World Best Holdings Ltd v Sarker & Anor

[2004] NSWSC 935

CITATION:	World Best Holdings Limited v Sarker & anor. [2004] NSWSC 935
HEARING DATE(S):	21/9/04; 23/9/04
JUDGMENT DATE:	12 October 2004
JUDGMENT OF:	Sully J at 1
DECISION:	(1) Claim for relief in paragraph 1 of plaintiff's summons filed on 8 July 2004 dismissed with costs; (2) Balance of claims for relief made by that summons stood over to date to be fixed; (3) Either party may approach the Common Law List Judge for further hearing date
LEGISLATION CITED:	Retail Leases Act 1994 (NSW) Administrative Decisions Tribunal Act 1997 (NSW) Local Courts (Civil Claims) Act 1970 (NSW)
CASES CITED:	Dutt v Central Coast Health Service; Central Coast Area Health Service v Dutt (EOD) [2003] NSWADT AP3 Cerminara v Commissioner of Police, NSW Service & anor. (GB) [2001] NSWADT AP 32 Lloyd v TCN Channel Nine Pty Ltd & anor [1999] NSWADTAP 3 Briginshaw and Briginshaw (1938) 60 CLR 336 Coulder v The Queen (1988) 164 CLR 350 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 Carr v Neill [1999] NSWSC 1263
PARTIES :	World Best Holdings Limited Abul Sarker & anor.
FILE NUMBER(S):	SC 30052/04
COUNSEL:	M. R. Ellicott - Plaintiff M. Ashhurst/S. Docker - Defendant
SOLICITORS:	Phillip Anthony Biber - Plainfiff Kemp Strang - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

SULLY J

12 October 2004

30052/04 – WORLD BEST HOLDINGS LIMITED v ABUL SARKER & ANOR.

JUDGMENT

HIS HONOUR:

Introduction

1 By a summons filed on 8 July 2004 World Best Holdings Limited as plaintiff seeks sixteen itemised forms of relief against two named defendants. The first defendant is Mr. Abul Sarker. The second defendant is the Administrative Decisions Tribunal. Mr. Sarker opposes the granting of any relief to the plaintiff. The Administrative Decisions Tribunal has filed an appearance submitting, save as to costs, to any order that the Court might make.

2 Of the sixteen claims for relief made by the summons only the first two are immediately in point. They claim:

“1. Leave of this Court pursuant to section 77(4) of the Retail Leases Act 1994 to appeal the whole of the decision of the Administrative Decisions Tribunal (“ADT”) given on 25 June 2004 in proceedings nos. 035087 and 035100, upon the grounds set forth in the Statement of Grounds annexed to this Summons and marked “A”.
2. The right to appeal pursuant to section 77(2) of the Retail Leases Act 1994 , the whole of the decision of the ADT given on 25 June 2004 in proceedings nos. 035087 and 035100 upon the grounds set forth in the Statement of Grounds annexed to this Summons and marked “A”.”

3 The Statement of Grounds there referred to purports to be filed in compliance with SCR Pt 51A Rule 5. That Rule is relevant to the institution by summons of an appeal as of right; and calls for “a brief but specific statement of the grounds relied upon in support of the appeal”. Where a plaintiff is seeking leave to appeal, then what is required of that plaintiff is laid down, not by R 5 but by R2A(6) which calls for:

“A statement of -
(a) the nature of the case;
(b) the questions involved; and
(c) the reasons why leave should be given.”

4 At the hearing before this Court the parties argued only the question whether the plaintiff should have the leave to appeal that is claimed in paragraph 1, quoted above, of the summons. That makes it necessary to have regard to the plaintiff’s Rule 2A(6) statement. The matters which Rule 2A(6) requires are stated as follows in an affidavit sworn on 8 July 2004 by the plaintiff’s solicitor:

“ The Nature of the Case
3. The First Defendant filed in this Court a summons for urgent relief against forfeiture of his lease of the Premises by the Plaintiff (as lessor) pursuant to a notice of termination of lease served by the Plaintiff’s solicitor on 25 July 2003 alleging fundamental breaches of the lease and terminating the lease due to repudiatory conduct. These proceedings were no. 4087 of 2003 (Equity Division).
4. The First Defendant obtained relief from the Duty Judge of the Equity Division of this Court on 31 July 2003. Possession of the premises was restored to the First Defendant and the proceedings were transferred to the Tribunal.
5. On 5 September 2003, the Plaintiff filed a cross application (no. 035100) in the Tribunal seeking orders and declarations, inter alia , that:
(a) the Plaintiff had validly terminated the lease of the Premises;
(b) alternatively, the lease be rectified so as to disclose the agreed business use to which the Premises might be put by the First Defendant (namely the sale of Asian groceries, excluding Indian groceries);
(c) the First Defendant engaged in unconscionable conduct in selling Indian groceries in contravention of the terms of the lease and the lessor’s disclosure statement; and
(d) an injunction permanently restraining the First Defendant from selling such goods.
6. The First Defendant’s summons was allocated no. 035087 by the tribunal. At all times, interlocutory applications, affidavit material and the hearing itself were for all intents and purposes one set of proceedings (“the Proceedings”).
7. A number of interlocutory applications were filed in the Proceedings by both the Plaintiff and the First Defendant. Additionally, the Plaintiff served 2 further notices of termination of the lease on 31 October 2003 and 12 February 2004 relying upon the First Defendant’s repudiatory conduct and breaches of essential terms of the lease.
8. On 24 February 2004, the First Defendant asserted that the conduct of the Plaintiff itself constituted repudiatory conduct, whereupon the First Defendant terminated the lease and vacated the Premises.
9. As a consequence of the First Defendant vacating the Premises, the Plaintiff filed and served a further amended application seeking orders, inter alia , that the 3 notices of termination of the lease were valid (as alternate claims) and a declaration that the First Defendant wrongfully repudiated the lease. Claims relating to permitted business use of the Premises were abandoned as the First Defendant had then vacated the premises.
10. On 29 March 2004, the First Defendant filed an amended application/summons in the Tribunal, additionally alleging unconscionable conduct on the part of the Plaintiff. The First Defendant obtained leave from the Tribunal to amend his summons on 5 April 2004 in that respect. The alleged unconscionable conduct was particularised by the First Defendant’s solicitors on the evening of 5 April 2004, after day one of the hearing.
11. The various claims and cross claims of the Plaintiff and the First Defendant were ultimately heard by the Tribunal on 5, 6 and 7 April 2004.
12. The Tribunal found, among other things, on 25 June 2004 that:
(a) the Plaintiff had engaged in unconscionable conduct within the meaning of the Act;
(b) the First Defendant had validly terminated the lease (presumably on 24 February 2004);
(c) the Plaintiff should pay the First Defendant substantial damages as compensation for unconscionable conduct and for wrongful repudiation of the lease, payment to be made within 30 days of the date of the Tribunal’s decision.
The Principal Questions Involved, Should Leave Be Granted
13. Whether the Plaintiff validly terminated the lease by notice given on:
(a) 25 July 2003; or alternatively
(b) 31 October 2003; or alternatively
(c) 12 February 2004
14. Whether the Plaintiff engaged in unconscionable conduct within the meaning of section 62B of the Act.
15. Whether the Plaintiff engaged in unconscionable conduct so as to justify the First Defendant terminating the lease on 24 February 2004.
16. Whether the Tribunal properly found that the termination of the lease by the First Defendant on 24 February 2004 was an ancillary order as contemplated by section 77AA(2) of the Act.
17. Whether the First Defendant’s failure to comply with essential conditions of the lease relating to the provision of a bank guarantee and compliance with a fitout guide, constituted repudiatory conduct, in all the circumstances, by the First Defendant.
18. Whether the Tribunal was entitled to take into account without prejudice communications forwarded by the solicitor for the Plaintiff to the former solicitor for the First Defendant.
19. Whether the Tribunal should have permitted the First Defendant, as it did, to amend his claim and include an unconscionable conduct claim during the course of the hearing (commencing 5 April 2004).
20. Whether the Tribunal ought to have ordered damages and/or compensation to the First Defendant for the amounts and on the bases set out in the decision sought to be appealed from.
21. Whether there were “special circumstances” warranting a costs order against the Plaintiff in favour of the First Defendant pursuant to section 77A of the Act and section 88 of the Administrative Decisions Tribunal Act 1997 .
Reasons Why Leave Should Be Given
22. The Tribunal Members made numerous errors of fact which have been set out in the Grounds of Appeal. These errors infected their conclusions of law.
23. The Tribunal failed to make many findings of fact which were material to the conclusions of law reached by the Tribunal. These are also set out in the Grounds of Appeal.
24. The Tribunal acted on evidence which had not been admitted, took into account facts which were not relevant, admitted evidence of pure speculation as to damages suffered by the Plaintiff and allowed pursuit of an unconscionable conduct claim which was not particularised until after the conclusion of the first day’s hearing.
25. By reason of the above, the findings and conclusions of the Tribunal are open to serious doubt and substantial injustice and prejudice will be suffered by the Plaintiff in the absence of appellate review of the decision of the Tribunal.”

The Relevant Legislation

5 It can be taken as granted for present purposes that the present plaintiff and the present first defendant were at all material times respectively the lessor and the lessee of a particular retail shop; and that their lease was subject to the provisions of the Retail Leases Act 1994 (NSW), (“the RL Act”).

6 The RL Act provides a comprehensive scheme of statutory regulation of retail shop leases. There are some limited statutory exclusions from the ambit of the Act, but they have no present relevance.

7 Part 8 of the Act makes detailed provision for what it describes as “Dispute resolution”. Put simply, disputes can be resolved either by mediation; or by a determination of the Administrative Decisions Tribunal, (”the ADT”). Only the second of those alternatives is now relevant.

8 The Administrative Decisions Tribunal is a quasi-judicial body established by the Administrative Decisions Tribunal Act 1997 (NSW), (“the ADT Act”).

9 The objects of that Act are to establish the Tribunal as an independent body having certain prescribed functions. One of those prescribed functions is to make decisions at first instance in relation to matters over which the Tribunal is given jurisdiction by any statute.

10 One such jurisdiction-conferring statute is the RL Act. That Act confers upon the Tribunal a jurisdiction to hear and determine claims falling into either of two defined categories.

11 One such category is a “retail tenancy claim”, which is a class of claim defined in section 70 of the RL Act. The other category is an “unconscionable conduct claim”, a class of claim that is defined by section 62B of the RL Act. Each such class of claim is extensively defined in the Act; but the detail of the definitions need not now be canvassed. The ADT is given specific, but broad, powers to make various types of orders in connection with any particular claim; and, once again, it is unnecessary to make here a detailed analysis of those powers.

12 Section 77 of the RL Act provides for the bringing of appeals against a primary determination made by the ADT. The section provides:

“(1) A party to any proceedings (other than a party to proceedings for an unconscionable conduct claim) in which the Tribunal makes an order or other decision under this Act may appeal to an Appeal Panel of the Tribunal under Part 1 of Chapter 7 of the Administrative Decisions Tribunal Act 1997 .

(2) A party to any proceedings for an unconscionable conduct claim may appeal to the Supreme Court, on a question of law, against any decision of the Tribunal in those proceedings.

(3) Sections 120 and 121 of the Administrative Decisions Tribunal Act 1997 apply to an appeal to the Supreme Court under subsection (2) in the same way as they apply to an appeal to the Supreme Court, on a question of law, against a decision of the Appeal Panel.

(4) A party to any proceedings for an unconscionable conduct claim may appeal to the Supreme Court, with the leave of the Supreme Court, for a review of the merits of a decision by the Tribunal in those proceedings.

(5) Sections 115 and 116 of the Administrative Decisions Tribunal Act 1997 apply to an appeal to the Supreme Court under subsection (4) in the same way as they apply to appeals to the Appeal Panel under Part 1 of Chapter 7 of the Administrative Decisions Tribunal Act 1997 that extend to a review of the merits of an appealable decision.

(6) If proceedings relate partly to a retail tenancy claim and partly to an unconscionable conduct claim, subsections (2)-(5) apply to those proceedings.

(7) An appeal to the Supreme Court by a person under this section must be made:

(a) within such time and in such manner as is prescribed by rules of court made under the Supreme Court Act 1970, or

(b) within such further time as the Supreme Court may allow.”

13 The primary proceedings in the ADT between the present plaintiff and the present first defendant related partly to a retail tenancy claim, and partly to an unconscionable conduct claim; with the result that section 77(6) makes relevant section 77(2) – (5) inclusive.

14 As section 77(1) makes plain, an ADT determination of a claim that is solely a retail tenancy claim is not amenable to appellate review by this Court unless there has first been an appeal to an Appeal Panel of the ADT itself. A party who is aggrieved by the decision of that Appeal Panel has a right of further appeal to this Court but only “on a question of law”: see ADT Act s 119(1).

15 That being so, the effect of section 77(6) of the RL Act is to remove the possibility, obviously clumsy and undesirable, that a primary determination of the ADT in proceedings which involve in part a retail tenancy claim and in part an unconscionable conduct claim, will have to be split for the purposes of any appeal into its two component parts, the primary determination on one of those parts going on appeal initially to this Court; and the primary determination on the other of those parts going on appeal initially to an Appeal Panel, with the possibility of a second and subsequent appeal, pursuant to section 119(1), to this Court.

16 The rights of appeal for which section 77 of the RL Act provides incorporate certain provisions of the ADT Act. Section 77(2) of the RL Act thus incorporates the provisions of sections 120 and 121 of the ADT Act; and section 77(4) of the RL Act thus incorporates the provisions of sections 115 and 116 of the ADT Act.

17 Sections 120 and 121 of the ADT Act provide:

“ 120 Orders on appeal to the Supreme Court

(1) The Supreme Court is to hear and determine the appeal and may make such orders as it thinks appropriate in light of its decision.

(2) The orders that may be made by the Supreme Court on appeal include (but are not limited to):

(a) an order affirming or setting aside the decision of the Appeal Panel, and

(b) an order remitting the case to be heard and decided again by the Appeal Panel (either with or without the hearing of further evidence) in accordance with the directions of the Supreme Court.

121 Appeal does not stay decision

Subject to any interlocutory order made by the Supreme Court, an appeal under this Part does not affect the operation of the decision appealed against or prevent the taking of action to implement the decision.”

18 Sections 115 and 116 of the ADT Act provide:

“ 115 Appeals on the merits

(1) If an appeal under this Part extends to a review of the merits of an appealable decision, the Appeal Panel is to decide what the correct and preferable decision is having regard to the material then before it, including the following:

(a) any relevant factual material,

(b) any applicable written or unwritten law.

(2) The Appeal Panel may exercise all the functions that are conferred or imposed by or under any relevant enactment of this Act on the Tribunal at first instance to make the appealable decision concerned.

(3) In determining any such appeal, the Appeal Panel may decide:

(a) to affirm the decision, or

(b) to vary the decision, or

(c) to set aside the decision and make a decision in substitution for the decision it set aside.

116 Appeal does not stay decision

Subject to any interlocutory orders made by the Appeal Panel, an appeal under this Part does not affect the operation of the decision concerned or prevent the taking of action to implement the decision.”

The Construction of the RL Act, Section 77

19 It is convenient to begin by noting the terms of section 113 of the ADT Act, which section provides the basic terms of such rights of appeal to an Appeal Panel as are conferred by that Act. The section provides relevantly:

“113(1) A party to proceedings in which an appealable decision of the Tribunal is made may appeal to the Tribunal constituted by an Appeal Panel.
(2) An appeal under this part:
(a) may be made on any question of law, and
(b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision.”

20 I have not found, and I was not referred to, any decision of this Court, or of the High Court of Australia, concerning the proper construction of section 113. I have found, however, decisions of various Appeal Panels touching upon the topic.

21 The general purport of those decisions is conveniently summarised as follows in paragraphs 24, 25 and 26 of the decision of an Appeal Panel: Dutt v Central Coast Health Service; Central Coast Area Health Service v Dutt (EOD) [2003] NSWADTAP3:

“24. A preliminary question arises in relation to this appeal as to whether the ground of appeal identifies or establishes a question of law. Section 113(2) of the ADT Act allows a party to appeal to an Appeal Panel of the Tribunal ‘on any question of law’. With leave, the appeal may extend to a review of the merits of the appealable decision. ………………..
25. As a threshold question, the Appeal Panel must be satisfied that the appeal raises a question of law before giving leave to extend the appeal to a review of the merits (or factual findings) of the decision. The approach that the Tribunal has consistently adopted in relation to this issue was outlined by the Appeal Panel in Brandusoiu v Commissioner of Police [1999] NSWADTAP 8. The Appeal Panel said, at [4] that:
‘It is necessary for the appellant, therefore, to identify possible errors in the reasoning of the decision under appeal. It would appear that at least an arguable question of law would need to be identified before any consideration could be given to permitting an extension of the appeal to allow consideration of the merits. It would not be proper to embark on a consideration of the merits where no error of law was established.

26. Adopting this approach in the present case, we must be able to at least identify an error of law, before considering whether leave should be given to extend the appeal to the merits of the decision.”

22 That approach to the proper construction of section 113(2) of the ADT Act seems to have been followed consistently by other Appeal Panels of the Tribunal. It is useful to note the following supplementary observations made by an Appeal Panel in Cerminara v Commissioner of Police, NSW Service & anor (GB) [2001] NSWADTAP 32:

“41. ……………….. . The reference in s 113(2)(b) is to extending the appeal to a review of the merits, by leave. This implies that the appeal must be properly made before the Appeal Panel can give consideration to whether or not it should grant leave to review the merits of the Tribunal’s decision. The use of the word ‘extend’ suggests that an appeal must first be brought on a question of law before any question of merits can be raised in the appeal .” (emphasis added)

23 In Lloyd v TCN Channel Nine Pty Ltd & anor [1999] NSWADTAP 3, a member of the Appeal Panel which was dealing with that matter discussed, without having to decide, the way in which section 113(2)(b) should be construed and applied. For the sake of completeness of the present canvass, I note the following analysis put forward by that particular member of an Appeal Panel:

“151. First, the provision is ambiguous as to whether leave can only be given in cases where an appeal is also brought on a question of law and, if so, whether an error of law must first be established to the satisfaction of the Appeal Panel. In their submissions to us, all counsel adopted the position, put by counsel for the Committee, that ‘at least one substantive question of law must be raised bona fide by the appellant before any application for leave may be made by him’ . No counsel argued that an error of law must be made out, and I agree with this. The Tribunal in Mayhew v A [1999] NSW ADT AP 1 took this view, or a more stringent one, in an appeal in which the appellant was not legally represented. For myself, I am at present not persuaded that the Tribunal could not grant leave even if no question of law were raised. I can well imagine a case, for example, where an appellant could point to some blatant and important error of fact which called for remedy by an appeal panel in the interests of justice. Moreover, there may be appeals which could be shortly and conveniently disposed of by turning directly to the merits of the decision under appeal, without having to address the frustrating technical distinction between error of fact and error of law ………………………….. . I am inclined to think that Parliament may have intended ss 113(2)(b) and 115 to encompass cases such as these. However, I need not decide this point, since in the present case I have indeed found the decision under appeal to be vitiated by error of law.
152. Secondly, what principles should be adopted to govern the Appeal Panel’s discretion to grant leave? Again, I do not think this is a case in which to attempt the formulation, particularly since it was little addressed in argument before us. Instead, I propose to decide this question pragmatically in the particular circumstances of this appeal. This accords with the requirement of s 73(3), equally applicable to an appeal panel that the Tribunal ‘act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms’ .
153. I can see no direct parallel in the principles normally applied by appellate courts, for example, when deciding to entertain an appeal from an interlocutory decision …………… , although common considerations may come into play ……………….. . The appeal provisions in the ADT Act appear to be unique, and in my opinion they should not be tied down by drawing unsuitable analogies (but cf ss 208L, 208M of the Legal Profession Act 1987 (NSW) ).”

24 It is, in my opinion, significant that section 77 of the RL Act, which was inserted in its present form in 1998, that is to say after the enactment of the ADT Act, does not define the sub-section (4) right of appeal by leave as being in any way an extension of the sub-section (2) appeal as of right. It seems to me to follow that the restraints that have been read into section 113 of the ADT Act by Appeal Panels of the Tribunal in decisions such as those from which I have earlier quoted, have no place in the proper construction of section 77(4) of the RL Act.

25 If that be so, then the correct construction and application of section 77(4) raise the threshold question: what is it that an applicant for leave to appeal must establish before leave ought properly to be granted? There is, once again, no relevant decision, either of which I am aware or to which I have been referred, of this Court, of the High Court of Australia, or of any equivalent superior Court of Record. That being so, I think that the following propositions can be reasonably accepted as settled law:

[1] The onus of proof rests upon the party applying for leave to appeal.

[2] The standard of proof is proof on the balance of the probabilities. In that connection it is relevant to bear in mind the following observations made by Dixon J in Briginshaw and Briginshaw (1938) 60 CLR 336 at 361,362:

“Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters ‘reasonable satisfaction’ should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”

[3] The very fact that the relevant statutory scheme requires the grant of leave to appeal brings with it certain inferences which are summarised as follows in the joint judgment of Deane and Gaudron JJ in Coulter v The Queen (1988) 164 CLR 350 at 359,360:

“The requirement that leave or special leave be obtained before an appeal will lie is a necessary control device in certain areas of the administration of justice (e.g. appeals to a second appellate court) in this country. As a filter of the work which comes before some appellate courts, it promotes the availability, the speed and the efficiency of justice in those appeals which are, in all the circumstances, appropriate to proceed to a full hearing before the particular court. It also represents a constraint upon the overall cost of litigation by protecting parties, particularly respondents, from the costs of a full hearing of appeals which should not properly be entertained by the relevant court either because they are hopeless or, in the case of a civil appeal to a second appellate court, because they do not possess special features which outweigh the prima facie validity of the ordinary perception that the availability of cumulative appellate processes can, of itself, constitute a source of injustice. In these circumstances, it is neither surprising nor regrettable that the application for leave or special leave to appeal has, in this country, become a generally accepted and standard part of ordinary curial procedures. In a case such as the present where the application for leave to appeal was from a criminal conviction or information to a first court of appeal exercising general supervisory appellate jurisdiction, the requirement of leave effectively represents no more than a means of efficiently disposing of prospective appeals which would obviously fail since it is difficult to envisage circumstances where a competent application for leave to appeal to such a court could properly be refused in a case where the conviction should be set aside if leave were to be granted and the appeal were to proceed to a full hearing.
On the other hand the application for leave or special leave to appeal commonly possesses a number of special features which set it apart from at least some other judicial proceedings. First, it involves the exercise of an extremely wide judicial discretion. Secondly, and notwithstanding the refusal of the application ordinarily involves the final determination of the particular litigation, that wide discretion can commonly be exercised without the provision of detailed or, sometimes, any reasons. Thirdly, if the application is to the court which will hear the appeal if leave is granted, there is a risk that the ordinary appearance of judicial disinterest in the outcome of proceedings may be, albeit wrongly, seen as qualified in that the work-load of what would ordinarily be an already over-burdened bench will vary according to the number of successful applications. Fourthly, it is inevitable that a refusal of leave will be sometimes seen by an unsuccessful applicant as a decision to close the doors of the court in his face rather than as an examination and reasoned rejection of his claim that he has been the victim of a miscarriage of justice in the court or courts below. The effect of these special features of judicial proceedings dealing with applications for leave to appeal is not to lessen the importance of the ordinary safeguards of the administration of justice. To the contrary, the effect is to emphasise the importance that they be observed.”


[4] In such a case as the present case, when leave is sought to have a full-scale merits appeal against a decision of a specialised quasi-judicial tribunal such as the ADT, general considerations of the kind referred to by Deane and Gaudron JJ require to be further qualified by bringing properly to account any particular and relevant aspects of the ADT Act itself. In that connection, chapter 6 of the ADT Act contains extensive provisions respecting the procedure of the ADT. Sections 70; 73(1), (2), (3), (4), (5)(a); 81 and 89(5) are particular examples. These provisions, and in particular the cited portions of section 73, provide a very loosely structured procedural template for the ADT. The Tribunal is required to observe what are described without further elaboration as “the rules of natural justice” . Subject to that over-arching requirement, the Tribunal is empowered to determine its own procedure; is not bound by the rules of evidence; “may inquire into and inform itself on any matter in such manner as it thinks fit ”; is to act “with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms” ; and “is to act as quickly as is practicable” .

[5] Account must be taken, too, of the settled reluctance of superior Courts to establish closed categories, or immutable criteria, in any context where to do so could unjustly inhibit the exercise in a particular case of a judicial discretion that has been conferred in broad and general terms such as are exemplified by section 77(4) of the RL Act.

[6] In addition to all of the foregoing matters, it is necessary to have regard to the question, still vexed notwithstanding repeated attempts by appellate Courts to resolve it, of how there is best to be conceptualised, and then articulated, the essence of the distinction between what is properly to be regarded as a question of law, and what is properly to be regarded as a question of fact: see for a comparatively recent discussion in the High Court of Australia, Vetter v Lake Macquarie City Council (2001) 202 CLR 439.

I have had, myself, occasion to consider this particular question in a matter arising out of section 69 of the Local Courts (Civil Claims) Act 1970 (NSW) as it stood in December 1999: Carr v Neill [1999] NSWSC 1263, see in particular at paragraphs 14-22 inclusive. It might be both convenient and useful to reproduce paragraph 22:

“I have thought it useful to explore, in the early stages of this judgment, the foregoing principles of law in order to emphasise the narrowness of the appellate jurisdiction that the appellant now invokes. It will be necessary, of course, to look presently at the relevant detail of the learned Magistrate’s reasons for his Worship’s judgment. But it is important to be clear from the outset of any such exercise that the present appellant cannot succeed simply by pointing to findings of fact made by the learned Magistrate, and by contending, however persuasively, that, in effect, the findings might well have been made in favour of the appellant rather than in favour of the respondent. Nor will it be sufficient for the appellant to convince this Court that, had the matter been before this Court at first instance, findings of fact would have been made in terms more favourable to the appellant than the findings made by the learned Magistrate. Insofar as the judgment of the learned Magistrate rests upon inferences of fact drawn by his Worship from the evidence before him, it will not be sufficient to sustain the present appeal that the appellant can demonstrate that the particular process of reasoning by which the learned Magistrate arrived at the particular inference is apparently illogical, provided only that there is some evidence reasonably capable of giving rise to the inference.”

The Application of the Foregoing Propositions to the Present Case

26 It is appropriate to begin by noting the terms of paragraph 88 of the ADT’s reasons for its decision. That paragraph summarises the process of reasoning which led the ADT to its finding that the plaintiff had been guilty of statutory unconscionable conduct towards the first defendant:

“88. In our assessment, WBH was exploiting its own loose management of both the fitout system and the security by way of bank guarantee. Seeking to terminate the lease without warning on those grounds was not reasonably necessary for legitimate protection of its interests in terms of (b). A liquid amount equal to the security under a bank guarantee was immediately provided. It had raised no issue as to the standard of the fitout or Council compliance. Sarker responded on both fronts immediately. WBH used unfair tactics against Sarker by not giving any notice at all of its concerns as to breaches of the Lease in terms of (d). WBH unreasonably failed to disclose to the lessee its intended conduct in terms of (i). WBH acted in bad faith by seeking to exploit the provisions under the Lease to solve its own commercial error in terms of (k).”

27 The references in that quotation to (b), (d), (i) and (k) are references to what the ADT regarded as being the relevant portions of section 62B(3) of the RL Act.

28 The plaintiff attacks the entirety of these findings. It is very important for present purposes to have precision in the plaintiff’s definition of the asserted errors which are said to justify the grant of leave to bring a full merits appeal to this Court. To that end it is appropriate to begin by noting the following portions of the plaintiff’s written submissions:

“30 The Plaintiff contends that these are matters of law and not matters which go to the merits. If that view be incorrect it seeks leave to contest the finding of unconscionability and the factual foundation thereof and the decision of the Tribunal based upon that finding.
31 The factual basis is set out in Paragraph 88 of the Tribunal’s decision ………. . A number of separate matters are relied upon to ground the unconscionability finding. The Plaintiff submits that upon examination it is clear that the findings were procedurally unfair to the Plaintiff as they were not based upon the particulars provided by the Applicant of its claim or otherwise do not withstand scrutiny.
32 As stated at the outset, particulars of unconscionability were only given after the conclusion of the first day’s hearing. ………….. . They had been requested by the Plaintiff well prior to the hearing. Leave to maintain the unconscionability claim was only given at the commencement of the hearing. The case was fought on the basis of those particulars. Thus if the Tribunal relies upon matters not forming part of those particulars the Plaintiff has suffered substantial prejudice. The Tribunal itself in the course of argument advised the First Defendant that it would hold it to a case based upon those particulars. The Plaintiff took the view that the First Defendant had not made out a case based upon the particulars provided and called no evidence from its officers on facts relating to those allegations. Therefore it had no opportunity to address some of the matters relied upon by the Tribunal – particularly when they departed from the particularised case. The fact that the Tribunal made no reference at all to these particulars and whether they had been made out when making their findings on unconscionability is telling.
33 The following findings cannot be found in the particulars or are not properly available on the evidence:
(a) exploitation of supposed loose management of the fitout system;
(b) Sarker responded on both fronts (bank guarantee and fitout) immediately. This finding is totally inconsistent with the finding of the Tribunal that Sarker delayed at least two months in completing fitout and that he was not in compliance …………………… ;
(c) WBH acted in bad faith by exploiting provisions under the lease to solve its own commercial error. Elsewhere in the decision the Tribunal acknowledged that Sarker had not complied with the terms as to fitout in many respects; particularly in relation to the provision of a plan and the use of unlicensed trade persons and expending the required amount of $40,000 ………….. . This was an essential term and expressly so. In any event the particulars do not maintain such a case.
34 The above findings obviously played a significant role in the Tribunal’s finding of unconscionability. One cannot discern whether the decision would have been different had they ignored those matters. Therefore it is appropriate that this Court review those findings and that leave be given in relation to them on that basis and on the basis of the matters referred to above. The Plaintiff also relies on its submissions in the Tribunal below concerning the particulars …………… and will refer to them at the hearing of this leave application.”

29 These submissions, as amplified in the plaintiff’s oral submissions, focus upon the particulars of alleged unconscionable conduct, as supplied by the first defendant to the ADT. These particulars are in writing, and they take the form of a chronology commencing on 25 July 2003 and concluding on 28 November 2003, of events each of which is said to have manifested some particularised form(s) of statutory unconscionable conduct. It seems to me that the portion of those particulars having present significance is the portion dealing with the events of 25 July 2003. In that connection what was particularised asserted:

“1. 25 July 2003 (letter Phillip Biber) (document 28) and lockout action by Helen James.
Purported termination of lease and locking applicant out of shop:
- without providing an opportunity to rectify any alleged breaches;
- without complying with s 129 of Conveyancing Act;
- when fit-out was still incomplete;
- contrary to agreements between solicitor re bank Guarantee
- letter includes false statement that the allegations had previously been raised with Applicant
- purported termination for the improper purpose of attempting to amend disclosure statement so as to include a term that applicant was precluded from selling Indian Groceries;

Unconscionable conduct resulted in:
- loss of trade
- damage to stock
- damage to reputation
- legal expenses”

30 I do not agree that the paragraph 88 findings “were procedurally unfair to the plaintiff as they were not based upon the particulars provided …………. .”.

31 It is, obviously, correct to say that if paragraph 88 be set alongside the quoted particulars, there is no identity of language or of form. That cannot be, however, itself determinative of the issue now posed by the plaintiff. What has to be considered in a level-headed way is whether the substance of the findings in paragraph 88 and the substance of the relevant particulars are in accord. I cannot see how they are not in accord.

32 What, then, of the plaintiff’s alternative submission that the paragraph 88 findings “were procedurally unfair to the plaintiff as they ……………. otherwise do not withstand scrutiny”?

33 In dealing with that particular issue it is necessary to read paragraph 88 fairly in the context of the reasons, overall, given by the ADT. The ADT sets out in paragraphs 68 and 69 of its reasons a number of factual conclusions which it describes as “Major Conclusions from Factual Findings”. Paragraphs 9 through 67 of the reasons detail those “Factual Findings”.

34 The expressed major conclusions are:

“68 In ordinary commercial terms and based on our respective experience of commercial dealings we summarise what has happened in the following way. We are satisfied on all the evidence that:
(a) Sarker in relevantly tight financial circumstances decided to take on a new business operation which he would operate as a family business serving his ethnic community. He negotiated a lease from WBH to run an Asian Grocery Shop, with exclusive rights in that category.
(b) WBH did not scrutinize Sarker’s financial circumstances in any great detail and allowed Sarker into possession under an offer of lease giving him exclusive rights to run an Asian Grocery Shop without, for unexplained reasons, checking its position vis-à-vis other tenants’ Leases.
(c) What happened at Minto Mall was, to use the colloquial expression we used at the hearing, a “stuff-up” over the permitted use provisions and exclusivity rights of two shops in the Mall.
(d) We do not think it can seriously be contended that India is not part of Asia and that Indian goods do not fall within the generic description of Asian Groceries Shop as permitted trading items. Accordingly we consider it was commercially astonishing for WBH to have tried to fix the problem by sticking with that proposition.
(e) Sadly, instead of accepting that a simple error had been made which required a commercial negotiation for its resolution, WBH chose an unsupportable commercial and legal distinction and then sought to rely on whatever legal argument was available to it in order to bring an end to one of the Leases, solving the problem by removing one of the traders.
(f) While Sarker did not comply with the Tenancy Fit out Guide during the fit out period, there was no management of this process at all by WBH during the rent-free fit out period and no warnings given to Sarker that he had failed to seek approval for his plans and tradespeople.
(g) There was no suggestion prior to the First Termination Notice which came out of the blue after Sarker had been trading for just 3 days, that Sarker’s fit out activity had anything other than the acceptance of WBH and the Centre Management. Both parties approached the process in a very informal manner.
(h) It can be inferred that Sarker was happy to do this to save money in the early stages of establishing a new business when he had very limited financial resources and major commitments to his house and new business. He may have been happy to take a risk that nothing would flow from not pursuing formal Council approval processes when the Fit out Guide did not insist on it and the centre managers seemed happy for him to start trading with no check.
(i) At the same time, strictly speaking, the provision of the Lease governing fitout did not specifically insist that the requirements of the Guide had to be complied with before the end of the fit out period. Accordingly the subsequent compliance with Council requirements may strictly have been adequate in terms of the lease provisions.
(j) Sarker probably took advantage of the lax administration of the fit out process to contain his costs such that the objectively assessed value of the works, at least as at the date of the purported termination, may not have been $40,000. Nevertheless, the behaviour of WBH does not exonerate Sarker from his responsibility to obtain written approval for his fit out and to use qualified tradespeople to carry out the works. Sarker probably also made no attempt to determine whether he needed to apply to Council, because no-one from WBH indicated this was essential and the Lease did not make it so.
(k) In relation to the bank guarantee WBH through its solicitors did not insist on the bank guarantee being in place, let alone a lease, before allowing him into possession (with everything that flowed from that in terms of the commencement of the Lease under the Retail Leases Act).
(l) Immediately the guarantee became an issue, Sarker stood willing to provide cleared funds to cover the security and those funds were in fact paid, albeit held, on a without prejudice basis by WBH.
(m) When the error as to use was pressed by the other tenant who also had exclusive rights in relation to Indian foods, WBH decided, presumably on legal advice, to solve the problem by peremptorily terminating Sarker’s lease. This was done without any warning on the ground that his failure properly to comply with the fit out terms and his failure to provide the Bank Guarantee, were expressly essential terms under the Lease justifying repudiation with no notice or warning.
(n) Over the next six months WBH prosecuted its legal arguments intensively, virtually refusing to negotiate or concede any point, appealing two interlocutory decisions and maintaining until just prior to the hearing the existence of a collateral agreement for a limited use of Sarker’s premises which would have solved the problem.
(o) Ultimately WBH declined to lead any evidence at the hearing of the collateral agreement and withdrew its claim in that regard, providing no witnesses as to its conduct prior to the purported termination of the Lease and only offering evidence of its lawyer and building assessor.
69 Accordingly, as commercial people, we consider the conduct of WBH to be quite unacceptable in the ordinary management of a retail shopping centre having regard to usual industry standards and practices. The question is whether under the law governing the rights and obligations between these two parties, WBH was entitled to pursue the course it did.”

35 The ADT’s reasons then proceed to various questions of law which are outside the ambit of the present application for leave to have a full-scale merits appeal.

36 On 7 April 2004 the ADT heard some oral submissions from counsel for the present plaintiff. During the course of those submissions the Judicial Member of the Tribunal put to counsel the following matters:

“Well, we’re going to run out of time shortly. I know that one of the issues that is activating the minds of my colleagues and I, because we have discussed it during recesses, is that you still haven’t begun to address the fact that this all came about because of what appears on the face of the evidence from World Best Holdings, that whether for some reason it made an error, there had been an error in granting conflicting use to two lessees. We would like to hear from you on behalf of your client as to how you say the evidence does not establish that its choice about fixing that error was not to sit down and say, “We’ve made a mistake here, we’ve got to negotiate through this”, but to solve it by instantly serving a termination notice. That, to us, goes to the heart of the unconscionability issues. My colleagues, as commercial men, and myself as a commercial lawyer, see that that is at the heart of this case. There had been a stuff up, and instead of negotiating through, serve a whole series of litigious actions.
Now, can you deal with what your submissions are about that proposition.”

37 Counsel’s first response was to reiterate submissions earlier put by him to the effect that there never had been a conflicting uses problem, because one use was for Asian foods, and the other use was for Indian foods, and those two uses were generically different. The Judicial Member said in reply that all three members of the Tribunal were of the view that: “it’s impossible to sustain that argument that Asian food and Indian food are not all part of the same basket”. It seems to me that this view is a conclusion of fact that was well open to the Tribunal.

38 Counsel’s submissions then shifted to an argument that, even were it to be accepted that there had been no conflicting use problem, the evidence did not support a finding that the peremptory termination of the first defendant’s lease had been in any way unconscionable. The evidence supported, it was submitted, a finding that the first defendant had been guilty of breaches of his obligations as Lessee, especially in the matter of the shop fit-out; and that such breaches were of such a kind as to amount to a repudiation by the first defendant of his obligations. That being so, then it followed, according to the submission, that the plaintiff had been entitled thereupon to determine the lease peremptorily.

39 The decision of the ADT rejects these submissions, albeit with an acknowledgement that the first defendant was, on a fair view of the evidence, not strictly compliant with some of his obligations under the lease, and in particular with his obligations to do certain things within certain time frames.

40 The essential reasoning of the Tribunal is, I think, quite clear, and derives from the observations made by the judicial member during oral submissions.

41 The Tribunal simply would not accept that there had never been any conflicting use problem, the need to resolve which had caused the plaintiff simply to terminate the lease peremptorily. As I have said, I think that such a view was well open to the Tribunal.

42 Where that finding took the Tribunal is, I think, also quite clear. The Judicial Member, in the course of his interchanges with counsel on 7 April 2004, put the point with complete clarity and as follows:

“I’m just saying to you what we have, having heard the evidence in the fulfilment of our statutory responsibility, as members of this tribunal, drawing on our own backgrounds in our various walks of life, we say that we are unanimous in that it strains credulity that there isn’t a clear connection between resolving the problem with Dhaka by serving the notices of termination. We think that it follows as night follows day. We don’t want you to be under any illusion.”

43 What the Judicial Member there says about “having heard the evidence” needs to be understood by reference to the course of that evidence at the Tribunal hearing. On that topic, paragraphs 6 and 7 of the published reasons for decision are completely clear:

“6 The hearing of oral evidence and initial submissions lasted three days. WBH filed extensive affidavits by its officers who had direct commercial responsibility for the Lease and its operation, containing many detailed allegations directly relevant to key facts in issue. However WBH ultimately chose not to call those witnesses or tender those affidavits, surprisingly given the intensity of the interlocutory conflict. It relied only on the agreed and admitted documents (see below), on the evidence of its lawyer, Mr. Biber, of Mr. Yee the lawyer who drew the Lease, and of an expert witness with knowledge of building matters, Mr. Philpott. In those circumstances, the Tribunal was not assisted with WBH’s version of much of what transpired and subject to ensuring we have been properly satisfied on the evidence, we have been guided by the documents and the Lessee Sarker’s evidence as finalised during and after cross-examination.
7 In addition to the substantial documentation attached to Sarker’s six affidavits admitted into evidence, Ex D, the Applicant also filed a very useful and substantial Chronological List of Annexures and Exhibits, Ex J with numbered documents (cited here as Ex J/1-109), which was accepted by WBH as evidence. The Tribunal also had reference to a large quantity of personal financial records of Sarker, in Exs I and N, and extensive records of the Shop 48B business, Ex D/6 January Affidavit principally on fit out expenses, Ex O on suppliers, and Ex P on fit out expenses.”

44 Were there no more to the present application than the matters which I have summarised thus far, then I would be of the opinion that the findings and conclusions of the Tribunal were all findings and conclusions of fact well open to the Tribunal, and that no cause had been shown for allowing a free-wheeling merits appeal.

45 It is, however, necessary to deal with the fact that the plaintiff’s submissions to this Court do not approach the matters in hand by a process of reasoning of the kind that seems to me to be appropriate. The plaintiff’s submissions isolate a number of particular errors which are said to have been made, demonstrably, by the Tribunal; and then seek so to characterise the nature and the supposed effect of those errors as to justify, in effect, a root and branch appellate review by this Court of the whole of the factual issues that were litigated in the ADT.

46 The first suggested error concerns what is said in paragraph 40 of the ADT’s reasons:

“Also on that day, 29 July 2003, WBH generated a new Disclosure Statement for a new lease with Sarker for a term from 11/08/2003 to 10/08/2006, Ex J/37. That document was admitted into evidence by Deputy President Chesterman during interlocutory proceedings. It included Special Condition 4:-
Notwithstanding the ‘Permitted Use’ described on page 1 of this Disclosure Statement [which was ‘Asian Grocery Store’], the Lessee will agree with the Lessor that the Permitted Use will be described in the Lease in the following terms:
“Asian Grocery Shop, but expressly excluding the sale of Indian groceries and Halal Meats during the term of the lease and any renewal of it.”
that is, a proposed exclusion of the permitted range of goods in the Dhaka Lease.”

47 The admission into evidence of the so-called “new Disclosure Statement” was very controversial at the ADT hearing. It suffices for present purposes to understand that after a great deal of very heated argument the Judicial Member said:

“And I think I have arrived at the point where the potential delay to the proceedings and time taken over this, at this point I don’t intend to read that document.”

48 The plaintiff now contends that paragraph 40 of the reasons shows that in fact the Tribunal did read and have regard to the particular document; that such conduct contravened the requirements of natural justice; and that, as the written submissions put the contention:

“Plainly the Tribunal should never have referred to this document nor should they have in any way sought to make findings on the basis of what it contained.
This Court is unable to assess what role it played in the other findings of fact relating to unconscionability though it may have affected the Tribunal’s finding that the Plaintiff acted in bad faith in seeking to exploit provisions under the lease to solve its own commercial error. This alone is a basis for allowing an entire appeal on all matters relating to merits or, at the very least, all matters relating to unconscionability.”

49 It seems to me that the short answer to the plaintiff’s present submissions is that the reasoning that underpins paragraph 88 of the published reasons does not seem to depend in any way upon either the existence or the contents of the “new Disclosure Statement”. A fair reading of the whole of the published reasons seems to me to indicate that paragraph 40 itself appears as part of a detailed chronological canvass of the course of the dealings between the plaintiff and the first defendant; that the so-described “Major Conclusions from Factual Findings” do not refer either specifically or by necessary implication to either the existence or the contents of the “New Disclosure Statement”; and that were all and any consideration of the “New Disclosure Statement” to be strictly excluded, the essential reasoning in paragraph 88 could still be supported upon the basis of findings well open to the Tribunal.

50 The remaining suggested errors can be dealt with as a group. They embrace aspects of the findings and orders made by the ADT upon the topics of: the takings of the first defendant’s business; allowances properly to be made for stock losses; allowances for fit-out; adjustments on account of rent; and costs.

51 The points made as to costs seem to me to propound questions of law as to which leave is not now required. The points made as to the other topics all come down to the proposition that no reasonable tribunal of fact could have made the questioned findings and orders; or, to put the point in another way: that there was no evidence capable of supporting the questioned findings and orders. The issues thus tendered by the plaintiff give rise, in my opinion, to questions of law as to which leave is not required.

52 The course of argument at the recent hearing elicited further written submissions made by leave by both the plaintiff and the first defendant. The submissions of the plaintiff include this submission:

“The Act does not require the leave application to be determined at any particular stage of the appellate procedure in cases where an appeal as of right has been instituted. Thus, for example, the current application could be stood over to the hearing of the appeal on matters of law and the court at that time could determine whether in the light of submissions on the matters of law it was appropriate to extend the appeal to a review of the merits. A situation might arise, for example, where “technical” distinctions concerning what are and what are not “matters of law” could give rise to a situation where a Court determines that matters raised, whilst important, are in truth not matters of law and a meritorious appeal might otherwise disappear as a result. In such a case there would seem to be some utility in standing the application over. Such a course would also obviate the necessity of a Court on a leave application engaging in extensive debate as to what are matters of law and what are not.”

53 Because I am not disposed to grant the leave now sought, I have considered whether or not I should adopt the plaintiff’s suggestion. The first defendant opposes any such course; and expresses as follows the bases of that opposition:

“The plaintiff suggests that this application should be stood over to the hearing date if the Court is in any doubt whether leave is required. The basis for this submission is that the plaintiff should have the benefit of the doubt. This submission should be rejected. The plaintiff requested that the hearing on the question of leave occur separately. Also, the plaintiff has the onus of persuading the Court that leave for a merits review should be granted. It has not done so. If there is doubt about whether leave is required, leave should be refused. If the doubt arises from the drafting of the grounds of appeal, the plaintiff should not benefit from the doubt created.”

54 I accept the general thrust of those submissions of the first defendant. The plaintiff chose to separate from its multiple claims for relief the claim made in paragraph 1 of the summons. There has been a full contested hearing upon the issue thus tendered by the plaintiff. If, as I believe to be the case, the plaintiff has not established the particular claim to relief, then the Court should say so, and should make the appropriate final order on that particular claim: interest rei publicae ut sit finis litium.

Orders

[1] The claim for relief in paragraph 1 of the plaintiff’s summons filed on 8 July 2004 is dismissed with costs.

[2] The balance of the claims for relief made by that summons are stood over to a date to be fixed.

[3] Either party may approach forthwith the Common Law Division List Judge for the purpose of having fixed that further hearing date.

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Last Modified: 07/16/2007