Subway Realty Pty Ltd v Nekon Pty Ltd
[2013] NSWADT 231
•17 October 2013
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Subway Realty Pty Ltd v Nekon Pty Ltd [2013] NSWADT 231 Hearing dates: 15 July 2013 Decision date: 17 October 2013 Jurisdiction: Retail Leases Division Before: K Rickards, Judicial Member Decision: 1. The Application is dismissed.
2. The parties must file and serve any further written submissions as to costs within 14 days. The Tribunal will thereafter determine any order as to costs upon the basis of filed papers in accordance with section 73 of the Administrative Decisions Tribunal Act 1997.
Catchwords: Misleading and deceptive behaviour; Estoppel Legislation Cited: Retail Leases Act 1994 Cases Cited: Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276;
Xin v Zakos [2002] NSW ADT 189
Waltons Stores (Interstate) Limited v Maher [1998] HCA 7
Waterman v Gerling Australia Insurance Company Pty Ltd [2005] NSWSC 1066Category: Principal judgment Parties: Subway Realty Pty Ltd (Applicant)
Strokers Pty Ltd (Applicant)
Nekon Pty Ltd (Respondent)Representation: Counsel
M Klooster (Applicants)
D Pritchard SC (Respondent)
Cordato Partners (Applicants)
Uther Webster & Evans (Respondent)
File Number(s): 125144
REASONS FOR DECISION
The Respondent ("Nekon") is the owner of the Waratah Village Shopping Centre at Waratah, New South Wales. This centre comprises a number of individual shops, some with adjoining outdoor areas.
On 1 September 2008 the First Applicant ("Subway") entered into a lease agreement in respect of Shop 4 at the shopping centre ("the premises") for a period of 3 years with two 5 year options ("the Lease").
The Second Applicant ("Strokers") is a franchisee which has operated a "Subway" takeaway food outlet from the premises since about August 2009.
It is common ground that the Lease is a retail lease agreement for the purposes of the Retail Leases Act 1994 (the "RL Act") and that the premises comprise a retail shop for the purposes of the RL Act.
The dispute which is the subject of these proceedings concerns an outdoor area immediately adjacent to the premises which has been used by Subway patrons for the consumption of Subway takeaway food.
During the initial term of the Lease, Nekon allowed a number of operators of food outlets operating in the vicinity of the premises, and including the Subway business conducted at the premises, to place tables and chairs in the areas immediately outside their respective shops for use by customers.
By notice given on 24 May 2011, Subway exercised its option to renew the Lease for the period 1 September 2011 to 31 August 2016 (the "New Lease").
After the option to renew was exercised, there was discussion between the parties about formalising the arrangement for use by the Applicants of the seating area immediately outside the premises.
Renewal of the Lease also required setting of a new market rent for the premises for the first year. After a period of negotiation between the parties extending over a number of months, agreement was reached that the new amount of rent payable for the first year of the renewed term would be $64,500 per annum plus GST. At the same time, tentative agreement was also reached between the parties concerning the nature and extent of tenancy fit out works required under the terms of the Lease, and it was also agreed that Subway would be permitted to use the area of approximately 25 square metres immediately outside the premises for outdoor seating subject to certain conditions.
The Respondent's agent Matthew Yovich sent a letter or communication to the First Applicant on 7 September 2011 which reflected what Nekon understood to be the precise items of agreement and sought confirmation from the First Applicant. Its terms were as follows:
"WARATAH VILLAGE
Re: Lessee confirmation of Market rent review and proposed works
Tenancy: SHOP 4 - SUBWAY
Attention: Glenn Robertson
Date: 7 September 2011
Dear Glenn
Further to our recent discussions and the signed correspondence date 16 August 2011, we confirm the following
Market rent review
$64,500 per annum + GST agreed
Tenancy fitout works
The following works to be undertaken by the franchisee prior to 16th October 2011.
Above shopfront signage to be cleaned and internally illuminated and re-positioned post installation in accordance with the fitout guide.
New signage at the front of the awning in accordance with the fitout guide including power supply from the tenancy.
Purchase of new outdoor tables in accordance with the Lessor's specifications
Replacement of any outdoor seating more than 12 months old, with new wicker furniture in accordance with the Lessor's specifications
Alterations to exposed electrical cables and power point adjacent to the shopfront to ensure these are concealed
Note: Graphic treatment to shopfront no longer required
Licensed Seating Area
Lessee to be granted use of an approx. 25m2 outdoor seating area as per attached outdoor seating plan (final configuration to be finalised) conditional upon the following;
Lessee responsible for provision and maintenance of furniture and upgrade as may reasonably be required; and
Lessee responsible for removal of rubbish, cleaning and maintaining of tables. Chairs and tables must be adequately cleaned and maintained at all times; and
The Lessee providing proof that the Lessee's public liability insurance policy covers the licensed seating area; and
Provided there is no adverse effect or interference to the use of the shopping centre by the public or quiet enjoyment of shop premises leased to other tenants.
Please confirm the above by signing and returning a copy of this correspondence.
Don't hesitate to contact me should you have any queries.
Regards
Brookfield Partnership
Matthew Yovich
On behalf of Nekon Pty Ltd
cc: Robert Rockefeller"
The above document provided for execution and return by the Applicants; there is no dispute that this was done.
As outlined above, the dispute which is the subject of these proceedings relates to the nature and extent of any subsisting rights of the Applicants relating to use of this outdoor seating area adjacent to the premises.
On or about 5 January 2012, Nekon submitted a new lease agreement to the First Applicant which contained clause 30.1 in the following terms:
30.1 The Lessor as Licensor agrees to grant the Lessee as Licensee a licence to use a area of approximately 28m2 for outdoor seating ('the licensed area'), upon payment of a licence fee of $1.00 per annum, subject to the following conditions:-
(a) The Licensee, at the Licensee's expense, will be required to provide furniture in accordance with the licensor's furniture design guidelines and ensure that the furniture is adequately maintained and/or replaced where reasonably required;
(b) The Licensee will be required to ensure that the licensed area and tables and chairs are serviced, cleared and cleaned at all times during the Licensee's trading hours with inspections of the licensed area and tables and chairs to be undertaken every 30 minutes at a minimum;
(c) The Licensee will be required to ensure that the tables and chairs are correctly positioned within the licensed area during trading hours and stored in the lessee's Premises outside of normal trading hours;
(d) The Licence will be required to provide evidence that the Lessee's public liability insurance policy, and worker's compensation insurance policy, covers the licensed area;
(e) The Licensee's use of the licensed area shall not cause any adverse effect or interference to the use of the Shopping Centre by the public, or to the quiet enjoyment of shop premises leased to other tenants;
(f) The Licensor reserves the right to restrict the use of the licensed area and the number of tables and chairs placed in the licensed area at any time in the event that the Licensee is in breach of any of the conditions referred to herein; and
(g) The Licensor reserves the right to increase the licence fee at the end of the initial twelve (12) month period.
The Applicants say that the above terms do not reflect the terms agreed to by the parties in September 2011 for the licensing and use of the outdoor seating area and upon which the Applicants proceeded in entering into a new lease, undertaking certain work and continuing to operate their business at the premises. Their present claim is that Nekon has engaged in misleading and deceptive behaviour and that it is estopped from continuing its commercial relationship with the Applicants upon any basis other than the new lease agreement which should be "modified" by the Tribunal to include a different clause 30.1 in the following terms:
30.1 The Lessor as Licensor agrees to grant the Lessee as Licensee a licence to use an area of approximately 28m2 immediately adjacent to the premises for outdoor seating ('the licensed area'), upon payment of a licence fee of $1.00 per annum, subject to the following conditions:-
The Licensee, at the Licensee's expense, will be required to provide furniture and ensure that the furniture is adequately maintained and/or replaced where reasonably required;
The Licensee will be required to ensure that the licensed area and tables and chairs are serviced, cleared and cleaned at all times during the Licensee's trading hours.
The Licensee will be required to ensure that the tables and chairs are positioned within the licensed area during trading hours and stored in the Lessee's premises outside of normal trading hours;
The Licensee will be required to provide evidence that the Lessee's public liability insurance policy, and worker's compensation insurance policy, covers the licensed area;
The Licensee's use of the licensed area shall not cause any adverse effect or interference to the use of the Shopping Centre by the public, or to the quiet enjoyment of shop premises leased to other tenants;
Despite this clause 30, the Licensee's right to use the licensed area may be terminated by the Licensor without compensation at any time by written notice to the Licensee if the Licensee breaches the provisions of this clause 30 and such breach has not been rectified within a reasonable time of receiving notice in writing of the breach from the Licensor to the Licensee;
Written notice as referred to in clause f. above if only deemed to have been served upon the Licensee on the day sent if it is sent by email to [email protected]; and [email protected];
The Licensee may surrender this licence by giving no less than 72 hours' notice to the Licensor.
Given the present dispute, the new lease agreement has not been executed but all of its terms other than the proposed clause 30.1 have apparently been adhered to by the parties, pending resolution of this matter.
On 7 September 2012 Nekon issued a notice of termination of the licence agreement relating to the Applicants' use of the subject seating area. Nekon was restrained by the Tribunal from taking any further action in reliance upon such notice, pending final determination of these proceedings.
It is remarkable that a dispute of this type concerning the terms of use of a relatively small outdoor seating area adjacent to retail shop premises has not been able to be resolved without recourse to a contested hearing involving a large quantity of evidentiary material and submissions, given the commercial background of the parties and their ongoing relationship pursuant to the renewed Lease.
The Proceedings
The original Application sought orders that the proposed New Lease agreement be "modified" in accordance with what was said to be the agreement comprised within the letter from Nekon's agent to the Applicants dated 7 September 2011, and that such "modified" lease be entered into by the parties within 7 days thereafter. There was also what may be described as a "catch all" provision within the original Application seeking "any further or other orders which the Tribunal deems necessary".
To perhaps repeat what is stated above, the orders which were originally sought by the Applicant were based upon what was asserted to be an enforceable agreement set out within the letter from Nekon's agent to Subway dated 7 September 2011.
Hearing of this matter was set for 15 July 2013. At commencement of the hearing, the Applicants abandoned the contention that the letter dated 7 September 2011 was a binding agreement between the parties. The Applicants continued to seek an order pursuant to section 72 (1) of the RLAct that the New Lease agreement to be entered into between the parties be "modified" in accordance with the terms of the letter dated 7 September 2011, but instead now based this application for "modification" upon two different grounds:
- that Nekon had engaged in misleading and deceptive conduct in breach of section 62D of the RL Act, and;
- that Nekon was also "estopped from entering into the New Lease without the proposed clause for the licensed seating area".
In response to this late development, counsel for Nekon contended that the Applicants should not be permitted to raise these new claims of misleading and deceptive conduct and estoppel at such a late stage and that the Application should be immediately struck out. Subsequently, after a short adjournment had taken place for the purpose of discussion between the parties, counsel for the Applicants advised the Tribunal that an adjournment was not being sought, that the Applicants did not propose to present any additional evidence in support of the amended grounds, and that the Applicants would proceed upon the basis of the evidence which had already been filed.
Given the above advice from the Applicants, together with the Tribunal's indication that it would permit Nekon an opportunity to present further submissions in reply to the amended Application, there was no further opposition raised by Nekon to the hearing of the matter then proceeding.
On behalf of the Applicants, affidavits of their solicitor Fiona Ta'akimoeaka sworn 26 April 2013, 12 July 2013 and 14 March 2013 were admitted into evidence, with the latter affidavit being permitted into evidence only as to costs. For the Respondent, affidavits of Matthew Yovich sworn 27 May 2013 and 12 July 2013 were admitted into evidence and an affidavit of Joseph Antoun sworn 12 July 2013 was admitted as to costs only. Objections were taken to certain components of Ms Ta'akimoeaka's affidavits but the affidavits were admitted in their entirety upon the basis that these objections would be taken into account when determining whether any weight should be given to these particular parts of the Applicants' evidence in reaching any relevant conclusions.
Upon completion of the hearing, leave was given to Nekon to file and serve any further written submissions and authorities within 14 days. Written submissions had originally been provided by each of the parties at the hearing. Further submissions relating to the new grounds upon which the Application was based were then duly filed and served by Nekon in compliance with the foregoing order.
On 27 August 2013, the Tribunal then received further written submissions which were sought to be filed and relied upon by the Applicants. In a covering letter from Ms Ta'akimoeaka to the Tribunal it was stated that "the Applicants were due to file their further submissions on 31 July 2013 ... we apologise for the extensive delay in filing and serving the Applicants' further submissions". This letter went on to explain that the "reason for delay" was the fact that Counsel for the Applicants had been prevented from settling these further submissions by reason of the impending birth of his first child.
The Tribunal has no difficulty in accepting as true the above reason given for the perceived delay on the part of the Applicants' counsel in further considering this matter and settling additional submissions; however, the situation is that no orders were made by the Tribunal permitting submissions in reply to be filed on behalf of the Applicants.
These new submissions provided to the Tribunal also seek to introduce fresh evidence on behalf of the Applicants which is clearly and substantially different to the evidence previously admitted during the hearing, and in circumstances where the hearing proceeded on 15 July 2013 upon the basis of advice given to the Tribunal by counsel for the Applicants that, notwithstanding the late change to the grounds upon which the Application was based, no adjournment of the hearing was being sought nor was any new evidence being relied upon.
The above course of action adopted by the Applicants is extremely unusual. The complaint made by Nekon's solicitors as to the apparent unfairness of this course of conduct is well founded. Notwithstanding this unfairness, these additional submissions and their accompanying material have been taken into account in reaching a decision. Despite the unfairness created by seeking to introduce additional evidence and to make further submissions outside of the procedure permitted, it is the Tribunal's determination, given the reasons for the decision as set out below, that this unfairness has not operated adversely against Nekon.
It is convenient to commence consideration of the orders sought by the Applicants by examining the relevant provisions of the RL Act.
What are the powers of the Tribunal?
The range of powers of the Tribunal relating to retail tenancy claims are set out within section 72 of the RL Act:
72 Powers of Tribunal relating to retail tenancy claims
(1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate:
(a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person,
(b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings,
(c) an order that a party to the proceedings:
(i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of a lease, or
(ii) surrender possession of specified premises to another person, or
(iii) assign his or her or its rights under a lease to a specified person, or
(iv) do or perform, or refrain from doing or performing, any specified act, matter or thing,
(d) an order granting a party to the proceedings relief against forfeiture,
(e) an order, by consent of the parties, requiring the parties to the proceedings to rectify a lease,
(f) an order:
(i) declaring any provision made by a lease to be void for being inconsistent with this Act or the regulations, or
(ii) declaring that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee, or
(iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not, or
(iv) declaring that a party is or is not entitled to receive payment of the whole or a part of a security bond,
(g) such other order, in the nature of an interlocutory order of a kind referred to in paragraphs (a)-(f), as the Tribunal considers proper to be made in order to resolve or assist resolution of the dispute between the parties.
(2) The Tribunal may make such ancillary orders as it considers necessary for the purpose of enabling an order under this section to have full effect.
(3) The Tribunal may impose such conditions as it considers appropriate when making an order under this section.
(4) The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so.
It is appropriate, at this juncture, to simply note that there is no express statutory power given to this Tribunal to "modify" a lease. Pursuant to section 72(1)(e), the Tribunal may make an order requiring the parties to rectify a lease, but this can only be done by consent of the parties.
The Applicants seek "modification" of the new lease to incorporate the terms of clause 30.1 recited in paragraph 13 above. Notwithstanding the observations contained within the preceding paragraph, it is appropriate to consider the two grounds upon which the Applicants seek "modification": that Nekon has engaged in false and misleading conduct and thereby breached section 62D of the RL Act, and; that the principle of promissory estoppel operates to prevent Nekon from entering into the New Lease agreement without inclusion of the clause 30.1 for the licensed seating area as proposed by the Applicants.
Relevantly, s62D of the RL Act is as follows:
62D Misleading or deceptive conduct in connection with retail leases
A party to a retail shop lease must not, in connection with the lease, engage in conduct that it is misleading or deceptive to another party to the lease or that it is likely to mislead or deceive another party to the lease.
The consequences of a breach of section 62D are defined by the provisions of section 62E:
62E Right to compensation
A party or former party to a retail shop lease who suffers loss or damage by reason of misleading or deceptive conduct of another party may recover the amount of the loss or damage by lodging a claim against the other party under section 71.
Within its submissions, Nekon correctly asserts that any proven breach of section 62D by a party to a retail lease agreement enables the innocent party to recover the amount of any loss or damage suffered by reason of such conduct, but does not ground any other right or remedy which may exist pursuant to section 72 of the RL Act.
Is a claim established under Section 62D of the RL Act?
The Applicants assert that, within its communication on 7 September 2011, Nekon engaged in three instances of misleading and deceptive behaviour toward the Applicants.
The test as to whether misleading or deceptive behaviour has occurred is objective; see, for example, the short observation and recital of authority made by Deputy President Olssen in Davis v Sydney Harbour Foreshore Authority (No 2) [2009] NSWADT 276:
28 The test as to whether conduct is misleading or deceptive or likely to mislead or deceive is an objective one: Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre [1978] HCA 11; (1978) 140 CLR 216.
The first misleading or deceptive representation complained of by the Applicants is said to be that, within the 7 September 2011 letter, Nekon expressly represented that the rental of $64,500 per annum plus GST would "include any benefit in connection with the use of a licensed area".
Examination of the 7 September 2011 letter does not reveal any such statement. Consideration of other communications between the parties, even though the Applicants only assert a representation made on 7 September 2011, also fails to identify any such express representation. What is revealed by examination of this evidence is that there was an agreement reached between the parties that the commencing market rent payable for the premises under the New Lease agreement would be the amount of $64,500 per annum plus GST, agreement as to the fit out work to be supplied and completed, and agreement that a licence would be given to the Applicants to use the area of approximately 25 square metres adjacent to the premises for outdoor seating of its patrons subject to certain conditions. There is no express representation that the agreed rent included any actual or notional payment for the licensed seating area.
The Applicants also assert that, in relation to the seating area, there was an implied representation within the 7 September 2011 letter that "the obligation of 'adequately' cleaning and maintaining the area imported elements of reasonableness". Having considered this submission and the relevant evidence, the Tribunal accepts that what constitutes "adequate" cleaning and maintaining of the outdoor seating area is the same type or level of care which is required by the terms of the Lease; however, there is no evidence which shows that any such implied representation was objectively deceptive or misleading at the time that it was made in September 2011, or that the Applicants relied upon any such representation to their detriment.
The Applicants also assert that the 7 September 2011 letter contained an implied representation that Nekon "was satisfied with the current level of cleanliness of the outdoor seated area". It is the Tribunal's conclusion that no such representation can be fairly said to arise from this communication. There is simply no language or absence of language which can reasonably be interpreted upon an objective basis as indicating Nekon's satisfaction with the previous state of the outdoor seating area.
In relation to this particular issue, the only inference which the Tribunal can fairly and comfortably draw from the terms of the 7 September 2011 letter is that the requirements set out therein, that the Lessee was to be "responsible for removal of rubbish, cleaning and maintaining of tables. Chairs and tables must be adequately cleaned and maintained at all times", and that there was to be "no adverse effect or interference to the use of the shopping centre by the public or quiet enjoyment of shop premises leased to other tenants", inferred that there may have been previous issues relating to cleanliness or misbehaviour within the subject outdoor seating area.
Even if such misleading or deceptive representations were proved, there is no satisfactory evidence of loss or damage thereby caused to the Applicants.
Although the Applicants contend that the agreed market rent figure of $64,500 includes a component of rent payable for use of the outdoor seating area and submit that they have thereby suffered loss by having to pay this increased rent, there is simply no evidence to support such an assertion. The evidence reasonably points to a conclusion that the market rent was negotiated between the parties independently of any consideration or inclusion of any commercial rental value for the outdoor seating area.
Within the additional submissions which were tendered by the Applicants without leave, the claimed purchase cost of the outdoor seats and tables is provided as well as the expenditure for the other agreed fit out works. Expenditure on the fit out works, except for the outdoor tables and seating, is not in any way linked to the agreement concerning the outdoor seating area. In relation to the expenditure of the named entity "Subway/Waratah" upon tables and chairs, it can be observed that these items retain inherent value, are portable, were acquired as part of agreed fit out obligations pursuant to the terms of the Lease upon its renewal, and that they are obviously used in the course of the Subway business to attract and retain customers. There is no satisfactory basis for these items to be accepted as proving detriment suffered by the Applicants due to misleading or deceptive conduct on the part of Nekon, even if such conduct was proved.
Within the additional submissions presented by the Applicants, there was also reference to "loss of trade" and to other "losses not claimed", the relevance of which are not satisfactorily explained. These matters do not properly relate to the issues for determination in the present proceedings and should not have been presented.
Does promissory estoppel arise?
An initial, perhaps trite, observation to be made is that successful application of the principle of promissory estoppel in favour of the Applicants can act only as a shield to protect them against any actions on the part of Nekon which are not in accordance with any relevant promise found to have been made.
The Applicants say that a promissory estoppel has been created in their favour such that they are entitled to have the new lease agreement "modified". The appropriate way in which an established estoppel is to be utilised was expressed by Judicial Member Donald in Xin v Zakos [2002] NSW ADT 189 in these terms:
(45) Furthermore, even if an equity were to arise, it can do so only by way of an estoppel, that is, by way of entitling the Lessee to resist a claim by the Lessor based on rights other than those promised. This is often expressed as the equity constituting a shield not a sword but that description needs to be used with care. Accordingly, any equity of the sort claimed by the Lessee could not justify an action by it for damages for the loss of the goodwill of the business as is the primary claim before the Tribunal in this case.
Within paragraphs 40 and 41 of his decision in Xin, Judicial Member Donald also considered the applicable tests to be applied in order to determine whether an equitable estoppel has arisen, as set out by the High Court in Waltons Stores (Interstate) Limited v Maher [1998] HCA 7:
40 The formulations of the test of when an equitable estoppel arises vary but they establish a significant burden for the party asserting the equity arises. Mason CJ and Wilson J at 525 said:
As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. ... this may be found ... in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party.
41 Brennan J at 542 set out six principles:
In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship exists between the plaintiff and the defendant or that a particular legal relationship will exist between them and, in the latter case, that the defendant is not free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
In response to the claim of promissory estoppel, Nekon submits that the Applicants have led no evidence of any understanding of or reliance upon any promise other than what is contained within the affidavits of Ms Ta'akimoeaka, the solicitor within the firm representing the Applicants. It is pointed out that no one from either of the Applicants has given evidence that they actually read and considered the communication relating to the nature and terms of the proposed licence for the outdoor seating area, or that actions were then undertaken by the Applicants which were detrimental, or that at any relevant time they relied upon any representations understood by them to have been made by Nekon.
In support of their contention that a promissory estoppel has been created, the Applicants submit that the Tribunal does not need such direct or specific evidence from the Applicants in order to establish a promissory estoppel as is suggested by Nekon; they say that the Tribunal need only look at the overall nature and sequence of events to see that the actions of the Applicants in entering into the renewed lease, paying increased rent, undertaking fit out works and purchasing furniture, were to their detriment and all followed on from the misrepresentations made by Nekon within the communication sent on 7 September 2011.
The representation relied upon by a party in forming an assumption upon which an estoppel may be based need not be express nor does it have to be completely clear; an outline of the proper approach to determining whether a "clear and unequivocal" representation or assumption supporting an estoppel has been created, is provided by Brereton J in Waterman v Gerling AustraliaInsurance Company Pty Ltd [2005] NSWSC 1066:
(91) I do not overlook the requirement that a representation or assumption founding an estoppel be "clear and unequivocal": though this has usually been recognised in the fields of equitable promissory or proprietary estoppel [see Legione v Hateley, 436-437 (Mason and Deane JJ); Woodhouse A C Israel Cocoa Limited SA v Nigerian Produce Manufacturing Co Limited [1971]2QB23, , 60 (Lord Denning MR); Low v Bouverie [1891] 3 Ch 82, 106 (Bowen LJ), 113 (Kay LJ)] it is plain that the requirement that a representation be clear and unequivocal applies generally to an estoppel in pais [Legione v Hateley, 435 (Mason and Deane JJ); Western Australian Insurance Company Limited v Dayton [1924] HCA 58; (1924) 35 CLR 355, 375 (Isaacs ACJ)], and estoppel by convention is a species of estoppel in pais. But as Mason and Deane JJ explained in Legione v Hateley, the requirement that a representation - or assumption - must be clear if it is to found an estoppel in pais or a promissory estoppel, does not mean that it must be express, and a sufficiently clear representation - or assumption - may properly be implied from words, conduct or even silence, and it is not necessary that a representation - or assumption - be clear in its entirety, it sufficing that so much of it as is necessary to found the propounded estoppel satisfies the requirement. ...................And a promise may be definite, in the sense that there is a clear promise to do something, even though exactly what is promised is not precisely defined: [Flinn v Flinn [1999] VSCA 109; [1999] 3 VR 712, 738 (Brooking JA, Charles and Batt JJA concurring); see also Australian Crime Commission v GrayI [2003] NSWCA 318, [184-200] (Ipp JA; Mason P and Tobias JA agreeing on this point)]. As Tobias JA has observed, even if a representation is insufficiently precise to give rise to a contract, that does not necessarily disqualify the representation from founding a promissory estoppel, much depending upon the circumstances in which the representation is made and the context against which it is to be considered, so that a representation will be sufficiently clear and unambiguous if it is reasonable for the representee to have interpreted it in a particular way, which it is clearly capable of bearing and upon which it is reasonable for the representee to rely, and in those circumstances it would be unconscionable for the representor to deny responsibility for the detriment that arises because of that reliance. On the other hand, if it is not reasonable for the representee to rely on the meaning he attributes to the representation, then it cannot be unconscionable for the representor to deny responsibility for the detriment that the representee sustains because of that unreasonable reliance [Galaxidis v Galaxidis [2004] NSWCA 111, [93]-[94]]. Thus, the requirement that a party should not be estopped on an ambiguity does not mean that the precise terms of the assumption or representation which founds the claimed estoppel must be entirely and unequivocally clear: an estoppel can arise even though the precise terms of the assumption or representation may be difficult to ascertain, so long as it is clear that there was an assumption, and the scope of the assumption, though its full extent may be uncertain, is at least sufficient that it can be said that the defendant's conduct would involve a departure from it.
The Tribunal does not consider that the estoppel as claimed by the Applicants is made out.
The estoppel claim made by the Applicants at the hearing was expressed to be that Nekon could not enter into any new lease agreement other than one which included the version of clause 30.1 put forward by the Applicants and set out above in paragraph 14; however, review of the clause shows that its terms are different to the terms of the 7 September 2011 letter upon which the Applicants rely. The same can of course be said of the version of clause 30.1 put forward by Nekon, but this observation does not assist the present case put forward by the Applicants.
Of more importance, in taking the approach set out within Waterman and applying the principles set out by the High Court in Waltons Stores, the Tribunal has not identified satisfactory evidence of any reasonable assumption directly formed by the Applicants and which is based upon any proven misrepresentation or deception by Nekon within the September 2011 letter. There is also no satisfactory proof of any real detriment flowing from any such misrepresentation or deception.
The Applicants have not sought declaratory relief or other orders pursuant to section 72 of the RL Act concerning the outdoor seating area. They instead seek "modification" of a lease agreement where the Tribunal lacks power to do so; additionally, the stated grounds of misleading and deceptive behaviour and estoppel have not been established. For these reasons, the Application must fail.
The parties have already filed brief submissions as to costs. Any further submissions as to costs should be filed and served by either party within 14 days of the date publication of this decision, following which the question of costs will be determined "on the papers".
ORDERS
The Application is dismissed.
The parties must file and serve any further written submissions as to costs within 14 days. The Tribunal will thereafter determine any order as to costs upon the basis of filed papers in accordance with section 73 of the Administrative Decisions Tribunal Act 1997.
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Decision last updated: 17 October 2013
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