Ma).

5. Because of the view we have reached regarding Ms Diao's credibility, where her evidence conflicts with that of another witness, we prefer the evidence of that other witness.  Where it conflicts with evidence in documents tendered as exhibits we prefer the documentary evidence.  Where Ms Diao's evidence is against Oakside's interest or is supported by documentary evidence we accept her evidence.

6. We find that after the Australia Post signage was removed when the licence was terminated on 30 April 2020, the Premises reopened in September 2020 with signage identifying the Premises as offering pet supplies for sale to the public.  One sign erected at that time bore the words 'My Pet Supplies',[21] another 'My Pet Supplies, Quality Pet Food Brands for Owners who Care for the Health and Wellbeing of their Pets'.[22]  There was no signage on the Premises upon its reopening that indicated it was a post office. 

   [21] Exhibit B page 218 (Supp HB page 45).

   [22] CM1to Exhibit I, witness statement of Cindy Ma and Exhibit B page 220 (Supp HB page 47).

7. We accept the evidence of the respondent and find from the photographs taken of the outside of the premises on 16 February 2021 that the sign 'North Perth Post' which is presently erected on the front of the Premises was not erected until some time after 16 February 2021.  Ms Diao was unwilling to say so in her evidence, instead engaging the respondent's counsel in an argument about whether consent to take the photograph had been obtained.  She did not give any evidence as to when it was actually erected.  When she was asked whether it had been erected after 16 February 2021 she answered 'I dispute that'[23] but when asked when it was erected her answer was 'I do not know'.[24]  When Ms Diao was asked to explain why the sign had been recently erected and why a sign identifying the property as North Perth Post had not been erected when the business opened in September 2020 the following exchange took place:

   [23] ts 76, 22 February 2021.

   [24] ts 77, 22 February 2021.

   Ms Diao, why did you decide to put up the sign at the eleventh hour?  Just tried to influence the Tribunal that, in fact, you're carrying on a post office type business rather than a pet store; that's why you've changed the signs isn't it?---This is the major ­ primarily business that we are doing - - -

   When - - -?--- - - - we are operating - - -

   Why did you - - -? --- - - - anyway.

   - - - make the change to the signs?  Take down the Pet Supply and put this there?---Because it is the main entrance to the building, we will carry on with that sign from - - -

   Yes?--- - - - and then whatever you say, it is the North Perth Post.  It will stay there.

   And why didn't you do that in October or November or in January?---Probably we did already, but because I didn't organise the signage, so I can't really give you exact date of when this has been put - - -

   Who organised the signage?---I will have to find out.  It was the signage people doing it - - -

   Who - - -?--- - - - because I can't do it - - -

   Who runs the business, Ms Diao?--- So on the side of this is Mr Lander.  He operated on signage.[25]  

   [25] ts 77, 22 February 2021.

8. We accept the evidence of Ms Diao that at the Premises she now offers pet supplies for sale and also sells stationery items, envelopes and packaging.[26]  The applicant tendered photographs which show parcels at the Premises and a 'Parcel Connect' sign.  However Ms Diao accepted in cross-examination and we find that the business does not offer mail acceptance and processing, money orders and bill payment services which were previously provided when Oakside held the Australia Post licence.[27]  

   [26] ts 15 and 68, 22 February 2021.

   [27] ts 69-70, 22 February 2021.

9. Ms Diao gave evidence that Oakside now acts as an agent for various courier companies receiving parcels which are collected by those companies for delivery elsewhere and also that Oakside delivers parcels within her local area for those companies.  Her evidence was that the courier companies involved included DHL, Fastway, Aramex and Toll.[28]  Ms Diao gave evidence that Oakside can now deliver parcels to an area which extends beyond North Perth into neighbouring suburbs, including Leederville and Mt Hawthorn, which it was not permitted to do under the terms of its licence with Australia Post, and that the offering of this service is a source of pride to her.  However, the applicant produced no evidence of any agreements other than one incomplete agency agreement which did not include execution clauses. 

   [28] ts 14 and 56, 22 February 2021; Exhibit G, witness statement of Ms Diao para 14 (HB page 244).

10. Numerous photographs tendered by Oakside as part of Exhibit C show packages at the Premises which are consistent with Ms Diao's evidence that the Premises are used by Oakside in the course of parcel receipt and delivery.  The photographs at page 13 of Exhibit C identifies that the parcel shown is delivered by Aramex.  Page 14 of Exhibit C shows a delivery sticker for a satchel addressed to a property in Highgate which bears at its top left hand corner the words 'fastway an Aramex company'.  Page 1 of Exhibit C contains a photograph of a sign on a counter which states:

    Send collect return your parcels here

    Visit parcelconnect.com.au to get started

    Parcelconnect.

    Delivered by fastway couriers.

11. Exhibit C also contains two photographs[29] of a similar sign affixed to a wall on what appears to be the outside of a building. 

    [29] Exhibit C pages 2 and 4 (HB page 299-300).

12. Based on that evidence we accept Ms Diao's evidence of the extent of the parcel collection and delivery services which the applicant now provides from the Premises.  

13. The Tribunal also accepts the unchallenged evidence of Mr Xavier Burton that on 7 December 2020 he attended the Premises and purchased pet products.[30]  The till receipt to which he referred in his affidavit identifies the business from which the goods were purchased as 'My Pet Supplies'.[31]  

    [30] Exhibit F, witness statement of Xavier Burton paras 2 and 9.

    [31] Till receipt is at Exhibit A page 172 (HB page 518).

14. Despite Ms Diao's denials, the Tribunal accepts the evidence of Mr Burton that the photographs he took on 7 December 2020 show aspects of the exterior and interior of the Premises.[32]  Those of the interior of the premises show pet products being offered for sale on shelves and racks.  That evidence is consistent with the till receipt and with the signage on the Premises at the time. 

    [32] Photographs are at Exhibit A page 149 – 171 (HB page 495-517).

15. It is also consistent with the contents of the letter from the applicant's solicitor to the respondent's solicitors dated 18 September 2020.[33] In that letter it is said that Oakside had not sought legal advice about the legal ramifications of commencing to trade as a pet supply business before doing so, and was at the time 'oblivious' to the requirement that prior consent to a change in use was required. Oakside's solicitors explained the nature of the pet supply business as one selling 95% dry pet food, 5% refrigerated pet food, and pet accessories; described it as a clean respectable business which had been met with enthusiasm by the North Perth community; and requested 'retrospective approval under clause 12.1 of the Lease to a change the use of the Premises from post to retail pet supplies (no live animals) …'.

    [33] Exhibit G (HB page 32­34).

16. Based on all of the evidence which we accept, most particularly the photographs taken on 7 December 2020 and 16 February 2021, which formed part of Exhibit B and Exhibit F, we find that the primary business being carried on from the Premises since it reopened in September 2020 is the sale of pet supplies.

17. We note that in para 6 of its written submissions the applicant invites the Tribunal to visit the Premises and see for ourselves the look and feel of the Premises.  We cannot and would not do so for the following reasons:

    1)the invitation was extended after the hearing had concluded and while the decision in relation to this matter was reserved.  Even making allowances for the fact that the applicant was represented by its director, re-opening the applicant's case after the hearing has concluded would require compelling reasons which do not exist in this case. 

    2)a visit to the Premises would only tell us what the Premises looked like on the day of the visit.  It would tell us nothing about how the Premises has looked over time since it re-opened in September 2020 and would therefore be of very little if any assistance in resolving the application.

    3)the view which we take about the legal definition of the term 'post office' (to which we come to below) would cause us to conclude that the Premises is not being operated as a post office even if we accept everything Ms Diao has said about the way in which the Premises is used. 

Post office

1. Having determined the facts, the Tribunal must now determine whether the use to which the Premises is put does amount to use as a post office.  That requires determining what is meant by the words 'post office' when used in the Lease. 

2. The construction of a contract is a question of law not fact.[34]  The object of construction of a contract is to give effect to the common intention of the parties.  Intention may be actual, expressed or inferred.  The question to be answered is 'what have the parties said' not what did they mean to say.  The task of the Tribunal in determining what was meant by the words 'post office' is to determine what a reasonable person in the positon of the parties would have understood.[35] 

   [34] Francis v Lyon (1907) 4 CLR 1023 at 1040.

   [35] Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 [22]; (2004) 218 CLR 451 at 462.

3. A commercially sensible approach is to be taken.  Due weight is to be given to the factual context.  Construction rules and preferences are employed. 

4. Starting with the factual context, as Gleeson CJ explained in International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 at [8]:

   In giving a commercial contract a business like interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract and the objects which it is intended to secure.  An appreciation of the commercial purpose of a contract calls for an understanding of the genesis of the transaction, the background and the market[.]

5. In Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 Mason J stated that the issue of evidence of the discussions between the parties prior to entering into a contract was admissible in limited circumstances. He said:

   … [E]vidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible to more than one meaning.  But it is not admissible to contradict the language of the contract when it has a plain meaning[.] 

6. The important surrounding circumstance in this case is that at the time the Lease was entered into the applicant had purchased an Australia Post franchise and entered into a licence agreement with Australia Post by which it became a licensed agent of Australia Post.  It is in that context that the Lease, permitting the Premises to be used as a 'post offce' was entered into. 

7. The term 'post office' is defined in the Macquarie Dictionary Online as follows:

   1.the authority responsible for the country's postal and telecommunications services.

   2.a local office of this authority for receiving, distributing and transmitting mail, selling postage stamps, providing telecommunications services, etc.

8. The provision of courier services and the sale of packaging materials, envelopes, boxes and other merchandise from the Premises which was described in evidence by Ms Diao does not meet that definition. 

9. We find that that the expression 'post office' has a plain and natural meaning in Australia, well understood by reasonable people in the position of the parties.  This term is understood to refer to an office run either directly by Australia Post or by an agent of Australia Post at which the services offered by Australia Post, the primary one being the accepting of and consigning of letters and other forms of mail for delivery elsewhere, are provided.  

1. That meaning is supported by the factual context which operated when the Lease was entered into which was previously identified. 

2. In any event, we find that the expression 'post office' as it is used in Australia is a term of art with a particular legal meaning.  In the Post and Telegraphic Act 1901-1973 (Cth) the expression 'post office' was defined as follows:

   'Post office' means a house building room railway postal van or carriage place or structure where postal articles are by permission or under the authority of the Postmaster-General or a Deputy Postmaster­General received delivered sorted or made up or from which postal articles are by the authority aforesaid despatched including a pillar box or other receptacle provided for the reception of postal articles for transmission.

3. In the Australian Postal Corporation Act 1989 (Cth) the word 'office' is defined in s 3 as follows:

   Office, in relation to Australia Post, means an office (in Australia or outside Australia):

   (a)established by Australia Post for the supply of postal services; or

   (b)conducted by an agent of Australia Post.  

4. Section 4 provides that for the purposes of the Act, an article is carried by post if it is carried by or through Australia Post.

5. Section 29(1) of the Australian Postal Corporation Act 1989 (Cth) reserves to Australia Post the exclusive right to carry letters within Australia whether the letters originated within or outside Australia. Section 29(2) provides that the reservation of service to Australia Post under s 29(1) extends to:

   (a)the collection, within Australia, of letters for delivery within Australia; and

   (b)the delivery of letters within Australia.

6. Section 30 of the Australian Postal Corporation Act 1989 (Cth) provides that the services reserved under s 29 do not include certain services. They include, among other things, the carriage of newspapers and magazines,

7. The Tribunal concludes that the term 'post office' conveys a commonly understood meaning within Australian society which is associated with the collection of and delivery of letters and other items of mail by a government or quasi government entity, currently known as Australia Post, or by its agents.  That is the meaning to be ascribed to the term in the Lease.  That meaning is confirmed by or consistent with the context in which the Lease was entered into and which would have been understood by the parties at the time.  

Conclusion ­ meaning of 'Post office'

1. Applying that definition of the expression 'post office' we conclude that the parcel delivery service offered by the applicant does not constitute the operation of a 'post office'. 

2. The applicant relies on a letter which its solicitors HHG Legal sent to the respondent's solicitor on 22 December 2020 in support of its position that it has been operating a 'post office'.  That letter asserted that if there had been a breach of the lease by Oakside (presumably by the operation of a pet supply store) it had remedied the breach by 22 December 2020 and was operating a post office.  The letter referred to the applicant's business for the supply of mail and other parcel delivery services from the premises.  The solicitor also asserted that the action to terminate the Lease was prohibited by the COVID Response Act. 

3. While we have considered those arguments, advanced by the applicant in this case, we have rejected them for the reasons we have set out above. 

4. The Tribunal therefore concludes that the applicant, as lessee, has not carried on a business of a post office from the Premises since it closed on 30 April 2020.  Its use of the Premises for the purpose of a pet supply store since its reopening in September 2020 and more recently as a courier means that the applicant has been in breach of the term of the Lease which requires it and the pet supply store to use the Premises for its permitted purpose unless written consent to do otherwise is given.

5. The respondent, therefore, is not precluded from taking steps to re-enter the Premises by s 9 of the COVID Response Act. This is because s 9 prohibits such action where it is being taken because of the applicant's failure to pay rent whereas the respondent's action is being taken because the applicant has breached the lease by using the Premises in a way which was not permitted by the terms of the Lease and without the written consent of the respondent.

6. Ms Diao's witness statement contained many statements about how poorly Australia Post franchisees are being treated by Australia Post. The applicant may be correct about aspects of the treatment by Australia Post of its licensees.  However, we do not need to and do not intend to embark on an analysis of that evidence because it is not relevant to the issues to be determined by the Tribunal except to note that the termination of the licence agreement by Australia Post has resulted in the applicant being unable to comply with the covenant in the Lease to use the Premises as a post office.

Financial hardship dispute

1. We have already found that there is between the parties a 'financial hardship dispute'. 

2. We have found at [24] that the applicant has breached the Lease by failing to pay all of the rent and outgoings due under the lease.

3. It was not in dispute and we find that the respondent has not granted a waiver, deferral or reduction in respect of the unpaid rent or other unpaid amount of money.

4. It is not in dispute and we find that the respondent claims that the breach was not a result of the tenant suffering financial hardship.

5. Resolving the financial hardship dispute requires us to determine the correctness of the respondent's claim that the failure to pay rent was not a result of the tenant suffering financial hardship.

6. Financial hardship is defined in s 14(1) of the COVID Response Act as follows:

   financial hardship in relation to a tenant, means financial hardship suffered by the tenant as a result of 1 or more of the following ­

   (a)a restriction imposed under a written law in response to the COVID-19 pandemic;

   (b)changes in societal behaviour in response to the COVID-19 pandemic;

   (c)any other consequences of the COVID-19 pandemic. 

7. The applicant claims that the failure to pay all outstanding rent is the result of the COVID-19 pandemic.  It claims that Australia Post terminated the licence because of the COVID-19 pandemic. 

8. In her evidence Ms Diao repeatedly said that the licence merely expired.  Oakside's written submission also refer to the licence expiring.  In her witness statement, Ms Diao says that Australia Post poached all of the North Perth Licensed Post Office business clients.[36] 

   [36] Exhibit G witness statement of Ms Diao para 4 (HB page 240).

9. Ms Diao cannot be truthful both in her evidence that the licence merely expired and in her assertion that the Australia Post terminated the licence because of a downturn in revenue resulting from the COVID-19 pandemic. 

10. She also said in her witness statement that the poaching of Oakside's business clients by Australia Post severely impacted the cash flow and devalued her business.[37]

    [37] Exhibit G, witness statement of Ling Diao para 4 (HB page 240).

11. For reasons which we have set out at [36] we have found that the licence was terminated by Australia Post.  But there is no evidence before us upon which we could be satisfied that the termination was the result of the COVID-19 pandemic.  We do not accept Ms Diao's evidence in that regard for the same reasons we have rejected other aspects of her evidence. 

12. The respondent submitted that any downturn in revenue which may have been experienced by the applicant between 1 May 2020 and 1 September 2020 is the result of the closure of the business during that time following the termination of the Australia Post licence.  Ms Diao gave evidence, which we accept, that during that time she was coming up with a new business which could operate from the Premises.[38]  There was no financial evidence given or tendered by the applicant that during that time no revenue was derived from the Premises.  However, we are prepared to infer from the evidence that the business was closed for that period and from the nature of the business conducted from the Premises (that is, the Australia Post Business not being an e­commerce business) that the revenue declined 100% over that period when compared with revenue in the comparable period in 2019.   

    [38] ts 94­95, 22 February 2021.

13. However we are unable to find that the decline in revenue in that time was in any way related to:

    a)a restriction imposed under a written law in response to the COVID-19 pandemic;

    b)changes in societal behaviour in response to the COVID -19 pandemic; and/or

    c)any other consequences of the COVID-19 pandemic. 

14. This is because we accept Ms Diao's evidence that the business closed because the Australia Post licence was terminated and she was stressed and closed until she could try to make her business work. 

15. The respondent submitted that any difference between the revenue of the applicant in the period from 1 September 2020 to 22 February 2021 and in the comparable period from 1 September 2019 ­ 22 February 2020 could not be attributed to the COVID-19 pandemic.  The respondent  submitted that because the business which was being operated after the applicant re-opened the Premises was a different business to that which the applicant had been operating at the Premises at the comparable time in 2019-2020 no comparison could be drawn between the revenue for both periods.  The respondent submitted that any difference in revenue earned in those times was a result of the fact that a substantially different business was being conducted.  

16. We have already found that after the business re-opened the Premises was being used principally for the sale of pet supplies.  It was only some time later that the applicant endeavoured to operate a business which resembled a post office in that it sold cards, packaging material and accepted and delivered parcels as agent for courier companies.  We find that while the revenue generated by the business after it re-opened may have been less than that generated before the closure, we are not satisfied that the effects of the COVID-19 pandemic was the reason for that difference. 

17. Accordingly we conclude that the applicant's failure to pay rent owed under the Lease is not the result of financial hardship as that term is defined in s 14(1) of the COVID Response Act.

Code of conduct dispute - entitlement to rent relief

1. We next turn to the question of whether the Tribunal can and should order any rent relief sought by the applicant.

2. The expression 'rent relief' is defined in clause 1 of the Code as follows:

   rent relief ­

   (a)means any form of relief provided to a tenant in respect of the tenant's obligation to pay rent under a small commercial lease; and

   (b)includes the following ­

   (i)a waiver by the landlord of all, or a portion of, rent that would otherwise be payable under the small commercial lease;

   (ii)the deferral of the payment of all, or a portion of, rent that would otherwise be payable under the small commercial lease on a particular date to a later date.

3. Pursuant to clause 5 of the Code, a tenant under a small commercial lease who is an eligible tenant in relation to the small commercial lease, may, during the emergency period, request rent relief from the landlord under the lease.

4. As we found in [25] there is between the parties a 'code of conduct dispute'.  This is because the applicant claims to be entitled to and has requested rent relief which has not been granted by the respondent, who disputes that the applicant is entitled to rent relief under the Code. 

5. The applicant applied to the Tribunal under s 16(1) of the COVID Response Act to have the dispute determined. The application was made during the emergency period as required by s 16(2) of the COVID Response Act and, as required by s 16(3) of the COVID Response Act, the Commissioner issued a certificate on 29 October 2020 in respect of the dispute under s 18 of the COVID Response Act.[39]  

Eligible tenant

[39] Exhibit G (HB page 108).

1. In order to be entitled to rent relief under clause 5 of the Code, the applicant must be an 'eligible tenant'. That expression is defined in clause 2 of the Code. Relevantly, clause 2 provides:

   (1)During the period beginning on 30 May 2020 and ending on 27 September 2020 (the relevant period), a tenant under a small commercial lease is an eligible tenant in relation to the small commercial lease if ­

   (a)the following turnover in the financial year ending on 30 June 2019 was less than $50 000 000 ­

   (i)if the tenant is a franchisee ­ the turnover of the business conducted by the tenant at the land or premises that are the subject of the small commercial lease;

   (ii)if the tenant is a corporation that is a member of a group ­ the turnover of the group;

   (iii)in any other case ­ the turnover of the business conducted by the tenant at the land or premises that are the subject of the small commercial lease;

   and

   (b)the tenant ­

   (i)qualifies for the jobkeeper scheme under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Commonwealth) section 7 during the relevant period; or

   (ii)has, at any time during the emergency period before 28 September 2020, satisfied the decline in turnover test set out in section 8 of those Rules.

   (1A)During the period beginning on 28 September 2020 and ending on 3 January 2021 (the relevant period), a tenant under a small commercial lease is an eligible tenant in relation to the small commercial lease if ­

   (a)the tenant meets the requirements of subclause (1C); and

   (b)the tenant ­

   (i)qualifies for the jobkeeper scheme under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Commonwealth) during the relevant period; or

   (ii)does not qualify for the jobkeeper scheme during the relevant period, but nevertheless satisfies any test relating to turnover during July, August and September 2020 by which a person can qualify for the jobkeeper scheme during the relevant period.

   (1C)For the purposes of subclauses (1A)(a) and (1B)(a), a tenant meets the requirements of this subclause if the following turnover in the financial year ending on 30 June 2020 was less than $50 000 000 ­

   (a)if the tenant is a franchisee ­ the turnover of the business conducted by the tenant at the land or premises that are the subject of the small commercial lease;

   (b)if the tenant is a corporation that is a member of a group ­ the turnover of the group;

   (c)in any other case ­ the turnover of the business conducted by the tenant at the land or premises that are the subject of the small commercial lease.

2. In this case, the respondent submits that the applicant has not established that it is an eligible tenant.[40]

   [40] Respondent’s closing submissions, para 102.

3. We therefore turn to consider whether the applicant has established that it is an eligible tenant for any of the relevant time periods.

30 May 2020 – 27 September 2020

turnover in the financial year ending 30 June 2019

1. The applicant (not being a franchisee or a corporation that is a member of a group) must first establish that the turnover of the business conducted by it at the Premises that are the subject of the small commercial lease was less than $50,000,000 in the financial year ending 30 June 2019 (clause 2(1)(a)(iii) of the Code).

2. The respondent did not dispute that the applicant's turnover in the financial year ending on 30 June 2019 was less than $50,000,000 for the purposes of clause 2(1)(a) of the Code. Ms Diao gave evidence that 'Oakside was under $50 million revenue. Oakside is a small business'.[41]  Accordingly, we accept Ms Diao's evidence and find that the turnover of the applicant for the financial year ending 30 June 2019 was less than $50,000,000.

qualifies for jobkeeper

[41] ts 53, 22 Februay 2021.

1. The applicant, not being a non-profit body or deductible gift recipient, will qualify for the jobkeeper scheme under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) (CERP(PB) Rules) if it carried on business in Australia on 1 March 2020 and satisfies the decline in turnover test in s 8 of the CERP(PB) Rules (s 7 CERP(PB) Rules). The decline in turnover test, set out in s 8 of the CERP(PB) Rules, is satisfied where there is a shortfall in projected GST turnover for a turnover test period that equals or exceeds 30% for a relevant comparison period of current GST turnover. Section 8(7) of the of the CERP(PB) Rules defines the expression 'turnover test period' as a calendar month that ends after 30 March 2020 and before 1 October 2020 or a quarter that starts on 1 April 2020 or 1 July 2020. It also defines the expression 'relevant comparison period' as the corresponding period in 2019; that is, the same month or quarter in 2019.

2. Ms Diao gave evidence that Oakside qualified for jobkeeper payments because it had a 30% decrease in revenue during the pandemic even though it had not applied for or received jobkeeper.  Ms Diao's evidence was that because the Australia Post licence came to an end on 30 April 2020 and there was a lot of stress on her she didn't apply for jobkeeper because she closed the business for a few months.[42]   Ms Diao also stated in re-examination:

   I did not like to not pay rent.  I didn't even apply for the jobkeeper although I'm entitled to but still try to work hard, try to make business working to make a living, to be able to pay bills.[43]  

   [42] ts 53, 22 February 2021.

   [43] ts 98, 22 February 2021.

3. It is not in issue, and we find, that the applicant carried on business in Australia on 1 March 2020.

4. Because we have found that Ms Diao is not a credible witness in every respect, we are not prepared to accept as proof of the applicant's eligibility for jobkeeper her assertion of that fact.  Accordingly, we must consider whether the documentary evidence before the Tribunal confirms Ms Diao's evidence of the applicant's entitlement to jobkeeper.

5. In order for the applicant to be eligible for jobkeeper, it must establish that during the relevant period, being the period beginning on 30 May 2020 and ending on 27 September 2020, it satisfied the decline in turnover test in s 8 of the CERP(PB) Rules as set out above.

6. The applicant produced a profit and loss statement for the 12 months ending 30 June 2019, which showed a net profit of $71,639.[44]  Ms Diao said she could not produce a profit and loss statement for the year ended 30 June 2020 because the business had closed before 30 June 2020, and in any event she said that considered the information irrelevant for rent relief.[45] 

   [44] Exhibit B, page 195.

   [45] ts 90, 22 February 2020.

7. The applicant has not provided us with turnover figures for a relevant comparison period for the purposes of s 8 of the CERP(PB) Rules. The profit and loss statement for the year ended 30 June 2019 produced by the applicant cannot be relied upon to establish that there has been a decline in turnover. The production of annual turnover figures (as opposed to monthly or quarterly figures) does not meet the definition of a 'relevant comparison period' for the purposes of s 8 of the CERP(PB) Rules.

8. Based on the evidence we find that the applicant has not satisfied us that it meets the decline in turnover test for the period beginning on 30 May 2020 and ending on 27 September 2020.  Accordingly, we find that the applicant has not established that it was eligible for jobkeeper payments in the relevant period.

Not eligible for jobkeeper but nonetheless satisfied the decline in turnover test

1. We next turn to consider whether the applicant has at any time during the emergency period before 28 September 2020 satisfied the decline in turnover test in s 8 of the CERP(PB) Rules for the purposes of cl 2(1)(b)(ii) of the Code. That is, the question for the Tribunal is whether or not the applicant satisfied the decline in turnover test between 30 March 2020 and 27 September 2020.

1. The decline in turnover test in s 8 of the CERP(PB) Rules is set out above.

2. The applicant tendered evidence in the form of Australia Post licensee monthly statements for the periods ending 31 May 2019 and 20 April 2020.[46]  The statement for the period ending 31 May 2019 shows a year to date figure payable to the applicant of $219,096.17.  The statement for the period ending 30 April 2020 shows a year to date figure payable to the applicant of $206,358.86.  The amount paid to the applicant by Australia Post for the month of April 2020 was $4,589.05 compared with $20,667.96 for the month of May 2019.

   [46] Exhibit B, page 198-199. 

3. The applicant also produced a profit and loss statement for the 12 months ending 30 June 2019, which showed a net profit of $71,639.[47] As we have stated at [106] above the applicant did not produce a profit and loss statement for the year ended 30 June 2020.

   [47] Exhibit B, page 195.

4. The applicant has not provided us with turnover figures for a relevant comparison period for the purposes of s 8 of the CERP(PB) Rules because the corresponding period for April 2020 is April 2019 and not May 2019. As stated above, we have found that the profit and loss statement for the year ended 30 June 2019 produced by the applicant cannot be relied upon to establish that there has been a decline in turnover because the production of annual turnover figures does not meet the definition of a 'relevant comparison period' for the purposes of s 8 of the CERP(PB) Rules.

5. Accordingly, based on the evidence tendered by the applicant in these proceedings, the applicant has not satisfied us that it met the the decline in turnover test for the emergency period before 28 September 2020.

28 September 2020 - 3 January 2021

turnover in the financial year ending 30 June 2020

1. The respondent did not dispute, and we find, that the applicant's turnover for the financial year ending 30 June 2020 was less than $50,000,000 for the purposes of cl 2(1C)(c) of the Code.

qualifies for jobkeeper

1. In order for the applicant to be eligible for jobkeeper, it must establish that during the relevant period, being the period beginning on 28 September 2020 and ending on 3 January 2021, it satisfied the decline in turnover test in s 8 of the CERP(PB) Rules as set out above.

2. The applicant produced graphs of product sales generated by an accounting package, Square, utilised by the business for the month of September 2020 to December 2020.[48]  This was accompanied by a ledger showing product sales and total income.  For the period 1 September 2020 to 30 September 2020, the total amount collected by the business was $6,866.78.[49]   For the period 1 October 2020 to 31 October 2020, the total amount collected was $9,130.93.[50]  For the period 1 December 2020 to 31 December 2020, the total amount collected was $8967.37 (with a net total of $8840.04).[51]  The applicant did not provide any documentary evidence of comparative turnover figures for the same months in 2019.

   [48] ts 51, 22 February 2021.

   [49] Exhibit B, page 202.

   [50] Exhibit B, page 206.

   [51] Exhibit B, page 213.

3. Based on the evidence tendered by the applicant in these proceedings, the applicant has not satisfied us that it meets the decline in turnover test for the relevant period, being the period beginning on 28 September and ending on 3 January 2021 because the applicant failed to produce comparative turnover figures for the relevant comparison period as defined in the CERP(PB) Rules. We find that the applicant has failed to adduce the necessary documentary evidence that establishes that it qualified for jobkeeper payments.

not eligible for jobkeeper but nonetheless satisfied the decline in turnover test

1. We next consider whether the applicant has established that, despite not qualifying for jobkeeper, it has nevertheless established that it satisfies any test relating to turnover during July, August and September 2020 by which a person can qualify for jobkeeper during the relevant period. A basic decline in turnover is provided in s 8 of the CERP(PB) Rules as set out above. An alternative turnover test can be used by a business during July, August and September 2020 if it does not satisfy the basic decline in turnover test: see Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020 (Cth) (CERP(PB) Alternative Rules).

2. Relevantly, a business that has temporarily ceased trading during the relevant comparison period may be eligible for jobkeeper if the cessation in trading was due to an event or circumstances outside the ordinary course of the entity's business.  To satisfy the alternative test for a business that has temporarily ceased trading, it is necessary to compare the current GST turnover with the same period as the turnover period in the year immediately before the business ceased trading.  Also, the business must have resumed trading before 28 September 2020. 

3. Ms Diao stated that the applicant's Australia Post licence ended on 30 April 2020 and that the business closed on that date.[52]  Ms Diao also gave evidence that the business reopened on 1 September 2020.[53]  However, Ms Diao did not provide evidence of comparative turnover figures for July, August and September 2019.

   [52] ts 53, ts 66, 22 February 2020. 

   [53] ts 54, ts 81, 22 February 2020.

4. For the reasons set out above, we find that the applicant has not demonstrated that it satisfies the test in s 8 of the CERP(PB) Rules or any alternative turnover test during July, August and September 2020 because the applicant failed to produce comparative turnover figures for July, August or September 2019.

4 January 2021 - 28 March 2021

turnover in the financial year ending 30 June 2020

1. The respondent did not dispute, and we find, that the applicant's turnover for the financial year ending 30 June 2020 was less than $50,000,000 for the purposes of cl 2(1C)(c) of the Code.

qualifies for jobkeeper

1. In order for the applicant to be eligible for jobkeeper, it must establish that during the relevant period, being the period beginning on 4 January 2020 and ending on 28 March 2021, it satisfied the decline in turnover test in s 8 of the CERP(PB) Rules as set out above.

2. The applicant did not adduce any documentary evidence in respect of its decline in turnover for the relevant period beginning on 4 January 2021 and ending on 28 March 2021.  Accordingly, we find that the applicant has not established that it was eligible for jobkeeper payments in the relevant period.

not eligible for jobkeeper but nonetheless satisfied the decline in turnover test

1. We next consider whether the applicant has established that, despite not qualifying for jobkeeper, it has nevertheless satisfied any test relating to turnover during October, November and December 2020 by which a person can qualify for jobkeeper during the relevant period. A relevant basic test relating to turnover is provided in s 8 of the CERP(PB) Rules as set out above.

2. We find that the turnover tests under the CERP(PB) Alternative Rules do not apply to the applicant's circumstances. The applicant recommenced trading at the Premises on 1 September 2020 and, therefore, we find that the alternative turnover test relating to the cessation of a business does not apply.

3. As we have said previously, the applicant produced graphs of product sales generated from an accounting package, Square, utilised by the business for the months of October to December 2020.  These were accompanied by a ledger showing product sales and total income.  The applicant did not provide any documentary evidence of comparative figures for the same months in 2019.

4. The applicant also produced an email from Ms Diao to the respondent's property managers dated 3 February 2021 advising of a decrease in revenue from $48,996.69 (purportedly for the month of December 2019) to $8840.04 for the month of December 2020.[54]

   [54] Exhibit B, page 190.

5. We do not accept the applicant's contention that a decline in turnover in December 2020 is established by the email from Ms Diao dated 3 February 2021.  This is because we find that the turnover figures for December 2019 referred to in Ms Diao's email are not supported by any financial documentation, such as business activity statements or profit and loss statements generated from an accounting system.  Based on the evidence tendered by the applicant in these proceedings, we find that the applicant has not established that it satisfied any test relating to turnover during October, November and December 2020 because the applicant failed to produce comparative turnover figures for October, November or December 2019. 

Conclusion regarding eligible tenant

1. For the reasons set out above, we find that the applicant has not satisfied us that in respect of any of the relevant periods it was an eligible tenant for the purposes of cl 2 of the Code. Accordingly, we conclude that the applicant is not entitled to any rent relief under the Code and, therefore, we are unable to make an order under s 17(2) of the COVID Response Act.

Criteria relevant to the exercise of discretion

1. In case our finding that the applicant has failed to establish that it is an eligible tenant is incorrect we next consider whether we would find that the applicant would be entitled to rent relief, having regard to the requirements of the Code.

2. The overarching obligations of landlords and tenants when participating in negotiations under the Code are provided in cl 4 of the Code as follows:

   4.Overarching obligations of landlords and tenants

   In negotiations for the purposes of this Code, the landlord and the tenant under a small commercial lease ­

   (a)must cooperate; and

   (b)must act reasonably and in good faith; and

   (c)must act in an open, honest and transparent manner; and

   (d)must provide each other with sufficient and accurate information that is reasonable for them to provide in the circumstances for the purposes of the negotiations; and

   Example for this paragraph:

   Information evidencing a reduction in turnover of a business might include information relating to turnover generated from an accounting system or business activity statements submitted to the Australian Taxation Office.

   (e)must not make onerous demands for information from each other.

   Example for this paragraph:

   1.A demand to provide future cash flow projections.

   2.A demand to provide balance sheets, or profit and loss or year to date financials.

   3.A demand to provide bank balance details or statements.

   4.A demand that financial information be verified, examined, assured, audited or provided by a third party such as an accountant.

3. In making an order relating to a code of conduct dispute under s 17(2) of the COVID Response Act, the Tribunal must have regard to the financial impact of COVID-19 on the tenant's business, the landlord's financial capacity and the principles relating to rent relief set out in the Code (s 17(4) of the COVID Response Act).

4. Div 3 of the Code sets out the principles that apply to rent relief. Clause 5(2) of the Code, which forms part of Div 3, provides that a request for rent relief by a tenant must be in writing and be accompanied by:

   (a)a statement by the tenant that:

   (i)the tenant's lease is a small commercial lease; and

   (ii)the tenant is an eligible tenant in relation to the small commercial lease;

   (b)sufficient and accurate information that evidences that the tenant is an eligible tenant in relation to the small commercial lease;

   (c)sufficient and accurate information that evidences the reduction in the tenant's turnover that:

   (i)is associated with the business conducted on the land or premises that are the subject of the small commercial lease, and;

   (ii)the tenant has experienced during the emergency period or a relevant part of the emergency period.

5. We find that the applicant requested rent relief from the respondent on 23 March 2020, including that rent be deferred for two months.[55] However, at the time the applicant requested rent relief it did not advise the respondent of its eligibility for the jobkeeper scheme or provide any information about a decline in its turnover. For this reason, we find that the applicant's request for rent relief, when initially made, was not accompanied by sufficient and accurate information for the purposes of cl 5(2) of the Code.

   [55] Exhibit A, page 114.

6. The respondent's property manager replied to the applicant's request for rent relief on 15 April 2020 and requested that the applicant provide information including that it is eligible for the jobkeeper programme, a statement of the applicant's financial position, details of business interruption and other information relevant to its reduction in turnover impacting its ability to pay rent.[56]  The applicant did not provide any further information to the respondent in response to the request, until 17 December 2020.[57] Accordingly, we conclude that the applicant's request for rent relief was inconsistent with the principles set out in cl 5(2) of the Code and contrary to the overarching obligation on tenants in cl 4(d) of the Code to provide sufficient and accurate information to landlords for the purposes of negotiations. For that reason, we would decline to make an order granting rent relief even if we were (which we are not) satisfied that the applicant was an eligible tenant.

   [56] Exhibit A, page 115-116.

   [57] Exhibit B, pages 192-197.

7. We have found that the closure of the business conducted at the Premises was the result of the termination of the applicant's Australia Post licence rather than attributable to COVID-19.  For that reason, which is a factor to which we must have regard, we would decline to make an order for rent relief even if the applicant had established that it was an eligible tenant under the Code.

Compensation

Lost jewellery

1. In its submissions the applicant makes a claim for compensation for the loss of jewellery which it alleges was taken from the Premises as a consequence of the respondent changing the locks in June 2020.

2. In the course of her cross­examination Ms Diao seemed to indicate that she no longer wished to pursue her application for compensation for lost jewellery.[58]  However, that statement seemed equivocal.  As a result we have considered the issue of whether the applicant is entitled to compensation. 

   [58] ts 95-96, 22 February 2021.

3. In her evidence Ms Diao stated that the jewellery taken from the Premises belonged to her.  The major item which was taken, she says, was an engagement ring which had been given to her by her former husband which she kept at the Premises because she thought it was safe.[59]  No evidence was given by Ms Diao of the name of her former husband. 

   [59] ts 20, 22 February 2021.

4. At page 40 and 41 of Exhibit C (documents tendered by the applicant) are copies of receipts for certain items of jewellery.  Those receipts do not indicate that the jewellery to which they relate were purchased by Oakside.  The tax invoice from Jogia diamonds which is at page 40 of Exhibit C states that the diamond sold on 22 August 2008 was sold to a Mr Douglas Lander.  The tax invoice dated 10 June 2018 from First State Auctions which relates to the purchase of other jewellery which is at page 41 of Exhibit C was issued to a Julia Lander.  There is no evidence before us for which compensation is claimed from which we could find that any of the three items of jewellery were owned by Oakside.

5. There was also no evidence given by Ms Diao that the jewellery referred to in the invoices was in fact the jewellery which she alleged was stolen after the locks were changed or even that the jewellery was in fact stolen.  The document headed 'How to Upload CCTV Footage to Evidence.com.au' which is generated by the Digital Investigations Team of the WA Police which is pages 38-39 of Exhibit C contains no information that would indicate to what it relates apart from a handwritten notation on its final page that refers to police report No. 240620112888529.  

6. In circumstances where there is no evidence that the jewellery was stolen or belonged to the applicant we could not make an order compensating Oakside for its loss even if we had the authority to do so under the COVID Response Act or the Retail Shops Act.  

Legal fees and security guards

1. The applicant seeks compensation for the costs of obtaining legal advice.

2. At page 35 of Exhibit C is a Bankwest record of payment indicating that the sum of $3,546.46 was paid to Gregory Metaxas Legal on 7 July 2020.  There is no evidence as to who paid it or to what it related.

3. At page 36 of Exhibit C is a tax invoice dated 25 September 2020 from M6:8 Legal for the sum of $4,136 issued to the applicant.  The Fee Schedule attached to that invoice which was at page 37 of Exhibit C indicates it was for work done between 18 September 2020 and 25 September 2020 and appears to be in connection with requests made to vary the permitted use under the Lease rather than responding to a changing of the locks which occurred after what was said to be an unlawful re-entry of the Premises in June 2020.  The Tribunal has no evidence upon which it could be satisfied that the invoice was paid. 

4. The applicant also tendered documents indicating that it emailed an inquiry for a quote for security patrols in December 2020 after receiving the most recent notice of termination.[60]  These costs are not associated with remedying any unlawful re-entry.

   [60] Exhibit D.

5. Neither the COVID Response Act nor the Retail Shops Act permits the Tribunal to make any award of compensation for expenses of these kinds.  In any event, there is insufficient evidence before us that would persuade us that such an order should be made, even if it could be made.   

Declarations sought by the respondent

1. In its written submissions the respondent states that in all the circumstances it is appropriate for the Tribunal to make declarations that will give effect to the termination and ensure that the applicant vacated the Premises.[61]

   [61] Para 113 subs dated 3 March 2021.

2. Whether the notice of termination is lawful turns on more than whether there were lawful grounds for taking the action.  Matters such as whether the notice was properly given under the terms of the Lease are relevant. 

3. This was not a matter raised at the hearing and the applicant was not on notice that the respondent would seek declarations to that effect.  No evidence or submissions were made about matters relevant to such issues.

4. In the circumstances we decline to make declarations of the kind sought by the respondent. 

Conclusion

1. Ms Diao, who is the embodiment of the applicant, is clearly trying to make a living from the Premises.  She has faced difficulties and is trying to overcome them for the benefit of her family.  Her work ethic and her attempts are in many ways to be admired.  However, like everyone Ms Diao needs to ensure that Oakside complies with the terms of its lease and may only seek relief from the effects on her business of the COVID-19 pandemic.  None have been established on the evidence. 

2. We have found that since the licence with Australia Post was terminated on 31 March 2020 the applicant has not operated a post office from the leased Premises.  It therefore follows that the actions which the respondent has taken to terminate the lease and evict the landlord are not prohibited by the COVID Response Act.  The applicant is not entitled to an order refraining the respondent from taking those actions or permitting the applicant to remain in occupation of the Premises under the lease. 

3. The applicant has not paid all of the rent and outgoings due and payable under the Lease.  There are significant arrears.   The applicant may be suffering financial hardship but that hardship has not been shown to have arisen from the effect of the COVID-19 pandemic.  Accordingly, the applicant is not entitled to any reduction in rent or any deferral of rent or any other form of relief which it may have been open to the Tribunal to give.     

1. No order for compensation will be made because the Tribunal has no jurisdiction to make orders of that type under either the COVID Response Act or the Retail Shops Act. 

2. The respondent sought a declaration under the SAT Act that will give effect to the termination and ensure that Oakside vacates the Premises.  It follows from what we have said above that the respondent's action in seeking to terminate the Lease is not precluded by the COVID Response Act.  However the Tribunal is not prepared to make a more general declaration as to the validity of its actions to terminate the lease.  There may be matters that affect the validity of the termination action which are not connected with the COVID Response Act about which the Tribunal is unaware.     

Orders

1. Subject to hearing from the parties we propose to make orders consequent to our findings in the following terms:

   1.The applicant's application is dismissed.

   2.The answer to the question arising under the lease which was referred to the Tribunal under s 16 of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) is that since 1 April 2020 the applicant has not operated a post office from the premises.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

CH

Associate to Judge Glancy

22 APRIL 2021