What types of covers are 'Authorised Goods' for the Applicants?
124On grounds outlined below, Mr Hand argued that even if, as a matter of contractual interpretation, the phrase 'all types of music players' in the definition of Music Players did not include iPhones, Sydney Markets was estopped from enforcing any rights against the Applicants arising from this interpretation.
125This argument, based on principles of conventional estoppel, was also put forward in connection what I have described, at [36] above, as the two alternative claims advanced by the Applicants.
126It will be recalled that one of these claims is that Sydney Markets is obliged to permit the Applicants to sell any cover at all into which an iPod will fit, even if it is an iPhone-labelled cover. The other is that Sydney Markets is obliged to permit them to sell any unlabelled cover into which an iPod will fit, even if an iPhone will also fit into it.
127These claims are based on the proposition that all of the covers described in them must be regarded as 'used for' iPods and therefore as falling within the scope of the words 'iPods... all types of music players...and other accessories used for such players' within the definition of Music Players in the Classification Schedule.
128The viability of these various claims advanced by the Applicants depends on the answer to the question posed in the heading to this section: what types of covers fall within the scope of 'Authorised Goods' so far as the Applicants are concerned?
129Applicants' primary submissions . Mr Hand's outline of submissions, handed up during the hearing, included the following passage:-
43. Estoppel by conduct may be invoked "to prevent an unjust departure by one person from an assumption adopted by another as the basis for some act or omission which, unless the assumption be adhered to, would operate to that other's detriment": Thompson v Palmer (1933) 49 CLR 507 per Dixon J at 547.
44. On the evidence before the Tribunal, the Applicants adopted an assumption that they were permitted to sell iPod and iPhone accessories at their stalls. They adopted that assumption on the basis of their dealings with Ms Lees and the representations made by her. Acting on that assumption, they continued to trade in the markets and invested significant funds in purchasing further stalls. It would clearly operate to the Applicants' detriment if the Respondent were to fail to adhere to that assumption.
45. The circumstances give rise to an estoppel that operates against the Respondent, in turn grounding the declarations sought by the Applicants in prayer one of their applications for original decision.
130In his oral submissions in chief, Mr Hand sought to reinforce this argument by referring to the following aspects of the evidence: (a) the statement by Ms Lees in her letter of 9 December 2009 to Mr Cai and Ms Gao (see [48] above) that they could sell 'dual purpose' covers, though 'it would be preferable where possible that those covers do not show the logo iPhone'; (b) the evidence from both Mr Steffe and Ms Gao (see [52 - 53]) that on or about 4 January 2010 he told them that as long as goods sold by them did not show the iPhone logo, they 'should be able to sell them for now; and (c) Ms Li's unchallenged evidence (see [55]) that when she asked Mr Steffe on or about 25 January 2010 whether she could sell covers for iPhones that did not have iPhone logos, he replied 'I don't care'.
131Sydney Markets' submissions . In contesting Mr Hand's claim that an estoppel had arisen, the points made by Mr Docker included the following: (a) because neither Mr Cai nor Mr Xu had given evidence, the Tribunal could not make the requisite finding that all the Applicants had made the assumption urged by Mr Hand; (b) the precise content of any such assumption was not apparent from the evidence; and (c) the Applicants should not be permitted to base any estoppel on statements allegedly made by Ms Lees, because they did not raise any claim of estoppel until the hearing of the case and Sydney Markets therefore could not call Ms Lees (who ceased to be an employee early in 2010) to give evidence about what she said to them. In support of these arguments, Mr Docker cited the judgment of Tobias JA (with whom Mason P and Campbell JA agreed) in Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at 645-648, [199] - [214].
132Mr Docker's submissions also dealt with two other questions of importance in the present context.
133The first of these was the meaning and significance of the words 'used for' in the definition of Music Players in the Classification Schedule. Mr Docker submitted that these words should not be interpreted literally, because in the ordinary course an item was not 'used' before it was sold (unless it was sold second hand) and a seller could not predict what uses a buyer might make of a purchased item. Instead, as he expressed it in his outline of submissions, the phrase 'other accessories used for such players' in the definition required 'consideration of whether an item can objectively be said to be made for use as an accessory for "iPods, MP3 players, MP4 players, all types of music players"'. It would be incorrect, he added, to insert the words 'can be' before 'used' because this would lead to 'absurd results': for example, that 'garbage bags could be sold as raincoats because it is possible to use a garbage bag as a raincoat'.
134Mr Docker acknowledged on behalf of Sydney Markets that covers might exist which could 'objectively be said to have been made for use for both iPhones and iPods'. But he claimed that with one exception none of the covers admitted into evidence as examples of what the Applicants sold did in fact satisfy this test. The exception was the iPod-labelled cover annexed to Mr Benic's first affidavit (see [79] above). None of the other covers were made in such a way that an iPod would fit into it properly. Moreover, not only iPhone-labelled covers but, on some occasions at least, unlabelled covers had been sold by the Applicants to customers who asked for 'iPhone covers'.
135Secondly, Mr Docker addressed the question whether in the course of the dealings between Sydney Markets and the Applicants, the scope of what were 'Authorised Goods' was varied by Sydney Markets in a manner binding on the Applicants.
136He relied in this connection on the concluding words of the definition of 'Authorised Goods' in clause 1.1 of both the Occupancy Agreement and the Rules, and on the provisions in these documents regarding 'Further Conditions' (Agreement, clauses 1.1 and 6.12), Variation of the Occupancy Agreement (Agreement, clause 25) and Prohibited Goods (Rules, clause 7.5) (see above at [22 - 23]). He submitted that under any or all of these provisions, the letters written to the Applicants by Mr Steffe on 18 January 2010 (see [54]) and the letters written to them by Kemp Strang on 5 August 2010 and 14 October 2010 (see [83] and [85]) had the effect of excluding iPhone-labelled covers and 'covers for Apple iPhones' from the range of 'Authorised Goods', so far as the Applicants were concerned.
137Mr Docker argued also that the undertakings accompanying the Supreme Court's consent orders of 8 July 2010 (see [66 - 68]) effected a variation of the contract between the parties, with consideration passing from each of them. Alternatively, he maintained, they provided the basis for a conventional estoppel, the detriment to Sydney Markets being that it gave up the right to defend the proceedings and vindicate the stance that it had adopted.
138The Applicants' submissions in reply . With reference to the estoppel alleged against Sydney Markets, Mr Hand submitted that it would have been possible for Sydney Markets to call Ms Lees as a witness on the second day of the hearing (which took place three days after the first day).
139On the question whether the unlabelled covers sold by the Applicants were accessories 'used for' iPods, he submitted that in order to answer this description it was not necessary that a cover should be such that an iPod, as well as an iPhone, should fit into it 'perfectly'. The Tribunal should not apply a criterion along these lines.
140Mr Hand also argued that the scope of 'Authorised Goods' had not been varied, for the following reasons: (a) according to the definition of 'Further Conditions' in clause 1.1 of the Occupancy Agreement, they were restricted to conditions 'relevant to the Premises'; (b) the examples of 'Prohibited Goods' given in clause 7.5 of the Rules showed that the concept was confined to goods tainted in some way by illegality; (c) each of the letters of 18 January, 5 August and 14 October 2010 to the Applicants did not purport to vary the scope of 'Authorised Goods' or state the nature of any variation being effected, but instead merely set out what Sydney Markets claimed to be the proper interpretation of the definition of Music Players; and (d) because the undertakings accompanying the Supreme Court's consent orders were given to the Court, they could not be held to have varied the agreement between the parties or to have grounded an estoppel.
141My conclusions. For four reasons (at least), the Applicants' claim based on conventional estoppel must fail, in my opinion.
142First, I agree with Mr Docker that the 'assumptions' alleged to have been adopted by each pair of Applicants and by Sydney Markets and have provided the basis for an estoppel is not established by the evidence to a sufficient degree of certainty. In so far as the claims are founded on what Ms Lees allegedly said to Mr Cai and Ms Gao in July or August 2007 and what she alleged said to Mr Xu and Ms Li in late 2008 or early 2009, the evidence did not, for instance, show precisely what types of 'iPhone and iPod accessories' she approved for sale, nor whether any approval granted by her was unlimited, or subject to any temporal or other condition(s). As between the later statements by Ms Lees and Mr Steffe to which Mr Hand referred, the scope of what was approved by them changed materially, rendering it even more difficult to rule that any estoppel arose.
143Secondly, I accept Mr Docker's submission that the Applicants' account of these dealings with Ms Lees should not be accepted as the basis for an estoppel claim when, due to late notice of this claim, Sydney Markets had no reasonable opportunity to call her as a witness.
144Thirdly, any account given by Ms Gao or Ms Li of oral statements made to them by Ms Lees or Mr Steffe must be treated with caution, because at the hearing they both requested, and were granted, permission to give their evidence through an interpreter. It must be inferred that their capacity to understand spoken English was limited, although they both said that they could read English quite well. This is an important consideration because, as Mr Docker submitted, the evidence relating to any assumption on which a conventional estoppel is based must establish its content to a significant degree of particularity.
145Fourthly, it is to be inferred from the affidavits of both Ms Gao and Ms Li that before the time of the relevant discussions with Ms Lees they had entered into arrangements with Sydney Markets on the basis of the Occupancy Agreement. As just outlined, this Agreement conferred on Sydney Markets a specific power to vary the scope of 'Authorised Goods' (in clause 1.1) and also a broader power to vary the terms of the Agreement itself (in clause 25). Any representation by Ms Lees as to what the Applicants would be permitted to sell would not create an estoppel barring Sydney Markets from exercising one or other of these powers unless it made this quite clear. Ms Gao's and Ms Li's evidence as to what she said does not include any such component.
146In my judgment, the scope of 'Authorised Goods', so far as the Applicants were concerned, was fixed in Mr Steffe's letters to them, dated 18 January 2010. Before they received that letter, they were authorised to sell 'dual purpose' covers, even if they showed the logo 'iPhone'. This conformed with the interpretation of the definition of Music Players conveyed to them in Ms Lees' letters of 9 December 2009. But Mr Steffe's letters dated 18 January 2010 made it quite clear that 'covers depicting the logo iPhone' fell outside the scope of Authorised Goods and gave the Applicants two months' notice in which to sell or remove stock of this nature.
147I do not accept the distinction, drawn in Mr Hand's submissions, between (a) a letter purporting to set out Sydney Markets' interpretation of words currently defining the scope of 'Authorised Goods' and to require compliance with that interpretation within a period of 30 days or more - notably when a different interpretation has been outlined in very recent correspondence - and (b) a letter exercising Sydney Markets' power in clause 1.1 of the Occupancy Agreement and the Rules to vary on 30 days' notice the scope of Authorised Goods. The substance of two such letters is the same. They convey to the relevant standholder the information that whatever might have been understood in the past, the scope of 'Authorised Goods' is to be, after 30 or more days, the range of goods stated in the letter.
148In view of this determination, it is not strictly necessary for me to rule on whether any of the other provisions cited by Mr Docker also constituted a lawful basis for Sydney Markets to change the scope of Authorised Goods. I am inclined to think that clause 25 of the Occupancy Agreement, being drawn in very broad terms, might have done so. But for the reasons suggested by Mr Hand, I take the opposite view regarding the provisions relating to Further Conditions and to Prohibited Goods.
149Equally, I do not have to rule on whether Kemp Strang's letters of 5 August or 14 October 2010 had the effect of varying the scope of 'Authorised Goods'. I am inclined to think that they did not. These letters, as well as Kemp Strang's letter of 16 July 2010, purported to prohibit the Applicants from selling not only iPhone-labelled covers, but also 'iPhone covers'. They did not define what they meant by this phrase, which is of uncertain import. But these letters claimed to be doing no more than requiring the Applicants to abide by the undertakings that they had given to the Supreme Court. In those undertakings, the permitted types of cover included 'covers for Apple iPods which also fit Apple iPhones as long as those covers do not carry the word iPhone'. It may certainly be argued, as Austin Haworth did on the Applicants' behalf, that a prohibition on 'iPhone covers' narrowed the scope of permitted goods further than the undertakings did. This constitutes a sound reason for ruling that Kemp Strang's letters should not be held to have altered the scope of 'Authorised Goods'.
150It remains for me to consider here the meaning of the words 'used for' in the definition of Music Players. I have found this question, on which the submissions were relatively brief, to be difficult to resolve.
151It seems to me that the test urged by Mr Docker - namely, whether the item in question 'can objectively be said to be made for use as an accessory for "iPods, MP3 players, MP4 players, all types of music players"' - may be too narrow. I am instead inclined to the view that 'used for' means something like 'commonly used for' or 'often used for'.
152In determining whether a particular cover, such as the unlabelled covers which the Applicants have sold, is 'commonly used for' an appliance such as an iPod, evidence that the appliance does not fit reasonably tightly into it, or that buttons or other controls on the appliance cannot be used efficiently or at all while it is in the cover, will suggest that the cover is not 'commonly used for' the appliance. On this reasoning, the covers sold to Mr Benic during February 2011 which accommodated an iPhone 4 very tightly but were found by me to be distinctly unsuitable for an iTouch 4, for the reasons just given (see [94]), could not be said to be 'used for' iTouch 4s.
153It may also be relevant to inquire as to the circumstances in which the relevant item is marketed. The broad definition of 'Sell or Sale' in the Occupancy Agreement and the Rules includes the phrase 'offer or expose for sale, barter or exchange'. When, as Mr Welmeela and Mr Benic testified (see [92 - 93]), the Applicants sold unlabelled covers to them in response to their requests for 'an iPhone cover', it is at least arguable that they had 'offered for sale', and indeed sold, a cover that was not 'used for' an iPod, but for an iPhone.
154In this decision, I will not make a final determination of these questions, nor of the broader question (with which these are closely linked) of what are now 'Authorised Goods' that may be sold by the Applicants at their stands in the Market. These are difficult questions, some of which were addressed only briefly by the parties. I will therefore provide a further opportunity for submissions about them to be put before me. Having considered any such submissions, I will endeavour (if it can usefully be done) to formulate a declaration clarifying the rights of the parties. This is in line with a suggestion contained in the penultimate paragraph of Mr Docker's outline of submissions.