2. The term must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it (Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41).

The general approach of the court is, that if the lease is "commercially effective without the term, the court will not imply it." (Carter and Harland supra 217).

The Tribunal cannot imply a term "to emancipate one side from all the chances of failure ..." (Bowen LJ, The Moorock (1889) 14 PD 64 at 68, as quoted in Carter and Harland at 218.)

The Tribunal does not agree with the respondent that the term must be implied for reason of business efficacy. There is no legal necessity for a retail shopping lease to provide for a sinking fund. In the normal course of events, the landlord would be responsible for the type of maintenance and repair activities associated with a sinking fund unless the parties agree on the establishment of a sinking fund. It is therefore for the parties to negotiate and agree on the establishment of a sinking fund and its purpose. Hence the reference in s 12A to "if" the parties agree to establish a sinking fund, then the purpose must be defined.

The respondent has failed to discharge its onus of proof that it is necessary for business efficacy to conclude that the Forecourt Levy must be interpreted as agreement for an implied sinking fund under the Act.

3. The term must be so obvious that "it goes without saying". This equates the "officious bystander" test or the "oh of course" test set in Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206.

While there may be good reasons to establish a sinking fund in a retail shop lease, it does not mean that it "goes without saying" that such a fund is necessarily implied by parties. It is within the discretion of parties to put the establishment of a sinking fund forward in negotiations and to agree, or disagree, on its merits.

Mr Duffield, in evidence, referred to himself as the "author" of the Forecourt Levy, as he prepared the commercial terms of the lease. However, by his own admission, the first time reference was made to the Forecourt Levy as a "sinking fund" after proceedings had commenced when he referred to the "Forecourt Sinking Fund", in his witness statement dated 12 August 2005. Prior to that date, neither he, nor the applicant referred to the Forecourt Levy as a sinking fund Mr Duffield also admitted that he did not manage the levy as a "sinking fund" and he did not refer in any correspondence to the levy as a "sinking fund".

The applicant acknowledges in the disclosure statement that he "has been an in situ tenant at Barrack Square for a number of years and is familiar with the Barrack Square Area and Jetties". However, no mention was made in evidence, or the disclosure statement, to a sinking fund having operated in the past and that the parties had intended it to continue in some form or another. For the respondent to contend "it goes without saying" that the Forecourt Levy is, per implication, a sinking fund, is therefore implausible. The objective facts do not support such an implication.

4. The term must be capable of clear expression. This requirement rests on two legs, namely, it must be clear what exactly the parties had agreed to, and the term must be capable of being formulated with a "sufficient degree of precision". (Refer to the discussion in Graw supra 225, as well as Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 and Ansett Transport Industries (Operations) Pty Ltd v Commonwealth [1977] HCA 71; (1977) 139 CLR 54 at 62.)

It appears from the evidence, the disclosure statement and the lease, that there was no agreement between the parties as to the purpose of the Forecourt Levy, much less that it was to be regarded as a "sinking fund" as the Act requires. Without a clear purpose for the Forecourt Levy being agreed, and without any of the documentation, such as the lease or the disclosure statement referring to the purpose of the Forecourt Levy, it is not possible for the Tribunal to enunciate what the monies may be used for.

The Tribunal accepts that the respondent might have had the establishment of a sinking fund in mind but that does not translate into an "agreement" for the Forecourt Levy to be such a fund is for the purpose to be clear. Other possibilities are also open and it is not the role of the Tribunal to second-guess the intent of the parties. The Tribunal cannot imply one particular formulation if other terms "could be implied". (Carter and Harland supra page 220).

5. The term must not contradict any express term of the contract. The term sought to be implied must therefore be consistent with other terms of the lease and not be dealt with sufficiently by other parts of the lease (Carter and Harland supra page 220).

Carter identifies three sub-elements of this test, namely, that the implied term must not be inconsistent with what the parties have agreed; where the contract contains an "entire" contract clause an implied clause may give rise to an estoppel; and, the matter is already dealt with sufficiently by the contract.

The lease does not contain an "entire lease" clause, but that in itself cannot be held to justify the implication sought by the respondent. The lease is detailed and extensive. There is no indication that the parties intended for the lease to be "open ended" by not including an "entire lease" clause.

The disclosure statement is required, by the Act (s 6), to contain all:

"[O]ral and written agreements and representations made by the Lessor or through his/her agent(s) in negotiations together with relevant information including but not limited to: ... any additional charges payable by the lessee such as shop fitout or contributions to marketing and sinking funds."

Even in the absence of an entire lease clause, the requirements of the Act remain clear and binding - the lease and Disclosure Statement must set out the entire agreement between the parties.

88 The Tribunal therefore concludes that the respondent has failed to demonstrate that the Forecourt Levy can, on the facts, be implied to refer to a "sinking fund".

89 The Tribunal finds that the Forecourt Levy is (1) not a sinking fund; and (2) its purpose is not clear.

90 In light of the Tribunal's foregoing finding that the Forecourt Levy cannot be held to imply a sinking fund, nor for that matter, can it be implied to be a variable outgoings fund, the question is, what are the implications in regard to payments that have been made, and ongoing payments under the Forecourt Levy?

91 Section 15(2) determines that "a provision of a retail shop lease, to the extent that it is contrary to or inconsistent with anything in this Act or with anything that by this Act the lease is taken to provide, is void".

92 The effect of s 15(2) is not for the entire lease to be void, but merely that cl 6.2 and any other provision related to the Forecourt Levy are void and therefore unenforceable (Graw ibid page 374). Section 26(1)(a) enables the Tribunal to make an order for a lease to be amended in an event where the landlord had "misled" the tenant. The facts in this application do not support a conclusion that the respondent misled the applicant, and therefore the Tribunal cannot make an order for the lease to be varied. Parties may continue to comply with the clause, but it cannot be enforced, or they may agree to amend it in order to accurately reflect their intentions.

93 Counsel for the respondent contends that s 12A does not provide for a refund from a sinking fund. However, following the finding of the Tribunal that no sinking fund had been established, and even if it had been established, no purpose was agreed to, s 12A is not applicable. The precedents referred to by counsel to sustain his argument that payments to the Forecourt Levy are merely suspended until the requirements of s 12A are complied with, are therefore not applicable.

94 In this matter the refund is not required under the terms of the lease or the provisions of the Act, but on the basis that there was never any ground for the money to be claimed by the respondent.

95 It therefore flows that monies paid by the applicant into the Forecourt Levy must be refunded as there was never any proper contractual entitlement for the funds to be levied (Herman v Charlesworth [1905] 2 KB 123, Carter and Hardland supra 922 - 923) and no further payments have to be made pursuant to cl 6.2.

96 It is ordered that the questions be responded as follows:

1. The Forecourt Levy is not a sinking fund or a variable outgoings fund under the Act.

2. The respondent is obliged to account for all income and expenditure related to the Forecourt Levy.

3. The respondent cannot demand further payment by the applicant of a proportion of the Forecourt Levy, as cl 6.2 of the lease is void.

4. Payments made by the applicant into the Forecourt Levy must be refunded.

I certify that this and the preceding [96] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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DR B DE VILLIERS, MEMBER