Torchia v Swanton (No. 2)

[2011] NSWADT 185

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:

Torchia v Swanton (No. 2) [2011] NSWADT 185

Hearing dates:

5 and 6 May 2011

Decision date:

02 August 2011

Jurisdiction:

Retail Leases Division

Before:

D Patten, Deputy President
T Tyler, Advisor

Decision:

1. I order the respondents to pay the sum of $92,650 to the applicants.

2. No order as to costs.

Catchwords:

Damages - loss of opportunity - quantification - business valuation

Legislation Cited:

Retail Leases Act 1994

Cases Cited:

Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130
United Group Rail Services Ltd v Rail Corporation NSW 74 NSWLR 618

Category:

Principal judgment

Parties:

Eugene Torchia and Lesley Astill-Torchia (Applicants)
Alastair Swanton and Beverley Swanton (Respondents)

Representation:

Counsel
Mr M McCall (Respondents)
Mr S Spring (Agent - Applicants)
Stephen Tester and Associates (Respondents)

File Number(s):

105054

REasons for decision

1. RETAIL LEASES DIVISION (D PATTEN (DEPUTY PRESIDENT), T TYLER (NON-JUDICIAL MEMBER / ADVISOR)): On 5 October last, I gave a decision in this matter on the issue of the respondents' liability to the applicants. My conclusions were summarised in these two paragraphs:

I also find, as indicated earlier, that the lack of good faith exhibited by the respondents was unconscionable within section 62B of the Act and that as such conduct was in connection with a retail shop lease the applicants are entitled to damages under section 62B(8). It is unnecessary to consider whether they may alternatively be entitled to damages under section 72.

In light of my findings and the basis upon which the case was argued it will be necessary for there to be a further hearing as to damages. Provisionally my view is that damages should be quantified as indicated by Allsop P (in United Group Rail Services Ltd v Rail Corporation NSW (2009) 74 NSWLR 618) on the basis that the applicants lost the opportunity to have their request for a renewed lease discussed in good faith and with fair consideration. The Tribunal will be obliged to assess the applicants' prospects of success in negotiating a fresh lease having regard to those criteria.

1. It is unnecessary to repeat at length what was published on 5 October but there will be references to particular aspects during the course of these reasons which deal with the issue of damages. Upon that subject the Tribunal heard evidence on 5 and 6 May. Such evidence comprised a further affidavit of Mr Torchia sworn 3 May 2011 and three affidavits of Mr Garry Hughes both of whom were cross-examined, an affidavit of the second respondent, Dr A W Swanton, and an affidavit of Mr Warwick Dolman. Both Dr Swanton and Mr Dolman were also cross-examined. It is noteworthy that Dr Swanton did not give evidence on the liability issue, it being then stated that his wife conducted all business transactions on their joint behalf.

1. Dr Swanton's affidavit deposed to matters which I regard as relevant in assessing the value of the chance lost by the applicants. It included…