Perfection Fresh Australia v Melbourne Market Authority (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 02567 of 2013

PERFECTION FRESH AUSTRALIA PTY LTD AND OTHERS	Plaintiffs
v
MELBOURNE MARKET AUTHORITY	Defendant

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	17-18 JUNE 2013
DATE OF JUDGMENT:	27 JUNE and 2 JULY 2013
DATE REASONS PUBLISHED:	2 JULY 2013
CASE MAY BE CITED AS:	PERFECTION FRESH AUSTRALIA v MELBOURNE MARKET AUTHORITY (No 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 342

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INJUNCTIONS – Interlocutory injunction – Applicable legal principles – Estoppel – Contract – Unconscionable conduct within the meaning of Schedule 2 of the Competition and Consumer Act 2010 (Cth), ss 21 and 22 – Whether serious question to be tried – Whether damages an adequate remedy – Balance of convenience – Direct communication between parties – Whether parties should be prevented from communicating directly in the ordinary course – Professional Conduct and Practice Rules 2005 (Vic), r 18.4.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr N Lucarelli QC with Mr J Patterson and Mr A Dinelli	Wilmoth Field Warne
For the Defendant	Mr J Karkar QC with Mr M Wyles SC, Dr C Button and Mr M Costello	Herbert Smith Freehills

TABLE OF CONTENTS

A. Introduction

B. Background

C. Events leading up to the Ballot

C.1    General matters
C.2    Specific documents directly relied upon
C.3    Further documents and other matters relied upon

D. Overview of the pleaded case

E. Legal principles

E.1 Injunctive relief
E.2 Unconscionable conduct

F. A serious question to be tried?

F.1     Estoppel
F.2     Contract
F.3     Events after the Ballot
F.4     Unconscionable conduct

G. Harm which might be suffered and the balance of convenience

H. Paragraph 2 of the summons

I. Other matters

J. Conclusion

HIS HONOUR:

A. Introduction

This is the second occasion upon which the plaintiffs have moved the court for injunctive relief. The first occasion was on 28 May 2013. On 30 May 2013 Vickery J provided interim relief (“Vickery J’s Judgment”).[1] His Honour granted an interim injunction in the following terms:
[1][2013] VSC 287.

Until 5:00 pm 18 June 2013, or further order, the Defendant (the “Authority”) whether by itself, its servants and/or agents or otherwise howsoever be restrained from:
(a)removing or purporting to remove any store holders’ allocation;
(b)otherwise disentitling a store holder from their allocation;
(c)reallocating any store holders’ allocation to any other person;
(d)informing or stating to any store holder that if they do not comply with a request then the Authority will remove their allocation;
(e)informing or stating to any store holder that if they do not comply with a request then the Authority will otherwise disentitle them from their allocation –
of a store at the Epping Market.

By agreement between the parties, upon the plaintiffs giving the usual undertaking, this injunction was extended on 18 June 2013 until the determination of this interlocutory injunction application.

On 30 May 2013, his Honour also ordered a mediation pursuant to r 50.07 of the Supreme Court (General Civil Procedure) Rules2005 (Vic) and s 66 of the Civil Procedure Act 2010 (Vic). That mediation has been conducted.

The orders set out in paragraph 1 above largely reflect the relief sought in paragraph 1 of the plaintiffs’ summons dated 22 May 2013. The plaintiffs now also seek the following relief:

Until the hearing and determination of this proceeding, or further order, the [defendant] whether by itself, its servants and/or agents or otherwise howsoever be restrained from communicating directly with any of the store holders who the [defendant] has been informed are being represented by Wilmoth Field Warne, Solicitors, in relation to the relocation of the Melbourne Wholesale Fruit and Vegetable Market from West Melbourne to Epping.

The 1^st to 8^th plaintiffs conduct wholesale businesses at a large market, being the Melbourne Wholesale Fruit, Vegetable and Flower Market (“the West Melbourne Market”). The West Melbourne Market is located at 542 Footscray Road, West Melbourne. The West Melbourne Market has many components, including stores, stands, warehouses, offices, roads, car parks and loading areas. Each of the 1^st to 8^th plaintiffs is a storeholder at the West Melbourne Market. Some of these plaintiffs also have warehouses at the West Melbourne Market. All stores and warehouses are leased from the defendant (“the Market Authority”).

The 9^th plaintiff (“Fresh State”) was formed to represent persons whose place of business is the West Melbourne Market and who engage in the buying or selling of produce or services. Fresh State represents “the vast majority” of all persons that operate wholesale businesses at the West Melbourne Market, including the 1^st to 8^th plaintiffs. I will refer to all the plaintiffs collectively as “the Storeholders”.

The Market Authority was established pursuant to s 4 of the Melbourne Market Authority Act 1977 (Vic) (“the Act”). The objects of the Market Authority are as follows:[2]

(a)to provide a commercially viable wholesale facility for the efficient distribution of fresh produce;
(b)to optimise returns on land and assets controlled and managed by the Market Authority; and
(c)to ensure a fair and competitive environment for the wholesale trading of produce.

Further, the functions of the Market Authority include controlling, maintaining and managing the “Melbourne wholesale fruit and vegetable market” and “the market land”.[3] Market land is defined in s 3 of the Act, by reference to schedule 2. Schedule 2 consists of a plan which identifies the market land as 21.37 hectares located at 542 Footscray Road, West Melbourne. Further, I was informed by counsel that in May 2013 market land was gazetted under s 34 of the Act to include an area of land adjacent to the Hume Freeway at Cooper Street, Epping (“the Epping Site”).[4] The Epping Site is approximately 67 hectares.

[2]Section 5.

[3]Section 6.

[4]See Victoria Government Gazette G20, 16 May 2013 at 1015.

For the reasons that follow, on 27 June 2013 I made the following orders:[5]
[5]Immediately before the orders were made an undertaking was given in the following terms:
Upon the defendant (by its counsel) undertaking to the court that until 5 pm on Friday 12 July 2013 it will allow any current lessee at West Melbourne Market who participated in the ballot on 6 December 2012 to submit to the defendant agreements to lease and leases in accordance with the letter dated 21 May 2013 from the Department of Business and Innovation (which letter is exhibit JJR1 at page 995), and such amendments as have been indicated in court by the defendant’s senior counsel this afternoon 27 June 2013, the court orders that ….

(1)The injunction granted on 30 May 2013, and extended by consent on 18 June 2013, is discharged.
(2)The plaintiffs’ application pursuant to paragraph 1 of the summons dated 22 May 2013 is dismissed.
(3)The summons dated 22 May 2013 is otherwise adjourned to a date to be fixed.
(4)Liberty to apply.
(5)Costs reserved.

B. Background

His Honour Vickery J has already set out extensively some of the relevant background in this matter.[6] In the interests of expedition, I will not repeat what is there set out, but will assume the reader has had the benefit of reading Vickery J’s Judgment.
[6]Vickery J’s Judgment, [6]-[10], [13]-[40]. I note:
(1)References to the “Ninth Defendant” in pars 6, 8(e)(ii) and 10 should be references to the “9^th plaintiff”.
(2)The word “rented” in par 8(c)(ii) should read “licensed”.
(3)The paragraph numbered “8(h)(vi)” should be numbered “8(i)”.
(4)The heading “Intention to Lease” in par 28 should read “Instruction to Lease”.
(5)The references to “92 store holders” in par 29 should read “94 store holders”.
(6)The reference to “paragraph 82(b)” in the chapeau to par 31(c) should be a reference to “paragraph 31(b)”.
(7)The reference to “the Minister for Major Projects” in par 40 should be preceded by “a government representative, in the presence of”.

In summary, the Market Authority is seeking to relocate the wholesale fruit and vegetable market conducted at the West Melbourne Market to the Epping Site. This process is occurring by reason of a decision of the Victorian government to establish a new wholesale market facility. The Storeholders seek to obtain leaseholds at the Epping Site, but only on the basis that they obtain terms and conditions of any proposed lease which, amongst other things, are fair and reasonable.[7] For reasons I will develop, the Storeholders claim to have pre-existing rights which entitle them to new leases on this basis.
[7]Each of the Storeholders, including Fresh State, seek the allocation of premises at the Epping Site. Only the claims of the 1^st to 8^th plaintiffs are made in this proceeding. For convenience, I will refer to the claims made by the “Storeholders” throughout the judgment.

Various representations have been made by the Minister for Major Projects (“the Minister”) and by the Market Authority. These representations, together with the pre-existing arrangements between the parties and a ballot conducted on 6 December 2012 (“the Ballot”), are said to give rise to the causes of action sought to be advanced by the Storeholders in this proceeding.

The causes of action pleaded in the further amended statement of claim filed 11 June 2013 (“FASOC”) essentially fall into 3 categories; namely, claims in contract, estoppel, and unconscionable conduct as that term is to be understood in ss 21 and 22 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“the ACL”).[8]

C. Events leading up to the Ballot

C.1 General matters

[8]These provisions came into operation on 1 January 2011. The ACL has been part of the laws of Victoria from 1 December 2012: see Vickery J’s Judgment, [61]. The FASOC relies upon the ACL as it applies in Victoria, referring to the “Australian Consumer Law (Victoria)” (consistent with the description found in s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic)). For the purposes of this application, I have assumed, without deciding, that, in relation to the conduct the subject of this proceeding, the Market Authority “carries on a business”. Accordingly, I have also assumed the Market Authority is bound by the ACL pursuant to s 16 of the 2012 Act.

As I have stated above, the Ballot was held on 6 December 2012. The purpose of the Ballot was to determine priority for the allocation of stores at the Epping Site. The entitlement to participate in the Ballot was given to existing lessees, as at 15 November 2010, at the West Melbourne Market (“the West Melbourne Lessees”). As Vickery J noted, prior to the Ballot “[e]xtensive negotiations ensued between members of [Fresh State], the Government and the [Market Authority] as to how the proposed relocation should be implemented. The negotiations focussed in particular on how the relocation of business premises at the West Melbourne Market should be undertaken and how the rents payable in respect business premises (sic) sited in the Epping Market should be determined.”[9]
[9]At [19].

Although Vickery J did refer to some details of these negotiations,[10] it is now necessary to go into the more immediate events leading up to the Ballot in further detail. I note that his Honour did not have the benefit of any submissions of the Market Authority in relation to these events.[11]
[10]His Honour referred to “critical documents” at [73]-[78]. To avoid confusion, I note the references at [73], [74] and [78] to “29 July 2012” should read “29 June 2012”.
[11]I was informed that, although the Market Authority was represented on 28 May 2013, the submissions made on its behalf on that occasion were confined to the balance of convenience.

Paragraph 93A of the FASOC alleges an agreement made on or about 6 December 2012 (“the Agreement”). These allegations (which were not pleaded at the time the matter was before Vickery J) found a claim in contract, alternatively a claim in estoppel, which are additional bases upon which injunctive and declaratory relief is now sought by the Storeholders. Specific performance is also sought.

The particulars to paragraph 93A of the FASOC state that the Agreement was partly in writing and partly to be implied. Those particulars list exhaustively the documents comprising the written terms of the Agreement. Then the particulars set out further documents and other matters from which it is alleged, amongst other things, that certain terms are to be implied. Many of the events leading up to the Ballot are also relied upon in the unconscionable conduct claims.

C.2 Specific documents directly relied upon

There are 9 documents particularised as evidencing the Agreement “[i]nsofar as [the Agreement] was in writing”. By reason of the manner in which the case is pleaded, I will refer to the documents in some detail.

On 8 March 2012 the Minister circulated a “message to the Melbourne wholesale market”. That message included the following:

On 27 February 2012, three discussion papers concerning allocation arrangements for the new market were released for feedback from the marketing community. Comments are due back on 16 March 2012.
The discussion paper on the allocation of the store proposes an entitlement for current leaseholders for stores (as at 15 November 2010) [ie the West Melbourne Lessees] in the new market. Under the proposed entitlement:
·all current leaseholders of stores (as at 15 November 2010) will be made an offer of space as close as possible to their current store space; and
·if a current leaseholder sells their whole entitlement, the buyer is entitled to the same proposed allocation of space as the leaseholder who sold it.

Partial transfers of leases are not recognised in the proposed allocation where they would result in the creation of an additional store at Epping because there is no space to accommodate any more stores.
…
It is not true to say that transfers of leases have been disallowed. However all leaseholders and potential leaseholders involved in transfers must understand that they have no guarantee of an allocation until a final decision on the proposed allocations have been made.
Decisions on the proposed allocations will not be made until comments have been received from the market and consideration has been given to the views.
Once the decision is made, all eligible leaseholders will be notified of their allocation of space at the new market.
This entitlement to a space at the new market only becomes binding once a lease for the new market is signed.
(Emphasis added.)

On 29 June 2012 the Minister issued a statement entitled “Arrangements to apply for allocation of fruit and vegetable stores in the new wholesale market at Epping” (“the 29 June 2012 Statement”). The 29 June 2012 Statement referred to recent “consultation” with market members. The 29 June 2012 Statement included the following:

Store allocations will only be made to business (sic) currently holding leases in the market.
The following store allocation rules will apply so as to ensure that a store as close as possible in size to current holdings can be offered to all leaseholders: …

Various rules were then set out concerning the allocation of space to the West Melbourne Lessees, and the means by which different sized stores would be made available.

The 29 June 2012 Statement continued:

The arrangements above, along with the creation of small stores, ensure that stores as close as possible in size to current holdings can be offered to all leaseholders. If this approach is not adopted, then all existing leaseholders are not able to be accommodated in the new market. Consequently, an auction for the allocation of space in the new market would need to occur.

The 29 June 2012 Statement then referred to a compensation regime for those lessees that would lose space (depending on their ultimate allocation) if they were to move to the Epping Site.

The 29 June 2012 Statement also foreshadowed a ballot for the allocation of the stores across the entire market. It is not necessary to set out the detail here. It is sufficient for present purposes to note that rules were imposed unilaterally by the Minister as to how the Ballot was to be conducted. After setting out 13 separate rules, further rules were identified in relation to the selection of specific store locations. These rules totalled 6 in number. Finally, after all these rules were set out, the following was stated:

If you do not participate in each stage of the [B]allot or the selection process for a specific store, the space allocation offered to you will be forfeited and will become the subject of an open competitive tender to be conducted by the [Market Authority].
A trading period of two months will apply after the Ballot in order to settle all leaseholder store locations before Agreements for Leases are signed.
At the end of the allocation process (including the trading period), any unallocated space will be subject to an open competitive tender process.

The 29 June 2012 Statement then set out the “next steps” to occur, providing as follows:

The [Market Authority] will write to each eligible leaseholder:
·making an offer of store space at Epping;
·confirming the process for calculating the allocation of store space at the new market;
·specifying the store space to be offered to the leaseholder as a result of the application of those allocation rules;
·indicating the conditions which must be satisfied by leaseholders in order to accept an offer for space at the new market; and
·seeking comment on the preferred way of treating losses and gains of store space by leaseholders.

(Emphasis added.)

Finally, the 29 June 2012 Statement concluded as follows:

The formal offers of tenancies over specific stores at the new market will be contained in leasing documentation to be sent to leaseholders after the trading period has concluded.

The proposed terms of such leasing documentation were not the subject of any disclosure at this time. Indeed, the proposed terms were not disclosed at any time before the completion of the Ballot and the allocation of the stores at the Epping Site.

The next document relied upon by the Storeholders was a discussion paper dated June 2012. It is not clear whether this was communicated to the Storeholders before or after 29 June 2012.[12] The discussion paper was said to be “prepared for the [Market Authority] Advisory Committee by [the Department of Business and Innovation]”.
[12]The evidence is that it was available on the website of the Market Authority “in late June 2012”.

It is not necessary to go into the contents of this discussion paper in any detail. It set out numerous matters which were relevant to the considerations of the Minister in setting rent at the Epping Site. These matters included judgments to be made about the impact of proposed rent increases on the overall wellbeing of the market and its future.

The discussion paper also gave some background in relation to the funding that had been provided by the Victorian government in relation to the Epping Site. The part of the paper relevant to the funding included the following:

In July 2011, the Government announced that the Melbourne Wholesale Market would be relocating to Epping and that significant additional State funding would be provided to reduce the level of debt funding associated with the relocation from the original, unaffordable level of $216 million to a maximum of $120 million. Under the previous level of debt funding, rents would have been unsustainable and would have been more than double current levels.

…
The model takes into account the mix of budget (“equity”) funding and debt to achieve the best outcome for rents.
…
The Victorian taxpayer contribution ($480 million) is not recoverable nor sought via rents and remains a sunk cost or a taxpayer subsidy to the project. Rents are set to recover only the debt component [ie a maximum of $120 million] and the operating cost.
(Original emphasis.)

On 10 July 2012 the Market Authority sent a letter to each of the West Melbourne Lessees. That letter set out the conditions upon which each of the West Melbourne Lessees would be able to take up an offer for space at the Epping Site. The letter recorded that there would be 3 sizes of store; namely, small stores, medium stores and large stores, the areas of which would be 56 square metres, 112 square metres and 193 square metres respectively. Each of the letters dated 10 July 2012 was specific to the circumstances of the West Melbourne Lessee to whom it was addressed. The letters identified the existing square metres held by the West Melbourne Lessee, and then identified the amount of space that would be offered at the Epping Site. Some West Melbourne Lessees were offered a larger amount of space at the Epping Site than had been held previously; others were offered a smaller area of space than held previously.

Having dealt with the particular circumstances of the West Melbourne Lessee, all the 10 July 2012 letters contained the following:

There are two conditions that you must meet in order to accept the allocation of store space set out in this letter. You will be informed of the date by which the conditions need to be fulfilled by you in order to accept the offer of store space described in this letter (Conditions Date).
If the conditions are not met by you by the Conditions Date then:
·you will have no ability to accept the offer of store space at the new market described in the letter;
·you will have no store space allocated to you in the new market; and
·the space allocation described in this letter will become the subject of an open tender to be conducted by the [Market Authority].

These conditions are that by the Conditions Date, you must sign and return to the [Market Authority]:
·a Store Agreement for Lease for the new premises which at the time that it is signed will be the agreement between the [Market Authority] and you in respect of the stores allocated to you at the new market; and

…
(Emphasis added.)

It is clear that the conditions to be met by the Conditions Date (and thereby “accept the offer”) could only be met after the Ballot had been conducted. This follows from the fact that the allocation of the new store(s) needed to occur before an agreement for lease capable of execution could be prepared and made available to be signed by the relevant West Melbourne Lessee. The letter set out in extensive detail the manner in which the Ballot was to be conducted. The objective of the process adopted was to “determine the order in which [each participating West Melbourne Lessee] is able to select its specific store location in the new market”. The letter also made plain that it was “at the time” of execution by the proposed lessee that there would be an agreement.[13]

[13]In these circumstances, it makes no material difference if the conditions are characterised as conditions precedent or conditions subsequent: see Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 552.3-552.6.

Each of the letters dated 10 July 2012 also included the following statement:

If you do not participate in the [B]allot or the selection process for a specific store, the space allocation described in this letter will be forfeited and will become the subject of an open tender to be conducted by the [Market Authority].
Following the [B]allot, there will be a two month period during which leaseholders may agree to trade store locations in the new market with other leaseholders. Only whole stores may be traded. Where leaseholders wish to trade a store location this will need to be communicated to the [Market Authority] to ensure that each Store Agreement for Lease refers to the appropriate premises for each leaseholder.

The next document particularised in paragraph 93A of the FASOC was a letter dated 28 September 2012 from the Minister to Fresh State. In this letter the Minister thanked Fresh State for engaging in discussions concerning proposed rental levels at the Epping Site. The Minister also thanked Fresh State for discussing its submissions with its members before finalising the submission made to the Victorian government. The letter continued by the Minister “endeavour[ing]” to address a number of statements that had been made by Fresh State. In so doing, what was stated included the following:

·The basis for rent at Epping is not comparable to that for the current market. Different operating costs apply to both markets. The methodology of the rents model has been approved by the Department of Treasury and Finance and all operating and debt servicing calculations will be checked before the final rents are set;
·In setting rents, the Government’s approach is one of reasonableness and fairness;

…
·The Government’s aim is to relocate as many tenants who wish to go to Epping as possible and not impose unnecessary cost increases that discourage their move;

…
·If rents were to be held static as you have suggested, it would result in a much higher increase in rents at a later date in order to achieve the required revenue target;

…
(Emphasis added.)

The letter dated 28 September 2012 also contained the following statement:

The Government has already demonstrated its commitment to keep rent increases at reasonable levels by providing significant additional funding to drastically reduce the unaffordable level of debt proposed under the previous Government (from $216 million to a maximum of $120 million). Without this funding, rents would have increased to well over double the current levels.
Furthermore, the Government has decided that none of the taxpayer contribution to the project is being recovered. This remains a taxpayer subsidy to the market relocation.

The next document identified in the FASOC is a statement from the Minister dated 4 October 2012, entitled “Rent options for the new wholesale market at Epping”. This statement recorded that the government had received 61 submissions in relation to the rent options being considered. In putting that the government’s main objective was for a successful transition of all current market members to the Epping Site, a number of statements were made. These included the following:

The Government’s approach towards rent setting is one of reasonableness and fairness (original emphasis).

This statement was preceded by 2 paragraphs, the contents of which were identical to the 2 paragraphs quoted in paragraph 31 above.

The 4 October 2012 statement also noted that the current rent increases at the West Melbourne Market were set following a market review. The intention to change this approach was stated, namely by increasing rent at the Epping Site by either 4% or CPI per annum, whichever is the higher.

The final document identified as recording the Agreement in writing is a notice from the Minister dated 2 November 2012. That notice was entitled “All store leaseholders offered stores at new Epping market”. The notice identified 8 separate ballots to occur on 6 December 2012. Separate ballots were to occur to accommodate the different number of stores and ownership arrangements amongst the West Melbourne Lessees. The notice referred back to the rules for the Ballot announced on 29 June 2012.[14] The concluding statements of the notice included the following:

Following the ballots for stores, storeholders will have six weeks (up to 21 January 2013) to trade and advise the Department of Business and Innovation of the outcomes of the trade.
Final leases will be issued to eligible storeholders from 22 January 2013 with all leases required to be signed by 15 February 2013. Any stores not committed to through leases by 15 February 2013 will be released for open public tender.
(Emphasis added.)

[14]See par 21 above.

The notice also contained a registration form to be completed by any of the West Melbourne Lessees who intended to participate in the Ballot.

C.3 Further documents and other matters relied upon

Insofar as the Agreement is alleged to be implied, a large number of matters are referred to in paragraph 3(a)-(r) of the particulars to paragraph 93A of the FASOC. These particulars include reference to 12 documents additional to those referred to in section C.2 above. I will refer to these documents before addressing the other particulars pleaded.

On 21 July 2009 the relevant government department (“the Department”)[15] issued a statement entitled “New Developments in the Relocation of the Melbourne Wholesale Market to Epping”. That statement “reiterate[d]” the government’s commitment to 5 key principles. One of the principles stated was:

Existing tenants will be given the opportunity to take up space in the Market once relocated at Epping.

[15]Then known as the Department of Innovation, Industry and Regional Development. Although the name of the relevant department changed, I will simply refer to the relevant department as “the Department”, unless quoting from a document.

On or about 11 November 2010 a document was circulated by the Department which listed every West Melbourne Lessee. That document recorded the current store space in total square metres for each West Melbourne Lessee. Based on the existing stores and the area held, an indicative allocation was provided. The indicative allocation stated the proposed new space (ie either small, medium or large), the number of stores (ie 1, 2 or 3), and the percentage change in area that would be held by each West Melbourne Lessee.

On 18 November 2010 the Department published a “Notice to Market Members”. That notice referred to recent discussions with Fresh State on issues affecting the relocation. The notice recorded that the allocation of stores had been based upon the Market Authority’s records of “store holdings at Footscray Road”. It stated that the Market Authority would be writing to the West Melbourne Lessees to seek confirmation of the information held by the Market Authority. The notice concluded with the following:

IMPORTANT PLEASE NOTE: Until an “offer for space” is made, storeholders will not know what they can offer a purchaser of their business in respect of space at the Epping Market. Current storeholders who are considering selling/trading part or all of their leases at Footscray Road will need to seek advice from the Melbourne Market Authority before agreeing to transfer part or all of their business at Footscray Road.
ALL OTHER MARKET MEMBERS
Other members of the market will be consulted on allocation options affecting them.[16]

[16]It appears only the West Melbourne Lessees (ie the wholesalers) were to obtain the benefit of the regime being put in place for the relocation to the Epping Site. I was informed by senior counsel for the Storeholders that there were several other entities who conduct business at West Melbourne Market (for example, entities who own and conduct cafes) who stand in a different position.

On 26 November 2010 the Department sent a letter to Fresh State. That letter responded to 4 questions Fresh State had asked the Department. The letter also recorded that the Department and the Market Authority had met on a weekly basis with the board of Fresh State to discuss issues and arrive at a resolution in relation to the questions raised.

The 4 questions said by the Department to have been asked by Fresh State are recorded as follows:

(1)Fresh State to receive the Government’s allocation model/or models (who gets what at Epping). “Like for like and no trade ups.”
(2)Fresh State to receive the Government’s warehouse allocation model, and if there is more warehousing at Epping than currently, then an explanation of how Government intends to deal with current warehouse tenants (sic) equity.
(3)Some form of commitment to transfer our current leases from Footscray to Epping so that members have certainty in planning their businesses, including buying or selling leases at Footscray and security of tenure.
(4)The $$$ amount of the Industry Assistance Package and what proportion will go to current leaseholders.

The letter attached a document entitled “Proposal on market relocation” (“the Proposal”). In answer to question 1, the Proposal included the following statements:

The Government has previously made the commitment that “current storeholders will be given the opportunity to take up a store at the new market.”
In order to give effect to this commitment:
· Each leaseholder will be allocated space at Epping; and
· All existing leaseholders can be accommodated at Epping, on the basis of data supplied by the [Market Authority] as at 15 October 2010.

The Proposal then set out the allocation principles to be applied. After setting out those principles (most of which I have already set out in section C.2 above), the Proposal then outlined a 3 stage process in relation to the allocation of the new stores. The Proposal then proceeded to set out 8 steps to implement the allocation. The last of these steps was “Agreement for Lease and leases for specific positions at Epping”.

In answer to question 2, it was stated that sufficient warehousing needs would be provided at Epping to achieve efficiencies and create a viable market. It was also said that proximity warehousing would only be built with a demonstrated demand for space. Principles were then set out in relation to how allocation of warehousing would be prioritised, with “warehouse tenants that occupy warehousing within the existing Footscray Rd market [to] be given first priority”.

In answer to question 3, no commitment to transfer any leases was given. The following response was given:

It is not legally possible to transfer an existing lease at Footscray Road to a future lease at Epping because any lease is specific to an identified property.
The allocation process that is outlined above gives leaseholders certainty for planning their businesses:
·evidence of current occupancy
·an offer for space
·an agreement for lease
·a lease.

In response to question 4, it was stated that the Industry Assistance Package would be $34.2 million. The application of the package was said to be the subject of “ongoing conversation between the market community and [the Department]”. It was stated that $19 million remained available to assist with the transition of all market groups.

The Proposal was the first detailed document in relation to the relocation to Epping. It is noteworthy that from the very start, it was contemplated that agreements for lease and new leases would be required in relation to taking up the allocations at Epping. In short, the suggestion that leases might be transferred was rejected. It is also of note that there was no representation made as to the proposed terms of any future agreements for lease and leases.

In addition to the Proposal, there was also a powerpoint presentation made available by the Department on 26 November 2010. This presentation was largely concerned with the principles to be applied to the relocation. It spoke in terms of “commitments” applying to the West Melbourne Lessees. The powerpoint presentation included the following:

TRANSLATION PRINCIPLE
As far as possible, given the total amount of store space and the number of stores available at Epping, each leaseholder will be offered/allocated space at Epping as close as possible to their current holding*
*A leaseholder may be offered a different number or configuration of stores compared to what they currently hold at Footscray Road.

The presentation then set out the principles to be applied in relation to those offered less space, and those offered more space.

Under the heading “Process to achieve allocation” appeared the following:

3 Stage process
…
Second stage
—“Offer for space” at Epping issued by [the Authority] (based on allocation principles). The offer will provide information on the type of store (large, medium, small) and the amount of space.
—Based on the offer, a period of trading will be permitted to enable leaseholders to make adjustments to their space allocation and for some to exit, if they so desire.
—Before any trade of a whole or a part of a holding is finalised, it must be notified to the [Market Authority] for approval. This is to check on whether there are any space or other implications.
…

Third stage
—Allocation of specific store positions.
—“Agreement for lease” (AFL) at Epping issued by the [Market Authority].
—A lease for each specific store/location at Epping to be issued to those who have signed an AFL with the [Market Authority].
(Emphasis added.)

The powerpoint presentation also had a section entitled “Steps to Implement”. These 8 steps reflected what was contained in the Proposal. The presentation is a lengthy document. It is not necessary to go into any further detail as the remaining material matters are, broadly speaking, set out elsewhere in the judgment.

On 5 August 2011 the Proposal was approved (as provided on 26 November 2010 but with changes to the dates that had expired) by all relevant parties at a meeting attended by various persons, including the Minister and representatives of Fresh State.

In February 2012 a discussion paper was circulated. The paper had been prepared for the Market Authority “Advisory Committees” by the Department. The discussion paper sought feedback from the West Melbourne Lessees on a number of matters. These matters included the allocation of store space at Epping and options where there were space differences between the space presently held at West Melbourne Market and that available at Epping. The discussion paper suggested a “limit of +/- 15%” as the defining point of gain or loss in relation to the allocation at the Epping Site (ie any gain or loss less than 15% would not be recognised). The discussion paper also included the following:

Before leaseholders are assigned to a specific store location, rents will be made available. Rent will apply to all store space.
…
Irrespective of the option adopted, a trading period of two months would apply after the ballots in order to settle all leaseholder store locations before leases are signed. …
At the end of the process, any unallocated space will be subject to a competitive tender process.

On 9 October 2012 a statement from the Minister was issued entitled “Arrangements to apply to loss and gain of store space at the new wholesale market at Epping”. This statement recorded that the loss and gain of space to West Melbourne Lessees would be valued at $3,000 per square metre. It also recorded that the difference would be calculated based on leases held as at 15 November 2010.

On 30 November 2012 the Department sent a letter to each of the West Melbourne Lessees. These letters dealt with the adjustment of store space anticipated by the proposed move to Epping. In relation to those West Melbourne Lessees that were to receive a reduced store space, the letter set out the amount of compensation payable based on the previously stated amount of $3,000 per square metre.[17] Conversely, those West Melbourne Lessees who were to gain space were required to make payments to the Department (subject to a number of qualifications it is not necessary to detail here).
[17]The evidence discloses that some of the West Melbourne Lessees who fall into this category have already been paid compensation. This is notwithstanding that those lessees have not yet signed any agreement for lease or lease in relation to the Epping Site. Senior counsel for the Market Authority said if these lessees did not take up new leases they might be the subject of some restitutionary claims, but the better view was these payments might be treated as ex gratia payments. In any event, nothing turns on this presently.

On 4 December 2012 the Market Authority published “Market circular No: 572”. It was addressed to “All Store Leaseholders at the Melbourne Market”. The circular set out the details for the Ballot to be held on 6 December 2012. It also provided certain rules in relation to the conduct of the Ballot. It concluded with the following:

A trading period of two months will apply after the [B]allot in order to settle all leaseholder store locations before Agreements for Leases are signed. At the end of the allocation process (including the trading period), any unallocated space will be subject to an open competitive tender process.

The final document particularised in this part of the FASOC was a pro forma letter from the Minister dated 6 December 2012. The evidence discloses that such a letter was sent to each of the West Melbourne Lessees who participated in the Ballot congratulating those West Melbourne Lessees on selecting the store or stores chosen upon the Ballot being conducted. That letter stated:

The Government’s main objective for the Melbourne Market Relocation Project is to successfully transition all current market members who choose to go to the new market site at Epping. We understand that for many businesses this will involve significant change to how they currently operate.
…
The next step in your move to Epping is the execution of the standard Agreement to Lease and Lease Agreement by 28 February 2013.

It was contended by the Market Authority that 28 February 2013 was the “Conditions Date” as that term was defined in the letters dated 10 July 2012.[18] That is plainly correct. No submission was made in opposition to this contention.

[18]See par 28 above.

The letter then attached a series of documents, namely a summary of the key commercial terms of a standard agreement for lease and lease, drafts of those documents, draft fitout guidelines, floor plans and a leasing timetable.

The attached leasing timetable set out the process for finalising the leasing documentation for the Epping store space selected by each of the West Melbourne Lessees. It notified each of them that the agreement for lease and lease were required to be executed and received by the agent appointed by the Market Authority (“the Agent”) by 5 pm on 28 February 2013. It stated that after this date the Market Authority would tender any “un-signed stores” on the open market. The leasing timetable also stipulated that it was necessary for the West Melbourne Lessees to sign an instruction to lease form by 5 pm on 21 February 2013. Execution copies of leasing documentation would be prepared on the basis of the information provided in that form. It was foreshadowed that the final standard documents for the agreement for lease and the lease would be available on 16 January 2013.

In addition to referring to the 12 further documents, the following particulars are provided:

3Insofar as the [Agreement] is to be implied, the [Storeholders] rely upon the following matters:
(a)prior to the relocation of the market being considered in the context of lease terms in 2003, leases entered into by store holders for stores at the West Melbourne Market were:
(i) for terms of 5 years; and
(ii)had an annual rent increase clause which increased rent by the equivalent of CPI;

(b) the matters in paragraphs 137A(f) to (i) below;
(c)the construction of the Epping Market for the specific purpose of:
(i)the Melbourne wholesale fruit and vegetable market being conducted from there; and
(ii)enabling the store holders to continue operating their wholesale businesses from the Epping Market following relocation;

…
(f)On 17 November 2010, store holders that attended the [Fresh State] members information session were informed of the store space allocated to them by the [Market Authority] set out in the … indicative allocation table;
…
(k)at all relevant times after 26 November 2010, the [Market Authority] required that [West Melbourne Lessees] informed it of any sale or assignment of rights to the allocation of store space at the Epping Market;
(l)in August 2012, the [Market Authority] no longer sought to include a term, in deeds of assignment of leases of stores at the West Melbourne Market, that the assignee may not be guaranteed store space at the Epping Market;
(p)immediately before the [B]allot took place (on 6 December 2012) the [Market Authority] displayed a plan of the central market complex which took into account all of the sales or assignments by store holders of allocations of store space at the Epping Market that had been entered into prior to 30 November 2012.

By way of cross-reference to paragraph 137A(f)-(i) of the FASOC,[19] the following particulars were also pleaded as matters relied upon:
[19]See subparagraph (b) in the preceding paragraph.
(f)the [Market Authority] has decided that at or about the time of the closure of the West Melbourne Market the Epping Market will open and commence operating as the only wholesale fruit and vegetable market in Melbourne;
(g)further to paragraph (f) above, the Epping Market will then be the only location at which the store holders can continue to conduct their wholesale businesses following the closure of the West Melbourne Market;
(h)after the closure of the West Melbourne Market and the opening of the Epping Market, in order to continue to operate the wholesale businesses, the store holders must be able to operate their wholesale businesses from a store at the Epping Market;
(i)by reason of the matters in paragraph (h) above, if a store holder is not able to operate their wholesale business from a store at the Epping Market then the store holder will lose the value of that business.

D. Overview of the pleaded case

The FASOC consists of 195 pages. It is divided into 10 sections. Section G of the FASOC is entitled “Chronology of key events”. It consists of 25 pages and covers a period of more than 8 years. The chronology pleaded commences with a media statement from the then Premier of Victoria on 5 May 2005 to the effect that the West Melbourne Market would move from Footscray Road to the Epping Site. The chronology concludes by referring to a statement alleged to have been made by a government representative on 13 May 2013. That statement is pleaded as being to the effect that the market presently located at Footscray Road would open at the Epping Site in the third quarter of 2014, or possibly 2015.

It is unnecessary to go through the many allegations of fact made. The background to the case, together with the specific matters relied upon by the Storeholders in the events leading up to the Ballot have already been traversed.[20] Suffice to say that the move has been a drawn out, and presently continuing, process which has involved extensive review and consultation. This has included a fresh review and consultation process as a result of the present government being elected on 2 December 2010. In consequence of this later process, on 20 July 2011 the government confirmed it was proceeding with the relocation to Epping.[21]
[20]See pars 8-60 above.
[21]See par 26 above.

Having set out this extensive chronology, the FASOC, in section GA, then pleads the facts relevant to the Agreement. That part of the pleading (paragraphs 93A-93I) also incorporates claims based on estoppel. The terms of the Agreement, “alternatively the estoppel agreement” (“the Estoppel Agreement”), are pleaded as follows:[22]
[22]FASOC [93F]. I have adapted some of the language to make the terms used consistent with the terms used elsewhere in the judgment.

(a)The lease to be offered to the West Melbourne Lessees by the Market Authority would be on the following basis:
(i)the lease would be for the store(s) allocated to the West Melbourne Lessees in the Ballot;
(ii)the lease would be for a term of 5 years;
(iii)the initial rent would be fair and reasonable;
(iv)the rent would be increased annually by an amount equivalent to the CPI;
(v)upon the expiry of the lease term the rent would be reviewed to market; and
(vi)otherwise upon the terms and conditions mutatis mutandis of the previous leases entered into between the Market Authority and the West Melbourne Lessees;

(b)In the alternative to paragraph (a) above:
(i)the terms of the lease to be offered to the West Melbourne Lessees would be in all respects fair and reasonable; and
(ii)the Market Authority would act in good faith and fairly in setting the terms of the lease to be offered to the West Melbourne Lessees;

(c)The West Melbourne Lessees could sell or assign their right to be offered a lease of the store(s) referred to in subparagraph (a) above provided the Market Authority was notified of the sale or assignment; and
(d)the stores at the Epping Market, to be leased to West Melbourne Lessees, would at the Market Authority’s expense be suitable to conduct the West Melbourne Lessees’ wholesale business (at Epping).

It is alleged that the Agreement, alternatively the Estoppel Agreement, was breached by reason that:

(1)The Market Authority failed, refused or neglected to offer a lease in the terms pleaded.[23]
(2)There was a failure, refusal or neglect to offer a lease for stores that were fit for the purpose of conducting wholesale businesses.[24]

[23]FASOC [93G].

[24]FASOC [93I].

Next, in section H of the FASOC, the Storeholders plead (in paragraphs 94-346B) a lengthy series of matters. With recent amendments involving the insertion of new paragraphs, there are 305 separate paragraphs in this part of the pleading. These form the basis of alleging unconscionable conduct on the part of the Market Authority. The matters alleged to establish unconscionable conduct fall, broadly speaking, into 2 categories; namely, general matters as to unconscionability and 9 specific matters alleged to be unconscionable. As to the general matters pleaded, they are articulated to support the allegation that the relocation to the Epping Site is, in effect, a compulsory relocation. In relation to the 9 specific matters, 5 of them are broken down into a number of sub-categories.

To descend to the level of detail pleaded as the basis for the individual claims of unconscionable conduct would make this judgment unwieldy. This is not appropriate for an interlocutory judgment of this kind. A list of the sub-categories by reference to the topics of the matters pleaded demonstrates that the Storeholders have chosen to complain about a very large number of matters the subject of negotiation to date. Those topics are as follows:

(1)       The level of rent: paragraphs 98 to 128.
(2)       The basis of the rent review: paragraphs 129 to 138.
(3)       The store dimensions: paragraphs 139 to 143.
(4)The steel beams intended to be used as part of the fitout: paragraphs 144 to 153.
(5)The location of the drainage outlets: paragraphs 154 to 157.
(6)The length of the initial term of the proposed leases: paragraphs 158 to 179.
(7)Use of ethylene glycol in the central cooling system (including consequences in relation to the ability to obtain insurance): paragraphs 180 to 209.
(8)The requirement for rental security bonds: paragraphs 210 to 232.
(9)The non-identification and non-quantification of rates, taxes, levies and other charges for the stores: paragraphs 233 to 241.
(10)Fees to be imposed for the use of the central cooling system and heating system: paragraphs 242 to 254.
(11)Various warehousing issues: paragraphs 255 to 289.
(12)Failure of the Market Authority to agree to compensate Storeholders for moneys spent on stores at the West Melbourne Market: paragraphs 290 to 292.
(13)Business disruption and risks caused by the proposed relocation: paragraphs 293 to 297.
(14)Failure to pay compensation for direct costs of relocation: paragraphs 298 to 302.
(15)Failure to provide information as to the “Landlord’s Works”: paragraphs 303 to 309.
(16)Issues in relation to the fitout works at the Epping Site: paragraphs 310 to 331.
(17)Failure to offer to amortise the cost of tenants’ fitout works at the Epping Site: paragraphs 332 to 337.
(18)Complaints about the proposed operating rules at the Epping Site. Complaints are made about 14 separate rules: paragraphs 338 to 347.

The main body of the FASOC concludes with section I, pleading matters relevant to the proceeding being a group proceeding pursuant to Part 4A of the Supreme Court Act 1986 (Vic). Paragraph 350 of the FASOC reads as follows:

The group members to whom this proceeding relates are:
(a) the 93 store holders including [the Storeholders]; and
(b)the other store holders (referred to in paragraph (b) of the particulars subjoined to paragraph 349 above);

who will suffer loss and damage as a result of the conduct of the [Market Authority] set out herein.

Common questions of fact and law are then set out.

The prayer for relief is also of some considerable length. Not including costs or ancillary matters, there are 79 separate paragraphs setting out the relief the Storeholders seek. In summary, the Storeholders seek:

(1) Proposed store lease terms
(a)Declarations that the Market Authority agreed to offer store leases for stores allocated to West Melbourne Lessees on certain specific terms or alternatively on terms that were fair and reasonable in all respects, together with orders for specific performance to give effect to such alleged lease agreements.[25]
[25]FASOC, prayer for relief pars A(1)-A(4).
(b)A declaration that the Market Authority agreed that the stores allocated to each West Melbourne Lessee are to be made suitable, at the Market Authority’s expense, for the conduct by each West Melbourne Lessee of their wholesale business, together with an order for specific performance to give effect to such an agreement.[26]
[26]FASOC, prayer for relief pars A(5)-A(6).

(2) Treatment of store holders’ store allocations
(a)Declarations that the actual or threatened removal or disentitlement of West Melbourne Lessees’ allocations by the Market Authority constitutes statutory unconscionable conduct in the circumstances, together with injunctions to restrain any such conduct.[27]
[27]FASOC, prayer for relief pars A-C and E-F.
(b)A declaration that if the Market Authority removes or disentitles the West Melbourne Lessees from their allocations, the West Melbourne Lessees will suffer loss and damage.[28]
[28]FASOC, prayer for relief par D.
(c)Declarations that certain other alleged conduct of the Market Authority in relation to the proposed relocation of the wholesale fruit and vegetable market from Footscray to Epping constitutes statutory unconscionable conduct in the circumstances, together with an injunction to restrain such conduct.[29]
[29]FASOC, prayer for relief pars F(1)-F(2).

(3) Current and proposed rental increases
(a)Declarations that both current rental increases at West Melbourne Market and proposed rental increases at the Epping Site by the Market Authority constitute statutory unconscionable conduct in the circumstances or are otherwise not fair and reasonable, together with injunctions to restrain such conduct.[30]
[30]FASOC, prayer for relief pars G-I.
(b)A declaration that the market rent or a fair and reasonable rent for the stores at Epping market is $270.00 per square metre per annum, together with an injunction to mandate that the Market Authority charge West Melbourne Lessees an initial rent for stores at Epping that is the market rent, a fair and reasonable rent, or $270.00 per square metre per annum.[31]
[31]FASOC, prayer for relief pars J-K.

(4) Proposed store dimensions, steel beams and location of drainage outlets
Declarations that the Market Authority’s proposal to lease stores at Epping market to West Melbourne Lessees with certain fixed store dimensions, steel beams and drainage outlets constitutes statutory unconscionable conduct in the circumstances, together with injunctions to restrain such conduct.[32]
[32]FASOC, prayer for relief pars L-M(2).

(5) Allocation of initial lease terms for stores at Epping
Declarations that the conduct of the Market Authority in allocating initial lease terms to West Melbourne Lessees (including by recourse to the proposed quota system) and in making certain allegedly incorrect statements in relation to such lease term allocations constitutes statutory unconscionable conduct in the circumstances, together with injunctions to restrain such conduct.[33]
[33]FASOC, prayer for relief pars M(3)-Q.

(6) Ethylene glycol issues
Declarations that the conduct of the Market Authority in allegedly failing to provide certain information regarding the proposed use of ethylene glycol in the central cooling system constitutes statutory unconscionable conduct in the circumstances, together with injunctions to restrain such conduct and orders that the Market Authority provide certain information concerning these issues.[34]
[34]FASOC, prayer for relief pars R-T.
(7)Security bond issues and “make good” obligations for existing Footscray leases
(a)A declaration that, by making the alleged 6 May 2013 representation regarding the bank guarantee/insurance bond obligations under the proposed store leases, the Market Authority has engaged in misleading and deceptive conduct or conduct likely to mislead and deceive, together with an injunction to restrain the Market Authority from continuing to make the alleged representation.[35]
[35]FASOC, prayer for relief pars U-V.
(b)Declarations that the conduct of the Market Authority in relation to the proposed rental security bonds for the Epping store leases and the “make good” obligations in respect of existing Footscray store leases constitutes statutory unconscionable conduct in all the circumstances, together with injunctions to restrain such conduct.[36]
[36]FASOC, prayer for relief pars V(1)-X.

(8)Information regarding rates, taxes, charges, fees, costs and other expenses
Declarations that the conduct of the Market Authority in failing to provide information regarding various rates, taxes, charges, fees, costs and other expenses that will apply under the Epping store leases constitutes statutory unconscionable conduct in all the circumstances, together with orders that such information be provided and injunctions to restrain such conduct.[37]
[37]FASOC, prayer for relief pars Y-FF.

(9) Warehousing issues
Declarations that the conduct of the Market Authority in relation to the proposed warehousing at the Epping market constitutes statutory unconscionable conduct in all the circumstances, together with injunctions to restrain such conduct and orders that certain information as to the proposed warehousing be provided.[38]
[38]FASOC, prayer for relief pars FF(1)-JJ.

(10) Issues regarding compensation for relocation costs
Declarations that the conduct of the Market Authority in failing to agree to compensate West Melbourne Lessees for sums spent on their stores at Footscray, for the disruption to their businesses arising from relocation to Epping, and for the direct costs of relocation constitutes statutory unconscionable conduct in all the circumstances, together with injunctions to restrain such conduct.[39]
(11)Proposed treatment of “Landlord’s Works”, “Landlord’s Fitout Works Items”, other fitout costs and amortisation
Declarations that the conduct of the Market Authority in failing to provide certain information regarding the “Landlord’s Works” under the proposed store leases, its conduct in relation to the “Landlord’s Fitout Works Items” under the proposed store leases, its proposal that certain refrigeration and office fitout costs be borne by store holders under proposed store leases, and its failure to offer to amortise the costs of tenants’ fitout works under proposed store leases, constitutes statutory unconscionable conduct in all the circumstances, together with injunctions to restrain such conduct and orders that certain information be provided.[40]

(12) Proposed operating rules
Declarations that the conduct of the Market Authority in relation to its proposed regime of operating rules at Epping Market constitutes statutory unconscionable conduct in all the circumstances, together with injunctions to restrain such conduct.[41]

[39]FASOC, prayer for relief pars JJ(1)-KK.

[40]FASOC, prayer for relief pars KK(1)-QQ.

[41]FASOC, prayer for relief pars QQ(1)-RR and TT. For completeness, I note that paragraph SS of the prayer for relief is incomplete, simply providing for “[a]n injunction (both interlocutory and final) that the MMA by its servants, agents or howsoever otherwise be restrained from:”, but that other paragraphs (ie pars QQ(2) and TT) fully particularise injunctions which seek to restrain the alleged statutory unconscionable conduct in relation to the proposed operating rules.

As can be seen from the summary of the relief in the preceding paragraph, there is no claim made by the Storeholders for loss or damage. In other words, the Storeholders’ position is that they require either specific performance of the Agreement or the Estoppel Agreement (in either of the 2 alternatives pleaded) or they seek declaratory and injunctive relief. Accordingly, there is no basis contemplated on the case as advanced by the Storeholders for relief to be awarded consequential upon the market being relocated and established at Epping in accordance with the regime proposed by the Market Authority.

E. Legal principles

In relation to contract and estoppel, I will refer to the relevant principles in section F below (which deals with whether or not there is a serious question to be tried). However, in relation to injunctive relief and unconscionable conduct, it is convenient to address the relevant principles presently.

E.1 Injunctive relief

In Vickery J’s Judgment, his Honour set out the principles governing the circumstances in which a court will grant interim or interlocutory injunctions. As his Honour noted, these principles are now well established.[42]
[42]Vickery J’s Judgment, [42]-[52]. The Market Authority submitted that, as Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 was decided after Bradto v State of Victoria (2006) 15 VR 65, the court should not rely on Bradto v State of Victoria. However, on my reading of the 2 decisions, what was said in Bradto v State of Victoria was entirely consistent with the later decision of the High Court. Moreover, the decision of Bradto v State of Victoria has been referred to with approval repeatedly since 2006: see, for example, AGL HP1 Pty Ltd v Alanvale Pty Ltd [2012] VSC 192, [37]-[39], [64], [67]; Tabet v Commonwealth Bank of Australia Ltd [2008] VSCA 197, [28]-[29]; Petros v Beru [2007] VSCA 226, [17]. (For a useful discussion on what was considered in Australian Broadcasting Corporation v O’Neill, see Piroshenko v Grojsman (2010) 27 VR 489, 492-494 [13]-[20].)

His Honour conveniently summarised the position as follows:[43]

The granting of injunctive relief is discretionary and the court must be satisfied that:
(a)there is a serious question to be tried in the sense that the plaintiff must show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending trial;
(b)if there is no injunction but the plaintiff‘s claim is ultimately vindicated, the plaintiff will have suffered irreparable harm for which damages will not be an adequate remedy; and
(c)the balance of convenience must favour the grant of the injunction.

[43]At [43].

His Honour also discussed the relationship between “a serious question to be tried” and “balance of convenience”. In short, if the claim of a plaintiff is very weak then the balance of convenience must be more strongly in favour of the plaintiff before the court grants any injunctive relief so that there is a lesser risk of injustice in the granting of any injunction.[44]
[44]At [48]-[49], citing Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 82 [84]; Bullock v The Federated Furnishing Trades Society of Australasia(No 1) (1985) 5 FCR 464, 472.5. See also Samsung Electronics Co Ltd v Apple Inc (2012) 286 ALR 257, 272-273 [51] (Dowsett, Foster and Yates JJ); special leave to appeal was refused: [2011] HCA Trans 341.

Finally, the court should always bear in mind that it should take whichever course “appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’, in the sense of granting an injunction to a party who fails to establish [its/her/his] right at the trial, or in failing to grant an injunction to a party who succeeds at trial”.[45]

E.2 Unconscionable conduct

[45]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 73 [35].

In Vickery J’s Judgment, his Honour set out the relevant provisions of the ACL.[46] His Honour also referred to the relevant authorities.[47] In so doing, Vickery J quoted at length from the decision of Jessup J in ACCC v Lux Distributors Pty Ltd.[48] The parties accepted Vickery J has stated the law correctly. By reference to the judgment of Jessup J, together with the authorities his Honour referred to, the following propositions may be stated:

(1)The concept of unconscionable conduct in this statutory context is wider than the general law; the provisions build on and are not constrained by cases at general law and equity.
(2)The conduct complained of must demonstrate a significant or real (perhaps high[49]) level of moral obloquy that is irreconcilable with what is right or reasonable; it is not enough that the conduct is objectively unfair, unjust, wrong or unreasonable.
(3)The conduct complained of must usually involve deliberate wrongdoing, though in some circumstances recklessness, including wilful blindness, will suffice.
(4)The provisions focus on the conduct of the person said to have acted unconscionably.
(5)There are no specific elements to a cause of action; although there are certain ingredients or prerequisites that need to be satisfied, a finding of unconscionable conduct requires an examination of all the circumstances.

F. A serious question to be tried?

[46]At [111]-[112]. I have repeated the paragraphs of s 22(1) relied upon by the Storeholders in par 149 below.

[47]At [115]-[118].

[48](2013) ATPR 42-429.

[49]There is still some uncertainty on the authorities as to the appropriate description of the level of moral obloquy required: see, for example, Director of Consumer Affairs Victoria v Scully (No 3) [2012] VSC 444, [30]-[32] (Hargrave J), referred to with approval in Violet Home Loans Pty Ltd v Schmidt [2013] VSCA 56, [58] (Warren CJ, Cavanough and Ferguson AJJA).

I will now consider the issue of whether there is a serious question to be tried in relation to whether the causes of action pleaded are capable of supporting the relief sought.

F.1 Estoppel

It is convenient to deal with the claim founded on estoppel first.

In Waltons Stores (Interstate) Ltd v Maher[50] Brennan J made the following observations:[51]

It is essential to the existence of an equity created by estoppel that the party who induces the adoption of the assumption or expectation knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation …
The unconscionable conduct which it is the object of equity to prevent is the failure of a party, who has induced the adoption of the assumption or expectation and who knew or intended that it would be relied on, to fulfil the assumption or expectation or otherwise to avoid the detriment which that failure would occasion. The object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon.
If this object is kept steadily in mind, the concern that a general application of the principle of equitable estoppel would make non-contractual promises enforceable as contractual promises can be allayed. A non-contractual promise can give rise to an equitable estoppel only when the promisor induces the promisee to assume or expect that the promise is intended to affect their legal relations and he knows or intends that the promisee will act or abstain from acting in reliance on the promise, and when the promisee does so act or abstain from acting and the promisee would suffer detriment by his action or inaction if the promisor were not to fulfil the promise.
(Emphasis added.)

[50](1988) 164 CLR 387.

[51]At 423.4 and 423.7-424.2. See also at 428.8-429.4 as to what it is necessary to prove to establish an equitable estoppel.

As the above observations demonstrate, the doctrine of estoppel does not supplant the law of contract. In other words, generally speaking, the elements necessary to establish a valid cause of action in contract may not be sidestepped by relying upon a claim in estoppel.

In ACN 074 971 109 Pty Ltd (as trustee for the Argot Unit Trust) v The National Mutual Life Association of Australasia Ltd[52] the Court of Appeal referred with approval to the approach of Redlich J in that case at first instance. The Court of Appeal observed that his Honour distinguished between cases “in which the requirements of conscience necessitate that the defendant be held to an assumption which he or she has created and … ’other cases’ in which ‘the Australian preference is not to fulfil the plaintiff’s expectation but to analyse what is the detriment suffered by the plaintiff from doing acts and things which he or she might [not] otherwise have done because of the promise’”.[53]
[52](2008) 21 VR 351.
[53]At 393 [166] (Buchanan, Nettle and Dodds-Streeton JJA), referring to [2006] VSC 507 at [943]. See also at 395 [171], 396 [180].

As the Court of Appeal noted,[54] the High Court has not foreclosed, as a matter of doctrine, relief making good the assumption in an appropriate case. However, it is beyond question that it is essential to identify precisely[55] the detriment alleged to have been caused by the conduct giving rise to the estoppel pleaded. Only when the detriment is properly identified can the court then consider what, if any, relief is appropriate (assuming the impugned conduct is established or, on an interlocutory application, a serious question to be tried is established).
[54]At 394 [169].
[55]On an interlocutory application such precision is not required, however the probable or likely detriment still needs to be substantially identified.

The representation alleged in the FASOC,[56] the reliance upon which is said to give rise to the estoppel, is as follows:

… prior to the [B]allot being conducted on 6 December 2012, the [Market Authority] represented to [the Storeholders] that upon the [Storeholders] participating in the [B]allot and accepting the store(s) allocated to them the [Market Authority] would offer to each [Storeholder] a lease of the store(s) allocated to the [Storeholder] in the [B]allot,
(“the Representation”).

[56]FASOC [93B].

It is then alleged[57] that, in reliance upon the Representation, the Storeholders:

(1) Participated in the Ballot on 6 December 2012.
(2)Accepted the allocation to them of the specific store(s) as a consequence of the Ballot.
(3)Did not seek to obtain a lease of a store preferred by them, and were the subject of a restraint from seeking such a store.

No further detriment is alleged. In particular, it is not said that any of the Storeholders have adopted a different course of conduct in relation to their tenancy at the West Melbourne Market or the conduct of their businesses to date.

[57]FASOC [93C]-[93D].

Further, there is nothing in the evidence to suggest that any Storeholder was capable of obtaining a lease of a store at the Epping Site if it had not participated in the Ballot and accepted the allocation as a result of the Ballot. No alternate allocation would have been possible to date, as it is common ground that neither the Victorian government nor the Market Authority has put in place any alternate arrangements.

In these circumstances, in my opinion, on the evidence presently available, any case based on estoppel which sought to establish an entitlement for a new lease for a term of 5 years (amongst other things) must be considered to be very weak. On the facts before me, such relief would be entirely disproportionate to the minimum equity created if the estoppel case were made out.

By the FASOC,[58] the Storeholders allege the Market Authority is estopped from denying an agreement to offer each Storeholder a lease for the store(s) at the Epping Site as allocated in the Ballot. The Storeholders then plead[59] precisely the same terms as being applicable to both the Agreement and, in the alternative, the Estoppel Agreement. The Storeholders then seek specific performance in relation to the Agreement, alternatively the Estoppel Agreement. In so doing, the Storeholders have, in my opinion, impermissibly attempted to conflate the elements pertaining to a cause of action in contract with those referable to a cause of action in equitable estoppel.
[58]FASOC [93E].
[59]FASOC [93F].

It follows that the Storeholders have failed to show a sufficient likelihood of success in relation to the estoppel claims to justify an injunction being continued.

F.2 Contract

I now turn to consider whether there is a contractual relationship between the parties. This, in turn, requires the court to consider whether there was an offer capable of acceptance and, if so, of what that offer consisted (or at least arguably consisted).

As noted above[60] the case as pleaded alleges the Agreement was partly in writing. However, it is not contended that any particular document referred to in support of this allegation contains an offer which is capable of acceptance. Rather, the documents identified are put forward as cumulative in their effect, culminating in a state of affairs immediately before the Ballot on 6 December 2012. It is submitted by the Storeholders that this cumulative effect of various representations, in the circumstances surrounding those representations, comprises an offer capable of acceptance by the Storeholders to create legal relations, and in consideration of which the Storeholders have a right to new leases at new premises. In addition, it is submitted those new leases must be subject to material limitations as to the terms that may be lawfully put forward by the Market Authority.
[60]See pars 15 and 16 above.

Accordingly, to assess the seriousness of the question to be tried, it is necessary to look first at the 9 documents to see precisely what is being “offered”.[61]
[61]There may be a real issue at trial as to whether some or any of these documents were contractual in nature. I have assumed this point in favour of the Storeholders for the purposes of this application.

Based on the documents set out in paragraphs 17 to 35 above, it is apparent that what was proffered by the Market Authority included the following:

(1)An entitlement to an offer of space, subject to the allocation rules and conditions imposed.[62]
(2)The government’s approach towards rent would be fair and reasonable.[63]
(3)As part of setting the level of rent, the government would seek to recover a maximum of $120 million of the relocation costs incurred by the government.[64]
(4)Rent would be increased at 4% or CPI.[65]
(5)The Ballot would be conducted on 6 December 2012 to determine the order in which stores were to be allotted in accordance with the proposed allocations.[66]
(6)Formal offers would be contained in leasing documentation after the trading period and the position would only become binding once a lease had been signed.[67]
(7)A failure to participate in the Ballot or the selection process would result in the proposed allocated space being forfeited.[68]
(8)Any forfeited space would become the subject of an open/public competitive tender.[69]

[62]See pars 18, 22, 23, 27, 28 and 29 above.

[63]See pars 30, 31 and 32 above.

[64]See pars 26, 30 and 31 above. In fact, the evidence suggests the government will now seek to recover no more than $16.7m of debt, plus interest. However, given this evidence is apparently challenged by the Storeholders, I have not formed any view on this issue for the purposes of this application.

[65]See par 33 above.

[66]See pars 28 and 34 above.

[67]See pars 17, 21, 23, 28 and 34 above.

[68]See pars 21, 28 and 29 above.

[69]See pars 21, 29 and 34 above.

When a comparison is made between the matters set out in the preceding paragraph and the terms pleaded in paragraph 93F of the FASOC,[70] the material differences are readily apparent. Accordingly, the pleaded terms must necessarily rely upon the further documents and facts particularised in paragraph 3 of the particulars as giving a basis for those terms to be implied.
[70]See par 63 above.

The Storeholders acknowledge that the usual requirements for terms implied in fact are those set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings.[71] However, the Storeholders do not seek to satisfy those requirements as the contract for which they contend is not “a formal contract which was complete on its face”.[72] In essence, the Storeholders contend that the parties have not attempted to spell out all of the terms of the contract, but have left many of them to be inferred or implied.
[71](1977) 180 CLR 266 at 283.1.
[72]Cf Hawkins v Clayton (1988) 164 CLR 539 at 571.4 (Deane J).

I refer to section C.3 above.[73] I have set out the details of these documents at some length, referring to those parts of the documents that were emphasised by senior counsel for the Storeholders. In my view, neither individually nor collectively can those documents give rise to the terms as pleaded when read objectively with the purpose of ascertaining the intention of the parties. These documents are entirely consistent with the 9 documents previously referred to, the substance of which I have summarised in paragraph 92 above.
[73]At pars 36-58.

As can be seen from paragraph 3(a) of the particulars, the Storeholders’ starting point in seeking to establish implied terms of contract is the pre-existing terms of the leases at West Melbourne Market.[74] This necessitates a consideration of the relationship between the Storeholders and the Market Authority as set out in the existing leases. Although I was not taken directly to the terms of such a lease in the course of submissions, in my view it is important for the court to properly understand the legal relationship between the Storeholders and the Market Authority as determined by the existing leases governing the landlord/tenant relationship.[75]
[74]See par 59 above.
[75]The lease speaks in terms of landlord and tenant rather than lessor and lessee.

The key terms of the typical lease up until 2008 (as far as the evidence before me discloses[76]) included that a lease was for a term of 5 years at a fixed rent payable monthly in advance.[77] The annual rent was to be varied in accordance with a formula referable to the consumer price index. Every 3^rd year the annual rent was to be reviewed to market in accordance with specific provisions contained in the lease. These provisions allowed for a valuer to make a final and binding determination in the event the parties were unable to agree.
[76]A lease was tendered by the Storeholders which was said to be an example “of lease documents in use at the time with a five year term and a rent review to CPI”: affidavit of John Joseph Roach affirmed 14 June 2013, [69].
[77]Senior counsel for the Market Authority stated that it was incorrect that all leases were 5 years. He said some were 4 years, with an option for a further 1 year. Evidence was offered in reply, though none was filed. As will become apparent, my reasoning is not affected by whether the leases were all for 5 years, or only some of them.

(4)The Market Authority (and the Minister and the Department) have engaged in extensive consultation and negotiation with the West Melbourne Lessees, over an extensive period of time.
(5)The Market Authority has given the West Melbourne Lessees sufficient time for them to properly consider the terms of the proposed leases. This is particularly so given that, at the hearing on 17 and 18 June 2013, the Market Authority undertook that it would give the Storeholders a further 7 days to consider their position if the injunction in place were discharged. In fact, a further 15 days has been given.
(6)If the West Melbourne Lessees do not wish to accept the leases as proffered, they are not compelled to do so and are not necessarily shut out from obtaining a store or stores at Epping (albeit they do run the risk of missing out on a store, or obtaining a store which may be different or on more onerous terms, if they participate in the public tender process).
(7)The Storeholders, understandably, seek certainty but it may be that the circumstances are such that the desired level of certainty cannot be provided as the establishment of the Epping Site is still a work in progress.

In summary on this issue, I am persuaded by the evidence as it presently stands that there is a serious question to be tried about whether or not the conduct of the Market Authority was, in all the circumstances, unconscionable. However, as is apparent from the matters I have set out in the preceding paragraph, it is also likely that there are strong arguments to suggest that, in all the circumstances, the conduct of the Market Authority could not be properly characterised as unconscionable for the purposes of s 21(1) of the ACL. My view on the evidence available is that the likelihood of success at trial is uncertain. In short, the question is fairly evenly balanced, and in the circumstances the question of the balance of convenience ought to weigh heavily in determining the outcome of this application.

G. Harm which might be suffered and the balance of convenience

As is apparent from section F above, although I have found there is a serious question to be tried in relation to some of the claims made in the proceeding, I have not found that the Storeholders have particularly strong prospects of success. In these circumstances, the weight to be given to the balance of convenience is increased commensurately.

For the reasons set out below, I have formed the view that the balance of convenience overwhelmingly favours the Market Authority and that the order previously made granting injunctive relief should be vacated.

Essentially, the Storeholders put forward the following as key factors relevant to the alleged harm likely to be suffered by the Storeholders and the balance of convenience:

(1)The rent of $478 per square metre per annum may result in the Storeholders going out of business.

(2) The Storeholders will lose the right to a store at Epping.
(3) Damages are not an adequate remedy.
(4)The Storeholders have inadequate information upon which to properly consider the proposed leases.

I will deal with each of these in turn.

First, the evidence before the court does not establish that any of the Storeholders will go out of business if the new leases are signed. The submission is no higher than they may go out of business. The individual financial position of each of the Storeholders has not been provided to the court. In the circumstances, I cannot form any concluded view on this point. Although it is axiomatic that a rent increase will increase the operating expenses of a business, it does not necessarily follow that such an increase will necessarily make a business unprofitable. Further, the threatened conduct does not threaten the existing businesses of the Storeholders at any time up until the expiry of their existing leases. For the reasons set out above,[99] there is serious doubt about whether the Storeholders have a right to maintain their businesses beyond the term of their exiting leases.
[99]See pars 96-105 and 116-118 above.

Secondly, whether or not a Storeholder loses its store(s) is within each Storeholder’s own control. Each Storeholder is faced with the decision about whether they wish to have the certainty of maintaining the store(s) allocated to it by signing the relevant agreement(s) for lease and the lease(s). Adopting such a course would not preclude any Storeholder from maintaining a claim that the Market Authority has acted unconscionably. In addition to damages, there are many forms of relief that might be able to be obtained.[100] The Market Authority has accepted that a claim for damages could be pursued by the Storeholders in the event that the leases are signed. Also, the prayer for relief may be amended to propose what changes would be required to the new leases (or any other relevant transactional documents) to give the Storeholders appropriate relief in the event they are successful at trial.[101]
[100]See, for example, ACL, ss 237 and 243.
[101]The existing prayer for relief already seeks any further order as the court may deem appropriate, however it would be preferable to amend to identify specifically any further relief sought.

In short, if the Storeholders have a good case, the court is perfectly able to protect them pursuant to the provisions of the ACL. Obviously, there is a risk involved, namely that the Storeholders will not succeed at trial, but that is a matter for them to assess.

The above observations are particularly acute in circumstances where the Storeholders are not required to commence paying rent immediately. In other words, there will be no requirement to pay “double rent” by reason of the execution of the further leases. The course to be adopted will mean that the West Melbourne Lessees’ obligations under existing leases will cease at the time any of them become lessees at the Epping Site. Although there will be some costs involved in relation to fitout and the like, there is no suggestion that those costs would cause any of the Storeholders irreparable harm.[102]
[102]In relation to “Landlord’s Works”, see par 179(4) below. In relation to “Tenant’s Works”, these must be borne by the prospective lessees who commit to the Epping Site. One of the claims for unconscionable conduct is based on the inability of the lessees to amortise these costs in a manner similar to that proposed for “Landlord’s Works”: FASOC [332]-[337].

Thirdly, in my view damages would be an adequate remedy in this case. The parties have agreed to have the trial of this matter heard this year. Through proper case management, the court may ensure that this occurs. The Epping Site is not due to open until August 2014, at the earliest. In those circumstances, it is likely that the trial can be heard and determined well before any substantial losses are suffered.

Fourthly, in my view the provision of information, or lack thereof, does not materially alter the position. As noted above, a considerable amount of information has been provided by the Market Authority in more recent times.[103] On the information that is available, each Storeholder may decide to proceed with the lease or not. If some Storeholders have the desire to have more concrete information on certain matters, then they can await the public tender process,[104] but of course will lose their right to be allocated a store by so doing. Again, in my view, this is a matter for each Storeholder to decide.
[103]See schedule A to this judgment.
[104]The details of the public tender process are not yet known. The details of the public tender cannot be determined until the position of the West Melbourne Lessees is known. Accordingly, the Storeholders cannot be certain as to precisely what information will be made available as part of the public tender process.

In summary, I can see little real prejudice or harm to the Storeholders if the injunction were discharged (as it now has been). I understand a difficult decision will need to be made by each Storeholder in the short-term as to whether or not to sign the new lease(s). However, if that course is adopted by the Storeholders, there could be no suggestion that the Market Authority would not be able to meet any other award of damages, or comply with any order of the court, if it is ultimately found that one or more of the claims of the Storeholders is made out.

In addition to the matters put forward by the Market Authority in response to the factors raised by the Storeholders, the Market Authority has provided further evidence of prejudice it would suffer if the injunction were to remain on foot. That evidence includes the following:

(1)For the market to commence operations at the Epping Site by August 2014 (currently the proposed date[105]), in the short-term a reasonable amount (at least half) of the 144 stores currently under construction at the Epping Site must be let by the Market Authority and fitted out by tenants, or alternatively a few of the stores must be let out to larger businesses that are capable of generating sufficient volume of trading activity and business through-put to have an operating market.
(2)If the level of business activity referred to in the preceding subparagraph cannot be achieved the State would need to reserve all its options with respect to the relocation of the Melbourne Market to the Epping Site. It is possible the whole project will be scuttled.[106]
(3)The Market Authority and the Department need to know with certainty that, when the market opens at the Epping Site, either the facility will be fully tenanted or, if not, what the makeup of the tenants will be. If there are insufficient prospective tenants committed to the Epping Site the Market Authority and the Department will need to reconfigure the trading floor and also consider options for the remainder of the facility.
(4)The State needs to complete “Landlord’s Works” for each of the 143 stores at the Epping Site.[107] The Landlord’s Works must be decided, priced and constructed. None of this can occur until the tenants’ requirements are known, and those requirements cannot be ascertained until tenants have committed to stores by signing lease documentation. (The costs of the Landlord’s Works are to be borne by the tenant, but the evidence discloses they may be financed by being amortised through the rent. Accordingly, I consider the cost of such works to be a neutral factor when considering the balance of convenience. [108])
(5)Until the lease documentation is executed (or at least the subject of commitment), the State cannot finalise the warehousing demand at the Epping Site or establish the actual tenants’ warehousing requirements. These matters are prerequisites to the necessary funds being obtained for the work to be approved. Further, the warehousing itself cannot be finalised until such matters are known.[109]
(6)If lease documentation is not signed, uncertainty will arise in relation to construction which may be priced by tenderers for the development, thereby increasing costs, which in turn may be to the detriment of the tenants if those costs are allowed to be incorporated into the rent.[110]
(7)For so long as the State is required to keep an offer open to the West Melbourne Lessees, the opening of the market at the Epping Site will be deferred. Self-evidently, this will give rise to substantial holding costs being incurred.[111] Although these costs might ultimately be met by the undertaking as to damages, it is still a risk which causes prejudice.
(8)Very substantial sums have been committed to the project, presently standing at $600.7 million,[112] consisting of $480.7 million in taxpayer funds and $120 million by way of debt.[113] Whether these funds are “sunk” costs or amounts that continue to attract interest, substantial delay in realising the benefit from the expenditure of those costs will be contrary to the public interest.
(9)The review conducted by the present government found that continuing at the West Melbourne Market would cost taxpayers at least $100 million more than the option of relocating to the Epping Site. It also found that the West Melbourne Lessees would face higher long term tenancy costs as well as significant disruption to business if the wholesale food and vegetable market remained at West Melbourne and upgrades were completed at West Melbourne.[114]

[105]The Storeholders challenge the ability of the Market Authority to be ready by August 2014: affidavit of John Joseph Roach affirmed 14 June 2013, [33]. Whether the likely date is August 2014 or some months thereafter does not alter the key issues for consideration on this application. On either scenario, any material delay will be prejudicial to the Market Authority.

[106]The submission made by the Market Authority was that the continuation of the injunction would “probably scuttle the project”. Given the number of years the project has already taken and the amount of money that has been invested, I am not satisfied that such an outcome is probable. However, I accept it is a real possibility, especially in circumstances where the length of the potential delay (including the time for any appeal from the trial judge’s decision) could be considerable.

[107]There is an inconsistency in the evidence as to whether there are 143 or 144 stores proposed at the Epping Site.

[108]There is an additional complaint in relation to Landlord’s Works, namely that the costs are uncertain: affidavit of John Joseph Roach affirmed 14 June 2013, [28]. Given the matters referred to above, I do not consider this issue a material consideration for the purposes of this application.

[109]The evidence in relation to this matter was the subject of objection from the Storeholders. Whether or not that evidence is in admissible form, it is self-evident that until the requirements of the tenants are known it would not be possible to know precisely what the warehousing requirements will be. Further, presumably it would be unsatisfactory, and contrary to the prospective tenants’ interests, to proceed with construction without knowing such matters. If the warehousing were finalised without knowing the tenants’ requirements, it may ultimately prove to be unsatisfactory when the requirements crystallise.

[110]The evidence before the court was that there would be detriment to the tenants by reason of this uncertainty and the further costs incorporated into the tenders. This was objected to as a conclusion. Accordingly, I have referred to the above factors simply as a real possibility rather than a definite consequence.

[111]Figures were given in this regard, but they were subject to objection as being conclusory. As the components of the amounts put forward were not properly disclosed, I do not intend to take the actual amounts into account. However, it is self-evident there would be holding costs, which are likely to be significant.

[112]The Storeholders suggest that this level of expenditure fails to take into account the land the State will recover at West Melbourne once the relocation has been completed. This does not seem to be a matter which assists the Storeholders as the land is owned by the State and, subject to the terms of any existing leases, the State is at liberty to use the land upon which the West Melbourne Market is located as it chooses.

[113]The $120 million of debt funding is yet to be secured.

[114]This evidence was part of the evidence led by the Storeholders: JJRI, p 277, to the affidavit of John Joseph Roach affirmed 23 May 2013.

In my opinion, when one looks at the matters raised by the Market Authority collectively, there is a substantial prejudice which undoubtedly will be suffered if the injunction is maintained until the trial and determination of this proceeding. In order for it to have been possible to counter these factors, it would have been necessary for the Storeholders to have established a strong prima facie case or a strong case on issues relating to the balance of probabilities. For the reasons set out above, the Storeholders have failed to do so.

H. Paragraph 2 of the summons – communication between the parties

I refer to paragraph 3 above.

The evidence discloses that from time to time the Market Authority has contacted the Storeholders directly concerning the ongoing negotiations in relation to the relocation. Such communications have been engaged in after WFW Solicitors have asked the Market Authority to refrain from contacting their clients directly.

I was referred to no authority which suggests that, in a commercial case such as this, it is appropriate for the court to prevent the parties from speaking to each other directly.

As there are solicitors on the record for all parties, generally speaking, it would not be proper for one of the solicitors to communicate directly with the opposing party or parties to the exclusion of their solicitors.[115] Obviously once solicitors are on the record, unless one of the exceptions to the usual position exists, the solicitors should communicate directly with the opposing solicitors. However, absent some form of improper or inappropriate behaviour on the part of a party or parties, I can see no good reason why the parties should be prevented from communicating directly with each other. Indeed, there are likely to be good reasons why, in many cases, an order preventing direct communication would be contrary to the interests of the parties, and the interests of justice.[116]
[115]See Professional Conduct and Practice Rules 2005 (Vic), r 18.4.
[116]The Civil Procedure Act 2010 (Vic), s 8 requires the court to give effect to the overarching purpose. The order sought might be contrary to the overarching purpose as it might give rise to inefficiencies and additional cost.

Accordingly, the relief sought in paragraph 2 of the summons is refused.

Other matters

In light of my findings set out above, it has not been necessary for me to consider a number of submissions. I refer to 3 matters in particular.

First, in addition to submitting that the ACL did not apply to the Market Authority,[117] the Market Authority submitted that the subject matter of the proceeding was not justiciable. This was put on the basis that the relocation to the Epping Site was a matter of government policy, and that the court did not have jurisdiction to interfere in such matters. Given that there are many decisions of government that might be said to be the subject matter of the allegations in this proceeding, a careful analysis would be required in order to form any view about the merits of the submissions made. Given the desirability of providing a prompt judgment to the parties, I have refrained from engaging in this exercise.
[117]See fn 8 above.

Secondly, submissions were made by both the Storeholders and the Market Authority in relation to what rental would reflect the market rent at the Epping Site. Although this question is not irrelevant for the purposes of determining whether the government’s approach towards rent would be considered to be fair and reasonable, I have not found it necessary to form a view as to whether there is a serious question to be tried on the actual amount of rent. As noted above, if the rent is ultimately found to be excessive, this may be dealt with by way of an award of damages and, further or alternatively, by compelling amendments to the relevant provisions of the leases (and any other relevant transactional documents) governing the position at the Epping Site.

Thirdly, in Vickery J’s judgment, his Honour referred to the Storeholders having “a legitimate expectation”[118] that the process embarked upon by the Market Authority would be conducted reasonably and fairly. The use of such language reflects the submissions made on behalf of the Storeholders both before his Honour, and again before me.
[118]Vickery J’s Judgment, [128].

In my view, to speak in terms of “a legitimate expectation” in the context of the claims made in this proceeding is unhelpful. Clearly such language is inapplicable to claims in estoppel and contract. It may be that the Storeholders will ultimately contend that one of the relevant circumstances was the alleged legitimate expectation. Without expressing a final view, presently I am unable to see how an overlay of such language assists in determining the issue of whether the conduct of the Market Authority was, in all the circumstances, unconscionable.

J. Conclusion

I am not unsympathetic to the Storeholders’ position. It is inherently uncertain. It is fully understandable as to why the Storeholders would want to achieve as much certainty and continuity as possible, with as little risk as possible. However, it is necessary to have a proper legal or equitable basis to achieve that outcome.[119] For the reasons expressed above, I have found it unlikely there is a proper basis based on either the estoppel or the contract claims. In relation to the allegations concerning unconscionable conduct, although there is a serious question to be tried, given the factors in relation to the balance of convenience and the other remedies that are readily available to the Storeholders, it is my view that there is no proper basis upon which the injunction previously granted could be continued.

[Deliberately left blank.]

[119]Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 241 [91] (Gummow and Hayne JJ).

SCHEDULE A

Information provided by the Market Authority to the Storeholders in response to questions raised in the Storeholders’ summons dated 22 May 2013

Information requested Information provided Document and date provided

Safety of glycol to be used in secondary cooling system Food safe glycol will be used Letter to WFW Solicitors from the Department dated 10 May 2013

Steel support structure for each store Information about the relative load-bearing capacity of the steel beams in large and medium stores is available on the Market Authority website The Department letter dated 10 May 2013; online since 14 May 2013

Fitness for purpose of the fire sprinkler system The contract between the Secretary to the Department and Bovis Lend Lease requires that the sprinkler system meet approvals required by law and fire engineering requirements Affidavit of Viraj Perera, project director of Melbourne Markets Relocation Project, sworn 14 June 2013

Survey of each store The Storeholders who participated in the Ballot received store plans, copies of which are in each agreement for lease Tenancy pack provided to the Storeholders on 6 December 2012

Information and detailed drawings of secondary cooling system A schematic diagram showing configuration of the system has been provided to Fresh State Diagram provided by the Market Authority on 28 November 2012

Warehousing to be built, including rent for warehouse space, estimated fit out costs, method of allocation of warehouse space and proposed date of completion of construction Large quantity of information available Various documents as outlined in the affidavit of Viraj Perera sworn 14 June 2013 pars 77-102

Method of allocation of customer parking No decision has been made on the issue N/A

Rates to be paid by the Storeholders at Epping This information should be sought from the local council (City of Whittlesea) N/A

Copy of the design and construction contract between the Market Authority and Bovis Lend Lease dated 17 March 2010 The contract is available (without its schedules) to the general public on the Victorian government’s tender website Affidavit of Viraj Perera sworn 14 June 2013

Copy of head lease between the Market Authority and the Secretary to the Department dated 4 April 2013 This document is confidential between the Secretary and the Market Authority. A deed poll is instead to be provided to the Storeholders (not yet provided.) Letter to WFW Solicitors from the Department dated 10 May 2013

Bonds to be paid by the Storeholders at Epping The Storeholders are to provide a 6-month bond. Personal guarantees will not be necessary. Letter from the Department to WFW Solicitors of 3 May 2013.

Cost of Landlord’s Works for each store at Epping The State is in the process of obtaining a new cost estimate. Perera affidavit sworn 14 June 2013

---

Information requested	Information provided	Document and date provided
Safety of glycol to be used in secondary cooling system	Food safe glycol will be used	Letter to WFW Solicitors from the Department dated 10 May 2013
Steel support structure for each store	Information about the relative load-bearing capacity of the steel beams in large and medium stores is available on the Market Authority website	The Department letter dated 10 May 2013; online since 14 May 2013
Fitness for purpose of the fire sprinkler system	The contract between the Secretary to the Department and Bovis Lend Lease requires that the sprinkler system meet approvals required by law and fire engineering requirements	Affidavit of Viraj Perera, project director of Melbourne Markets Relocation Project, sworn 14 June 2013
Survey of each store	The Storeholders who participated in the Ballot received store plans, copies of which are in each agreement for lease	Tenancy pack provided to the Storeholders on 6 December 2012
Information and detailed drawings of secondary cooling system	A schematic diagram showing configuration of the system has been provided to Fresh State	Diagram provided by the Market Authority on 28 November 2012
Warehousing to be built, including rent for warehouse space, estimated fit out costs, method of allocation of warehouse space and proposed date of completion of construction	Large quantity of information available	Various documents as outlined in the affidavit of Viraj Perera sworn 14 June 2013 pars 77-102
Method of allocation of customer parking	No decision has been made on the issue	N/A
Rates to be paid by the Storeholders at Epping	This information should be sought from the local council (City of Whittlesea)	N/A
Copy of the design and construction contract between the Market Authority and Bovis Lend Lease dated 17 March 2010	The contract is available (without its schedules) to the general public on the Victorian government’s tender website	Affidavit of Viraj Perera sworn 14 June 2013
Copy of head lease between the Market Authority and the Secretary to the Department dated 4 April 2013	This document is confidential between the Secretary and the Market Authority. A deed poll is instead to be provided to the Storeholders (not yet provided.)	Letter to WFW Solicitors from the Department dated 10 May 2013
Bonds to be paid by the Storeholders at Epping	The Storeholders are to provide a 6-month bond. Personal guarantees will not be necessary.	Letter from the Department to WFW Solicitors of 3 May 2013.
Cost of Landlord’s Works for each store at Epping	The State is in the process of obtaining a new cost estimate.	Perera affidavit sworn 14 June 2013

[2013] VSC 342

27 JUNE 2013