Applicants v Respondents

1. The calculations relied upon by the tenant are based on the receipt history produced by the landlord.

42 Section 52 of the RLA provides

(1) A retail premises lease is taken to provide as set out in this section.

(2) The landlord is responsible for maintaining in a condition consistent with the condition of the premises when the retail premises lease was entered into -

(a) the structure of, and fixtures in, the retail premises; and

(b) plant and equipment at the retail premises; and

(c) the appliances, fittings and fixtures provided under the lease by the landlord relating to the gas, electricity, water, drainage or other

(3) However, the landlord is not responsible for maintaining those things if -

(a) the need for the repair arises out of misuse by the tenant; or

(b) the tenant is entitled or required to remove the thing at the end of the lease.

1. For the reasons set out in paragraph 27 I found that the flooding on 19 November 2017 was caused by the storm event on that day and the age and condition of the roof. I did not find that the tenant caused the roof to leak because of the installation of flues in 2015.
2. The landlord said he was aware of asbestos issues with the premises after the roof was damaged in November 2017. He saw pieces of asbestos roofing loose on the roof and about 20 holes in the roof.
3. By reason of s 52 of the RLA the landlord is required to maintain the roof in the same condition it was in at the start of the tenancy. The tenancy started in 2013. There is no evidence that there were asbestos issues other than a lack of an asbestos register at the start of the tenancy.
4. I accept the evidence of Rohan Saunders of SPI Property Inspections that he observed large rust holes in the roof, gutter failure and that the asbestos roof had deteriorated over time.
5. I accept the uncontradicted evidence of the tenant that the premises were watertight at the start of the lease.
6. The landlord agreed in cross-examination that after 19 November 2017 the premises were not watertight and unable to be used as a panel beating shop until the roof was replaced in June 2018. He also agreed with the contents of an email dated 31 May 2018 from Rohan Saunders which stated that the current condition of the roof is not fit for the trading purpose of the tenant.
7. The evidence is that the premises were watertight at the start of the tenancy and not watertight from 19 November 2017 until the roof was replaced on 18 June 2018.
8. The landlord did not maintain the roof in a condition consistent with the condition of the premises when the lease was entered into. For the reasons stated the deterioration of the roof was not caused by any misuse by the tenant associated with the installation of flues in 2015.
9. I find the landlord breached the lease by not maintaining the roof.
10. Section 57 of the RLA provides that where premises are damaged as in this case, the tenant is not liable to pay rent or outgoings during the period in which the premises cannot be used.
11. The premises could not be used for the permitted purpose between 19 November 2017 and 18 June 2018.
12. Section 54 of the RLA provides that the tenant is entitled to reasonable compensation from the landlord in the present circumstances.
13. Clause 8.1 of the lease provides that if the premises are damaged and can not be used for the permitted use a fair proportion of the rent and buildings outgoings is to be suspended until the premises are wholly fit again.
14. The tenant has not claimed any loss or damage other than reimbursement of the rent and outgoings paid while the premises were not fit for the permitted use. The tenant's business interruption claim following the flooding in November 2017 was rejected by its insurer due to the condition of the premises. The tenant did not pursue any claim against the landlord at the hearing other than for reimbursement of money paid.
15. I find that $37,196.39, being the amount of rent and outgoings paid by the tenant during the period when it could not operate its permitted use from the premises, is a reasonable amount of compensation that the landlord is to pay the tenant.

30 The Landlord submits that the basis of compensation ordered is erroneous because the Tribunal applied s 54 of the RLA where s 57(1)(b) of that legislation and, its corollary under the Lease provisions, clause 8.1, ought to have been applied:[48]

1. When determining to award the tenant the sum of $37,196.39 for being unable to make any use of the leased premises from 19 November 2017 to 18 June 2018 due to water ingress, was the Tribunal required to reduce the sum awarded to the tenant to account for the fact that the tenant continued to make some reduced use of the premises in accordance with [s 57(1)(b)] of the Retail Leases Act 2003 ("the RLA")?

31 Section 54 of the RLA relevantly provides:

54 Tenant to be compensated for interference

(1) A retail premises lease is taken to provide as set out in this section.

(2) The landlord is liable to pay to the tenant reasonable compensation for loss or damage (other than nominal damage) suffered by the tenant because the landlord or a person acting on the landlord's behalf -

(e) fails to rectify as soon as practicable -

...

(ii) any defect in the retail premises or in the building or retail shopping centre in which the retail premises are located, other than a defect due to a condition that would have been reasonably apparent to the tenant when entering into or renewing the lease or when the tenant accepted assignment of the lease; or

...

And the relevant provisions of section 57(1) of the RLA as follows:

57 Damaged premises

(1) A retail premises lease is taken to provide the following if the retail premises, or the building in which the premises are located, is damaged -

(a) except where the tenant caused the damage, the tenant is not liable to pay rent, or any amount in respect of outgoings or other charges, that is attributable to any period during which the premises cannot be used under the lease or are inaccessible due to that damage; and

(b) except where the tenant caused the damage, if the premises can be used under the lease but that use is reduced to some extent by the damage, the tenant's liability for rent, and any amount in respect of outgoings or other charges, that is attributable to any period during which the use is reduced is decreased to the same extent; and

...

8 DAMAGE OR DESTRUCTION

8.1 If the premises or the building are damaged so that the premises cannot be used or accessed for the permitted use -

8.1.1 a fair proportion of the rent and building outgoings is to be suspended until the premises are again wholly fit and accessible for the permitted use, and

8.1.2 the suspended proportion of the rent and building outgoings must be proportionate to the nature and extent of the damage or inaccessibility.

32 The Tribunal did not refer to the provision of the RLA or the Lease under which it made its finding regarding reasonable compensation.[49] Indeed, the word "compensation" in that paragraph may, on its face, confuse, as "compensation" is the word used in s 54. However, when the paragraph is considered in its context there is no basis for any confusion. More particularly, as appears in its there immediate preceding reasons, the Tribunal observed that the Tenant made no claim for compensation for loss and damage, for which s 54 provides, other than for its rent and outgoings. In my view it is clear that on a reasonable interpretation of the reasons of the Tribunal its orders were made under s 57(1)(a), having found that the premises could not be used for their permitted purposes during the Interference Period. This is the submission the Tenant makes[50] and, for these reasons, I am persuaded by it.

33 Moreover, I am of the view that the full amount of rent and outgoings paid during the Interference Period could equally have been sought to be recovered or reduced under any of ss 54, 57(1)(b) of the RLA or clause 8.1 of the Lease if the full amount of rent and outgoings were found to be appropriate compensation or the proportion of the rent and outgoings for which the Tenant ought not be liable during that period.

34 The Landlord makes contrary submissions in this respect. His primary submission is that the Tribunal ought to have ordered a reduction to the rent and outgoings under s 57(1)(b) given that the parties agree that the premises were put to some use during the Interference Period. Under the Lease the Permitted Use is, principally, "panel beater, spray painting and mechanical repairs ...".[51] The parties agree that because the premises were not water-tight during the Interference Period they could not be used for panel beating.[52] Mr Deicke gave evidence that during the Interference Period the premises were put to limited use as a vehicle damage and assessment centre, evidence that was accepted by the Tribunal.[53] This evidence was supported by the evidence given by the Landlord himself, who observed that the premises were closed during business hours during the Interference Period.[54]

35 In my view it is clear on the evidence before the Tribunal that, as the Tenant submits, the use of the premises as an assessment centre during the Interference Period was de minimis such that the Premises during that time cannot be said to have been capable of being put to their Permitted Use. There is no argument made that the Tenant was putting the premises to a use that was not permitted under the Lease.[55] There is in my view then no vitiating error which affects the Tribunal's application of the RLA and orders that the Tenant be reimbursed for full amount of the rent and outgoings paid during the Interference Period.

Ground H: sharing or giving up possession of the premises

36 The Lease obliges the Tenant to remain in sole possession and occupation of the premises, unless consent is otherwise given by the Landlord. The Lease relevantly provides:[56]

4.7 Except by a transfer or sublease to which the landlord has consented, the tenant must not give up possession or share occupancy of the premises or grant a licence to anyone else or mortgage or charge its interest under the lease or enter into occupation of the premises without the landlord's written consent. Consent is at the landlord's discretion.

Breach of this Lease covenant was argued by the Landlord in the Tribunal.

37 This ground of appeal is first articulated by the Landlord as follows:[57]

1. Was it open to the Tribunal to conclude that there had been no change in possession of the premises as alleged in the Notice to Remedy Breach of Lease dated 19 June 2018?

Developing this ground later in the Notice of Appeal the Landlord says:[58]

1. [t]he Tribunal failed to address the question of whether David Gavelan or a person or entity associated with him was sharing occupancy of the premises in breach of clause 4.7 of the lease.

38 The Landlord failed to satisfy the Tribunal that on the balance of probabilities the Tenant had breached the Lease by sharing its possession or occupancy of the premises. The Tribunal said:[59]

1. The first breach relied upon by the landlord is that the tenant has transferred the lease or sublet the premises to another person without the consent of the landlord and/or given up possession of the premises, sharing occupancy of the premises and/or entry into an arrangement that gives a person the right to enter into occupation of the premises.
2. I do not find that the breach has been proven on the balance of probabilities for the following reasons:
   1. The appointment of David Gavelan for one day as a director of the tenant does not equate to the tenant giving up possession of the premises;
   2. The landlord accepted in cross-examination that the lease had not been transferred;

c The tenant retained the keys for the premises;

1. Since the alleged giving up possession, the landlord continued to accept rent and accepted an option to renew suggesting a waiver of any breach by reason of who was occupying the premises;
2. The Google searches produced by the landlord do not show that the tenant gave up possession or shared possession of the premises;
3. The letter from the insurer denying cover to the tenants following the November 2017 flooding is not evidence of shared possession by reason of a reference to Melbourne Repair Centre. There could be many explanations for two business names being recorded in the letter. The insurance claim, policy document and other relevant documents relating to the insurance were not in evidence;
4. David Deicke is not a director of the tenant. His use of the term managing director is a lay person's use of the term and not reference to his legal position within the tenant or the related businesses. His evidence was, and this was not contradicted that he is the controlling mind of the tenant and of six other panel beating businesses regardless of whether he is a director of the companies conducting those businesses;
5. I accept that the Tenant's business rebranded to operate under the name Melbourne Collision Centre to conform with Mr Deicke's six other businesses;
6. the tenant's evidence which I accept was that there had been no change of possession and that it has remained in possession since the commencement of the lease.

39 The Tenant's evidence with respect to this issue arose primarily out of Mr David Deicke's evidence, which was summarised by the Tribunal as follows:[60]

1. [David Deicke] is the "managing director" of seven panel repair shops including the one operating from the premises. Each panel beating business is owned and operated by a separate company. He and his wife own the companies and their businesses. He attends all businesses on a weekly basis;

b The tenant's only asset is the business operating from the premises;

1. David Gavelan became the manager of the business operated by the tenant in 2015;

1. In 2015, he intended to franchise his shops. He approached shop managers offering profit shares or the sale of the business. David Gavelan wanted to buy the tenant's business. Deicke discussed the possible sale with Mr Angelo Christodoulakis, the landlord's property manager. He had documents prepared to effect a transfer of lease and submitted the documents to the landlord for approval. The landlord rejected the transfer and no transfer of lease occurred. In anticipation of the transfer, Gavelan was appointed as a director of the tenant for 1 day on 1 July 2015. He was immediately removed as a director when consent to the transfer was not given;

1. The tenant made a business interruption claim on its insurer. The claim was rejected on 23 February 2018 due to the premises being in poor condition and not well maintained: The Insured named on the letter rejecting the claim was Smash Master Collingwood & Melbourne Repair Centre;
2. Melbourne Repair Centre had been the name of a Moonee Ponds panel shop which was once owned by David Gavelan. Gavelan sold the Moonee Ponds business sometime between November 2017 and February 2018 to Deicke. He rebranded the business at the Moonee Ponds premises to Melbourne Collison Centre. All the businesses are now operated under that brand. No business was run at the premises under the name "Melbourne Repair Centre";

1. He and David Gavelan used the same insurance broker. He has separate insurance policies for each of the seven panel beating businesses. The reference to Melbourne Repair Centre on the insurer's rejection letter must be a mistake;

40 The Landlord's own evidence with respect to this issue was summarised by the Tribunal as follows:[61]

1. The tenant allowed another business to operate from the premises without his consent. Proof of this is that an internet search on 24 September 2018 of "Smash Masters Panel Beater", the tenant's trading name does not show the tenant's business operating from the premises;

1. The lease was transferred by the tenant to David and Sandra Gavelan in 2014 without his consent. After his consent was refused, the tenant remained in occupation of the premises and the transfer did not proceed;

1. The tenant used the premises between November 2017 and June 2018. He knows this because the tenant was complaining to the agent about the roller door jamming and had materials in the premises;
2. He agreed that since 2015 the tenant was and remained in possession of the premises and that David Gavelan is running the business;
3. He accepts that Smash Masters Collingwood is operated by the tenant. When shown an invoice from Melbourne Collision Repair Centre with the address of the premises and the same ABN as Smash Masters Collingwood, he did not accept a connection between Melbourne Collision Repair, a trading name and the tenant;
4. After being shown estimates issued by Melbourne Collision Repair dated 14 November 2018, 15 November 2018, 16 November 2018, 19 November 2018, 20 November 2018, 21 November 2018, 22 November 2018, 15 January 2019, 24 January 2019, 25 January 2019 and 30 January 2019, which have photos of vehicles attached, he agreed that the photos were taken in the premises; and

t The tenant has paid rent but not at the increased rent. ...

The Landlord's agent, Mr Angelo Christodoulakis, also gave evidence with respect to this issue, which was summarised by the Tribunal:[62]

1. In cross-examination he accepted that the tenant retained the keys between November 2017 and June 2018 and never said it was giving up possession. He drove past the premises a few times in this period and the business was not trading; and
2. Other than from the landlord telling him, he was not aware of any change in the identity of the tenant or a formal transfer of lease.

41 The Landlord's position on appeal is that: [63]

Mr Gavelan is running his own business in the premises ... concealed and facilitated by Mr Deicke.

42 The Landlord contends that the Tribunal took into account, what he calls, irrelevant considerations; specifically, whether the Lease was transferred, whether the Tenant retained keys, whether the Landlord accepted rent and an option to renew from the Tenant and Mr Deicke's role as the managing director of the Tenant.[64] These are, however, considerations relevant to the question the Tribunal had to decide because the Landlord asserted that the Tenant had either impermissibly given up possession or impermissibly shared occupation of the premises.[65] It was to this one question - whether there had been an impermissible sharing or parting with possession - that was consistently put, first to the Tenant in the Notice to Remedy Breach, then to the Tribunal, and to which the Tribunal expressly directed its findings in its Reasons.[66]

43 Additionally, the Landlord submits that the Tribunal failed to take into account relevant evidence, namely:[67]

(a) David Gavelan's LinkedIn webpage, in which he publicised his business at the premises[68];

(b) the existence of a company and business called Melbourne Repair Centre Pty Ltd, operated by Mr Gavelan and his wife[69];

(c) the fact that the tenant did not claim compensation for interference during the Interference Period under s 54 of the RLA but merely reimbursement for rent and outgoings;

(d) the inclusion of Mr Gavelan's business name in correspondence from the tenant's insurer;

(e) the tenant's failure to call Mr Gavelan or his wife as witnesses; and

(f) the tenant's failure to produce evidence of his employment and the tenant's purchase of his Moonee Ponds business.

The Landlord also says the Tribunal failed to have regard to the correspondence sent by Mr David Gavelan in the context of the roof leaks and rental review dispute referring to "my workers", "our situation", "we" and "our building" and "our business".[70] The Landlord contends this correspondence "only makes sense if [Mr Gavelan] is conducting his own business on the premises and thus sharing occupancy in breach of the lease".[71] Further, with respect to Mr David Gavelan's employment by the Tenant, the Landlord submits that the Tribunal ought to have drawn adverse inferences from the Tenant's failure to produce evidence of Mr Gavelan's employment.[72] In the Landlord's submission, an adverse inference ought also to have been drawn by the Tribunal from the Tenant's failure to produce its insurance policy,[73] a Jones v Dunkel point.[74] Correspondence between the Tenant and its insurer referred to both the business name of the Tenant and the Melbourne Repair Centre.

44 In my view, the evidence before the Tribunal fell well short of establishing that anything close to Mr Gavelan's involvement with the premises constituting the should be characterised as the sharing or surrendering of occupancy or possession with or to another entity. Moreover, the Landlord never established that an entity other than the Tenant traded from the premises. The trading names for the Tenant - Melbourne Collision Centre or Melbourne Collision Repair Centre - are explained in Mr Deicke's account of having purchased Mr Gavelan's Moonee Ponds business. Mr Gavelan's use of first person possessive adjectives and pronouns to describe the Tenant's employees is also explained by his role as the manager of the Tenant. As to the Jones v Dunkel point, the Landlord, who was the applicant at first instance in the Tribunal, cannot rely on a lack of evidence brought by the Respondent not having first satisfied the burden of proof of its, the Landlord's, case.[75] Accordingly, this ground must fail on appeal.

45 Nevertheless, the facts in the present appeal do touch upon significant questions with respect to the nature of possession. It is helpful to address some aspects of the these questions; principally, what is meant by a covenant prohibiting the sharing of possession and the sharing of occupancy of leased premises? "Possession" is in the law a term of art. It has been described as follows, "[i]n the strict legal sense of the word 'possession' has a highly technical meaning, and the sharing of possession is an unknown concept. It has been said that possession is single and indivisible."[76] Covenants preventing a tenant from parting with possession of a property during the term of a lease have been strictly construed given the consequence of a breach is forfeiture.[77]

46 In cases brought with respect to lease covenants that prohibit the sharing of possession but do not prohibit the sharing of occupancy, a distinction is made between the two. In Lam Kee Ying Sdn Bhd v Lam Shes Tong, the Privy Council advised that while there could be no dispute that occupancy had been shared, "[a] covenant which forbids a parting with possession is not broken by a lessee who in law retains possession even though he allows another to use and occupy the premises".[78] In that appeal, many factual examples were given that demonstrate what counted towards and what did not count towards the ultimate finding that the tenant had parted with possession of the demised premises. Thus, the Privy Council observed in its advice:[79]

Some of the evidence - as to the erection of the signboard, the transfer of the electricity, water supply and telephone and the issue of receipts, bills and invoices in the name of the second respondent - is equivocal and is quite consistent with a conclusion that although the second respondent occupied the premises the first respondent retained possession. However the fact that the second respondent tendered its own cheque in payment of the rent is some evidence that the second respondent regarded itself, and was regarded by the first respondent, as having possession of the premises. Even more significant in their Lordships' opinion is the fact that at no time before the trial or in evidence did the respondents give an unqualified denial that the first respondent had parted with possession to the second respondent. In their solicitors' letter of November 13, 1969, in their defence and in evidence the reply given by the respondents to the claim that they had broken the covenant was not that there had in fact been no parting with possession, but that there had been no parting with possession because the first respondent was a major shareholder in the second respondent. If in truth the second respondent had merely been given a licence to occupy the premises, and the first respondent had retained possession, it would have been easy for someone to say so. The other evidence that is in itself equivocal is to be understood in the light of the fact that the respondents, who could have produced affirmative evidence that the first respondent retained possession if that had been the fact, failed to do so In their Lordships' opinion the proper conclusion to be drawn from the whole of the evidence in the case, scanty as it may be, is that the first respondent did part with possession of the premises. The trial judge was therefore correct in his conclusion that the evidence established a breach of the covenant contained in clause 1 (g) of the lease.

47 Further guidance on prohibited sharing, albeit with reference again to the sharing of possession, rather than mere occupation, is provided by Tulepam Properties Ltd v De Almeida.[80] The lease in that case contained an absolute prohibition against sharing or parting with possession of a part only of the leased premises. Sir Douglas Frank QC, sitting as a deputy of the High Court, was required to determine whether there had been a breach of the covenant against sharing possession. On the basis of Lam Kee Ying, his Lordship found that there had been no parting with possession. However, it was found and it was "beyond dispute" that possession had been shared.

48 His Lordship also found that there was a prohibited "multi-occupation" in Tulepam for a number of reasons. The defendants were both natural persons and the tenants under the lease. The third defendant was a company in which the second defendant had an interest. The ground floor of the premises, a terrace, was permitted under the Town and Country Planning Act 1971 to be used for offices, but the two upper floors could only be used for residential purposes. His Lordship found:[81]

So far as the maisonette is concerned, unquestionably that has been used for office purposes from 1977, certainly until lunch-time yesterday. This flat was laid out, improved, to provide a standard of accommodation suitable for a director of a company, with carpets and high-grade wallpaper and so on. What the defendants did was to partition off some of these rooms and undoubtedly use them for general office purposes. For example, wardrobes were used as filing cabinets; there was an inter-office telephone exchange; there was a boardroom; and there were typists' desks, and so on. That breach is admitted.

This case is unusual in that the use the sharing entity, the third defendant company, made of the premises was also prohibited (albeit by the provisions of the Town and Country Planning Act 1971 not by a lease covenant), making it more readily apparent that the natural persons, renting those floors for strictly residential purposes, allowed that part of the premises to be occupied contrary to lease covenant. On his Lordship's construction of the lease, the clear occupation of part of the premises by a stranger to the lease was sufficient alone to demonstrate a breach of the absolute prohibition against the sharing of possession of part of the premises. This case has, however, attracted some criticism.

49 The relevant lease covenant considered by the Court of Appeal in Akici v LR Butlin Ltd[82] was similar to that considered in Tulepam in that it only prohibited parting with or sharing possession and did not make any express reference to occupation. The tenancy was held solely by Mr Akici. Shortly after his entering into the tenancy a company, Deka Ltd, started trading, making and selling pizzas at the premises. Around that time a Mr Gultekin became the company's sole director and holder of its two issued shares. It was found at first instance that "Mr Akici had shared occupation of the premises with the company, and that represented a breach of the covenant against the sharing of possession".[83] Neuberger LJ's leading judgment noted that the trial judge had relied upon the reasoning in Tulepam, of which his Lordship was critical in certain important respects:[84]

1. The difference between possession and occupation is rather technical, and, even to those experienced in property law, often rather elusive and hard to grasp. Nonetheless, it is very well established, and is particularly important, and indeed well known, in the field of landlord and tenant law, especially in relation to the question of whether an agreement creates a tenancy or a licence, and in relation to alienation covenants such as clause 4.18.
2. While interpretation of a word or phrase in a document must ultimately depend upon the documentary and factual circumstances in which it was agreed, it is desirable that the courts are as consistent as they properly can be when construing standard phrases in standard contexts. In that connection, a covenant against parting with possession is included in many, quite possibly most, modern commercial leases. Further the Courts have consistently given the strict meaning to such covenants as was adopted in unreserved terms by the Privy Council in Lam Kee Ying, and in the five cases therein referred to at 255H to 256B.
3. Accordingly, while one cannot lay down any immutable rule as to how a particular word or expression is to be construed in every document or lease, I consider that any court must be very cautious before construing the word "possession" as extending to occupation which does not amount to possession, especially in a familiarly expressed covenant against parting with possession in a detailed professionally drafted commercial lease, such as that in the present case.
4. In these circumstances, I consider that it would require a very strong and clear case before a covenant against parting with possession should be construed in any way other than that adopted by the Privy Council in Lam Kee Ying, particularly in the light of the consistent approach taken in the earlier authorities cited therein. ...
5. I turn to the covenant against sharing possession. On the face of it, one would expect the word "possession" to have the same meaning each time it appears in clause 4.18, particularly in light of the fact that it is a word which is familiar, especially in the context of leases, to lawyers. The only reason for not giving the word "possession" its normal technical meaning in a covenant against sharing possession appears to be that identified by Sir Douglas Frank, namely that possession is, as it were, unitary and cannot be shared.
6. I do not accept that possession cannot be shared. It seems to me that, as a matter of principle, it would have been open to Mr. Akici to share possession of the premises in this case with the company, or indeed with Mr. Gultekin. I accept that, as stated by Sir Douglas Frank, possession in those circumstances would be joint, and, in a sense, therefore unitary. However, it seems to me that, as a matter of ordinary language, a lessee who lets another person into possession of the demised premises, so that they are both in possession, can properly be said to "share" possession with that other person. Joint owners can be said to enjoy "shared" ownership. Indeed, I note that both section 34 of the Law of Property Act 1925 and section 36 of the Settled Land Act 1925, which are concerned with joint ownership of land, refer to the land being owned in "undivided shares".
7. In consequence, I do not agree with Sir Douglas Frank that to give the word "possession" its usual meaning in the context of the phrase "sharing possession" deprives the covenant of any legal effect. It has a real effect, namely to prevent the conversion of a tenancy to a single lessee into what, in practical terms, will amount to a joint tenancy.
8. It may be said that this conclusion will result in a covenant against sharing possession having relatively little value. The answer to that point may be said to be same as that given in Lam Kee Ying at 256C, namely that "the words of the covenant must be strictly construed, since if the covenant is broken a forfeiture may result". That approach may well be a little less powerful than it was 30 years ago, on the basis that such canons of construction are now given rather less weight. Nonetheless, the modern approach, namely that such covenants should be given what is, in their documentary, factual and commercial context, their natural and commercially sensible meaning, indicates, in my judgment, the same result. Further, I do not think one should lean in favour of giving a wide meaning to an absolute covenant (i.e. one which is not subject to a proviso that consent cannot be unreasonably withheld).
9. Another reason for giving "possession" the same meaning in the covenant against parting with possession and the covenant against sharing possession was identified by Mr. Lloyd in the course of his submissions. If, as the Judge thought, clause 4.18 forbids parting with possession of the whole or part of the premises and sharing occupation of the whole or part of the premises, it means that the lessee is not precluded from parting with occupation (as opposed to possession) of the whole or part of the premises. Given that he is not permitted to share occupation of the whole or part, that would be a rather odd result. As Mr. Lloyd submits, that is a factor that suggests that "possession" should either, as he contends, be given the meaning of "occupation" throughout clause 4.18 or, as I prefer, its natural technical meaning throughout the clause.
10. A further reason why it seems to me that it would be inappropriate to construe a covenant against sharing possession in a full and carefully drafted commercial lease as extending to sharing occupation is because many leases do contain covenants against parting with possession or occupation and/or covenants against sharing possession or occupation, as opposed to possession only. Indeed, as the facts in Jackson -v- Simons [1923] 1 Ch. 373 at 374 show, even as long ago as 1906 commercial leases were being drafted with covenants by the lessee not to "part with or share the possession or occupation [of the demised premises] or of any part thereof".
11. I also note that in Jackson at 380, Romer J, in a reserved judgment, found that the lessee had "retained the legal possession of the whole of the premises" and therefore had not committed any "breach of covenant against parting with possession". However, he went on to say that what the lessee had done "amounted to a sharing of the possession of part of the demised premises". This was, it should be added, in the context of a covenant which also precluded sharing of occupation. It therefore appears that that experienced Judge had no difficulty with the notion of sharing possession, because he would otherwise have found that there had been a sharing of occupation.
12. In my judgment, therefore, the reasoning in Tulepam was simply wrong on this point, because the whole basis upon which Sir Douglas Frank considered that he was justified in not giving "possession" its normal meaning was flawed.
13. For what it is worth, in this case the conclusion that the word "possession" in clause 4.18 should not be given the same meaning as "occupation" derives a little support from the fact that there is reference to occupation elsewhere in the lease (namely in the covenant restricting the user of the premises and the proviso providing for an abatement of the rent in the event of damage by an insured risk). That is a makeweight point, but it certainly does not detract from the conclusion that "possession" should be given its natural, if technical, meaning when it appears in clause 4.18.
14. In these circumstances, I conclude that there would only have been a breach of clause 4.18 in the present case if Mr. Akici had parted with possession, or shared possession, of the whole or part of the premises, and that there would have been no breach of covenant if he had merely shared occupation of the whole or part of the premises.

50 The judgment of Neuberger LJ in Akici, and this passage in particular, was cited with approval in Clarence House Ltd v National Westminster Bank Plc,[85] which, like the present lease, concerned a lease covenant prohibiting the sharing of occupation and the sharing of possession. However, on the facts of Clarence House v NatWest there was no possibility of a shared occupation. Akici has also been cited with approval by the Queensland Court of Appeal, also on facts distinguishable from both Akici and the present case. There does not, however, appear to be any evidence of the issue of shared occupancy where such a thing is prohibited by lease covenant having been considered by the courts. The present facts do not, as the Tribunal found, provide such a case, as the applicant Landlord has failed to prove that any entity other than the Tenant was ever present at or operating from the premises, much less in occupation.

51 The Landlord has failed to show any real prospect of success with respect to any of the grounds of appeal upon which it relies. The Landlord's application for leave to appeal fails. The parties are to bring orders to give effect to these reasons.

52 I reserve the question of costs and will hear the parties on this issue.

[1] Brondolino v Surf Coast Smash Masters Pty Ltd (Building and Property) [2019] VCAT 538 ("Tribunal Reasons").

[2] Exhibit APB-3 to the Affidavit of Anthony Paul Brondolino (31 August 2018), Lease of Real Estate (14 August 2013) ("the Lease").

[3] Lease, Clause 2.2.1, Schedule Item 15.

[4] Commissioner of State Revenue v Frost (2011) 83 ATR 832 at 834 [5] citing Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335-6 and Myers v Medical Practitioners' Board (Vic) [2007] VSCA 163; (2007) 18 VR 48 at 55-6 [28].

[5] Boucher v Dandenong Ranges Steiner School Inc [2005] VSC 400; (2005) 145 LGERA 21 at 26 [15] citing Spurling v Development Underwriting (Vic) Pty Ltd [1973] VicRp 1; [1973] VR 1 and Whitehorse City Council v Golden Ridge Investments Pty Ltd [2005] VSCA 198; (2005) 13 VR 275.

[6] (2011) 83 ATR 832 at 833-4 [3].

[7] Commissioner of State Revenue (Vic) v STIC Australia Pty Ltd (2010) 2010 ATC 20-232 at 11,839 [10];

[2010] VSC 608; 81 ATR 682 at 687 [10] per Davies J.

[8] Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331; Al-Hakim v Monash University (unreported, Court of Appeal, Vic, No 3707 of 2003, 28 March 2003); Myers v Medical Practitioners Board (Vic) [2007] VSCA 163; (2007) 18 VR 48.

[9] See Morris v The Queen [1987] HCA 50; (1987) 163 CLR 454 at 475; [1987] HCA 50; 61 ALJR 588 at 597; [1987] HCA 50; 28 A Crim R 48 at 63-64; [1987] HCA 50; 74 ALR 161 at 176-177 per Dawson J.

[10] Osland v Secretary to the Department of Justice [No 2] [2010] HCA 24; (2010) 241 CLR 320 at 333 [21]; [2010] HCA 24; 84 ALJR 528 at 536 [21]; [2010] HCA 24; 267 ALR 231 at 240 [21] per French CJ, Gummow and Bell JJ.

[11] Morris v The Queen [1987] HCA 50; (1987) 163 CLR 454 at 475; [1987] HCA 50; 61 ALJR 588 at 597; [1987] HCA 50; 28 A Crim R 48 at 63-64; [1987] HCA 50; 74 ALR 161 at 176-177 per Dawson J; Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335 [10]; [1999] VSCA 117; 15 VAR 360 at 366 [10].

[12] Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335-336 [11]; [1999] VSCA 117; 15 VAR 360 at 366 [11] per Phillips JA; Commissioner of State Revenue v Challenger Property Nominees Pty Ltd [2006] VSC 203; (2006) 63 ATR 65 at 69 [20] and 77 [65] per Hollingworth J.

[13] Justice Legislation Amendment (Court Security, Juries and Other Matters) Act 2017, s 31(3).

[14] Myers v Medical Practitioners' Board of Victoria [2007] VSCA 163; (2007) 18 VR 48 at 55 [28], citing Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335.

[15] See Emrys Nekvapil, Pizer's Annotated VCAT Act (Thomson Reuters, 6th ed, 2017) 871.

[16] The same requirement is imposed upon applicants for leave to appeal a VCAT decision before the Court of Appeal under s 148(1)(a) of the VCAT, with the additional requirement to such an application set out at s 14C of the Supreme Court Act 1986; see Emrys Nekvapil, Pizer's Annotated VCAT Act (Thomson Reuters, 6th ed, 2017) 874-7.

[17] Section 63(1) of the Civil Procedure Act 2010 empowers a court to give summary judgment in a civil proceeding if the defence, inter alia, has "no real prospect of success".

[18] Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27 at 39 [29]. See also Kennedy v Shire of Campaspe [2005] VSCA 47, [3]-[14].

[19] [2005] HCA 40; (2005) 222 CLR 115 at 136 [64].

[20] Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 575, 597; cf Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at 348 [74].

[21] (Supreme Court of Victoria, Ashley J, 21 December 1994) at 13.

[22] (1971) 38 LGRA 6 at 18.

[23] (1980) 44 LGRA 65 at 67-8.

[24] (1985) 62 LGRA 346 at 349-50.

[25] The Gombac Group Pty Ltd v Vero Insurance Ltd [2005] VSC 442, [59].

[28] Appellant's Amended Outline of Submissions (21 June 2019), [17].

[31] Appellant's Amended Outline of Submissions (21 June 2019), [18](a).

[32] Appellant's Amended Outline of Submissions (21 June 2019), [18](b).

[34] Appellant's Amended Outline of Submissions (21 June 2019), [14].

[36] Appellant's Amended Outline of Submissions (21 June 2019), [20].

[37] Tribunal Reasons [28], set out above, [31].

[38] Outline of Submissions of the Respondent (21 June 2019), [7].

[40] See VCAT Transcript, 55, 56; where an email from Mr Stefan De Palma to Mr Angelos Christodouloukis (16 February 2018) and an email from Mr Rohan Saunders to Mr Stefan De Palma (31 May 2018) are referred to.

[41] Outline of Submissions of the Respondent (21 June 2019), [5], [6], [7].

[43] Appellant's Amended Outline of Submissions (21 June 2019), [24].

[45] Tribunal Reasons, [18](h), (i); [44]; Outline of Submissions of the Respondent (28 June 2019), [8].

[48] Appellant's Amended Outline Submissions (21 June 2019), [4]-[6].

[49] See Tribunal Reasons, [27], set out above [29].

[50] Outline of Submissions of the Respondent (28 June 2019), [4].

[52] Tribunal Reasons, [48]; see also above [25] and reference there to VCAT Transcript, 55-6.

[53] Tribunal Reasons, [39]; VCAT Transcript, 136; see also Appellant's Amended Outline of Submissions (21 June 2019), [7(c)].

[54] This went to toward a claim of breach by the tenant, which the Tribunal did not find at first instance and did not form part of the present appeal.

[55] Rather, the Landlord failed to satisfy the Tribunal that the Tenant had breached the Lease for failing to keep regular opening hours during the Interference Period (see Tribunal Reasons, [27], [28]), a finding against which the Landlord made no appeal.

[57] Amended Notice of Appeal (24 May 2019), Questions of Law, [G].

[58] Amended Notice of Appeal (24 May 2019), [31].

[63] Appellant's Amended Outline of Submissions (21 June 2019), [34].

[64] Amended Notice of Appeal, [36], [37], [38], [40]; Appellant's Amended Outline of Submissions (21 June 2019).

[65] Points of Claim (14 August 2018), [8(e)]; Notice to Remedy Breach of Lease with covering letter from Zervos Lawyers (19 June 2018), Particulars of Breach, [1(b)].

[66] See Tribunal's Reasons, [25]; and set out above at [42].

[67] Appellant's Amended Outline of Submissions (21 June 2019), [28].

[68] Points of Claim, [8 (Partics (viii))]; APB-10 (Lopez Affidavit, (251)).

[69] ASIC co search (Lopez Affidavit, (221)).

[70] Appellant's Amended Outline of Submissions (21 June 2019), [33].

[71] Appellant's Amended Outline of Submissions (21 June 2019), [33].

[72] Appellant's Amended Outline of Submissions (21 June 2019), [29], [30].

[73] Appellant's Amended Outline of Submissions (21 June 2019), [31].

[74] [1959] HCA 8; (1959) 101 CLR 298.

[75] Primrose Meadows Pty Ltd v Riverview Pty Ltd [2019] VSC 263, [19], citing Tenth Vandy v Natwest Markets Australia [2012] VSCA 103; (2012) VConvR 64,366 at 64,396 [154]-[156].

[76] Tulepam v Alemeida [1981] 2 EGLR 55 at 56.

[77] Lam Kee Ying Sdn Bhd v Lam Shes Tong (1974) 3 WLR 784 at 791.

[78] Lam Kee Ying Sdn Bhd v Lam Shes Tong (1974) 3 WLR 784 at 790.

[79] Lam Kee Ying Sdn Bhd v Lam Shes Tong (1974) 3 WLR 784 at 790.

[80] [1981] 2 EGLR 55.

[81] Tulepam Properties Ltd v De Almeida [1981] 2 EGLR 55 at 56.

[82] [2006] 1 WLR 201; [2005] EWCA Civ 1296.

[83] [2005] EWCA Civ 1296; [2006] 1 WLR 201 at 205, [13]; [2005] EWCA Civ 1296.

[84] [2005] EWCA Civ 1296; [2006] 1 WLR 201 at 205 at 207-9 [23]-[36]; [2005] EWCA Civ 1296; with which the other member of the Court, Mummery LJ, agreed, see 219 [90].

[85] [2010] 1 WLR 1216; [2009] EWCA Civ 1311.