Spuds Surf Chatswood Pty Ltd v PT Ltd (RLD) - [2012] NSWADTAP 2

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation: Spuds Surf Chatswood Pty Ltd v PT Ltd (RLD) [2012] NSWADTAP 2
Hearing dates: 17 and 18 November 2011
Decision date: 30 January 2012
Jurisdiction: Appeal Panel - Internal
Before: M Chesterman, Deputy President
P Molony, Judicial Member
J Schwager, Non-judicial Member
Decision:
1. Leave is granted for this appeal to extend to the merits.
2. A further hearing is to take place, for the purpose of receiving further submissions from the parties on the following questions:-
(a) Whether conduct of the Respondent occurring between February 2002 and July 2005 amounted to unconscionable conduct as claimed by the Appellant.
(b) Whether any such unconscionable conduct of the Respondent caused the Appellant to suffer loss for which damages may be recovered.
(c) If yes to (b), what is the amount of such loss.
3. The appeal is set down for further directions at 9.30 a.m. on 9 February 2012.

Catchwords: Retail lease - question of law - incompletely executed lease - alteration to memorandum of lease - obstruction of sight-lines and access to shop - covenant for quiet enjoyment - unconscionable conduct - causation - assessment of damages
Legislation Cited: Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994
Cases Cited: Abdul-Karim v Council of the New South Wales Bar Association [2005] NSWCA 93
Aras v Victoria Nominees Limited [2003] NSWADT 50
Aspromonte Pty Ltd v Zagari [1999] NSWSC 831
Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261
Australian Postal Corporation v Sellick (2008) 245 ALR 561
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Barsoum v Glebe Administration Board [2002] NSWADT 19
Barsoum v Glebe Administration Board [2002] NSWADTAP 38
Bischof & Anor v Werncog Pty Ltd [2004] NSWADT 241
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833
Burbridge v Vosedo Pty Ltd [2005] NSWADT 8
Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284
Casarotto v Australian Postal Commission (1989) 86 ALR 399
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76
Commissioner of Corrective Services v Aldridge [2000] NSWADTAP 5
Commonwealth v Verwayen (1990) 170 CLR 394
Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267
Express Newspapers PLC v News (UK) Ltd & Ors [1990] 1 WLR 1320
Evans v. Bartlam [1937] AC 473
Geneva Finance Ltd (Receiver and Manager Appointed) v Boys & Ors [2001] WASC 167
Helou & Ors v Bong Bong Pty Ltd & Anor trading as Regional Health Properties [2006] NSWADT 128
Hinton & Ors v Commissioner for Fair Trading, Office of Fair Trading (GD) [2007] NSWADTAP 17
Horwood v Memocorp Australia Pty Ltd [2010] NSWADT 69
Jones v Dunkel (1959) 101 CLR 298
Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456
Monie and Others v Commonwealth of Australia (2005) 63 NSWLR 729; [2005] NSWCA 25
Obradovic v Commissioner for Fair Trading, Office of Fair Trading (No 2) (GD) [2006] NSWADTAP 45
Owendale Pty Ltd v Anthony (1967) 117 CLR 539
Profilio v Coogee Bay Village Pty Ltd (No 3) [2011] NSWADT 4
Randi Wixs Pty Ltd v Pokana Pty Ltd (No 2) [2003] NSWADT 4
Spathis v Hanave Investment Co Pty Ltd & Anor [2002] NSWSC 304
Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2) [2011] NSWADT 152
Skiwing Pty Ltd v Trust Co of Australia Ltd (No 3) [2004] NSWADT 94
Skiwing Pty Ltd v Trust Company of Australia Ltd trading as Stockland Property Management [2006] NSWCA 276
Tarleton & Peters Pty Ltd v EK Nominees Pty Ltd [2010] NSWADT 248
Telstra Corporation Ltd v Sicard [2009] NSWSC 827
Trust Company of Australia Limited (trading as Stockland Property Management) v Skiwing Pty Ltd (trading as Café Tiffany's) [2006] NSWCA 185
Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152
Turnbull v NSW Medical Board [1976] 2 NSWLR 281
Wall's Gifts and Tobacco Pty Ltd v Warringah Mall Pty Ltd [2003] NSWADT 161
Whiteway House No.199 Pty Ltd v Abracoona Pty Ltd, Unreported, Supreme Court of NSW, Hodgson J, 29 May 1998
Texts Cited: B Cairns, Australian Civil Procedure, 4th edition (Law Book Co, Sydney, 1996)
Category: Principal judgment
Parties: Spuds Surf Chatswood Pty Ltd (Appellant)
PT Ltd (Respondent)
Representation: Counsel
A Fernon (Appellant)
S Angyal SC (Respondent)
Herro Solicitors (Appellant)
Colin Biggers & Paisley Lawyers (Respondent)

File Number(s): 119034
Decision under appeal

Citation:

Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152

Date of Decision:

2011-06-22 00:00:00

Before:

Retail Leases Division

File Number(s):

065171, 085081

decision

Introduction

(M Chesterman (Deputy President); P Molony (Judicial Member); J Schwager, (Non-judicial Member)): This is an appeal against a lengthy and substantial decision of the Retail Leases Division. In the proceedings, a major question was whether the Applicant, a former lessee of retail shop premises within a large retail shopping centre in Chatswood, was entitled to recover damages from the Respondent lessor on the ground that the lessor, by improperly permitting the erection of three kiosks and an ATM machine near the premises, had disrupted the Applicant's trade to a significant extent. As will appear below, this question dominated the appeal to which the present decision relates.

The Tribunal proceedings commenced on 12 October 2006 with the filing of an Application (file no. 065171) by the Applicant, Spuds Surf Chatswood Pty Ltd. In it, the Applicant sought an order that the Respondent, PT Ltd, pay $400,000 by way of damages and/or rental payments and a declaration that a clause in a memorandum of lease purporting to record the agreement for lease between the parties should be altered in a specified manner.

Although, as just indicated, the parties were in dispute regarding one clause of the lease between them, it was common ground between them that this lease (hereafter 'the Lease') was governed by the Retail Leases Act 1994 ('the RL Act').

On 23 April 2008, the Respondent filed an Application (file no. 085081) in which it sought an order that the Applicant pay $291,908.58 plus interest by way of unpaid rent and outgoings, lost rent and outgoings and making good costs.

The hearing of the competing Applications took place over 19 days during May and September 2009 and February 2010.

In its decision, delivered on 22 June 2011 ( Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152 - hereafter 'the Tribunal's decision' or 'the substantive decision'), the Tribunal dismissed the Applicant's claim (which had been amended since the filing of the Application) and upheld that of the Respondent. It ordered the Applicant to pay the sum of $327,533.55 plus interest to the Respondent.

The Tribunal also ordered that the issue of costs was reserved. In accompanying directions, it set out a timetable for the filing of written submissions on this matter and on the amount of interest to be paid, and stated that these matters would be resolved without a hearing.

On 19 July 2011, the Applicant filed a Notice of Appeal against the substantive decision.

In a further decision delivered on 3 August 2011 ( Spuds Surf Chatswood Pty Ltd v PT Ltd (No 3), PT Ltd v Spuds Surf Chatswood Pty Ltd (No 2) [2011] NSWADT 186 - hereafter 'the Tribunal's costs decision'), the Tribunal ordered that the amount of interest to be paid by the Applicant was $92,811.46 and that the Applicant pay the Respondent's costs of the two sets of proceedings.

The Applicant has filed an appeal against the Tribunal's costs decision. At the hearing of its appeal against the substantive decision, the parties agreed that our consideration of the question of costs should be deferred.

This hearing took place before us on 17 and November 2011. Mr Fernon of counsel appeared for the Applicant and Mr Angyal SC appeared for the Respondent. Before the hearing commenced, each party filed an outline of its submissions (hereafter referred to as 'Appeal Submissions').

The decision that we have reached is that due to doubts that we have about the correctness of certain aspects of the Tribunal's decision, we should grant leave for this appeal to extend to the merits and should hear further argument from the parties' representatives regarding these particular matters.

The ensuing paragraphs give our reasons for this decision. They are numerous because this litigation is substantial and we have not found it easy to determine how the appeal should be resolved.

In the Appeal Submissions and in counsel's addresses at the hearing of the appeal, a number of questions about the procedures governing appeals from Tribunal decisions were canvassed. It is convenient here to give an outline of the questions raised and our rulings in relation to them.

Principles relating to internal appeals

Part 1 of Chapter 7 of the Administrative Decisions Tribunal Act 1997 (hereafter 'the ADT Act') contains the following provisions relating to 'internal appeals', such as the present appeal. An appeal against an 'appealable decision' (defined in section 112) may be made as of right on a question of law (see section 113(2)(a)), and may extend, with the leave of the Appeal Panel under section 113(2)(b), to a review of the merits of the decision. If an appeal is restricted to questions of law, the orders that the Panel may make (under section 114) include an order affirming or setting aside the decision under appeal, an order remitting the whole or any part of the case to be heard and decided again by the Tribunal and an order in substitution for an order made by the Tribunal. If an appeal extends to a review of the merits, the Panel is required by section 115(1) to 'decide what the correct and preferable decision is having regard to the material then before it'.

In Abdul-Karim v Council of the New South Wales Bar Association [2005] NSWCA 93, Mason P (with whom Ipp JA and Hunt AJA agreed) emphasised at [34] that section 113(2)(b) conferred on Appeal Panels a 'genuine discretion' as to whether or not to grant such leave and that it was not enough 'merely to suggest that there is a bona fide challenge to a decision of fact'.

The judgments of Spigelman CJ and Tobias JA in Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456 established that, contrary to previous rulings by Appeal Panels, it was not necessary for an appellant to establish that the decision under appeal contained an error of law, or even that 'arguably' an error existed, before leave could be granted for the appeal to extend to the merits.

In a decision delivered during the following year, Obradovic v Commissioner for Fair Trading, Office of Fair Trading (No 2) (GD) [2006] NSWADTAP 45, the Appeal Panel made the following observations (at [10 - 13]) about the impact of the judgments in Lloyd :-

10 One approach that has been taken this year by the Appeal Panel to the leave discretion since the decision by the Court of Appeal has been to ask whether any 'substantial injustice' might arise if an extension of the appeal to the merits was not permitted.

11 A 'substantial injustice' can take a variety of forms - and includes matters which have since the inception of the Appeal Panel been recognised as permitting immediate exercise of the leave discretion, such as fresh evidence of significance and obvious errors in the content of orders. The emphasis on demonstration of substantial injustice is a typical feature of the way leave discretions in the superior courts relating to interlocutory appeals are exercised... While this is not an appeal on an interlocutory question, consideration of whether a substantial injustice would arise if leave was not granted provides a useful way of approaching the exercise of the discretion on this occasion.

12 Appellants will always say that there should be an extension of leave to the merits because otherwise they would suffer a substantial injustice. It cannot be that we simply accept such a submission.

13 We have got to stand back and look at the matter in a detached and objective way and seek to satisfy ourselves as objective decision makers whether the appellant has raised sufficient concern with us to have doubts that might suggest to us that if we did not extend leave to the merits, a substantial injustice would ensue, the injustice being an injustice measured by reference to the standards of the legal system and objective standards.

In Hinton & Ors v Commissioner for Fair Trading, Office of Fair Trading (GD) [2007] NSWADTAP 17 at [85], the Appeal Panel endorsed this approach:-

85 While the Appeal Panel's discretion to grant leave is not qualified by the ADT Act... it should be exercised with caution and in the interests of justice. It is not enough that the appellant disagrees with the decision. The Appeal Panel is not designed to be a second trial level of the Tribunal. As McHugh J said in CDJ v VAJ [1998] HCA 76; (1998) 197 CLR 172 at [111] the power to permit an appeal on a question of fact is 'not intended to have the practical effect of obliterating the distinction between original and appellate jurisdiction'. Appeal Panels must recognise the importance of not interfering with soundly-made decisions. An appellant should normally, we think, demonstrate on persuasive grounds that a substantial injustice would result if the decision was allowed to stand.

In his submissions on behalf of the Applicant, Mr Fernon drew to our attention various authorities illustrating the scope of the phrases 'question of law' and 'error of law'. He pointed out that the following species of error had been held to constitute errors of law: (a) failure to consider and determine a submission which had been 'seriously advanced' and was 'worthy of serious consideration' ( Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267 at 276-277; Casarotto v Australian Postal Commission (1989) 86 ALR 399 at 402-403), or was a submission 'of substance' that, if accepted, was 'capable of affecting the outcome of the case' ( Australian Postal Corporation v Sellick (2008) 245 ALR 561 at 569); (b) identifying a 'wrong issue', posing a 'wrong question', ignoring relevant material or relying on irrelevant material ( Craig v South Australia (1995) 131 ALR 595 at 602); (c) defining 'otherwise than in accordance with law' a question of fact that has to be decided ( Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156); and (d) failure to give adequate reasons for a decision ( Campbelltown City Council v Vegan (2006) 67 NSWLR 372 at 399; [2006] NSWCA 284 at [130]). Mr Angyal did not contest any of these propositions.

A further well-recognised instance of an error of law is making a finding of fact for which there is no probative evidence at all: see for example Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156-157; Skiwing Pty Ltd v Trust Company of Australia Ltd trading as Stockland Property Management [2006] NSWCA 276 at [52].

The question of leave to extend to the merits

In its Notice of Appeal and its Appeal Submissions, the Applicant listed 28 questions of law arising from the Tribunal's decision, claiming in each instance that the Tribunal 'erred in law'. It also sought leave for the appeal to extend to the merits, putting forward 16 reasons for so doing. Most of these reasons were formulated as alleged 'errors of fact' committed by the Tribunal.

In its Notice of Reply to Appeal and its Appeal Submissions, the Respondent contended that 27 of the 28 matters claimed by the Applicant to be questions of law were only questions of fact and that the appeal, in so far as it was based on these 27 matters, should be struck out, since no leave to extend to the merits had been granted. It contended further that if we granted leave at some point for the appeal to extend to the merits, we should conclude that the Applicant's 'merits submissions' were 'without merit'.

During the hearing of the appeal, we indicated that we would reserve until after the conclusion of the hearing our decision as to whether leave of this nature should be granted. We indicated also that we were not disposed to strike out summarily any Ground stated in the Notice of Appeal solely for the reason that it did not appear to raise a question of law.

Relevant evidence and findings in the Tribunal's decision

This section of our reasons comprises a relatively lengthy account, incorporating passages quoted from the Tribunal's decision, of evidence that the Tribunal admitted and findings of fact that it made. In this account and subsequently, the numbers of the many paragraphs in the Tribunal's decision to which we refer specifically, or from which we quote, are preceded by a capital 'T'.

This account is confined to the evidence and findings relating to the issues that were raised in the appeal. Numerous other items of evidence and a number of findings set out in the Tribunal's reasons do not have to be revisited in the present decision.

The shopping centre in which the premises leased to the Applicant were situated (hereafter 'the Centre') was known as Westfield Chatswood, or as Westfield Shoppingtown, Chatswood. In the Tribunal's decision, the Centre's owner, the Respondent, was also referred to on occasions as PT Ltd or 'Westfield'.

At all material times until 27 January 2004, the sole director of the Applicant was Mr George Mimis. His sister, Ms Eliabeth Mimis-Weeks, was the secretary. At some time during 2004 or 2005, they became estranged from each other, and Ms Mimis-Weeks took over control of the Applicant. Mr Mimis ceased to have any involvement with its affairs.

As from January 1999, the Applicant occupied shops 415 and 416, on Level 4 of the Centre, under a lease from the Respondent. It carried on business there under the name Surf City.

At that time, two kiosks, numbered 406 and 407, stood near the frontage of these shops. The leases relating to them were however surrendered in October 1999 and July 2000 respectively.

On 1 September 2001, the Respondent granted a five-year lease of the area where these kiosks had been, authorising the construction of a kiosk known as the B-Zone kiosk. At T26, the Tribunal gave the following description of this structure:-

The B-Zone kiosk as set up comprised four illuminated "walk through" display units on a north-south line parallel to an adjacent void on the east and a further four illuminated display units and a cash and wrap counter in front of them in a semi-circular shape. The western side of that counter was the kiosk's widest point, the width of the kiosk there being about 5 metres. There was an illuminated sign in the form of a globe of diameter approximately 800mm or so on top of a narrow diameter pole about 1.2m high above the cash and wrap counter and mirrors on top of the display unit. There was track lighting suspended from the ceiling and two ceiling-mounted television monitors on pantograph suspension systems. There were from time to time items exhibited for sale on top of the display units.

Between July and December 2001, negotiations commenced between Mr Mimis and Mr Olivier Sicouri, a Westfield leasing executive, for a new lease of shops 415 and 416 to the Applicant. In late February or March 2002, it became known that the lessee of an adjoining shop, shop 417, would be vacating it. Negotiations for the Applicant's business to expand into this shop then commenced, and some months later, in circumstances described in detail below, the Lease came into operation with respect to the three shops 415, 416 and 417 (hereafter 'the Premises').

The location of these three shops within the Centre is important. Shop 417, which had a frontage of about 6.5 metres, was situated at a point on Level 4 where a north-south mall ended, at its northern extremity, in a T-junction with an east-west mall. At the southern end of the north-south mall was a walkway leading to a large multi-storey carpark. To the extent that the view along the north-south mall was unobstructed, visitors to the Centre who had used the walkway to get to it from the carpark could see Shop 417 as soon as they reached the mall and for as long as they remained in the mall.

Shops 415 and 416, which had a combined frontage of about 10.5 metres, stood beside shop 417, on its eastern side. The three shops formed part of the northern side of the east-west mall. There was pedestrian access to each end of this mall. Outside shops 415 and 416 and directly adjacent to its junction with the north-south mall, the east-west mall 'bifurcated' (as the Tribunal expressed it) around a 'void'. Near this point, its width was about 4 metres.

In the course of the negotiations for the Lease, the Respondent provided to the Applicant, in circumstances outlined below, a red-covered booklet setting out the Fitout Requirements for the Respondent's tenants in the Centre. Certain provisions within this booklet are of major importance in this case. In the form that it took during the period of negotiations for the Lease and until 2005, it was described by the Tribunal as follows at T170:-

170 The Westfield Fitout Requirements comprise a red-covered booklet (apparently often referred to in Centres as "the red book") of 40 or so pages. The Fitout Requirements are evidently issued to all prospective tenants; for example, they were issued to the Applicant with the disclosure statements issued to the Applicant in March 2002... They are also referred to in lease clauses calling for the Lessee's fitting out work to be done in accordance with "the approved plans" and "the fitout requirements" provided to the Lessee by or on behalf of the Lessor. Appendix 6 of the apparently then current Fitout Requirements deals with kiosks and item 7.0 Visual Presentation is relevant:

"Maintaining sightlines through all Kiosks is essential, therefore height restrictions apply. Maximum height 1400mm, (public contact is recommended at 1200mm).

Overhead elements including menu boards and structure are to be kept to a minimum. Canopies over free standing kiosks will not be approved, unless proven that sight lines will not be inhibited.

Overhead signage design must also be mindful of sightlines to surrounding tenancies.

All sightlines, heights and overall mass are subject to review by the Builder. ..."

Another relevant provision is clause 2(e) which expresses as one of the Lessee's obligations:

"The Lessee must

...

(e) comply with any rules or requirements of the Builder or the Lessor in relation to the Centre or the Lessee's Works;"

The definition of "Builder" in Clause 1.3 is such that in the case of an already developed Centre such as Westfield Chatswood "...the Builder is the company appointed by the Lessor to manage the Centre."

I note at this stage that the red books that are in evidence are those evidently produced in April 2002 and July 2004. The provisions above appear in both. The Respondent makes a submission to the effect that the relevant time consideration of the red book was March 2002 when the lease of the expanded Surf City was being negotiated and there is no evidence of the contents of the red book then. In my opinion, the more relevant time was about November 2002 when the Boost Juice kiosk was set up. In any event, it seems that at all relevant times the red book provisions were to the above effect.

From now on, we will use the term 'the 2002 Height Restrictions' to refer to item 7.0 of these Fitout Requirements, as they existed during 2002. The circumstances in which 'the Boost Juice kiosk' was erected are outlined below.

So far as is relevant to this dispute, the Tribunal's findings as to the circumstances in which the Lease came into being were recorded in the following passages in its decision (forming part of T29, T31, T33, T34 and T36 to T41):-

29 During February 2002 Mr Mimis had been negotiating in writing and meetings with Mr Sicouri on behalf of Westfield for a new lease of shops 415 and 416, at a base annual rent of about $250,000. Those negotiations were overtaken towards the end of February 2002 by information that shop 417, which was occupied by Nike, would be becoming vacant in the near future. Further negotiations between Messrs Mimis and Sicouri led to a lease for a term of 6 years commencing August 2002 at a base annual rent of $472,500 for shops 415, 416 and 417 being issued by Westfield's solicitors, Landerer & Company, to Mr Mimis on 8 May 2002. That lease had been recommended within Westfield management by Mr Sicouri on 13 March 2002 and it was approved by Westfield on 18 March 2002 as advised to Mr Mimis by Mr Sicouri by a letter of that date which attached Disclosure Statements. On 22 March 2002 Mr Mimis signed the Disclosure Statements and made alterations to some details within the Lessor's Disclosure Statement but made none to the Lessee's Disclosure Statement; agreement to those amendments was achieved by an exchange of faxes between Mr Sicouri and Mr Mimis a few days later.

31 It is convenient at this stage, however, to set out in more detail an account from contemporaneous documentation concerning these events of February - March 2002:...

13 February 2002

Mr Sicouri wrote to Mr Mimis referring to recent discussions regarding a proposed new lease of Shops 415 and 416 and enclosing a disclosure statement of several pages for a 5 year lease commencing on 1 May 2002 with a base annual rent of $252,000. The letter also enclosed a red-covered booklet of 40 or so pages being Westfield's "Fitout Requirements - Specialty Shops" ("Fitout Requirements" or "red book") and stated Westfield's proposal to be subject to, among other things, "compliance with the requirements in the enclosed booklet 'Fitout Requirements - Specialty Shops'". The disclosure statement also included reference to finishes, fixtures etc to be provided by the Lessee being "In accordance with the Fitout Requirements".

...

8 March 2002

Mr Sicouri forwarded by email to Mr Mimis a chain of several short emails, concerning Shops 415, 416 and 417, involving himself and other Westfield personnel between, it seems, 4 and 8 March 2002. The reproduction of the emails which has been tendered is poor and difficult to follow in respect of material around 4 March 2002. The emails refer to a plan. There are two attachments in A4 size in the reproduction tendered, the first being a floor plan of Level 4 of Westfield Chatswood in small scale and the second being a drawing entitled "Sketch Plan" and marked "Preliminary" showing shops 415, 416 and 417 combined. The email from Mr Sicouri to Mr Mimis says simply "As discussed". In the reproduction of the email chain as tendered, that email is immediately preceded by an email from Mr Sicouri to Mr Ron Zeman of Westfield saying "This plan does not make sense".

11 March 2002

Mr Mimis forwarded that email chain to Ms Mimis-Weeks saying "FYI new floor plan" and attaching two PDF documents, one of which is referred to in the attachment part of the heading on the email as "L4 - cover" and the other as "SK415-16-17".

...

18 March 2002

Mr Sicouri wrote to Mr Mimis with respect to "Proposed lease of Shop 415/7":"We refer to your recent discussions with Mr Olivier Sicouri, Regional Manager-Leasing and on behalf of the Lessor, PT Ltd, we have pleasure in submitting our proposal to you for a lease of the above premises. Details of our proposal are set out in the Disclosure Statement which is attached in duplicate to this letter." The disclosure document comprised several pages and like the letter of 13 February 2002 enclosed a copy of the Fitout Requirements and required compliance with them. The disclosure statement also included reference to finishes, fixtures etc having to be provided by the Lessee being "In accordance with the Fitout Requirements".

22 March 2002

Mr Mimis returned the completed disclosure statement documentation by fax to Mr Sicouri. He had made a number of alterations and additions to the document which he had signed and dated in various places. One printed page headed "Lessee's Disclosure Statement - Advice to Lessor" included Item 5 which read: "In entering into the retail shop lease, the Lessee has relied on the following statements or representations made by the Lessor or the Lessor's agent." That item left space for matters to be inserted. None was inserted. In the Advice to Lessor the word "sought" (as an alternative) was deleted from Item 3 so that it read: "The lessee has not sought independent advice in respect of the commercial terms contained in the Lessor's Disclosure Statement and the obligations contained in the proposed retail shop lease."

25 March 2002

Mr Sicouri wrote a letter to Mr Mimis in response to Mr Mimis' communication of 22 March 2002 requesting confirmation of his acceptance of his responses by signing and returning a copy of that letter.

5 April 2002

Mr Mimis faxed to Mr Sicouri a memo attaching a copy of the letter of 25 March 2002 which Mr Mimis had signed on 4 April 2002.

5 April 2002

Mr Sicouri wrote to Mr Mimis in reply and advised that Westfield's solicitors, Landerer & Company., had been instructed to issue lease documentation. Contact details were also supplied of Westfield's Tenancy Co-Ordinator and Specialty Shops' Designer.

33 On 8 May 2002, Landerer & Company, Solicitors, on behalf of Westfield wrote to Mr Mimis in respect of shops 415, 416 and 417, enclosing for his attention a lease in duplicate, a Deed of Agreement in duplicate, a Westfield check list and an invoice for their costs and disbursements. The letter stated that those documents were forwarded on the following conditions precedent:

(a) The existing lessee in respect of shop 417 surrendering its lease on terms and conditions acceptable to the Lessor.

(b) Our client must be able to obtain vacant possession of the premises before possession is granted under this Lease.

(c) Our client must approve the plans for any proposed alterations to the premises and for any illuminated sign. Any such plans should be sent directly to our client for its consideration.

The letter also stated that:

"The Lessee shall not be permitted to commence trading until we have received the following:

1. Executed Lease in duplicate.

2. Executed Deed of Agreement in duplicate.

3. Completed Westfield Document Checklist.

4. Cheque in our favour as shown in the attached account.

5. Cheque for $11,236.30 in favour of the Office of State Revenue in respect of anticipated stamp duty. Please ensure that your name, address and the details of the Premises appears on the reverse side of the cheque.

6. Cheque or Bank Guarantee for $35,625.00 in favour of P.T. Limited for the security deposit.

7. Cheque for $39,187.50 in favour of P.T. Limited for one month's rent in advance inclusive of GST.

8. Original Insurance Certificate(s) of Currency. We have enclosed a letter specifying our client's requirements and request that you forward it urgently to your insurance brokers.

9. Engineer's certificate certifying the structural adequacy of the fitout to be handed to centre management."

34 On 14 May 2002 there was a meeting between Mr Mimis and Ms Megan Johnson, a Regional Manager - Leasing for Westfield, agreeing that:

(a) The Nike shop would cease trading on 30 June 2002 and would remove fixtures, fittings, lighting and so forth, leaving the remainder of the tenancy to be made good by Spuds Surf.

(b) Rent for Shops 415, 416 and 417 would commence on 1 August 2002 (that date was subsequently extended to 10 August 2002).

(c) The Respondent would contribute an additional $10,000 to the Lessee's fitout making the total contribution in that regard $30,000.

36 On 1 July 2002 Mr Mimis wrote to Ms Johnson requesting that the commencement date for the rent be extended and that the lease include a promotional rebate on the minimum rent should the ratio of rent to gross sales exceed 18%. The extension of the date for the commencement of rent was ultimately agreed to but Westfield did not agree to the proposed promotional rebate.

37 The Applicant took possession of Shop 417 about 3 July 2002 and undertook refurbishment of Shops 415, 416 and fitting out Shop 417.

38 On 9 August 2002 Mr Mimis met with Mr Gary Pinter, another Westfield leasing executive, and Ms Johnson at Westfield's Head Office. Ms Mimis-Weeks says that shortly before that meeting Mr Mimis told her:

"I am concerned about the level of rent we have agreed to pay, as well as the clutter of traders in and around the store. I have organised a meeting at Head Office to discuss the matter with Westfield."

39 The Respondent allowed the Applicant to take possession of, fit out, and commence trading from shop 417 without securing execution by the Applicant of the lease...

40 On or about 21 August 2002 Landerer & Company received a cheque and a partially executed lease from Mr Mimis. The cheque was for the first month's rent plus GST and this was in replacement for an earlier cheque which Mr Mimis had sent on or about 13 August 2002 and which was not met on presentation. The lease was signed by Mr Mimis only; it was not signed by Ms Mimis-Weeks who says that she thought she did not have to sign the lease because Mr Mimis was both a director and the company secretary and had therefore signed it in both capacities. Mr Mimis had made manuscript changes to the lease by altering the commencement date to 11 August 2002 and the expiry date to 10 August 2008 but also adding to Item 10 on the front page of the lease:

"For every day there is a shop front stall and/or visual impediment to the shop front above 1.4 metres high in front of shops 415 to 417 for part or whole day, the minimum rent payable by the Lessee calculated on a daily basis will reduce by 10%."

41 On 26 August 2002 Landerer & Company wrote to Mr Mimis:

"We refer to the Lease and Deed of Agreement recently returned to us and note:

1. you have not provided us with a cheque for costs and stamp duty as requested under cover of our letter dated 8 May 2002;

2. you have amended the commencement and expiry dates to read 11 August 2002 and 10 August 2008. This is not agreed and we have been instructed that the commencement and expiry dates must be 10 August 2002 and 9 August 2008 respectively. Please let us have your written authorisation to make this change to Item 7 and 8 of the Lease;

3. you have made an unauthorised addition to Item 10 of the Lease and this addition is not agreed. Please let us have your written authorisation to delete this addition;

4. the documentation has not been fully executed. As you would be aware from previous leases entered into by our company, the documentation must be signed by the two directors or one director and one secretary of the Lessee company. It is not acceptable that the Lease only be executed by George Mimis and returned to us. The documentation must be executed by both George Joseph Mimis and Elizabeth Anne Weeks. We therefore enclose re-engrossed pages 6 and 7 of the Deed of Agreement in duplicate and re-engrossed pages 33 and 34 of the Lease in duplicate. Please ensure that the pages are executed properly this time and returned to us.

Once you have attended to all of the above, we may be in a position to certify to our client that the documentation is in order for execution by it."

In the Lease, the permitted use was stated as 'Retail sale of surf, skate, street, snow clothing and accessories, surf and bodyboards, wet suits, outerwear and apparel'. The minimum annual rent was $427,500.00, payable in monthly instalments. There was provision for the rent to increase in line with the CPI and for the payment of a 'percentage rent'. Mr Mimis was named as a guarantor of the Applicant's obligations under the Lease.

In a letter dated 12 November 2002 to Mr Roberts, the Centre Manager of Westfield Chatswood, Mr Mimis wrote in the following terms (see T44):-

I write regarding my premises Shops 415-417 Westfield Chatswood.

As you are no doubt aware, I have been extremely concerned regarding the clutter of temporary and permanent kiosks outside of my shopfront and main entrance. It is interesting to note that since the cosmetic kiosk was removed that my sales have significantly improved over the last week. Moreover, the signage and entrance is much more visible to through traffic entering from the foodcourt carpark.

It is disconcerting to see that the new kiosk being built at present is so close to my entry door, much closer in fact then the previous kiosk. I trust that the Westfield height restrictions on such kiosks will prevent my shopfront and signage from being blocked from the foodcourt carpark entrance.

I further express my concern over the continuing temporary kiosks located adjacent to my shopfront which create a barrier to ease of movement and entry to my store. The most recent being the calendar temporary trader last week. These matters require resolution as they are noted in my new lease and have been discussed in person with Gary Pinter and Megan Johnson.

You will be aware that I pay a premium rent to achieve the shop front and location that I trade from and as such I cannot afford to have my trade impeded by such kiosks without concurrently addressing any rental. This is particularly the case when I have now some sales record of the improvement when the clutter is removed.

Perhaps we can meet on site to review the above further as a matter of urgency...

The 'new kiosk' to which Mr Mimis referred was the Boost Juice kiosk. At T42 and T172, the Tribunal set out its findings relating to the negotiations culminating in the grant of a lease by the Respondent to Boost Juice and the terms of that lease:-

42 Negotiations which had commenced in the end of July 2002 between Westfield, Boost Juice Pty Ltd and D-7 Cosmetic Pty Ltd concerning B-Zone vacating kiosks 406 and 407 and kiosk 407 becoming a Boost Juice outlet, continued through to about 5 November 2002 when the B-Zone kiosk was removed and construction of a Boost Juice kiosk commenced. The Boost Juice kiosk commenced trading on about 15 November 2002.

172 Also relevant in this regard are clauses 10(1) and 29 of the Boost Juice lease:

"LESSEE'S WORKS

10.1(a) On or before the commencement date or any later date as the Lessor advises the Lessee in writing, the Lessee will carry out at its cost all its fitting out work to the Premises as shown in the approved plans referred to in this clause in accordance with the fitout requirements provided to the Lessee by or on behalf of the Lessor. The Lessee will carry out such work in a good and workmanlike manner to the Lessor's satisfaction.

(b) Before doing any fitting out work at the Premises the Lessee will prepare plans and specifications for such work and will obtain the approval of the Lessor to such plans and specifications.

(c) All work performed at any time by the Lessee requires the Lessor's written consent.

29 KIOSK HEIGHT CLAUSE

The Lessee covenants and agrees with the Lessor that the height of the Kiosk including any counters, signs, displays, merchandise and equipment installed therein shall not exceed 1400mm from the upper surface of the floor of the Shoppingtown upon which the Kiosk is situated."

Those clauses are also in other kiosk leases in evidence.

The Tribunal observed at T4(c) that the distance between the Boost Juice kiosk and the frontage of shop 417 was about 2.7 metres. It provided more details at T43:-

43... Kiosk 407 had an area of approximately 20m2 fitted within a substantially rectangular layout of depth along the north-south mall or walkway of 6 or so metres and a width along the east-west walkway of about 3.5 metres. The Boost Juice kiosk as installed included two blade signs. One was located on the western side towards the south western corner, facing north-south; it presented advertising and menu material, and it extended to approximately 2.8 metres above the floor and was approximately 900mm wide ("the first Boost Juice sign"). The other sign was at the north eastern corner of the kiosk facing east-west, in similar form ("the second Boost Juice sign"). The first Boost Juice sign had affixed at its top, about 300mm high, formed separate letters reading "Boost", facing north. There was nothing affixed above the second Boost Juice sign. On the western side of the kiosk on the northern side of the first Boost Juice sign, there was a free-standing bottled drink refrigerator of about 1.8m height and about 800mm width. At the north-western end of the Boost Juice kiosk there was a glass display case on top of the counter, to a height of about 1600mm in and on which pineapples and other promotional material seem to have been regularly placed. The north-western corner of the kiosk was within 3.0m of Shop 416 and the northern end of the kiosk was about 1.5m closer to Surf City than the B-Zone kiosk had been...

Mr Mimis wrote as follows to Landerer & Company on 9 December 2002, sending a copy to Mr Roberts (see T45):-

I write in response to your letter dated 26 August 2002 and apologise for the delay. I have been attempting to resolve my concerns relating to point 3 in your note directly with Centre Management to no avail.

I address the points in your correspondence as follows;

1. Payment of your costs will be forthcoming.

2. Agree to commencement date of 10 August 2002 and expiry of 9 August 2008.

3. Not agreed.

In discussion with each of Gary Pinter and Megan Johnson of Westfield Leasing (including a meeting at 12.30 pm on 9 August 2002 at Westfield HQ), the issue of the casual tenancies outside and around my doorway and visual impairment as a result of kiosk sightlines was discussed. It was understood as a result of this meeting that we would meet on site again to work out a resolution to my concerns which were agreed to by the parties in this meeting. At this point there has been no resolution.

In fact, casual tenancies have been abundant since the commencement of this new lease creating difficulties for traffic flow to see and access my shopfront. Additionally, a large Boost Juice kiosk has now been erected directly outside my doorway entrance with signage well in excess of the limitations placed by Westfield as follows: pursuant to Clause 7.0 - Appendix 6 Kiosks of the Westfield Fitout Requirements (Specialty Shops), it is clearly noted that "maintaining sightlines through all Kiosks is essential, therefore height restrictions apply. Maximum height 1400mm, (public contact is recommended at 1200mm.)" The signage erected by this Kiosk at 2600mm is well in breach of your standard fitout guidelines, thus further impairing my shopfront.

I have been offered additional signage opportunities by centre management on 27 November 2002, at my own expense, which is not an acceptable resolution this problem given the very significant rental I pay for the premium frontage that I should have.

Perhaps if I may suggest a meeting with Westfield HQ (Gary Pinter and appropriate leasing personnel), may be step 1 in this resolution process. However, I must note that should this not be resolved promptly, as it is now well overdue and impairing my optimal trade, that I will have to retrospectively invoke the hand written amendment to Item 10 of the lease.

4. I will have the required pages re-executed as per your request.

At T120 and T126, the Tribunal outlined Mr Roberts' answers to questions put to him about discussions between him and Mr Mimis following this letter:-

120 In cross-examination Mr Roberts was referred to the time lapse between the letter which Mr Mimis had written on 12 November 2002 expressing concern about the kiosks outside Spuds Surf and Mr Roberts' letter to Mr Mimis of 28 May 2003... He gave an explanation to the effect that there had in the meantime been discussions between himself and Mr Mimis and he had conducted some enquiries, saying, for example:

"What's probably missing in the transcript is there were conversations between George and I over the phone that reflected my response in the first instance to his issues, one in part about the mall space and we both had a very amicable discussion on a number of occasions about that. And more latterly the kiosk design issued that he raised. In the first instance I spent a bit of time, as I said I would, with him discussing with our design colleagues about the design, particularly with the Boost Juice kiosk and between the original raising of the issue I would be - my recollection would be I'm sure we discussed it, but I more formally responded in May."

126 It is also pertinent to note some evidence given in response to questions asked of Mr Roberts from one of the non-judicial members:

"Q. Did (Mr Mimis) state that the Boost Juice signage or anything to do with the kiosk were impacting on Surf City's sales?

A. I can't recall the discussions to answer it clearly but certainly his letter in 2003 indicates there was an impact, he perceived there was an impact.

On 20 March 2003, the Respondent agreed on the commercial terms for a lease of Kiosk 406 to Business Service Brokers Pty Ltd trading as Telechoice. The lease included a term that the Lessee's fitting out works would be carried out as shown in the 'approved plans' and 'in accordance with the fit out requirements provided to the Lessee by or on behalf of the Lessor'.

The Telechoice kiosk (which was sometimes referred to as 'the Optus kiosk') was subsequently installed and commenced trading on 1 June 2003. It was situated just south of the Boost Juice kiosk, on the eastern side of the north-south mall, and like the Boost Juice kiosk it was adjacent to, and about one metre from, the 'void' by which, to use the Tribunal's terminology, the east-west mall was 'bifurcated'.

The Tribunal described this kiosk as follows (at T46):-

46... Kiosk 406 covered an area of approximately 17m2 within a roughly rectangular layout of north-south depth of about 5m and east-west width of about 3.5 metres, and there was a distance of 2.5m or so between kiosks 406 and 407 [the Boost Juice kiosk] and the Telechoice kiosk had a blade sign on the eastern side facing north-south about 800mm wide standing about 1m above the kiosk cabinet...

A further letter dated 13 May 2003 from Mr Mimis to Mr Roberts included the following passage (see T47):-

Further to our various discussions and correspondence I write to you to bring to finality the issue relating to Boost Juice and various other kiosks outside my tenancy.

As discussed with you last year, clearly the placement and height of this Boost Juice tenancy is contrary to Westfield's standard design requirements, whilst the kiosk is larger than any previous kiosk in this location as per lease plans. I feel strongly that this has had an impact upon my immediate trade and traffic flow. Moreover, the variety of other temporary kiosks outside and around my premium shopfront have also impacted my trade potential. This is highlighted by the numerous weeks of casual trading of cheap ladies apparel kiosks selling replica garments to many of those sold in my store but subject to significantly lower rent and no fitout requirements, right adjacent to my shopfront.

Consequently, I now urgently need to bring this matter to closure. As you are aware there exists a provision in my lease to withhold 10% of the gross rental under the above circumstances. At this point I am left in a position where I will have to invoke this clause...

During the cross-examination of Mr Roberts relating to this letter, his attention was brought in particular to the reference to the Boost Juice kiosk having 'had an impact upon my immediate trade and traffic flow'. At T121, the Tribunal quoted the following extract from his responses:-

We spent quite a bit of time making sure that the design of the kiosk was in a, in similar location to any previous usages in that space. I think it's important to reflect on this is that I took the height reference in this to be about the menu boards not the physical height of the whole of the kiosk because that certainly wasn't raised as an issue, it's the menu boards particularly that Mr Mimis was referring to and I think we responded fairly clearly to that.

In further correspondence between Mr Mimis and Mr Roberts during 2003, the compatibility of the Boost Juice kiosk with the 2002 Height Restrictions featured prominently. The relevant paragraphs in the Tribunal's decision are T48 and T51:-

48 Mr Mimis and Mr Roberts met on 23 May 2003 to discuss the matter and Mr Roberts wrote to Mr Mimis on 28 May 2003 setting out his appreciation of the outcome of that meeting:

"Further to our meeting of Friday 23 May 2003 concerning your issues in relation to the Boost Juice Kiosk and its height and the casual fashion adjacent to Boost Juice.

As indicated, the casual site will become a permanent kiosk in the coming weeks and the casual fashion will cease.

Secondly, having reviewed the information supplied by you in relation to Boost Juice, the following information is provided.

The issue that you have constantly identified is the height of the menu boards. The section of the fit out guide you refer to, page 40, is specific in reference to the kiosk height to be restricted to 1400mm. This has been complied with strictly. On page 41, the restriction on menu boards only that they 'be kept to a minimum' in quantity. No restriction in height is identified or implied and as a result, I believe no further issue exists here.

Trusting this clarifies matters and should you have any further concerns, please do not hesitate to contact me."

51 Mr Mimis re-visited the issue of the kiosks with Westfield on 1 December 2003 when he wrote again to Mr Roberts:

"Further to our various conversations, meetings and correspondence I write to further address the matter that is the Boost Juice Kiosk outside my tenancy.

You note in your letter to me dated 28 May 2003 that you believe no issue exists in relation to the height of the kiosk. However, I believe you may have misinterpreted the Westfield Fitout Requirements Handbook. Point 7.0 page 40 states 'maintaining sight lines through all kiosks is essential, therefore height restrictions apply. Maximum height 1400mm." The point you refer to stating 'overhead elements including menu boards and structure are to be kept to a minimum' is not relevant here as the Boost Kiosk structures that are over 1400mm are not overhead but rather from the ground up. Had they been overhead they would not create the level of visual impairment that they currently do to my tenancy.

As such it would be appreciated if you could advise as a priority how you intend to rectify this situation."

There is no evidence of any response to that letter.

Mr Mimis ceased to be a director of the Applicant on 27 January 2004. But he nonetheless responded on the Applicant's behalf to a letter dated 12 March 2004 from Landerer & Company. In this letter, Landerer & Company stated that they had received no reply to their letter of 26 August 2002 and asked Mr Mimis to send them the relevant pages of the memorandum of lease, duly executed, within seven days. In his reply dated 30 June 2004 (see T53), Mr Mimis reiterated that the Applicant still insisted on the inclusion of the amendment to Item 10, adding that 'this has been communicated on numerous occasions to the Centre Management with no response forthcoming'. He stated also that Ms Mimis was now the sole director of the Applicant.

During January 2005, the Respondent issued a booklet entitled 'Retail Design Management Kiosk design guidelines - General Retail' (see T171). A section at the back included notes stating that 'this is a guide to assist Lessees ...' and 'is illustrative only'. It included the following provisions:-

general kiosk design

parameters

Maximum kiosk height is 1400mm

Walk through style layouts are encouraged where appropriate

general kiosk design

signage

1 x off main signage pylon

maximum size 2600mm (H) x

800mm (W) x

15mm (D)

We will refer henceforth to these provisions as 'the 2005 Height Restrictions'.

On 1 February 2005 (see T57), a lease from the Respondent to Love Salad Pty Ltd, relating to what became known as 'the Love Salad kiosk' commenced. This kiosk was located just south of the Telechoice kiosk and was also adjacent to the 'void'.

A letter dated 23 February 2005 from Landerer & Company to Mr Mimis (see T59) included the following passage:-

3. The Lessor will not agree to the unauthorised amendment made at Item 10 of the Lease and once again we request your authority to reinstate item 10 to its original form.

We note that such authority may be given by signing and forwarding copy of this facsimile back to our office.

4. We await receipt of ASIC verification that Elizabeth Mimis is the sole director/secretary of the Lessee company at the time that the Lease was executed. This was not attached as noted in your facsimile.

We advise that we are unable to progress the Lease in this matter until such time as the outstanding items above are attended to by the Lessee..."

At T60, the Tribunal described the next stage of this correspondence between Landerer & Company and the Applicant as follows:-

60 Following a telephone conversation which she had with them the previous day, on 29 April 2005 Landerer & Company forwarded to Ms Mimis-Weeks a copy of their fax of 23 February 2005 to Mr Mimis and also a copy of the lease in its then executed form. The covering letter from Landerer & Company requested that she "please provide us with the outstanding items as requested in our facsimile." Ms Mimis-Weeks says in evidence that she did not sign the lease or the guarantee because the Respondent refused to agree to the hand-written amendment to Item 10 of the lease, but it was her view that there was a lease in force.

During May 2005 (see T61), a St George Bank ATM was erected outside Shop 417.

The Tribunal's account of events after May 2005 contains three sets of findings relating to the handwritten amendment of Item 10 of the Lease, the obstruction of sightlines and other disruption of the Applicant's business by the Boost Juice kiosk and the effects of the installation of the Love Salad Kiosk, the Telechoice Kiosk and the St George ATM.

First, on 1 August 2005, Ms Mimis-Weeks and Mr Stevens held a meeting in which the principal item of discussion appeared to have been the possibility of downsizing the Applicant's business. On 8 August, he sent an email to her relating to this question. Her email message in reply, dated 11 August, contained the following passage (see T67):-

Also, have you had any feedback from your design team on the present obstructions to my shopfront from the kiosk tenancies? I am interested to see what you can offer me to offset this situation. Looking forward to catching up again shortly.

Secondly, the Tribunal described at T91 a meeting on 9 August 2006 attended by Ms Mimis-Weeks, her husband, Mr Lundy of Lundy Lawyers (whom the Applicant had retained), Mr Leslie (Westfield's Divisional Director of Leasing for Australia and New Zealand) and Mr Papagiannis (Westfield's National Leasing Manager). The Tribunal's outline of the discussion at the meeting included the following passage:-

Mr Lundy raised the manuscript addition which Mr Mimis had placed at Item 10 in the Lease document. Mr Papagiannis maintained Westfield's position that that amendment had not been agreed to.

Complaints were made by Ms Mimis-Weeks about structures obstructing the shopfront of Surf City, namely Boost Juice, the Optus kiosk and the St George ATM. Mr Leslie contended that complementary usage like Boost Juice would benefit Surf City. Mr Lundy said that basically they were seeking compensation in excess of $200,000.00 representing 10% reduction in rent for every day those structures were installed. Mr Leslie rejected that claim.

Thirdly, at T97 and again at T157(a), the Tribunal referred to a letter dated 1 September 2006 from Ms Mimis-Weeks to the then Centre Manager, Mr Derek Rossel. But the text of this letter, which is relevant to various aspects of our decision, was not reproduced in the Tribunal's decision. Omitting formal parts, it was as follows:-

Firstly, I would like you to provide me with the date of the first trading day for Boost Juice kiosk, which was some time in October 2002. From then to date there is a 10% reduction in my rent, calculated daily, due and payable to me by Westfield. The approximate sum being $250,000.00. I request Westfield pay this sum to me due under section 10 of my lease forthwith.

Secondly, I am requesting that the kiosks directly blocking my store entrance be removed and compensation paid to me for the alteration of traffic flow into my store since October 2002. My repeated requests for this have been ignored by Westfield to date. When Surf City entered into the lease with Westfield the Boost Optus and salad bar kiosks were not there nor were the ATM machines. Customers could walk from the blue level entry directly into the entrance of Surf City, which they can no longer do. Westfield has failed to take reasonable steps to prevent the adverse effects these kiosks have had on my trade.

In fact Westfield is in control of putting these kiosks in my doorway which has had a significant adverse effect on my business and I request the matter be rectified immediately. Please notify me of the time frame as soon as possible.

Three expert witnesses gave opinion evidence regarding the impact of the erection of the Boost Juice kiosk, the Telechoice kiosk, the Love Salad kiosk and (in some instances) the St George Bank ATM on the sightlines to the Premises and on the Applicant's trade. To the extent indicated below, they took into consideration the presence of the B-Zone kiosk at the time when the Lease commenced.

Mr Standley, a retail consultant, was called by the Applicant. The opinions that he expressed in his evidence in chief included the following (see T175):-

(a) "...there is a positive co-relation between the accessibility of a store to passing pedestrian traffic in a shopping centre and the turnover of the store."

(b) "...the material interference with the visibility of shops 415 to 417 would interfere with the ability of the Lessee to maximise or deliver sales as would be the case if the product offered for sale by the Lessee had clear line of sight by customers in particular entering level 4 of Westfield Chatswood from the car park blue level entry as existed at lease commencement."...

(e) "...the combined effect of the Boost Juice kiosk and the ATM kiosk on visibility and customer access as observed to Lessee's premises during peak trading has affected the Lessee's to the detriment of the Lessee."

During cross-examination, Mr Standley said (see T176):-

(a) That the Boost Juice kiosk involved "an aggressive usage".

(b) That he knew the B-Zone kiosk was in existence at the commencement of the lease of Shops 415, 416 and 417. He had assumed that it either did not interfere with sightlines to those shops or interfered less with those sightlines than did the Boost Juice, Telechoice and Love Salad kiosks.

(c) After being shown plans of the B-Zone kiosk, that the B-Zone kiosk was likely substantially to interfere with the sightlines to Shops 415, 416 and 417.

(d) That he had not compared the kiosk circumstances pertaining at the commencement of the lease and the circumstances as he observed them on 11 May 2007.

Ms Radosevic, an Architectural Draftsperson, was called by the Respondent. The material that she produced included three-dimensional computerised CAD representations of the north-south walkway towards the Premises, showing the four kiosks in various combinations. The Tribunal stated at T169 that she 'expressed no opinions in her report'. Later in this paragraph it stated, however, that during cross-examination, after being shown some photographs of the Boost Juice kiosk, the Telechoice kiosk, the Love Salad kiosk and the St George Bank ATM taken during 2005 and 2006, Ms Radosevic expressed the following opinions:-

(a) One of the November 2006 photos, taken in front of the Telechoice kiosk at the south eastern end looking north and showing the Optus blade sign presented "considerably worse" sightlines (to Surf City) than a photo of the B-Zone kiosk, included in the material attached to her report, taken near the south eastern corner and looking generally north;

(b) One of the August 2005 photos taken a few metres south of the Love Salad kiosk, roughly in line with the walk-through line which she had sought to simulate in her Rivet exercise "substantially inhibits the sightlines towards the Surf City store in that position";

(c) In one of the August 2005 photographs taken close to the south western corner of the Love Salad kiosk looking north, "the Boost Juice sign on the left hand side provides a substantial impediment... to the Surf City sign";

As stated at T46, the commercial terms of the Telechoice lease were agreed on 20 March 2003. The kiosk was then constructed and it commenced trading on 1 June 2003. We are inclined to the view (see above at [152]) that it contravened the 2002 Height Restrictions. The period between these two dates was the period when Mr Mimis, in his letter of 13 May 2003 to Mr Roberts, repeated his complaint that the Boost Juice kiosk contravened the Restrictions and Mr Roberts, in his letter of 28 May, rejected this complaint (see [47], [49] above).

As stated at T57, the Love Salad lease commenced on 1 February 2005. We are inclined to the view (see above at [152]) that it contravened the 2002 Height Restrictions. The Respondent issued the 2005 Height Restrictions, with which this kiosk did comply, during January 2005. The most recent complaint by the Applicant about non-observance of the 2002 Restrictions had been in Mr Mimis's letter of 30 June 2004 to Landerer & Company. As we pointed out above at [155], the Tribunal overlooked this letter when setting out its conclusions regarding the series of complaints made by Mr Mimis on behalf of the Applicant.

Taking all these considerations into account, it appears to us that the Applicant's case on its unconscionable claim against the Respondent could, at its highest, be based on the following matters occurring between February 2002 and July 2005:-

1. Through distributing the 2002 Height Restrictions to tenants and prospective tenants, the Respondent established them as a guideline or code operating throughout the Centre and assumed the responsibility of ensuring that the plans for new structures in the Centre complied with them.

2. In the Restrictions, the applicability of the maximum height limit to different types of signage was left unclear.

3. In February 2002, the Respondent made the Applicant aware of the Restrictions during negotiations for the Lease. In August 2002, shortly after the Lease commenced, the Applicant notified the Respondent's solicitors that it expected any new structures being erected near the Premises to comply with them. Yet without any notification to the Applicant, the Respondent proceeded during the next three months to approve plans for the Boost Juice kiosk near the Applicant's shop, in the context of granting a long lease, even though (a) on a viable interpretation of the Restrictions, the kiosk did not comply with them on account of the height of signage extending upwards from the ground and (b) the approval was at odds with a term of this lease.

4. In May 2003, in the course of unsuccessful negotiations between the parties, the Respondent's response to the Applicant's claims that the Boost Juice kiosk contravened the Restrictions was solely to state that they must be given a different interpretation, according to which they imposed no express or implied restriction on the height of any signage.

5. At about the same time, the Respondent also approved the construction of the Telechoice kiosk near the Premises, in the context of granting a long lease. It did this even though this kiosk also contravened the 2002 Height Restrictions.

5. During 2005, the Respondent issued the 2005 Height Restrictions, with which both of these kiosks were compliant. At about the same time, it approved the construction of the Love Salad kiosk near the Premises, in the context of granting a long lease. It did this even though this kiosk also contravened the 2002 Restrictions (though not those of 2005).

6. The Respondent claimed that it could not require the removal of any of the three kiosks, giving as a reason its own conduct in granting long leases in relation to them.

7. The Respondent also claimed that the substitution of the 2005 Height Restrictions for those of 2002 provided legitimate grounds for it to reject the Applicant's complaints about all three kiosks.

8. Despite receiving complaints during the period between August 2002 and June 2004 about the obstruction to sightlines caused by kiosks, the Respondent apparently took no steps, until July 2005 at the earliest, by way of providing rental or other financial assistance to the Applicant. Instead, it insisted that it was entitled to the full amount of rent stipulated in the Lease and it subsequently instituted legal proceedings to recover this rent.

It will be noted that these matters do not include the allegation, which we found unproved earlier in this decision and which Mr Angyal disputed in his submissions on the unconscionable conduct claim, that the Applicant relied on the 2002 Height Restrictions in reaching its decision to enter into the Lease.

In suggesting that a case along these lines should have been given consideration by the Tribunal and might have been sufficient for the Applicant, we reject two submissions made by Mr Angyal. The first was that it was never put to Mr Roberts during cross-examination that his interpretation of the Restrictions in his letter was incorrect, or that in advancing this interpretation he was acting in bad faith or in any other way that could be characterised as unconscionable, having regard to the indicia listed in section 62B(3) of the RL Act. We do not think that this was a relevant issue. The characterisation of Mr Robert's conduct in this regard was a matter for the Tribunal to consider, irrespective of whether it formed the subject of a question to him in cross-examination. The second was that the Tribunal's findings as to the parties' failure to reach a compromise negated any determination to the effect that in the context of these negotiations, or indeed any other context, the Respondent had greater bargaining power than the Applicant. We do not see why this should be so.

It will be observed that this framing of the Applicant's case extends beyond the matters alleged in the relevant particulars ((a), (b) and (i)) of the Applicant's unconscionable conduct claim. But many of the additional matters were included in the Applicant's Tribunal Submissions and its Tribunal Submissions in Reply. Other matters were the subject of findings by the Tribunal elsewhere than in the section of its decision in which it dealt with the unconscionable conduct claim. The Respondent could not reasonably assert that, when defending this claim, it would expect these additional matters to fall outside the range of those considered by the Tribunal.

Our conclusion overall is that the Tribunal did not take into account - or at least did not expressly take into account - all relevant considerations, factual and legal, when deciding to dismiss the unconscionable conduct claim. Its failure to do so was erroneous in law.

It may well be that the reason for these omissions by the Tribunal was that it was under pressure to complete its decision. To this extent, the passage from Hunt A-JA's judgment in Monie and Others v Commonwealth of Australia (2005) 63 NSWLR 729; [2005] NSWCA 25 on which Mr Fernon relied is again relevant.

The question now arising, as was the case with respect to the Applicant's claim under section 34, is whether we should therefore exercise our discretion to grant leave for the appeal to extend to the merits.

We have decided that we should indeed grant such leave with respect to the Applicant's unconscionable conduct claim. In order that we may then discharge our consequent duty under section 115 to reach 'the correct and preferable decision' on this claim, we will schedule a hearing at which the parties will have a further opportunity to present submissions relating to it.

At that hearing the parties will not be permitted to adduce further evidence unless strongly compelling reasons are advanced. Our reasons for so stipulating are that the events of importance in this case occurred quite a few years ago and that the parties had ample opportunity during the long period of the Tribunal hearings (from May 2009 to February 2010) to assemble and present their evidence.

The main ground for our grant of leave is that the matters that we have identified as the possible basis for a claim of unconscionable conduct against the Respondent were relied on (subject to a couple of exceptions) in submissions to the Tribunal but did not receive sufficient consideration. Yet they appear to us to include conduct by the Respondent within the range of, or at least akin to, the conduct described in a number of the so-called 'indicia' of unconscionable conduct by a lessor set out in section 62B(3). The provisions within this subsection that we have in mind particularly are paragraphs (a), (g) and (h); subparagraph (i) of paragraph (i); and paragraph (j).

We are aware that linking aspects of the Respondent's conduct to one or more of the matters listed in section 62B does not necessarily lead to a ruling that the overriding criterion laid down in Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557 - i.e., that the Respondent's conduct was 'highly unethical' and involved 'a high degree of moral obloquy' - has been satisfied. But this is a matter on which the parties will be able to put forward submissions at the forthcoming hearing.

It may be asked why we are minded to grant leave with respect to the Applicant's unconscionable conduct claim but not to its claim under section 34. The answer stems from two important distinctions between these claims. These are (a) that the unconscionable conduct claim, unlike the claim under section 34, is not affected by a requirement to prove that the matters complained of had a 'substantial' or a 'significant' effect on the Applicant's trade, and (b) that the restriction on damages resulting from the Applicant's failure to satisfy the notice requirement contained in section 34 does not apply to the unconscionable conduct claim.

For the foregoing reasons, the appeal with respect to the unconscionable conduct claim is upheld, to the extent that we grant leave for this part of the appeal to extend to the merits and invite further submissions to be made at a forthcoming hearing.

Causation and damages

In this section of our decision, we discuss the Tribunal's treatment of two questions: (a) whether the conduct of the Respondent about which the Applicant caused the Applicant to suffer any loss; and (b) if yes, what amount by way of damages was shown by the evidence to constitute appropriate compensation for such loss.

In the Notice of Appeal, the only reference made to these questions of causation and damages was within the section of the Notice setting out reasons why leave should be granted for the appeal to extend to the merits. Among the 16 reasons given, no. 5 was as follows: 'The Tribunal failed to give any or any proper reasons for its findings in respect of damages.'

The Tribunal's conclusions. At T242, the Tribunal recorded the following findings under the heading 'Loss and damage':-

242 Given that all the Applicant's claims have failed, I do not assess as an appropriate exercise, to seek to unravel the evidence as to quantum, particularly concerning any lost profits by the Applicant and the value of the Surf City business. Nevertheless, I do find that the Applicant has not proved any causal link between conduct by the Respondent and any loss or damage suffered by the Applicant. Also, I do make some short comments on particular matters of quantum: I found the Applicant's evidence, particularly as to the value of the business and loss of profits, inadequate;...I would have accepted that the business had a goodwill value of $1000,000; as to the loss of profits I agree with submissions by the Respondent to the effect that the assessment which the Applicant has sought to make out was speculative and in no way persuasive. The issues in these proceedings do not include a general inquiry into why the Surf City business ultimately failed but I do confirm that I am satisfied that it did not fail because of any of the complaints pleaded by the Applicant. I note, but do not express any view on, other suggested causes of that failure such as competition from the Applicant's other store, and Mr Mimis' store, in Victoria Avenue, loss of the Billabong brand, poor management of Surf City, poor cash flow, product supply and management problems and industry trends away from small surf shops.

The parties' submissions. For reasons that will shortly become apparent, we do not propose in this decision to describe at length the parties' Appeal Submissions relating to causation and to damages. It is sufficient to say as follows. Mr Fernon maintained that the Tribunal paid insufficient attention to the financial records tendered by the Applicant and to his submissions regarding the losses suffered by it on account of the Respondent's wrongful conduct. Mr Angyal maintained that the Tribunal's conclusions were entirely justified, particularly in the light of the defects in the Applicant's financial evidence that it described at T199 (see [79] above).

Our conclusions. We agree with Mr Fernon that the Tribunal's treatment of these questions was brief, no doubt because (as it said at T242) its overall decision was against the Applicant. We also agree with Mr Angyal (and with the Tribunal) that there would appear to have been significant defects in the Applicant's evidence on both causation and damages.

We are conscious also, however, that at the hearing of the appeal during November 2011 neither of these questions received significant attention. This was chiefly because, as the present decision demonstrates, many other matters had to be canvassed.

For these reasons, we have decided that at the forthcoming hearing for the purpose of receiving further submissions on the Applicant's unconscionable conduct claim, the parties should also be invited to address again the questions of causation and damages. They will not, however, be permitted to adduce further evidence, unless strongly compelling reasons are advanced.

We should add that we regard this extension of the scope of the hearing as particularly important for the Applicant. It would be of no material benefit for the Applicant to persuade us of the validity of its claim of unconscionable conduct if it did not also persuade us that the Tribunal erred at T242 in holding (a) that it had failed to prove any causal link between this conduct and any damage suffered by it and (b) that its efforts to show the quantum of any such damage were inadequate.

In this context, it is relevant that under section 72AA of the RL Act the only remedies available following a finding of unconscionable conduct are monetary remedies. They are as follows: (1) an order for the payment of money by a party to the proceedings (including damages, which may relate to pecuniary and/or non-pecuniary harm); (2) an order that a specified sum of money is not due or owing by a party; and (3) an order that a party is not entitled to a refund of any money paid to another party.

Finally, we think it useful to identify some aspects of these questions of causation and damages that the Applicant might seek to address at the forthcoming hearing.

Generally speaking, evidence that a retail lessee's financial situation has deteriorated during a period that is co-extensive with wrongful conduct by the lessor potentially causing such deterioration is not enough, standing alone, to demonstrate that the financial deterioration is actually caused by the lessor's conduct. In this context, as in many others, post hoc does not establish propter hoc. There are many reasons why a business conducted in a retail shop may decline over time.

Some of these reasons - for example, insufficiency of stock, visual presentation of a 'basic' standard only, poor customer service and decreases in sales within the relevant industry - were indeed claimed by Mr Terrill to have been manifest in the Applicant's business at the time when he inspected it. At the end of T242, the Tribunal itself referred to a number of matters, other than the interfering factors of which the Applicant complained, that might have caused its business to fail.

Furthermore, in its submissions to us so far, the Applicant has not pointed to any evidence in this case of the kind that in other comparable situations has assisted a court or tribunal to determine the extent, if any, to which such interfering factors have in fact impaired the trade of a lessee and to award damages accordingly. For instance, our attention has not been drawn to any evidence, expert or lay, on the question whether customers of retail businesses selling street clothing and clothing and accessories for surfing, skating and snow sports were frequently 'impulse' or 'casual' buyers, or more often would decide in advance both that they wished to buy such goods and what shop they would visit. Clear sightlines would be more important in the former situation than in the latter. We have not been made aware of any evidence of trends, upward or downward, in the number of customers to whom the Applicant sold goods (as opposed to the amounts that the Applicant received from these customers). There appears to us equally to have been no evidence of trends, upward or downward, in the trading fortunes of other similar retail businesses within the general neighbourhood of the Centre.

A number of Tribunal decisions within the Retail Leases Division - for example, Bischof & Anor v Werncog Pty Ltd [2004] NSWADT 241, Horwood v Memocorp Australia Pty Ltd [2010] NSWADT 69 and Profilio v Coogee Bay Village Pty Ltd (No 3) [2011] NSWADT 4 - illustrate the uses to which evidence on such matters can be put in cases such as the present one.

It may well be that evidence such as we have described was put before the Tribunal but not mentioned in its decision. If so, the forthcoming hearing will provide the Applicant with an opportunity to draw this evidence to our attention.

Our orders

We order as follows:-

1. Leave is granted for this appeal to extend to the merits.

2. A further hearing is to take place, for the purpose of receiving further submissions from the parties on the following questions:-

(a) Whether conduct of the Respondent occurring between February 2002 and July 2005 amounted to unconscionable conduct as claimed by the Appellant.

(b) Whether any such unconscionable conduct of the Respondent caused the Appellant to suffer loss for which damages may be recovered.

(c) If yes to (b), what is the amount of such loss.

3. The appeal is set down for further directions at 9.30 a.m. on 9 February 2012.

**********

Decision last updated: 30 January 2012

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Citations

Spuds Surf Chatswood Pty Ltd v PT Ltd (RLD) [2012] NSWADTAP 2

Most Recent Citation

Brashes Convenience Store Pty Ltd v Pitt and Castlereagh Pty Ltd (No 2) [2013] NSWADT 184

Cases Citing This Decision

4

PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446

Spuds Surf Chatswood Pty Ltd v Pt Ltd (No 3) (RLD) [2013] NSWADTAP 11

Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2) (RLD) [2012] NSWADTAP 35

Cases Cited

21

Statutory Material Cited

2

Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152

Spuds Surf Chatswood Pty Ltd v PT Ltd (No 3), PT Ltd v Spuds Surf Chatswood Pty Ltd (No 2) [2011] NSWADT 186

Abdul-Karim v Council of the New South Wales Bar Association [2005] NSWCA 93

Medium Neutral Citation:	Spuds Surf Chatswood Pty Ltd v PT Ltd (RLD) [2012] NSWADTAP 2
Hearing dates:	17 and 18 November 2011
Decision date:	30 January 2012
Jurisdiction:	Appeal Panel - Internal
Before:	M Chesterman, Deputy President P Molony, Judicial Member J Schwager, Non-judicial Member
Decision:	1. Leave is granted for this appeal to extend to the merits. 2. A further hearing is to take place, for the purpose of receiving further submissions from the parties on the following questions:- (a) Whether conduct of the Respondent occurring between February 2002 and July 2005 amounted to unconscionable conduct as claimed by the Appellant. (b) Whether any such unconscionable conduct of the Respondent caused the Appellant to suffer loss for which damages may be recovered. (c) If yes to (b), what is the amount of such loss. 3. The appeal is set down for further directions at 9.30 a.m. on 9 February 2012.
Catchwords:	Retail lease - question of law - incompletely executed lease - alteration to memorandum of lease - obstruction of sight-lines and access to shop - covenant for quiet enjoyment - unconscionable conduct - causation - assessment of damages
Legislation Cited:	Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994
Cases Cited:	Abdul-Karim v Council of the New South Wales Bar Association [2005] NSWCA 93 Aras v Victoria Nominees Limited [2003] NSWADT 50 Aspromonte Pty Ltd v Zagari [1999] NSWSC 831 Attorney General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261 Australian Postal Corporation v Sellick (2008) 245 ALR 561 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Barsoum v Glebe Administration Board [2002] NSWADT 19 Barsoum v Glebe Administration Board [2002] NSWADTAP 38 Bischof & Anor v Werncog Pty Ltd [2004] NSWADT 241 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 Burbridge v Vosedo Pty Ltd [2005] NSWADT 8 Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 Casarotto v Australian Postal Commission (1989) 86 ALR 399 CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76 Commissioner of Corrective Services v Aldridge [2000] NSWADTAP 5 Commonwealth v Verwayen (1990) 170 CLR 394 Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267 Express Newspapers PLC v News (UK) Ltd & Ors [1990] 1 WLR 1320 Evans v. Bartlam [1937] AC 473 Geneva Finance Ltd (Receiver and Manager Appointed) v Boys & Ors [2001] WASC 167 Helou & Ors v Bong Bong Pty Ltd & Anor trading as Regional Health Properties [2006] NSWADT 128 Hinton & Ors v Commissioner for Fair Trading, Office of Fair Trading (GD) [2007] NSWADTAP 17 Horwood v Memocorp Australia Pty Ltd [2010] NSWADT 69 Jones v Dunkel (1959) 101 CLR 298 Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456 Monie and Others v Commonwealth of Australia (2005) 63 NSWLR 729; [2005] NSWCA 25 Obradovic v Commissioner for Fair Trading, Office of Fair Trading (No 2) (GD) [2006] NSWADTAP 45 Owendale Pty Ltd v Anthony (1967) 117 CLR 539 Profilio v Coogee Bay Village Pty Ltd (No 3) [2011] NSWADT 4 Randi Wixs Pty Ltd v Pokana Pty Ltd (No 2) [2003] NSWADT 4 Spathis v Hanave Investment Co Pty Ltd & Anor [2002] NSWSC 304 Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2) [2011] NSWADT 152 Skiwing Pty Ltd v Trust Co of Australia Ltd (No 3) [2004] NSWADT 94 Skiwing Pty Ltd v Trust Company of Australia Ltd trading as Stockland Property Management [2006] NSWCA 276 Tarleton & Peters Pty Ltd v EK Nominees Pty Ltd [2010] NSWADT 248 Telstra Corporation Ltd v Sicard [2009] NSWSC 827 Trust Company of Australia Limited (trading as Stockland Property Management) v Skiwing Pty Ltd (trading as Café Tiffany's) [2006] NSWCA 185 Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152 Turnbull v NSW Medical Board [1976] 2 NSWLR 281 Wall's Gifts and Tobacco Pty Ltd v Warringah Mall Pty Ltd [2003] NSWADT 161 Whiteway House No.199 Pty Ltd v Abracoona Pty Ltd, Unreported, Supreme Court of NSW, Hodgson J, 29 May 1998
Texts Cited:	B Cairns, Australian Civil Procedure, 4th edition (Law Book Co, Sydney, 1996)
Category:	Principal judgment
Parties:	Spuds Surf Chatswood Pty Ltd (Appellant) PT Ltd (Respondent)
Representation:	Counsel A Fernon (Appellant) S Angyal SC (Respondent) Herro Solicitors (Appellant) Colin Biggers & Paisley Lawyers (Respondent)
File Number(s):	119034
Decision under appeal	Citation: Spuds Surf Chatswood Pty Ltd v PT Ltd (No 2), PT Ltd v Spuds Surf Chatswood Pty Ltd [2011] NSWADT 152 Date of Decision: 2011-06-22 00:00:00 Before: Retail Leases Division File Number(s): 065171, 085081