Wise Interests Pty Ltd v Trust Company Ltd

[2010] NSWADT 105

CITATION:	Wise Interests Pty Ltd v Trust Company Ltd [2010] NSWADT 105
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Wise Interests Pty Limited RESPONDENT Trust Company Limited Westfield Shopping Centre Management Co. Pty Limited
FILE NUMBER:	095212
HEARING DATES:	On the papers
DATE OF DECISION:	29 April 2010
BEFORE:	Fox R - Judicial Member
CATCHWORDS:	Unconscionable conduct
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	Attorney General of New South Wales v World Best Holdings Limited & Ors [2005] NSWCA 261 JV Idola Pty Limited v Patricia Mary Lovecek [2009] NSW ADT
REPRESENTATION:	APPLICANT P Macauley, solicitor RESPONDENT M Deutch, solicitor
ORDERS:	1. Unconscionable conduct claim dismissed, matter to proceed as retail tenancy claim 2. Costs reserved.

PRELIMINARY DECISION – UNCONSCIONABLE CONDUCT CLAIM

1 This is an application by a tenant of the Pitt Street Plaza for compensation from the landlord arising out of the redevelopment of that shopping centre. The development is ongoing, and for the purposes of this claim I assume that the alleged disturbance to the tenant’s business continues.

2 The practice of this Tribunal is now quite clear, a matter alleging unconscionable conduct cannot proceed until it has been established to the satisfaction of a Judicial Member that there is a prospect of establishing the highly unethical conduct identified by Spigelman CJ in Attorney General of New South Wales v World Best Holdings Limited & Ors [2005] NSWCA 261. An explanation of the reasons for the practice is found in my decision of JV Idola Pty Limited v Patricia Mary Lovecek [2009] NSW ADT. As therein indicated, the end result, it seems to me, is that the assessment which I now have to carry out amounts to an appraisal of what might in other jurisdictions be described as the pleadings. That enquiry is not only to note what might be the result of the matter particularised if fully proven, but also to examine whether the Retail Leases Act 1994 (or for that matter any other law) would afford an appropriate remedy without resort to s62B, and the orders envisaged by s72AA. This follows from the Chief Justice’s comments in World Best Holding, which I will quote again:-

“Parliament did not intend that “unconscionability” claims could be so readily made as to the virtually take the place of retail tenancy claims. They needed to make a high standard of moral obloquy.”

These words were spoken in the context of the distinction between retail tenancy claims and unconscionable conduct claims.

3 Of course, that must all be seen in the framework of s75(1), (2) and (3):-

“(1) If civil proceedings pending in a court involve a retail tenancy dispute, the court must on the application of any party to the proceedings transfer the proceedings (or so much of the proceedings as involve such a dispute) to the Tribunal to be dealt with as a claim under this Division, but only if the court is satisfied that:
(a) the dispute is such as may effectively be dealt with as a claim under this Division and that it is appropriate that the dispute be dealt with by the Tribunal, and

(b) the interests of justice do not require that the matter be dealt with by the court.

(2) In determining whether or not it is appropriate that a matter be dealt with by the Tribunal, a court is to have regard to the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court.

(3) Proceedings are taken to involve a retail tenancy dispute if any issue in dispute in the proceedings involves a liability or obligation with which a retail tenancy dispute is concerned.”

4 In making the necessary preliminary assessment, sight must not be lost of the fact that whilst a series of individual instances might each be addressed without resort to s62B, in combination, the individual actions complained of might amount to the highly unethical proscribed conduct.

5 In compliance with the requirements, the Applicant, on 30 March 2010 filed a document headed “Statement of Claim”. Despite its’ perhaps misleading title, the document, after identifying the status of the parties, went on to give particulars of conduct allegedly contrary to the requirements of s34, s10, and s41 of the Retail Leases Act. It then, under the heading “Unconscionable Conduct Particulars” gave 7 instances of identified conduct. I will deal with these only.

6 In relation to the other matters particularised, the document simply claims (for instance) “an order that the Respondents have breached s34(1)(b) of the NSW Retail Leases Act.” There follow similar claims in relation to ss34(1)(c), 34(1)(d), 10(1), 41(d) and 15(1). No specific claims for the payment of damages are made in respect of these various claims, but I presume them to be caught by the simple claim for an amount of $400,000.00, being the limit of the Tribunal’s jurisdiction.

7 Clearly the Applicant does not wish to place any of these matters within the parameters of s62B.

8 The instances of claimed unconscionable conduct are:-

“Particulars 4.1: The Respondents Agent Landerer and Co falsely accused the Applicant of not completing fit out works when all fit out works were completed as required by the lease.”

9 This is a simple issue of fact. It is difficult to see, even if completely proven, how that amounts to highly unethical conduct.

“Particulars 4.2: The Respondents charged management fees to the Applicant yet could not allocate any of these management fees to ensure the Applicant’s lease was registered, signed and returned to the Applicant in a timely fashion.”

10 This appears to refer back to the alleged breach of s15. It confuses management fees with the kind of expenses identified in s3 under the heading “Lease Preparation Expenses”:-

“"lease preparation expenses" means legal or other expenses incurred by the lessor in connection with the preparation or entering into of a retail shop lease, except for registration fees under the Real Property Act1900 .”

11 A failure to comply with the requirements of s15 could conceivably cause a Lessee damage. If that occurs, then that is a matter which falls within the definition of retail tenancy dispute:-

“"retail tenancy dispute" means any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates, and (without limiting the generality of the foregoing) includes a dispute about a security bond, but does not include a dispute of the kind referred to in section 19 (1) (b) or 31 (1) (b) as to the rent payable under a retail shop lease (where the rent is to be current market rent for the shop).”

12 The failure to register it seems to me to be appropriately described as a “mere” failure to abide by a requirement of the Retail Leases Act which does not of itself attract a penalty and does not involve “a high level of moral obloquy”. It is not unconscionable conduct.

“Particulars 4.3: The Respondent’s agent Ms Lucy Wilmont conceded that the Applicant’s contribution to marketing would be wasted if the Respondent were to advertise the shopping centre during a redevelopment yet the Respondent continued to charge the Applicant a marketing levy.”

13 This appears to be a complaint in relation to facilities and other trading vehicles placed in what are best described as “common areas” of the shopping centre. There is no allegation of actual obstruction but whatever is the complaint if fully made out, it is fully addressed by the obligations, rights and remedies created by s34, the headnote to which is “Lessee to be compensated for disturbance”.

“Particulars 4.5: The Respondents did not disclose the nature and scope of the redevelopment in its disclosure statement and ignored the Applicants constant requests for assistance further weakening the Applicant’s bargaining position.”

14 The first part of this complaint is fully addressed by s10; if made out, there is a right to compensation.

15 No indication is given of what assistance the Applicant sought from the Respondent, but whatever is complained of appears to be in the context of the redevelopment of the particular area, and presumably is a complaint about reduced customer access. That is fully addressed by the rights created by s34.

“Particulars 4.6: The Respondents in ignoring the Applicant’s breach of s34 complaints weakened the Applicant’s bargaining position.”

16 Whatever this is, if proven, it is also fully addressed by the rights given by s34.

17 I am of the view that a proper summary of the majority of the complaints made by the Applicant arise from the fact that the Respondent is engaged in a substantial refurbishment of the shopping centre in question. All of that is addressed by s34(1) the “tail” of which states that if:-

“the lessor does not rectify the matter as soon as reasonably practicable after being requested in writing by the lessee to do so, the lessor is liable to pay the lessee reasonable compensation for any loss or damage (other than nominal damage) suffered by the lessee as a consequence.”

18 I am satisfied that, even if all of the conduct particularised (or perhaps even hinted at) were fully proven, the Applicant would be fully and properly compensated within the retail tenancy dispute provisions of the Act. It follows that the matter should proceed as a retail tenancy claim.

19 As to the question of costs, the matter was dealt with on the papers, and involved no formal responses of any kind by the Respondent other than the simple oral submission that the particulars did not raise any s62B matters, and consequently it seems to me not appropriate not to make any specific costs order at this time, they are simply noted as reserved.