SEDUCE PTY LTD ACN 078 918 653 and THE TRUST COMPANY (AUSTRALIA) LIMITED
[2016] WASAT 24
•14 MARCH 2016
SEDUCE PTY LTD ACN 078 918 653 and THE TRUST COMPANY (AUSTRALIA) LIMITED [2016] WASAT 24
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2016] WASAT 24 | |
| COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) | |||
| Case No: | CC:19/2016 | 4 MARCH 2016 | |
| Coram: | JUSTICE J C CURTHOYS (PRESIDENT) | 14/03/16 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed under s 47 of the State Administrative Tribunal Act 2004 (WA) | ||
| B | |||
| PDF Version |
| Parties: | SEDUCE PTY LTD ACN 078 918 653 THE TRUST COMPANY (AUSTRALIA) LIMITED |
Catchwords: | Misleading or deceptive conduct Settlement deed Available relief |
Legislation: | Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 16C, s 16D, s 16D(1), s 25D, s 26, s 26D State Administrative Tribunal Act 2004 (WA), s 47, s 47(1) |
Case References: | Lean v Tumut River Orchard Management Ltd [2003] FCA 269 Seduce Pty Ltd v The Trust Company (Australia) Ltd [2015] WASC 441 |
Orders | 1. Seduce Pty Ltd's application dated 8 January 2016 is dismissed under s 47 of the State Administrative Tribunal Act 2004 (WA) |
Summary | The respondent's application to dismiss under s 47 of the State Administrative Tribunal Act 2014 (WA) was successful on the basis that the relief sought by the applicant was not available and, in any event, any claim had been settled by a deed of settlement between the parties. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) CITATION : SEDUCE PTY LTD ACN 078 918 653 and THE TRUST COMPANY (AUSTRALIA) LIMITED [2016] WASAT 24 MEMBER : JUSTICE J C CURTHOYS (PRESIDENT) HEARD : 4 MARCH 2016 DELIVERED : 14 MARCH 2016 FILE NO/S : CC 19 of 2016 BETWEEN : SEDUCE PTY LTD ACN 078 918 653
- Applicant
AND
THE TRUST COMPANY (AUSTRALIA) LIMITED
Respondent
Catchwords:
Misleading or deceptive conduct - Settlement deed - Available relief
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 16C, s 16D, s 16D(1), s 25D, s 26, s 26D
State Administrative Tribunal Act 2004 (WA), s 47, s 47(1)
Result:
Application dismissed under s 47 of the State Administrative Tribunal Act 2004 (WA)
Summary of Tribunal's decision:
The respondent's application to dismiss under s 47 of the State Administrative Tribunal Act 2014 (WA) was successful on the basis that the relief sought by the applicant was not available and, in any event, any claim had been settled by a deed of settlement between the parties.
Category: B
Representation:
Counsel:
Applicant : Mr KA Dundo
Respondent : Mr MG Hales
Solicitors:
Applicant : HopgoodGanim Lawyers
Respondent : Minter Ellison
Case(s) referred to in decision(s):
Lean v Tumut River Orchard Management Ltd [2003] FCA 269
Seduce Pty Ltd v The Trust Company (Australia) Ltd [2015] WASC 441
Introduction
1 On 8 January 2016, Seduce Pty Ltd (Seduce) filed an application in the Tribunal seeking an order pursuant to s 16D of the Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA) (CTRSA Act) that:
a) [Seduce Pty Ltd] a former retail shop lessee, suffered loss or damage because of misleading or deceptive conduct of another party or former party to the lease;
b) the lease be treated void ab initio;
c) [The Trust Company (Australia) Limited] pay [Seduce Pty Ltd] the sum of $527,047.59 by way of debt, damages or restitution; and/or
d) the sum of $240,631.57 claimed by [The Trust Company (Australia) Limited] for outstanding rent, is not due or owing by [Seduce Pty Ltd] to [The Trust Company (Australia) Limited].
2 The Trust Company has applied to this Tribunal for the summary dismissal of Seduce's application pursuant to s 47 of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
The chronology
3 On 22 May 2013, Westgem Investments Pty Ltd (Westgem) entered into a lease of premises with Seduce (the Lease).
4 Seduce alleges that in the course of the negotiations leading to the parties entering into the Lease, Westgem engaged in misleading or deceptive conduct.
5 On 18 June 2013, the land was purchased by The Trust Company which became the lessor under the Lease by operation of law.
6 The misleading or deceptive conduct that is alleged against Westgem is not alleged against The Trust Company, nor is it alleged that The Trust Company purchased the land, including the premises, with any knowledge of Westgem's alleged conduct.
The Trust Company's demand for rent
7 On 17 July 2014, The Trust Company alleged a breach of the Lease by Seduce.
8 On 1 August 2014, Seduce wrote to The Trust Company in the following terms:
Further to your letter received on the 17th July 2014 with relation to the alleged breach of lease on the premises occupied by Seduce Pty Ltd, Raine Square, Corner Murray and William Street, Perth, TM5, Murray St Level (Premises), we wish to advise that we will pass this matter to our lawyers as the landlord misrepresented the shopping centre and the intended use of the retail tenancies to us.
With evidential information we strongly urge that the landlord repeal the notice that has been issued by you as there is no legal basis given the misrepresentation that has been made by them. Given the above circumstances we will be pursuing costs on this store, we look forward to resolving the matter amicably.
9 On 15 August 2015, The Trust Company commenced District Court proceedings against Seduce for outstanding arrears under the Lease.
10 Seduce and The Trust Company subsequently entered into a Deedof Settlement in or about October 2014. The relevant terms are:
Background
A The Landlord leases the Premises to the Tenant.
B The Tenant owes the Landlord money for Rent, Outgoing, Services and Marketing Levy under the Lease.
C In order to avoid the costs, inconvenience and the uncertainty of litigation, the Parties have agreed to settle all disputes between them however arising on the terms set out in this Deed without any admission of liability by any Party.
1. Defined terms & interpretation
1.1 Defined Terms
In this Deed unless the contrary intention appears:
Claims mean any actions, suits, causes of action, debts, dues, costs, claims, liabilities, demands, damages, losses, costs and expenses of any description, decisions, judgments and orders either at law or in equity or arising under any statute, known or unknown of any nature whatsoever and howsoever arising;
…
Disputed Matters means all of the issues raised by the Parties relating in any way whatsoever to the non payment of money under the Lease prior to the Execution Date[.]
…
2. Settlement
2.1 Settlement Sum
The Tenant agrees to pay to the Landlord the Settlement Sum in full and final settlement of the Disputed Matters between the Landlord and the Tenant.
…
5. Release
In consideration of receiving the Settlement Sum referred to in clause 2 and the Costs referred to in clause 3 the Landlord;
- (a) absolutely and irrevocably releases and forever discharges the Tenant from all or any Claims which they have or, but for the execution of this Deed, may have had against the Tenant in relation to the Disputed Matters;
(b) will cause the consent orders referred to in clause 4 to be filed in the District Court and served on the Tenant within three days of receipt of the first instalment of the Settlement Sum;
(c) after the final payment of the Settlement Sum is received, the Landlord, within 7 business days of receiving a written request from the Tenant's solicitors, will produce to the Tenant a letter to acknowledge that the Tenant does not owe the Landlord any moneys referred to in the Statement of Claim dated 15 August 2014 in the Proceedings.
6. Absolute bar
The Parties acknowledge and agree that subject to the provisions of clauses 2, 3, 4 and 5 above, any party to this Deed is entitled to enforce this Deed as against any other party and may plead this Deed in bar to any claim, suits, demands or actions commenced by any party arising out of, pursuant to, or related to, the subject matter of this Deed (except if this Deed expressly provides otherwise).
…
11 On 23 July 2015, The Trust Company issued a Statutory Demand for $240,631.57, being $93,566.69 due pursuant to the Deed of Settlement and the balance of $147,014.85 due pursuant to the Lease.
12 On 13 August 2015, Seduce submitted a claim under s 16D of the CTRSA Act against The Trust Company for certification with the Small Business Commissioner pursuant to s 25D of the CTRSA Act.
13 In Seduce Pty Ltd v The Trust Company (Australia) Ltd [2015] WASC 441 (Seduce Case), Acting MasterGething (Master) explained at [6]:
In response, by application dated 17 August 2015, Seduce sought to set aside the Statutory Demand pursuant to Corporations Act 2001 (Cth) (CA) s 459H and/or s 459J(1)(b). As an alternative, it sought an order that the time for compliance with the Statutory Demand be extended until seven days after the determination of an application brought by Seduce pursuant to Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CTRSA) s 16D(1). The application under the CTRSA is against the Trust for orders arising out of misleading and deceptive conduct by Westgem. Further, on 27 October 2015, that is the day before the hearing, Seduce paid the amount of $93,566.69 into Court, this being the amount owing pursuant to the Deed. This is perhaps best seen as an invitation to the court to set aside the Statutory Demand subject to payment of the amount owed pursuant to the Deed into Court.
14 On 19 November 2015, the Master ordered that Seduce's application to set aside the Statutory Demand dismissed and that the $93,566.69 be paid out of Court to The Trust Company forthwith.
The CTRSA Act
15 Section 16C of the CTRSA Act provides:
A party to a retail shop lease must not, in connection with the lease, engage in conduct that is misleading or deceptive to another party to the lease or that is likely to mislead or deceive another party to the lease.
16 The relief that the Tribunal can grant is set out in s 16D(1) of the CTRSA Act:
A party, or former party, under a retail shop lease or former retail shop lease who suffers, or is likely to suffer, loss or damage because of misleading or deceptive conduct of another party or former party to the lease may apply in writing to the Tribunal for an order that the other party, or former party, pay compensation in respect of the loss or damage, or for other appropriate relief.
17 Section 26 of the CTRSA Act relevantly provides:
(1) Without limiting any power to make an order that is conferred by the State Administrative Tribunal Act 2004 but subject to this Act the Tribunal may make
(a) an order that requires a party to any matter before it to pay money to a person specified in the order; or
(b) an order for a party to any matter before it to do, or refrain from doing, anything specified in the order; or
(c) an order dismissing any matter before it.
(1a) The power in subsection (1)(b) includes power for the Tribunal to order the parties to enter into an agreement varying a retail shop lease as specified in the order where the Tribunal has found that the tenant under the lease was before entering into the lease misled by the landlord as to the meaning or effect of a term or condition of the lease.
(1aa) The Tribunal may, where it considers it appropriate to do so to resolve the matter concerned, make an order terminating a retail shop lease.
…
(4) The Tribunal may allow any equitable claim or defence, and give any equitable remedy, in a matter before it that the Supreme Court may allow or give.
Urgency of decision
18 The Trust Company's application under s 47 of the SAT Act was heard on 4 March 2016.
19 The Trust Company had filed an application for winding up against Seduce which is to be heard tomorrow, 15 March 2016.
20 The Trust Company's s 47 application under the SAT Act is related to whether or not the winding up application should proceed. Accordingly, the parties have sought that a decision be given by today 14 March 2016. The Tribunal has not dealt with every submission made by the parties, but only those sufficient to resolve The Trust Company's application.
The basis for dismissal under s 47 of the SAT Act
21 Section 47(1) of the SAT Act provides:
This section applies if the Tribunal believes that a proceeding
(a) is frivolous, vexatious, misconceived or lacking in substance; or
(b) is being used for an improper purpose; or
(c) is otherwise an abuse of process.
22 The principles that apply to The Trust Company's application for summary dismissal pursuant to s 47 of the SAT Act are correctly stated at paragraphs 33 and 34 of its submission:
The principle to be applied in order to strike out a proceeding on this ground is that '… it should be demonstrated that it is so obviously untenable that it cannot possibly succeed or is manifestly groundless or that it discloses a case which the court is satisfied cannot succeed' (See Ambrus and Chuches of Christ Homes & Community Services Incorporated [2006] WASAT 141 at [8] referring to Barwick CJ in General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125).
The term 'misconceived' connotes a misunderstanding of legal principle while the term 'lacking in substance' connotes an untenable proposition of law or fact (See Laurent and Commissioner of Police [2009] WASAT 254 referring to State Electricity Commission of Victoria v Rabel [1998] 1 VR 102. This decision was appealed by Laurent, however the appeal was dismissed)
The basis of The Trust Company's application
23 The Trust Company submits that Seduce's application should be dismissed on three grounds:
1) Section 16D of the CTRSA Act does not give the Tribunal power to award the relief sought by Seduce under s 16D.
2) Seduce's rights, if any, arising under s 16D of the CTRSA Act were settled under the Deed of Settlement.
3) The Master's decision gives rise to an estoppel.
The Tribunal's power under s 16D of the CTRSA Act
24 The Trust Company submitted:
35. Seduce's claim is misconceived because the Supreme Court Judgment [the Seduce Case] holds that the correct interpretation of section 16D(1) of the Retail Shops Act is that s16D(1) '... makes it clear that damages may only be claimed by a party against another party, or a former party, by whose misleading or deceptive conduct it suffers, or is likely to suffer, loss or damage. Thus, the section could be used by Seduce to claim damages against Westgem, a former party, for loss suffered because of misleading or deceptive conduct by Westgem. (See Seduce Supreme Court Judgment at [44]) Therefore, the Tribunal's power under section 16D(1) is limited to making an order only against the party which actually committed the misleading and deceptive conduct.
…
37. Furthermore, although section 26(1aa) of the Retail Shops Act gives the Tribunal the power to make an order terminating a retail shop lease, there is no express power conveyed on the Tribunal to void or set aside a retail shop lease ab initio and the Tribunal does not have the power to grant relief against a party who did not contravene the Retail Shops Act.
38. Seduce's argument as set out in the grounds of their application the subject of these Proceedings is that 'There is case law in Australia which states that where a lessee has been induced into an agreement, such as a lease, by a misrepresentation or by misleading conduct and that agreement is subsequently assigned, the court has power to declare the agreement void or to vary the agreement. In HP Mercantile Pty Ltd v Dierickx [2012] NSWSC 1005 per White J, it was held that an assignee to an agreement, such as a lease, takes that agreement subject to the equities available against the assignor and that the State Administrative Tribunal (SAT) has the power to make orders against an assignee, whether or not the assignee was implicated in the making of the representations or misleading conduct'.
…
25 In essence, the dispute between the parties as to the scope of the Tribunal's powers under s 16D of the CTRSA Act turns on whether s 16D should be read as The Trust Company contends.
A party, or former party, under a retail shop lease or former retail shop lease who suffers, or is likely to suffer, loss or damage because of misleading or deceptive conduct of another party or former party to the lease may apply in writing to the Tribunal for an order that the other party, or former party, pay compensation in respect of the loss or damage or for other appropriate relief [against the other party or former party who engaged in the misleading or deceptive conduct].
26 Or, as Seduce contends:
A party, or former party, under a retail shop lease or former retail shop lease who suffers, or is likely to suffer, loss or damage because of misleading or deceptive conduct of another party or former party to the lease may apply in writing to the Tribunal for an order that the other party, or former party, pay compensation in respect of the loss or damageor for other appropriate relief [against any other party].
27 There is something inherently unsatisfactory about ordering relief on the basis of misleading or deceptive conduct against a party who did not engage in that misleading or deceptive conduct.
28 Section 16D of the CTRSA Act would as a matter of construction standing on its own be read in the manner contended for by The Trust Company, that is, that appropriate relief can only be ordered against the other party, or former party, who engaged in the misleading or deceptive conduct.
29 Seduce summits that 'the other appropriate relief' is a reference to the relief available under s 26 of the CTRSA Act. It submits that the effect of the power granted to the Tribunal under s 26 of the CTRSA Act is to allow the Tribunal, as part of the 'appropriate relief', to make an order against The Trust Company in the terms sought by Seduce.
30 With respect to Seduce's submission, to accept that submission would be to expand SAT's power under s 16D of the CTRSA Act by reference to the available relief rather than to consider SAT's powers under s 16D of the CTRSA Act in its actual terms. As The Trust Company put it, to do so would be a case of 'the tail wagging the dog'.
31 The reference to s 16D of the CTRSA Act to an order that the other party or former party pay compensation is only a reference to the party who engaged in the misleading or deceptive conduct. The reference to the other relief is to the relief that may be ordered against the party or the other parties who engaged in them is leading or deceptive conduct.
32 The construction of s 16D of the CTRSA Act makes it unnecessary to consider either the cases relating to the Trade Practices Law which were considered by the Master, or to the case of Lean v Tumut River Orchard Management Ltd [2003] FCA 269 referred to by Seduce.
33 Seduce's application to the Tribunal under s 47 of the SAT Act should be dismissed on the basis that the Tribunal does not have jurisdiction to make an order under s 16D of the CTRSA Act against a party or former parties who did not engage in the misleading or deceptive conduct.
The Deed of Settlement
34 The Trust Company submitted that any claim Seduce may have had under s 16D of the CTRSA Act was settled by the Deed of Settlement.
35 Seduce submitted that the terms of the Deed of Settlement did not cover a claim by Seduce under s 16D of the CTRSA Act.
39. Just what that subject matter was needs to be gleaned from the document: it is not a defined expression. It is submitted that the subject matter, and what is regulated by the Deed, is rent and outgoings up to the date of the Deed: see Recital B and clause 1.1 (defining 'Disputed Matters' and 'Execution Date'). The Deed does not identify, and makes no reference to, a possible cross-claim or offsetting claim for misleading or deceptive conduct.
40. The section 16C of the CTSRA claim did not 'arise out' of rent and outgoings, or any claim for rent and outgoings. It is submitted that it is a free-standing claim which exists whether or not rent and outgoings are owing. It does not operate as a defence to a claim to rent and outgoings.
41. It is submitted that the section 16C of the CTSRA claim is not made 'pursuant to the subject matter of the Deed'. That subject matter is rent and outgoings.
42. It is submitted that the answer to the question as to whether the section 16C claim is 'related to' the subject matter of the Deed, is that it is not. The claim stands independent of the very subject matter. The claim relates to the Lease, but is not properly described as 'relating to the subject matter' of the Deed.
43. Terms limiting or excluding liability have always been closely scrutinised by the courts: SA Railways Comm v Egan 130 CLR 50612.
36 The Tribunal does not accept Seduce's submissions. The Deed of Settlement was entered into after the issue of Westgem's alleged misleading or deceptive conduct had been raised in Seduce's letter of 1 August 2014. The Trust Company commenced the District Court proceedings barely two weeks later.
The definition of 'claims'
37 The background set out in the Deed of Settlement makes it clear that the claim is for rent and other monies.
38 The definition of 'claims' is extremely wide and it extends to 'arising under any statute' which would include the CTRSA Act.
39 'Disputed Matters' includes all of the issues raised by the parties, that is, Seduce and The Trust Company, relating in any way whatsoever to the nonpayment of monies. Seduce raised the issue of its liability to pay the rent by reason of Westgem's misleading or deceptive conduct.
40 Clause 6 of the Deed of Settlement makes it clear that the Deed may be raised in bar by both Seduce and The Trust Company.
41 Although the Deed of Settlement does not make specific reference to the CTRSA Act, it is not necessary for it to do so because such a claim falls within the definition of 'claim' in the Deed of Settlement.
42 Section 16C and s 16D of the CTRSA Act arise out of rent and outgoings because they impact on Seduce's liability to pay the rent and outgoings.
43 The claim under the CTRSA Act does relate to the subject matter of the Deed of Settlement.
44 Accordingly, any claim Seduce may have had under the CTRSA Act is barred because it was settled under the Deed of Settlement.
The estoppel issue
45 In view of the Tribunal's findings above, it is unnecessary to deal with the estoppel issue.
Conclusion
46 The Trust Company's application under s 47 of the SAT Act should be granted.
Order
1. Seduce Pty Ltd's application dated 8 January 2016 is dismissed under s 47 of the State Administrative Tribunal Act 2004 (WA).
I certify that this and the preceding [46] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUSTICE J C CURTHOYS, PRESIDENT
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