Benyameen v Wetherill Park Market Town Pty Ltd

Introduction 1This judgment contains the reasons supporting a decision given ex tempore at the hearing of an Application filed on 2 September 2010 by Akhaker Benyameen, a lessee under a lease governed by the Retail Leases Act 1994, against the Respondent lessor, Wetherill Park Market Town Pty Ltd. 2One of the grounds on which the Applicant sought relief was that the Respondent had engaged in unconscionable conduct. Accordingly, the Tribunal was constituted in accordance with clauses 1 and 4 of Part 3B of Schedule 2 of the Administrative Decisions Tribunal Act 1997 ('the ADT Act'). It was constituted by a Deputy President who is a member of the Retail Leases Division, assisted by an appropriately qualified member (Non Judicial Member Harrison), acting in an advisory capacity only. Because no second advisory member was available to assist at the hearing, the Tribunal has proceeded with only one such member. At the commencement of the hearing, it drew the parties' attention to the fact that it was authorised to do so by sub-paragraph (4)(a) of clause 4 of Schedule 2, Part 3B. 3The hearing of the Application took place on 21 and 22 February 2011. In an ex tempore decision delivered on 22 February, the Tribunal dismissed the Application. On 21 March 2011, the Registry received a request under section 89(3) for written reasons for this decision.

The Tribunal's reasons for dismissing the Application 4On the first day of the hearing the Respondent applied for an order summarily dismissing these proceedings. In the Tribunal's opinion, this application by the Respondent should be upheld, for the reasons that follow. 5The ground of this application by the Respondent, as explained in section 1 of an Amended Reply filed in the Tribunal on 14 September 2010 was, in short, that the present Application by the Applicant for relief under the Retail Leases Act sought to relitigate issues that were determined by the Tribunal in orders that it made on 6 June 2008, in the course and indeed by way of conclusion of earlier proceedings between the same parties. 6In those earlier proceedings, which were instituted in December 2007, the principal orders sought by the Applicant were as follows. (a) That his occupation of premises owned by the Respondent in a shopping centre at Wetherill Park in which the Applicant carried on a grocery business should not be disturbed. (b) That the Tribunal should declare the rights and the liabilities of the two parties in the terms of a lease document that had been executed by the Applicant on 7 December 2007 and of two lessor's disclosure statements that had been executed by the Respondent dated 12 and 13 July 2006 respectively. (c) Damages. 7This earlier application in its final form, it should be added, set out certain alternatives to these three forms of orders, but they do not need to be reproduced here. 8The grounds that the Applicant advanced for those orders in the earlier proceedings included the following. First, during July 2006, the Respondent had agreed to lease the premises in question to the Applicant on the terms set out in the two disclosure statements. Secondly, the Respondent had refused to execute a lease document setting out those terms as evidenced in those disclosure statements. Thirdly, in the disclosure statements the lettable area of the premises was stated to be 156 square metres, whereas in fact it was only 130 square metres, and accordingly the rent already being paid by the Applicant, being calculated on a square metre basis, was excessive and should be refunded in part. Fourthly, the Respondent had caused the Applicant to lose sales by introducing a direct competitor carrying on a grocery business into the shopping centre. 9In affidavits filed in those earlier proceedings by the Applicant, by Mr Ross Trimboli, a director of the Respondent, and by Mr Leonard Pretti, the Respondent's managing agent, it was common ground that the two disclosure statements dated 12 and 13 July 2006 had been prepared by Mr Pretti, executed by Mr Trimboli on behalf of the Respondent and delivered to the Applicant. 10The principal matter of importance in the two disclosure statements was how they dealt with the question of exclusivity. The first disclosure statement, executed on 12 July 2006, was only two pages in length. It indicated in clause 26 that there was no agreement or representation by the lessor regarding exclusive trading rights for the Applicant or limitations on competing uses. However the second disclosure statement, a much longer and more comprehensive document that was executed one day later, contained the following question and answer at clause 36:- Question : Is the lessor able to assure the lessee/assignee that the current tenant mix as shown on the attached floor plan will not be altered through the introduction of a competitor or any other type of tenant? Answer (indicated by a tick in a box) : Yes. 11The lease document dated 7 December 2007, referred to in the Applicant's earlier application, did not however contain any clause conferring exclusive trading rights on the Applicant as a grocery store or limiting competing uses within the centre. 12At the hearing of those earlier proceedings on 6 June 2008, both parties had legal representation. The Tribunal made consent orders in the following terms:- By consent and without admissions, the Tribunal orders - (1) The Respondent to sign and register a lease in the form annexed hereto and marked A within a reasonable time at his own cost. A lease in the form of annexure A to be provided to the Applicant by the Respondent for execution by the Applicant. (2) The Respondent pay to the Applicant the sum of $15,030 within 28 days. (3) The Respondent pay the Applicant's costs in the amount of $2000 within 28 days. (4) The proceedings are dismissed. 13Those orders were initially set out in handwriting by the parties' representatives, then reduced to a formal document headed 'Notice of Decision' and dated 6 June 2008. 14The lease mentioned in order 1 did not include any exclusivity clause. Subsequently a lease in this form was executed by the parties and registered. A notable feature of it was that it stipulated a lower rent than had been stipulated in the document dated 7 December 2007. 15At the hearing of the current application for dismissal of these present proceedings, parts of an affidavit sworn by Mr Trimboli were admitted and he was cross-examined. He said in oral evidence, contradicting a statement made by him in his affidavit, that he was not present at the hearing on 6 June 2008 date. He said that the settlement reached at that hearing and embodied in the consent orders was in fact negotiated by Mr Pretti, his agent, and indeed that Mr Pretti persuaded him to agree to them. 16Mr Trimboli also testified as follows in paragraphs 21 and 22 of his affidavit:- 21. In relation to paras 5, 6 and 7 of the Applicant's statement the 6 June 2008 Consent Orders were negotiated taking into account all Disclosure Statements issued between the parties as at June 2008 including the Lease as initially issued and the proposed amendments by the Applicant. There was no agreement between the parties that the agreed lease contain a clause wherein the Respondent agreed to not alter the tenant mix through the introduction of a competitor or any other type of tenant. There is no provision in the lease nor was it agreed that the Respondent would not alter the tenant mix through the introduction of a competitor or any other type of tenant. 22. I did not agree at any time that it would be a term of the Lease that I would not alter the tenant mix through the introduction of a competitor or any other type of tenant. 17The reliability of these statements is, in the Tribunal's opinion, undermined to some extent by the fact that, as has just been mentioned, Mr Trimboli claimed in his affidavit to have attended the proceedings, then stated to the contrary in his oral evidence. 18It must also be borne in mind, however, that Mr Benyameen was not called to give evidence in this application by the Respondent for dismissal of the proceedings. Neither he nor anyone else on his behalf gave evidence to the effect that in the negotiations leading to the settlement on 6 June 2008 the statement in the second disclosure statement that the tenancy mix would not be altered remained binding on the Respondent even though no clause to this effect was included in the lease agreed to at the settlement. 19In the current proceedings, the Applicant has claimed in his Application filed on 2 September 2010 that the Respondent has been guilty of misleading or deceptive conduct, unconscionable conduct, pre-lease misrepresentations and breach of the lease between the parties. 20The principal ground advanced in this Application contains the following allegations: (a) the Respondent made a representation in clause 36 of the second disclosure statement that it would not alter the tenancy mix by introducing a competitor; (b) in reliance on this representation the Applicant agreed to enter into the lease contained in the consent orders; and (c) in or about 1 December 2009 the Respondent caused damage to the Applicant by introducing a direct competitor within the shopping centre. 21The Tribunal granted leave to Mr Pretti to represent the Respondent as its agent at the hearing of this specific application, though not for all purposes. 22Mr Pretti argued as follows: (a) the issue whether the Applicant should have some degree of exclusivity was explicitly raised by him (the Applicant) in the earlier proceedings in the Tribunal; (b) the consent orders declared all relevant rights and liabilities of the parties in relation to the lease of the premises, as indeed the Applicant had sought in the earlier application; (c) these rights and liabilities did not include any exclusivity for the Applicant; and (d) in the present proceedings he was seeking to relitigate this particular question even though it had been determined against him in the orders of 6 June 2008, made with his consent. 23That, in a nutshell, was the basis on which Mr Pretti put the argument that the Applicant was precluded by a principle such as res judicata, or possibly more accurately issue estoppel, from raising these matters again in the present proceedings. 24Mr Bland, counsel for the Applicant, put forward various contentions seeking to rebut this line of argument. These contentions will now be outlined in turn, accompanied by the Tribunal's observations about them. 25Mr Bland's first contention was that because the consent orders were not accompanied by any deed, it must not be readily assumed that they resolved all issues between the parties. In the earlier proceedings, he said, the principal issue in dispute was in fact the size of the premises. It would therefore be unsafe and improper for the Tribunal now to assume that the issue of exclusivity was also raised and resolved. Mr Bland cited various authorities - notably the judgment of Latham CJ in Taylor v Goldsmith (1950) 81 CLR 446 and the judgment of Einstein J in Shepherds Producers Co-operative Limited v Lamont [2009] NSWSC 294 - to the effect that any estoppel raised against a party by virtue of a prior judgment or court order must be clear, unambiguous and certain in every respect and that if these criteria are not met the estoppel should not be held to have arisen. 26In the Tribunal's opinion, however, the explicit references to the question of exclusivity in the Applicant's earlier application to the Tribunal, coupled with the fact that he sought from the Tribunal a declaration of the rights and liabilities of the parties under the lease, make it clear in the absence of contrary evidence from the Applicant (this being a matter already mentioned) that the consent orders must be taken to have resolved the exclusivity issue along with the other issues at stake between the parties. 27The consent orders were to the effect that the parties should sign a lease, which they ultimately did. That lease conferred no exclusivity rights on the Applicant. The Applicant obtained some clear benefits from the orders, notably an award of damages. There is no ground for interpreting the orders, therefore, as leaving unresolved the question of exclusivity. 28Secondly, Mr Bland argued that the disclosure statement of 13 July 2006, containing the all-important question and answer at clause 36, must be taken to have remained operative since no subsequent disclosure statement was ever prepared for the purpose of the lease contained in the consent orders. 29For the reasons already given, however, the consent orders were clearly viewed by the parties and intended by the Tribunal to resolve all matters raised in the two disclosure statements, along with the other matters ventilated in the application that the Applicant had filed. 30Furthermore, if the discrepancy between clause 36 of the second disclosure statement and the terms of the lease ultimately executed by the parties gave any ground for relief, the remedy available to the Applicant was that stipulated in section 11 of the Retail Leases Act , namely, rescission of the lease. Section 11 also states that any party seeking to invoke that remedy must do so within six months of the execution of the lease. During that period the Applicant knew or ought to have known that such a discrepancy existed, but he took no action within the stipulated period of six months. 31The same reasoning applies, it should be added, if the ground raised here against the Respondent is that despite the terms of section 11 there was no disclosure statement at all relating to the lease contained in the consent orders. Again the remedy prescribed by section 11 is rescission and again that remedy must be availed of within six months of the execution of the lease. 32Finally, Mr Bland argued that issue estoppel or res judicata could not arise because two of the grounds now advanced by the Applicant, namely, misleading or deceptive conduct and unconscionable conduct, were not advanced in the earlier proceedings. 33The Tribunal's response to this is that if, as has been held, the agreement between the parties reached in the earlier proceedings and set out in the consent orders did not include any exclusivity rights for the Applicant, he cannot now be heard to claim that the Respondent acted in a misleading or deceptive way, or indeed unconscionably, by allowing a competitor to commence trading. It is only if a promise by the Respondent not to do this can be said to have survived the earlier proceedings that its granting of permission to a competitor to operate could attract these characterisations. 34The Tribunal's final observation is that the conclusion that it has reached receives support from the important principle that settlements reached in proceedings in this Tribunal, or indeed in any other tribunal or court, should attract the degree of finality that they clearly and obviously are intended to provide to the parties. Mr Bland quite properly drew to the Tribunal's attention the importance of ensuring that settlements embodied in consent orders should not be taken to have embraced an unduly wide range of issues. But the counter-argument is that if settlements can be too easily attacked, the important process of encouraging and recording settlements - which receives, it should be mentioned, specific support from section 74 of the Retail Leases Act - could all too easily be impaired and the process of settlement would fail to bring the finality that it is clearly designed to have. 35This decision has the effect of bringing the proceedings to a close. The Applicant's Application to the Tribunal must be dismissed.