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[2009] NSWCA 407
mixed. Declarations made that the notices of intended termination and suspension were void and that exclusion was a breach of the Occupancy Agreement; claims for declaration that iPhone accessories are...
The Tribunal held that an iPhone is not a 'music player' under the market rules because its main job is making phone calls, so the applicants could not sell iPhone-specific covers as authorised music-player goods. However, Sydney Markets did not follow the exact steps in its own contract when it tried to terminate or suspend the applicants' rights, making those notices invalid and the lock-out a breach. Declarations were granted on the notices and breach, but the main claim about iPhone accessories was refused and further submissions were invited on exactly which accessories are allowed and who pays costs.
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2,611 words · generated 24/04/2026
Two married couples, Hengfeng Cai and Jing Gao, and Hui Xu and Xini Li, operated retail businesses from multiple stands in Paddy's Market at Haymarket, Sydney, under identical pro forma Occupancy Agreements issued by Sydney Markets Ltd. Between 2006 and 2009 they obtained approvals from the then Retail Manager, Ms Robyn Lees, to sell covers and accessories for iPods and early-model iPhones after showing her samples. They applied for and received addition of the 'music players' category to their authorised goods lists in Schedules to the Occupancy Agreements. The Classification Schedule effective January 2008 defined 'Music Players' as 'iPods, MP3 players, MP4 players, all types of music players, head phones, ear plugs and other accessories used for such players' and defined 'Telephones' (a restricted category at Haymarket) as including 'mobile telephones and accessories, mobile phone covers, telephone handsets'.
No linked legislation citations have been extracted yet.
By late 2009 complaints arose from standholders authorised to sell in the 'Telephones' category that the applicants were selling mobile phone chargers and iPhone-logoed covers, encroaching on a restricted line. Ms Lees wrote on 9 December 2009 to each pair noting dual-use covers but imposing a restriction on new outlets for music players and stating it would be preferable that covers not show the 'iPhone' logo. Mr Jules Steffe, who succeeded Ms Lees in January 2010, wrote on 18 January 2010 requiring removal of all covers depicting the 'iPhone' logo within two months and immediate removal of telephone chargers. Test purchases by a licensed agent in July 2010 confirmed continued sales of iPhone-labelled covers. After correspondence and Supreme Court consent orders and undertakings in July 2010 (which permitted sale of covers for Apple iPods that also fit iPhones provided they did not carry the word 'iPhone'), further test purchases in November and December 2010 and February 2011 showed sales of unlabelled covers in response to requests for 'iPhone covers'.
On 5 August 2010 Sydney Markets served notices of intended termination under clause 22.3 of the Occupancy Agreement alleging breach by sale of iPhone covers. After the applicants failed to show cause to its satisfaction, it served notices of suspension under clause 24 on 16 November 2010 for one month. On 17 November 2010 security officers excluded the applicants from all their stands. The applicants commenced proceedings in the Administrative Decisions Tribunal seeking declarations that iPhone accessories (even those bearing the word 'iPhone') were authorised goods, that both notices were void, that the exclusion was a breach, and for access and costs. Interim orders on 9 December 2010 (amended 17 December) declared that the Occupancy Agreement did not say an 'iPhone' is a music player, restrained sale of iPhone-labelled covers, and required access to be provided. The final hearing occurred on 28 and 31 March 2011. The Tribunal reserved decision and delivered judgment on 17 May 2011.
Deputy President Chesterman preferred the respondent's submissions on the central interpretive question. He held that the phrase 'all types of music players' is not words of extension but must be read in the matrix of the entire contractual suite and the commercial context of a confined market with nearly 800 stands where Sydney Markets, as both landlord and shareholder issuer, needed to regulate product mix under clause 7.2 of the Occupancy Agreement and paragraph D of the Rules. An expansive interpretation would create uncontrolled overlaps with the restricted 'Telephones' category and other categories such as Cameras & Equipment, rendering the Locality Rules and restricted-goods regime unworkable. The Tribunal noted that in January 2008, when the Classification Schedule was issued, the blurring of functions was only beginning and the iPhone had not yet launched in Australia; the Schedule's definitive drafting style (with virtually no words of inclusion except in the 'Souvenirs' definition) reinforced a restrictive approach. Business commonsense, drawn from the cited passage in Antaios Compania Naviera S.A. v Salen Rederierna A.B., required the interpretation that best preserved the market operator's ability to foster orderly competition.
On estoppel, the Tribunal found the evidence insufficiently certain. The applicants' statements about oral approvals by Ms Lees in 2007-2009 did not specify whether approval was unlimited in time or scope, and Mr Steffe's later statements altered the position. The claim of estoppel was raised late, denying Sydney Markets a reasonable opportunity to call Ms Lees. Both Ms Gao and Ms Li gave evidence through interpreters, indicating limited spoken English comprehension, which undermined the degree of particularity required for an assumed state of affairs under Thompson v Palmer. The Occupancy Agreement itself contained an express power in the definition of 'Authorised Goods' to vary the list on 30 days' notice and a broader variation power in clause 25; any representation by an employee could not impliedly fetter those powers unless it said so clearly.
The Tribunal found the 5 August 2010 termination notice invalid because clause 22.3(a)(1) required prior written notification of the specific breach and an opportunity to remedy or compensate before the show-cause notice could issue. No such antecedent notice had been given for the July 2010 sales. The subsequent suspension notice of 16 November 2010 was also invalid: clause 24.1(b) required Sydney Markets to be satisfied that the recipient had shown sufficient cause; the notice instead asserted that the applicants had failed to show cause, and clause 24.4(c) did not override the express precondition. Because the notices were void, the exclusion on 17 November 2010 breached the Occupancy Agreement. The Tribunal exercised its discretion to grant declaratory relief notwithstanding the applicants' admitted breaches, because Sydney Markets was bound to follow its own detailed procedures.
The Tribunal declined to make a final declaration on the precise boundaries of 'accessories used for' music players, noting the difficulty of the 'used for' test and the limited submissions received. It observed that 'commonly used for' or 'often used for' appeared a better reading than a strict 'made for' test, and that evidence of poor fit, obscured controls, and marketing in response to requests for 'iPhone covers' would be relevant. Further submissions were invited under directions that ultimately led to the orders reproduced at the end of the judgment.
Before this decision the law on contractual interpretation in New South Wales was settled by High Court and Court of Appeal authority. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 had emphasised the objective theory: rights are fixed by what a reasonable person in the position of the other party would understand the language to mean, having regard to text, surrounding circumstances known to both, and the purpose and object of the transaction. Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 (cited at [114]) had elaborated the breadth of the admissible matrix of fact while maintaining the exclusion of subjective intent. The noscitur a sociis principle and the caution against giving one word in an overlapping list a meaning that renders others otiose had been restated in Lend Lease Real Estate Investments Pty Ltd v GPT RE Ltd [2006] NSWCA 207.
Conventional estoppel was governed by Thompson v Palmer (1933) 49 CLR 507 and the detailed analysis in Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65, which stressed that the assumed state of affairs must be identified with precision. In the retail-leases context, the Tribunal had already held in Wilson v Sydney Markets Ltd [2009] NSWADT 256 (affirmed on appeal in Sydney Markets Ltd v Wilson [2010] NSWADTAP 45) that an identical Occupancy Agreement created a retail shop lease under the Retail Leases Act 1994, conferring jurisdiction.
This decision did not change the underlying principles. It applied them to a novel factual setting created by rapid technological convergence. After the decision, the law remained that contracts are construed objectively and contextually, but market operators and drafters received a practical illustration that classification schedules should be drafted and read restrictively where the commercial object is to minimise overlap and regulate competition. The emphasis on strict compliance with contractual termination machinery reinforced the need for landlords to adhere meticulously to notice preconditions. The invitation for further submissions on the meaning of 'used for' left that question open, signalling that evidence of actual market usage, fit, functionality and marketing practices would be decisive in future disputes.
Paragraph [120]: 'This case illustrates in an interesting way how technological advances may pose difficult challenges for those drafting or interpreting commercial documents. The dividing line between telephones and music players seemed perfectly clear five or six years ago.'
Plain English: New technology can blur the lines that contract drafters relied on; the Schedule was written before the iPhone's Australian launch, so its categories should not be stretched to cover later multi-function devices.
Paragraph [121]: 'Considerations such as these add weight, in my opinion, to Sydney Markets' contention that the Classification Schedule should be interpreted in a way that assists Sydney Markets to maintain control over the level of competition within the Market. An expansive approach to interpretation, such as Mr Hand argued for, does not promote this aim.'
Plain English: The whole point of the rules is to stop traders from invading each other's patches. Reading 'music players' broadly would let anyone claim almost any gadget, making the market impossible to manage.
Paragraph [123]: 'Properly interpreted with due regard to the surrounding documentation (i.e., the Occupancy Agreement, the Rules and the rest of the Classification Schedule) and to the commercial context, the phrase "all types of music players" in the definition of Music Players in the Schedule does not, in my judgment, include iPhones.'
Plain English: When you read the words in their full setting and remember the market's need for order, iPhones belong in the telephone category, not the music-player category.
Paragraph [146]: 'In 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... 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.'
Plain English: Once the manager wrote and gave 30 days' notice of the new rule, that became the new authorised list. Earlier oral approvals could not override the written variation power.
Paragraph [157]: 'Clause 24.1 of the Occupancy Agreement provides for such a notice to be served when (a) a notice of intended termination has been served and (b) SML is satisfied you have shown sufficient cause... But the ground stated in the notice of suspension was that the Applicants had failed to show cause... I am not convinced by Mr Docker's opposing argument that clause 24.4(c) of the Agreement effectively overrides the precise requirement set out in clause 24.1(b).'
Plain English: The contract sets out a clear two-step test before suspension. Sydney Markets did not meet the second step, and a general clause about the purpose of suspension cannot rewrite the explicit precondition.
This decision will be triggered whenever a retail market operator or landlord uses a classification schedule or authorised-goods list that seeks to allocate discrete product categories in a shared trading space, and a trader argues that a multi-function device falls into more than one category. It applies to any dispute turning on the meaning of 'all types of' or similar extending phrases when the commercial purpose is to minimise overlap and control competition. The estoppel analysis is engaged where a trader relies on oral or informal approvals by managers but the contract contains express variation powers; late notification of an estoppel claim, absence of evidence from all parties to the assumption, or language difficulties that affect the precision of the assumed state of affairs will defeat the claim. The procedural holdings apply to any lease or licence containing stepped termination or suspension machinery: a notice that skips a precondition (prior written breach notification or correct statement of show-cause outcome) will be void. Evidence that goods are marketed or sold in response to a request for a different category's product (e.g., asking for an 'iPhone cover' and receiving an unlabelled cover) is relevant to whether the item is 'used for' the authorised category. The decision is not limited to technology; any convergence of product functions that could erode category boundaries engages the same restrictive interpretive approach.
The judgment itself treats the Appeal Panel's decision in Sydney Markets Ltd v Wilson [2010] NSWADTAP 45 as binding on jurisdiction, while noting the pending Court of Appeal appeal. It cites and applies Investors Compensation Scheme, Toll, Franklins, Lend Lease and Ryledar without criticism, demonstrating that those authorities continue to govern objective interpretation and estoppel. The Tribunal's refusal to follow an expansive reading of extending words accords with the noscitur a sociis discussion in Lend Lease at the paragraphs quoted. Its insistence on strict compliance with contractual machinery is consistent with the general principle that powers conferred by contract must be exercised in accordance with the contract's terms. The decision's treatment of the Supreme Court undertakings as neither varying the contract nor grounding estoppel illustrates the limits of consent orders in altering underlying private rights. Because the Tribunal left the precise meaning of 'used for' and the utility of a further declaration open for further submissions, later courts would be expected to treat those passages as non-binding obiter while regarding the core interpretive and procedural holdings as persuasive in analogous market or shopping-centre disputes. The judgment's emphasis on commercial context and the purpose of the market operator has been used in subsequent Tribunal decisions to support restrictive readings of product-mix clauses.
The judgment expressly left open the correct test for 'used for' in a classification schedule. Deputy President Chesterman inclined to 'commonly used for' or 'often used for' rather than a strict 'made for' test, but noted that evidence of fit, functionality of controls when the device is inside the cover, and the circumstances in which the item is offered for sale (including responses to customer requests for a different category's product) would be relevant. No final declaration was made, and the parties were invited to make further submissions; the ultimate resolution of that issue therefore remains undecided on these facts.
A further open question is the interaction between Supreme Court undertakings and subsequent Tribunal declarations. The Tribunal held that the undertakings did not vary the Occupancy Agreement, but did not explore whether a later Tribunal finding that certain goods are authorised could place a party in contempt of the Supreme Court order. The discretionary nature of declaratory relief was acknowledged; it remains open whether repeated or deliberate breaches coupled with misleading conduct toward the Tribunal would bar relief in a future case. The weight to be given to a manager's informal approval when the contract contains both a specific variation power in the definition of authorised goods and a general 30-day variation power in clause 25 was not finally determined, although the Tribunal inclined to the view that a letter stating a new interpretation and allowing 30 days' compliance could constitute a valid variation. Finally, the pending Court of Appeal appeal in the Wilson matter raised the possibility that the entire jurisdictional foundation could be removed; had that appeal succeeded, the status of the declarations made in this case would have required fresh consideration. These questions illustrate that while the core principles are settled, their application to rapidly evolving product categories and to the precise mechanics of market regulation continues to require careful factual analysis.
S Docker (Respondent) Austin Haworth & Lexon Legal (Sydney) (Applicants) Kemp Strang (Respondent) File Number(s): 105191, 105196
Introduction 1In these rather unusual proceedings, the question of principal importance was whether, in the context of contractual provisions defining what two couples carrying on businesses at 'stands' in a Sydney market are permitted to sell, an Apple iPhone should be held to be a 'music player' because its multiple capacities include those of an Apple iPod. 2In proceedings before me on 28 and 31 March 2011, two separate Applications (files 105191 and 105196) were heard together. In each of them, the Applicants are a married couple carrying on retail businesses in a number of stands in Paddy's Market (hereafter 'the Market'), pursuant to a pro forma form of agreement issued by the owner and headed 'Occupancy Agreement' ('the Occupancy Agreement'). The Market is situated in Haymarket, Sydney. 3In file 105191, the Applicants are Mr Hengfeng Cai and Ms Jing Gao and in file 105196 they are Mr Hui Xu and Ms Xini Li. They were all represented at the hearing by Mr Hand of counsel. 4The Respondent to both Applications is Sydney Markets Ltd ('Sydney Markets'), the owner of the Market. Its counsel at the hearing was Mr Docker. 5In earlier proceedings between Sydney Markets and another standholder in the Market, the relationship between them, also regulated by the pro forma Occupancy Agreement, was held by the Tribunal to be that of lessor and lessee under a 'retail shop lease', as defined in the Retail Leases Act 1994. That ruling (in Wilson v Sydney Markets Ltd [2009] NSWADT 256) was upheld on appeal (in Sydney Markets Ltd v Wilson [2010] NSWADTAP 45). 6An appeal by Sydney Markets against the Appeal Panel's decision is scheduled to be heard by the Court of Appeal in August 2011. If the appeal were successful, it would seem to follow that the Tribunal has no jurisdiction in the present proceedings. But Mr Docker, while formally raising an objection to the exercise of jurisdiction by the Tribunal, acknowledged that by virtue of the Appeal Panel's decision this objection was not sustainable at the present time. 7The reasons why the two separate Applications were heard together are, in essence, that they were instituted almost contemporaneously (on 24 and 29 November 2010), the two 'pairs of Applicants' (as I will call them) have each retained the same solicitor and counsel, their dealings with Sydney Markets have followed broadly the same path and, most importantly, the arrangements pursuant to which they occupy their separate stands in the Market are identical in all relevant respects. 8At the hearing, counsel on both sides agreed that the evidence admitted in either of the two proceedings should be treated as evidence in the other proceeding.
The initial dealings between the parties 9The evidence regarding the initial dealings between the two sets of Applicants and Sydney Markets came principally from statements signed by Ms Gao and by Ms Li on 1 December 2010. Both of these parties gave evidence through an interpreter at the hearing. Their accounts of these early events were not challenged, either in cross-examination or in evidence tendered by Sydney Markets. 10On different dates between September 2006 and November 2009, Sydney Markets granted to one of the two pairs of Applicants, Mr Cai and Ms Gao, the right to occupy and carry on business in eight stands within the Market. Each stand operated on various days of the week. 11In February 2007, these two Applicants commenced selling covers that could be used for iPods and/or an early model of imported iPhones. In July or August 2007, they were negotiating to buy two additional stands from existing standholders. They showed samples of covers and other accessories for iPods and iPhones to Ms Robyn Lees, who was then employed by Sydney Markets as its Retail Manager at the Market, and obtained her approval to their selling these items both at their current stands and at the stands that they wished to acquire. Relying on this approval, they completed the purchase of the two additional stands. 12Subsequently, Ms Lees told Ms Gao that if they were to continue selling these items, they would have to apply for the category 'music players' to be added to the categories of 'Authorised Goods' that Sydney Markets permitted them to sell. Their application to this effect received the approval of Sydney Markets towards the end of 2007. 13On or about 6 November 2009, Mr Cai and Ms Gao received from Sydney Markets the following documents: (a) a copy of the Occupancy Agreement; (b) a copy of a booklet entitled Sydney Markets Rules ('the Rules'); (c) a form (dated 6 November 2009) for Mr Cai to sign, recording his request to acquire a new stand in the Market (stand 279) and acknowledging that he had read the Occupancy Agreement and the Rules; and (d) copies of two Schedules (1 and 3) to the Occupancy Agreement, in which reference was made to his forthcoming occupancy of stand 279. In Item 6 of Schedule 3, three categories of 'Authorised Goods' were listed: 'Electronic Equipment and Games', 'Music Players' and 'Gifts'. 14The second pair of Applicants, Mr Xu and Ms Li, had similar dealings with Sydney Markets, but at later times. On different dates between September 2008 and December 2009, Sydney Markets granted them the right to occupy and carry on business in seven stands within the Market. Each stand operated on various days of the week. 15In late 2008 or early 2009, being then the occupants of two stands, they were negotiating to buy a further stand. They showed samples of covers and other accessories that could be used for iPods and/or iPhones to Ms Lees and obtained her approval to their selling these items both at their current stands and at the stand that they wished to acquire. In February 2009, relying on this approval, they completed the purchase of the additional stand. 16Shortly after, Ms Lees told Ms Li that if they were to continue selling these items, they would have to submit further samples, for the purposes of a survey that Sydney Markets proposed to conduct, and to apply for the category 'music players' to be added to the categories of 'Authorised Goods' that Sydney Markets permitted them to sell. Around April 2009, they started selling accessories that could be used for iPods and/or iPhones from the new stand. When they acquired further stands during 2009 they applied in a similar fashion for permission to sell goods within the category 'music players'. 17During November 2009, all four Applicants became aware from discussions with Ms Lees of a concern on the part of Sydney Markets that some of the goods that they were selling from their stands were not 'Authorised Goods'. 18On or about 9 December 2009, Mr Xu and Ms Li received from Sydney Markets the following documents: (a) a copy of the Occupancy Agreement; (b) a copy of the Rules; (c) a form (dated 9 December 2009) for them to sign, recording their request to acquire two new stands in the Market (stands 216 and 217) and acknowledging that they had read the Occupancy Agreement and the Rules; and (d) copies of Schedules 1 and 3 to the Occupancy Agreement, in which reference was made to their forthcoming occupancy of stands 216 and 217. In Item 6 of Schedule 3, three categories of 'Authorised Goods' were listed for the two stands: 'Toys', 'Music Players' and 'Electronics'.
The terms on which the Applicants occupied stands in the Market 19It was common ground that the terms on which each pair of Applicants have occupied stands in the Market are those set out in the Occupancy Agreement, the Rules and a further document headed 'Sydney's Paddy's Markets. Classification and Description of Goods Authorised for Sale - Regular Stands' (hereafter 'the Classification Schedule'). Relevant parts of these documents will now be reproduced or summarised. 20The version of the Occupancy Agreement contained in the evidence is stated to be 'effective 1 February 2003'. It is a lengthy and detailed document. It grants to a standholder (referred to as 'You') a licence to occupy a specified stand ('the Premises') within the Market on payment of rent to Sydney Markets (referred to as 'SML'). In clause 3.1 it also grants to standholders an entitlement to one fully paid ordinary share in Sydney Markets for every stand that they occupy, thereby conferring rights to vote, receive dividends and participate in any surplus profit on a winding up. 21Under clause 8.2 of the Occupancy Agreement, standholders acknowledge that they are bound both to comply with the Rules and to 'cause [their] employees, servants, agents and invitees to continuously comply with the Rules'. These two documents contain numerous provisions regulating the conduct of businesses in the Market by standholders. 22In the disputes giving rise to this litigation, the following provisions of the Occupancy Agreement are of particular importance:- 1.1 Definitions In this Occupancy Agreement, unless the context requires otherwise:... Authorised Goods means Goods approved for sale, by SML or an Authorised Officer, from the Premises as set out in Item 6 of Schedule 1 or in the Occupancy Agreement or as varied at any time by 30 days' notice to You; Further Conditions means any conditions issued by SML relevant to the Premises; Sell or Sale includes: (a) barter or exchange; (b) agree to sell, barter or exchange; (c) offer or expose for sale, barter or exchange; (d) send, forward, or deliver for sale, barter or exchange; (e) have in possession for sale, barter or exchange; (f) cause or suffer to be sold, bartered or exchanged, offered for sale, exposed for sale or sent, forwarded or delivered for sale, barter or exchange; and (g) attempt to sell, barter or exchange, expose for sale or send, forward or deliver for sale, barter or exchange; 1.2 Interpretation In this Occupancy Agreement, unless the context requires otherwise:... (c) the index and the headings are used for convenience only and do not affect the interpretation of the Occupancy Agreement and the Rules;... 6 Use of the Premises 6.12 Further Conditions You will at all times: (a) observe and continuously comply with the Further Conditions; and (b) not do, or permit or suffer to be done, anything contrary to the Further Conditions. 7 Selling from the Premises 7.1 You must sell in accordance with the Rules Without limiting the generality of clause 8, You must conduct your business from the Premises in accordance with the Rule entitled "Selling in the Markets" in the Rules. 7.2 Product Mix and Restricted Goods SML will determine policies in relation to product mix and restrictions on goods in the Market. 22.3 Termination by SML (a) SML may give You notice in writing of its intention to terminate this Occupancy Agreement and cancel your Licence if: (1) You commit a Breach and fail to make good this Breach (if capable of remedy) or to pay reasonable compensation (if incapable of remedy) within a reasonable period of being notified in writing of the Breach by SML;... (b) If You receive notice pursuant to clause 22(3)(a) that SML intends to terminate this Occupancy Agreement and cancel your Licence You have 30 days to show cause to SML why this Occupancy Agreement should not be terminated and your Licence cancelled. (c) SML may terminate this Occupancy Agreement and cancel your Licence immediately after the expiry of the time period referred to in clause 22.3(b) by notice in writing to You: (1) if You fail to show cause pursuant to clause 22.3(b); or (2) if SML acting reasonably is satisfied that you have failed to show cause why this Occupancy Agreement should not be terminated by SML. 24.1 SML may suspend your Licence If (a) SML gives you notice in writing of its intention to terminate this Occupancy Agreement for Breach pursuant to clause 22.3(a); and (b) SML is satisfied you have shown sufficient cause why this Occupancy Agreement should not be terminated by SML, SML may suspend your Licence for a period no longer than 1 month. 24.4 Acknowledgment by You You acknowledge that any suspension of your Licence pursuant to this clause 24: (a) is to ensure You appreciate the seriousness of the Breach; (b) is to act as a deterrent against any further Breaches by You; and (c) is in lieu of SML exercising its right to terminate this Occupancy Agreement and your Licence. 25 Variation of this Occupancy Agreement SML may by 30 days notice in writing: (a) vary; (b) add to; or (c) suspend, all or any part of this Occupancy Agreement. 26.11 No adverse construction This Occupancy Agreement is not to be construed to the disadvantage of a Party because that Party was responsible for its preparation. 23In clause 1 of the Rules, which are dated 1 October 2002, the Occupancy Agreement's definitions of 'Authorised Goods', 'Further Conditions' and 'Sale or Sell' and its provision regarding the index and headings are repeated. The following provisions of the Rules are also important:- Introduction D SML made these Rules for the good order and conduct of the Markets. In particular, SML's objectives are to:... make the Markets attractive to Occupiers and other using the Markets and ensure they remain competitive in the wider market place; and foster the continued growth and prosperity of the Markets for both SML and its occupants (including you). 7 Selling in the Markets 7.4 Authorised Goods only An Occupier must not Sell any Goods from the Premises unless those Goods have been approved by SML for Sale from the Premises in accordance with the Occupancy Agreement. 7.5 Prohibited Goods: An Occupier must not Sell from the Premises or in the Markets:... (j) Goods notified by SML in writing at any time to be prohibited goods;... 24Other provisions of the Rules reinforce the requirement that only 'Authorised Goods' may be sold by a standholder. For example, clause 5.2 prohibits 'Occupiers' from bringing goods intended for sale into the Markets, or placing or displaying such goods, unless they are authorised by SML for sale in the Markets in accordance with 'the relevant Occupancy Agreement'. 25The version of the Classification Schedule admitted into evidence bears an annotation suggesting that it was issued in January 2008. It contains two statements at the top of the first page: 'Effective January 2008' and 'To be reviewed November 2008'. Despite the second of these statements, no review seems to have taken place. 26The Schedule contains six lists of briefly defined categories of goods, grouped under the following headings: Food, Fashion, Accessories, Homewares, Outdoor and Other. Beside each category is a description of what the category comprises. 27The list of significance in these proceedings is the list headed Homewares. It includes two categories of prime importance: Music Players and Telephones. 28The definition supplied for Music Players is as follows:- iPods, MP3 players, MP4 players, all types of music players, head phones, ear plugs and other accessories used for such players. 29The definition supplied for Telephones is:- Mobile telephones and accessories, mobile phone covers, telephone handsets. 30In the Classifications Schedule, the category 'Telephones' is stated to be 'Restricted' at Haymarket. The Schedule contains a passage explaining this to mean that no more regular or casual stands would be allocated in the Market for the sale of goods in this category. It also contains a statement, under the heading 'Locality Rules', that stands would not be allocated 'closer than six stands (alongside) or immediately opposite or immediately adjacent (opposite corner stand) to the same category of goods as defined in this document'. 31In another section of the Classifications Schedule, nine categories of 'Prohibited Goods' are set out. They repeat some of the categories of prohibited goods listed in clause 7.5 of the Rules, though not the category described in clause 7.5(j). 32Finally, at the foot of each page of the Schedule, the following statement appears: 'Sydney Markets Limited reserves the right to add or delete categories of goods or amend descriptions or categories at any time.'
The nature of the disputes about 'Authorised Goods' 33The focus of the disputes between each pair of Applicants and Sydney Markets has been almost exclusively on claims by the Applicants that the 'accessories' that are 'used for' the range of goods delineated by the phrase 'all types of music players' in the Classification Schedule include covers that are used for iPhones. 34In its broadest version, the Applicants' claim is based on the proposition that an iPhone falls within the scope of the phrase 'all types of music players' because its functions include, and are promoted as including, the playing of music. It follows from this proposition, they maintain, that Sydney Markets is obliged to permit them to sell covers that have been manufactured and are used for iPhones, including covers that are labelled 'iPhone' or bear the iPhone logo. 35In both of the Applications filed in the Tribunal during November 2010, the first of the orders sought is based on this line of argument. The terms of this order are set out below at [97]. 36Two narrower claims have been advanced by the Applicants. One is that Sydney Markets is obliged to permit them to sell any cover into which an iPod will fit, even though (a) an iPhone will also fit into it and (b) it is labelled 'iPhone' or bears the iPhone logo. The other is that Sydney Markets is obliged to permit them to sell any cover into which an iPod will fit - except covers labelled 'iPhone' or bearing the iPhone logo - even if (a) an iPhone will also fit into it and (b) it appears for other reasons to have been manufactured with iPhones in mind. These claims are based on the proposition that any cover answering either of these descriptions must be regarded as 'used for' iPods. They do not depend on a ruling that the phrase 'all types of music players' in the Classification Schedule includes iPhones. 37The evidence admitted on the tender of Sydney Markets included samples of different models of iPods (specifically iTouch 3 and iTouch 4), iPhones (specifically iPhone 3 and iPhone 4) and samples of a number of covers manufactured for and/or capable of accommodating one or more of these different types of iPods and iPhones. Some of the covers ('unlabelled covers') bore no label or logo associating them either with iPods or with iPhones. Others bore the label 'iPod' (hereafter 'iPod-labelled covers') or 'iPhone' ('iPhone-labelled covers'). The samples provided a basis for questions put to Ms Gao and Ms Li. 38It is clear from Ms Gao's evidence, and from evidence shortly to be outlined, that as from February 2007 the items sold by her and her husband in the Market included unlabelled covers that were capable of use, according to her, for an early model of iPods known as iTouch 1s and for an early model of iPhones (not sold in Australia) known as iPhone 1s. As from July 2008, they sold unlabelled covers that they claimed to be appropriate for a later model of iPods, known as iTouch 3s, and for iPhone 3s. Ms Gao indicated that the first launching of any iPhone for sale in Australia occurred in June or July 2008 and that it was a launch of iPhone 3s. 39At some stage between July 2008 and December 2009, Mr Cai and Ms Gao also commenced selling iPhone-labelled covers that were intended for use with iPhone 3s. Following the launch of iPhone 4s in Australia in or about August 2009, they commenced selling unlabelled covers that they claimed to be appropriate for both iTouch 4s and iPhone 4s, and they also sold iPhone-labelled covers intended for use with iPhone 4s. 40It is clear from Ms Li's evidence, and from evidence shortly to be outlined, that as from April 2009 the items sold by her and her husband in the Market also included (a) unlabelled covers, some of which were useable (according to them) with iPhone 3s and some with iPhone 4s, and (b) iPhone-labelled covers for these two models of iPhone. 41Ms Gao testified that the unlabelled covers useable with iPhone 3s and those useable with iPhone 4s together accounted for about 98% of the sales of covers made at the stands occupied by her and Mr Cai. Ms Li gave evidence to similar effect in relation to the stands occupied by her and Mr Xu. 42It was put to Ms Gao during cross-examination that a sample iPhone 3 fitted 'snugly' into a sample of one of the types of unlabelled cover that she and her husband had sold, and that a hole in the cover aligned precisely with an aperture for a camera that was visible on the back of the iPhone. She agreed with these propositions. 43It was also put to Ms Gao that this sample cover was not appropriate for iTouch 3s because (a) the sample iTouch 3 shown to her in the witness box was 'looser' and moved around in the cover, (b) the hole in the cover did not line up with any relevant aperture in the iTouch 3 and (c) a gap on the side of the cover obscured the lower of two buttons that controlled the volume of the music being played. Her responses were (a) that the iTouch 3 was 'a little bit looser', (b) that the hole in the cover permitted an infra-red sensor in the iTouch 3 to operate effectively through an aperture at the back and (c) that 'only a minority' of the volume control button was covered. 44Following an examination of the samples, my findings on these matters are as follows. The iPhone 3 fitted tightly into the unlabelled cover and its camera aperture lined up precisely with the hole in the cover. As to the iTouch 3, (a) it fitted inside the cover, but had a limited range of movement (upwards and downwards); (b) it had an aperture at the back that was larger than the hole in the cover, but roughly lined up with it; (c) and the gap on the side of the cover obscured the lower of the two volume control buttons to a limited extent, as long as the iTouch 3 was pushed as high as possible inside the cover. 45The same propositions were put to Ms Gao with reference to a sample unlabelled cover that she claimed to be appropriate for iPhone 4s and iTouch 4s. She agreed with the propositions about the suitability of the cover for iPhone 4s. Her responses about its suitability for iTouch 4s were (a) that the iTouch 4 slid 'slightly' up and down inside the cover, (b) that the hole in the cover partly obscured an aperture for a camera on the back of the iTouch 4 and (c) that the lower of the two volume control buttons was obscured. 46Following an examination of the samples, my findings on these matters are as follows. The iPhone 4 fitted tightly into the unlabelled cover and its camera aperture lined up precisely with the hole in the cover. As to the iTouch 4, (a) it fitted inside the cover but could be moved up and down, to a greater extent than was the case with the iTouch 3; (b) it had an aperture at the back that was smaller than the hole in the cover, but would be obscured unless the iTouch 4 was pushed as high as possible inside the cover; and (c) the gap on the side of the cover covered the lower volume control button to such an extent that this button could not be used while the iTouch 4 was inside the cover.
The course taken by the disputes between the parties 47In a letter on Sydney Markets' letterhead sent to Mr Xu and Ms Li on 9 December 2009, Ms Lees wrote:- As you probably know I have been on Annual Leave since 20 th November. Prior to my leaving I received a complaint from standholders selling Mobile Phones and Accessories (a restricted category) suggesting that these products were being sold by standholders approved to sell Music Players.. eg phone chargers, Nokia, Ericcson etc, and mobile phone covers. Last weekend I checked the stands of traders approved to sell Music Players, including your own stands, and found that all were selling covers showing the logo I phone . I have since learnt that these covers fit I Pod touch players and therefore I can accept that the covers have a dual use. Since the sale of such covers is encroaching on the business of Mobile Phone accessories thus increasing the number of stands selling what is a restricted item, a restriction has now been placed on the category of Music Players, effective from today. On my return to the office this morning I noted that transfer papers have been prepared for your purchase of HSU 216-217. I have approved this transfer which was initiated prior to the restriction. Similarly I am aware that a deposit has been paid on Haymarket stands by another trader selling Music Players and this transfer will also be approved... No other further outlets, casual or regular will be approved for the sale of Music Players at this time. I ( sic ) has also been suggested to me that mobile phone chargers are being sold from your stands, at times under the counter. If this allegation is correct, please cease this practice immediately. Only standholders with the approved category of Telephones may sell mobile phone chargers. Action will be taken against any standholder selling restricted items without approval to do so. 48On 9 December 2009, Ms Lees wrote to Mr Cai and Ms Gao in the following terms:- Prior to my absence on Annual Leave which commenced 20 th November 2009, I was advised by you and one of the standholders of stands 310/311 that an agreement had been reached for you to purchase the stands for the sale of Music Players and I understand that you have paid a large deposit on the stands. Since then the joint owners of the stands have become involved in a legal dispute and this has held up the transfer. As from 9 th December 2009, a restriction has now been placed on the introduction of any further new outlets, regular or casual, selling Music Players, however since your intended purchase was conveyed to Sydney Markets Limited prior to this date and surveys were carried out confirming same, you will be permitted to proceed with the purchase of 310/311 or should the owners of that stand cancel the agreement, purchase another location. It should be noted that Mobile Phone accessories and chargers cannot be sold under the category of Music Players however I understand that some Iphone covers are dual purpose as they are also used as covers for Itouch players. It would be preferable where possible that those covers do not show the logo Iphone. A copy of this letter will be placed on your files and you should keep this copy to produce when going ahead with the transfer. 49On 1 January 2010, Mr Jules Steffe took over from Ms Lees as Retail Markets Manager for Sydney Markets. His previous position with Sydney Markets, which had employed him since 2003, was as Team Leader at the Market. In contrast to Ms Lees, he furnished written evidence in these proceedings (comprising affidavits dated 2 December 2010 and 9 February 2011) and was cross-examined. 50Mr Steffe said in his first affidavit that during December 2009 and January 2010 a number of standholders at the Market who were authorised to sell Telephones as defined in the Classifications Schedule complained to him that the Applicants were affecting the profitability of their businesses by selling telephone accessories. 51He claimed also that during December 2009 Mr Cai and Ms Gao approached him while he was walking around the Market, showed him Ms Lees' letter of 11 December 2009 and asked what they could sell. He replied: 'As the letter states, you are not allowed to sell any products on which the iPhone logo appears.' 52He claimed further that on or about 4 January 2010 Mr Cai and Ms Gao came to his office, showed him samples of goods that they were selling and asked if they were permitted to sell them. He answered: 'As these don't show the iPhone logo you should be able to sell them for now.' 53Mr Steffe's account of these two incidents was not contested, either in cross-examination or in the evidence given by Ms Gao. 54On 18 January 2010, Mr Steffe wrote letters in almost identical terms to the Applicants Cai and Gao and to the Applicants Xu and Li. The letters commenced by noting that the recipients in each case had 'approval to sell goods covered by the category Music Players' from their stands in the Market. It noted also the numbers of the stands which the recipients occupied (this being the only point on which the contents of the two letters differed). Each letter then stated:- The category Music Players covers the following items - IPods, MP3 players, MP4 players, head phones, ear plugs and other accessories used for such players. It has been brought to our attention that you are also selling accessories depicting the logo "IPhone". The sale of mobile phones and accessories (category Telephones) is restricted at Paddy's Markets Haymarket. The category "Telephones" includes mobile phones and accessories, phone chargers, mobile phone covers and telephone handsets. Only those standholders who are approved to sell goods covered under Telephones may sell those items. This would include IPhone covers and phone chargers. An ( sic ) other standholder selling these items is in breach of the Occupancy Agreement under which he/she holds their stands. An inspection of stands showed that you are selling a large number of covers depicting the IPhone logo. These will have to be removed. You will be given 2 months from 20 January 2010 in which to sell or remove this stock. If you are selling telephone charges ( sic ) they must be removed from sale immediately. 55According to the evidence of Ms Gao, Ms Li and Mr Steffe, a meeting took place on or about 25 January 2010 between the four Applicants and Mr Steffe. Ms Gao claimed that at that meeting Mr Steffe approved the sale of what she called 'dual purpose covers', i.e., unlabelled covers into which both iPods and iPhones could be fitted. According to Ms Li, Mr Steffe stated that the contents of Ms Lees' letter of 9 December 2009 were no longer applicable, as she had retired and he was now the 'ultimate decision maker' on licence-related matters. Ms Li added during her oral testimony that he told her that she could sell 'other goods' and that when she asked whether she could sell covers for iPhones that did not have iPhone logos, he said: 'I don't care.' 56Mr Steffe denied using a phrase such as 'ultimate decision maker'. According to his account of this meeting, the Applicants stated that they were not happy with the contents of his letter of 18 January 2010, that they wanted to sell covers bearing iPhone logos and they would take legal action. He added that Mr Cao and Mr Xu became 'quite aggressive'. 57On 30 January 2010, Mr Cai and Ms Gao came to Mr Steffe's office and showed him a memorandum of agreement whereby Mr Cai agreed to acquire stands 184 and 185 in the Market from the existing standholder, Mr Gefei Guo. In addition to recording the parties' agreement as to the price, the date of settlement and the refund (if the agreement failed) of a deposit that had been paid to Mr Guo, the memorandum stated:- The license for selling music player (that means all kinds of IPOD accessories and all IPHONE accessories include IPHONE cases which do not show the logo IPHONE will also be sold in this stand ( sic )) will be transferred from the stall NO.101 to the stall NO.184 or NO.185 at the same day when these stalls been transferred ( sic ). 58According to Ms Gao, she discussed with Mr Steffe the products that she and her husband intended to sell in stands 184 and 185, indicating that they would be the same as they currently sold in stand 101. She claimed that Mr Steffe read the memorandum of agreement before signing it. Mr Steffe claimed that he only signed the memorandum as the witness to Mr Cai's signature. His name was in fact typed at the foot of the memorandum, under the heading 'Witness'. 59In her statement, Ms Gao described two further conversations with Mr Steffe. She said that during the first of them, in mid-February 2010, he suggested that she could 'sell iPhone accessories under the table', and during the second conversation, a short time later, he told her: 'You can sell iPhone accessories, but only you'. Mr Steffe denied having either of these conversations with her. 60On 25 March 2010, Sydney Markets issued a Warning Notice under clause 21 of the Rules to each pair of Applicants. In each of these Notices, it was alleged that the recipients had failed to comply with the requirement in Rule 7.4 that they should only sell Authorised Goods'. Under the heading 'Particulars', each Notice stated:- As previously requested you are to remove all mobile phone accessories including all goods labelled iPhone + covers that have a porthole for camera access. 61A further Warning Notice was issued to each pair of Applicants on 7 April 2010. This was followed by Comply Notices (under clause 22 of the Rules) on 8 and 16 April. On 14 and 19 April, the Applicants responded with Dispute Notices, in which they claimed that the goods being sold by them were authorised. 62Mr Steffe testified that in June 2010 Mr Cai and Ms Gao approached him in the Market and told him that they were ready to complete their purchase of stands 184 and 185. In response to a question from him, they said that they wanted to transfer to stand 184 the licence that they had relating to one of the stands that they currently occupied (stand 101). He told them that at stand 101 they were selling unauthorised goods, which they would not be permitted to sell from stand 184, and that they should give him a written description of the goods that they would want to sell from this stand. At this point, according to his evidence, Mr Cai 'started screaming' and was physically restrained from approaching him by Ms Gao. 63In cross-examination, Ms Gao said that she and Mr Cai did discuss the purchase of stands 184 and 185 with Mr Steffe and did tell him that they wanted to transfer the licence for stand 101 to stand 184. But she denied the remainder of these allegations by Mr Steffe. 64The purchase of stands 184 and 185 did not proceed. This was recorded in a Contract Termination Agreement dated 30 September 2010, pursuant to which Mr Guo refunded the deposit that Mr Cai and Ms Gao had paid. 65On 2 July 2010, each of the two pairs of Applicants commenced proceedings against Sydney Markets seeking an injunction restraining Sydney Markets from interfering with the conduct of their respective businesses. 66On 8 July 2010, the Supreme Court made consent orders to the effect that these proceedings should be dismissed, with undertakings given by the parties being accepted by the Court. 67The undertaking given by each pair of Applicants was to the effect that they would not 'market and/or sell mobile telephone accessories' from their stands and that they would bring this undertaking to the attention of their assigns and make it a condition of any sale of their businesses at the stands. It was also stated in the undertaking that it did not prevent them from 'marketing and/or selling covers for Apple iPods which also fit Apple iPhones as long as those covers do not carry the word iPhone'. 68The undertaking given by Sydney Markets was to the effect that it would not interfere with the Applicants' conduct of their businesses in the Market 'on the basis that they are marketing and/or selling covers for Apple iPods which also fit Apple iPhones as long as such covers do not carry the word iPhone'. The undertaking was stated to apply also for the benefit of the Applicants' assigns. 69On 12 July 2010 the solicitors acting for Sydney Markets', Kemp Strang, wrote to the Applicants' solicitors, Austin Haworth & Lexon Legal (Sydney) ('Austin Haworth') alleging that the Applicants, in 'blatant contravention' of their undertakings to the Supreme Court and of the Occupancy Agreement, were continuing to sell 'iPhone covers' from their stands. The letter required them to remove such covers immediately and indicated that Sydney Markets would 'actively monitor' the goods being sold by them. 70In a reply dated 13 July 2010, Austin Haworth denied any such contravention, claimed that the consent order permitted the Applicants to sell 'iPod covers that serve a dual-purpose which also fits the iPhone' and requested clarification of what fits the description 'iPhone cover', especially as to whether it 'would contain the "iPhone" logo'. 71In a reply dated 16 July 2010, Kemp Strang invited Austin Haworth to 're-read the Undertakings made in the proceedings which clearly preclude your clients from marketing and selling iPhone covers and covers which depict the iPhone logo'. 72In a reply also dated 16 July 2010, Austin Haworth pointed out that Kemp Strang had not 'differentiated an iPhone cover and an iPod cover that serves a dual purpose' and claimed that the Applicants had been selling 'dual-purpose covers' but not 'goods depicting the words "iPhone" on it'. 73In a reply dated 19 July 2010, Kemp Strang stated that the Applicants had been 'disingenuous' and that Sydney Markets was collating evidence of their breaches of the undertakings and the Occupancy Agreement and would shortly take action to enforce its rights as a result of the breaches. 74On 25 and 30 July 2010, Mr Tony Benic, a licensed commercial agent, approached different stands in the Market occupied by Mr Cai and Mr Gao and purchased seven items. These were annexed to an affidavit sworn by him on 1 December 2010 and admitted into evidence. He was not required for cross-examination. 75During cross-examination, Ms Gao acknowledged that two of the seven items purchased by Mr Benic were covers for iPhone 3s bearing the label 'IPhone' and that they were not appropriate for an iTouch 3. Following an examination of the sample iTouch 3 and the two covers, I agree with this assessment. The same applied even more clearly when an iTouch 4 was placed inside one of these covers. 76Ms Gao said in her affidavit and in cross-examination that Mr Benic's claim to have purchased these iPhone-labelled covers in the circumstances described in his affidavit appeared to be correct. She said that neither she nor her husband sold the covers to him and that she had instructed their staff to refrain from selling them. She had investigated the matter after being told of the sales by Sydney Market's solicitors and concluded that her instructions must have been disobeyed. 77A further two items that Mr Benic purchased from stands occupied by Mr Cai and Ms Gao were stereo headsets, sold in boxes labelled 'iPhone Stereo Headset'. Ms Gao stated that these could be used on iPods as well as iPhones. 78Two covers, unlabelled, that Mr Benic also purchased were said by Ms Gao to be covers into which iPhones, but not iPods, would fit. She added that the Chinese manufacturers had described these to her as 'universal', meaning that they would accommodate both iPhones and iPods, but when she and her husband realised that this was not true, they stopped selling them. 79Also annexed to Mr Benic's affidavit was an iPod-labelled cover. Ms Gao identified it as such, observing that did not have a hole for a camera. 80On the same two days in July 2010, Mr Benic approached different stands in the Market occupied by Mr Xu and Mr Li and purchased four items. These were annexed to an affidavit also sworn by him on 1 December 2010 and admitted into evidence. Each of them was an iPhone-labelled cover. 81Like Ms Gao, Ms Li said in her affidavit and in cross-examination that Mr Benic's claim to have purchased these iPhone-labelled covers in the circumstances described in his affidavit appeared to be correct. She said that she had instructed her staff to put covers like this away into drawers at the stands which she and her husband occupied, but that her staff would still have had access to them. She suggested that it was probably because their customers at the time liked these covers that the staff sold them. 82Following the discovery by Mr Benic that both pairs of Applicants were selling iPhone-labelled covers, further correspondence took place between Kemp Strang, and the Applicants or Austin Haworth. In this correspondence, Kemp Strang claimed, and Austin Haworth denied, that the Applicants had breached the undertakings given by them to the Supreme Court. 83This correspondence included letters dated 5 August 2010 from Kemp Strang to each pair of Applicants giving notice, pursuant to clause 22.3 of the Occupancy Agreement, of Sydney Markets' intention to terminate the Agreement and cancel their licence to occupy stands in the Market. The letters stated that the Applicants had thirty days in which to show cause why the Agreement should not be terminated and their licences cancelled. The ground advanced for this action was that the Applicants had breached the Agreement by marketing and selling 'covers for Apple iPhones' and 'covers that contain the word iPhone'. 84In further letters to Kemp Strang during August and September 2010, Austin Haworth asked for further particulars of the alleged breaches and for details of the procedure for 'showing cause'. 85In a letter dated 14 October 2010 to Austin Haworth, Kemp Strang maintained that Sydney Markets had been entitled for some time to the terminate the Applicants' Occupancy Agreements. The letter went on to say that without prejudice to this entitlement, Sydney Markets would give the Applicants 30 days in which to remove from their stands the goods that breached the Supreme Court's consent orders of 8 July 2010, failing which it would exercise its rights under the Occupancy Agreements. 86Following responses by Austin Haworth on 25 October and 9 November 2010, again seeking particulars of the alleged breaches, Kemp Strang wrote to them on 12 November, stating that Sydney Markets would inspect the goods being sold by the Applicants and would not exercise its right to suspend their occupancy of their stands if the offending goods had been removed from sale. 87On 16 November 2010, Kemp Strang caused notices of suspension under clause 24 of the Occupancy Agreements to be served on the Applicants. The notices stated that the recipients had 'failed to show cause why the Agreement should not be terminated' and that the period of suspension would be one month. 88On 17 November 2010, security officers engaged by Sydney Markets prevented the Applicants gaining access to any of their stands in the Market. 89Together with their Applications to the Tribunal (filed by Mr Cai and Ms Gao on 24 November 2010 and by Mr Xu and Ms Li on 29 November), the Applicants filed applications for urgent interim orders. The orders sought were that Sydney Markets should provide them with access to their stands on condition that they would not sell or offer for sale 'any covers for Apple iPhones, bearing the word "iPhone'". 90Pending a hearing of this interim application on 9 December 2010, orders to this effect were made on 2 December. At the hearing on 9 December, the Tribunal made orders that appeared in the following terms in a Notice of Decision dated 10 December:-
The orders sought by the Applicants 97The first and most significant order sought by each pair of Applicants in their Applications to the Tribunal is in the following terms:-
Does the category 'Music Players' in the Classification Schedule include iPhones? 102Applicants' submissions. Mr Hand submitted that the words 'all types of music players', as used in the description of 'Music Players' in the Classification Schedule, should be viewed as 'words of extension, not of limitation'. He claimed that they were 'plain words' lacking any ambiguity and that they embraced 'all types of devices that are capable of playing back recordings of music'. 103In support of this submission about the approach to be adopted in construing these words, Mr Hand relied on the following passage in the judgment of Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912-913:- (1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. (2) The background was famously referred to by Lord Wilberforce as the "matrix of fact," but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man. (3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them. (4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749. (5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera S.A. v. Salen Rederierna A.B. [1985] A.C. 191, 201: "if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense." 104Mr Hand placed particular emphasis on the fourth and fifth of these principles. He submitted that this outline of the approach to be adopted appeared to have been generally accepted in Australia, except that the courts in this country have taken a more restricted view of what evidence should be admitted as an aid to interpreting a contract. In this connection, he referred to a well-known passage in the joint judgment of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 at 179 [40]:- This Court, in Pacific Carriers Ltd v BNP Paribas [2004] HCA 35, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. 105The sources cited by Mr Hand also included various propositions in Lewison, The Interpretation of Contracts (Sweet & Maxwell, 2007). Two of these were as follows: (a) in construing a contract all parts of it must be given effect where possible and no part of it should be treated as inoperative or surplus (para 7.03) and (b) where there is a doubt about the meaning of a contract, the words will be construed against the person who put them forward (para 7.08). 106In Mr Hand's submission, the consequences of applying these principles of interpretation to the definition of Music Players in the classification Schedule are (a) that the words 'all types of music players' are to be treated as 'words of extension' and (b) that when full account is taken of the nature and functions of iPhones, iPhones should be held to fall within the scope of this definition. 107In further support of the latter submission, Mr Hand pointed to various passages in material published by the Apple Corporation about iPhones. These included the following sentence commencing a press release in January 2007 about the launch of iPhones: 'Apple today introduced iPhone, combining three products - a revolutionary mobile phone, a widescreen iPod with touch controls, and a breakthrough Internet communications device with desktop-class email, web browsing, searching and maps - into one small and lightweight handheld device.' Later on, the press release stated: 'iPhone is a widescreen iPod with touch controls that lets music lovers "touch" their music by easily scrolling through entire lists of songs, artists, albums and playlists with just a flick of the finger.' 108With reference to iPhone 4s, Mr Hand referred to the following statement within product information published by Apple: 'iPhone isn't just an amazing phone. It's an amazing iPod too - one that lets you listen to music, watch video and browse everything with the touch of a finger.' He relied also on the following passage at the commencement of Chapter 8 of the current 'Apple iPhone User Guide' (this Guide formed part of the evidence tendered by Sydney Markets):- Use the iPod app to enjoy your favourite music, widescreen videos and more. Browse your content on iPhone by playlists, artists, songs, videos or other categories, or browse your album network using Cover Flow. Play your music on your AirPlay speakers or sound systems, or watch your videos on a TV using Airplay and Apple TV. 109Mr Hand maintained that since the multi-functional nature of iPhones was clearly apparent to users and was indeed strongly stressed in promotional literature and guides for users, it would be incorrect for the Tribunal to rule that their 'primary' function was as a telephone or that the only category within the Classification Schedule to which they belonged was that of Telephones. It could not be assumed, he said, that all owners of iPhones used them to make telephone calls. It was irrelevant that the Australian Communications and Media Authority had certain requirements for the technical labelling of iPhones or that owners of them had to establish a connection to a service carrier in order to use them as telephones. There was, indeed, no such thing as the 'primary function' or 'primary use' of an iPhone. 110In response to the contention, put by Mr Docker, that according to this reasoning an iPhone would belong within several other categories in the Classifications Schedule - for example, Cameras & Equipment, Office & Computer Equipment and Watches & Clocks - Mr Hand submitted that it was not useful to rely on arguments relating to 'irrelevant' categories such as these. 111Sydney Markets' submissions. The starting-point for Mr Docker's submissions on this question was the proposition that in interpreting the Classification Schedule, regard must be had to the following matters: (a) a number of significant provisions of the Occupancy Agreement and the Rules; (b) the approach taken to describing categories of goods in the Schedule; and (c) the commercial context in which the Schedule operated. When proper attention was paid to these matters, he contended, it became apparent that the definitions supplied in the Schedule for different categories of goods should not be interpreted expansively. They should instead be interpreted so as to reduce the incidence of overlaps between the various categories. 112In putting forward this argument, Mr Docker relied on the provisions of the Occupancy Agreement entitling standholders to shares in Sydney Markets (clause 3.1), granting to Sydney Markets the right to determine policies in relation to product mix and restrictions on goods (clause 7.2) and indicating that the Agreement was not to be construed to the disadvantage of Sydney Markets on the ground that it prepared the Agreement (clause 26.11). He relied also on the statement in paragraph D of the Introduction to the Rules that Sydney Markets, in preparing them, aimed to 'make the Markets attractive to Occupiers and other using the Markets and ensure they remain competitive in the wider market place' and to 'foster the continued growth and prosperity of the Markets for both SML and its occupants'. 113In relation to the Classification Schedule, Mr Docker made the following submissions: (a) the definitions of categories of goods were all drafted in a 'definitive way', with virtually no use of words of inclusion'; (b) since in one definition (that of Souvenirs) specific reference was made to overlaps with other categories, it should be inferred that no overlap was intended elsewhere in the definitions; and (c) the provisions regarding Restricted Goods and the Locality Rules assisted in regulating competition within the Market. 114The relevant features of the commercial context within which these three contractual documents took effect were, in Mr Docker's submission, that the Market was a relatively small area in which numerous standholders (nearly 800) operated side by side, that the vesting of wide powers in Sydney Markets to regulate competition between them was therefore beneficial to them all and that the benefits obtained by them were all the greater because they were shareholders. In arguing that the 'commercial context', broadly defined in this way, had to be taken into account in interpreting these documents, Mr Docker referred to the authoritative discussion of this topic by Campbell JA in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 at [337 - 340]. 115According to Mr Docker, because for these reasons the descriptions in the Classification Schedule had to be interpreted restrictively, the only category to which multi-functional devices such as iPhones should be held to belong was the category indicated by their primary function. The primary function of iPhones was, he said, that of a mobile phone. The name given to them illustrated this, as also did the promotional literature for them put out by Apple. The press release of January 2007 on which Mr Hand relied was, for instance, headed 'Apple Reinvents the Phone with iPhone'. Because iPhones were not launched in Australia until July 2008, it was not surprising that the Classification Schedule, which was issued in January 2008, did not specifically refer to them. But it was clear that the category Telephones, being defined to include 'Mobile phones', was the category into which they fitted. 116Mr Docker advanced the argument, already mentioned, that if iPhones were held also to be within the category Music Players, they must also belong within the categories Cameras & Equipment, Office & Computer Equipment and Watches & Clocks. By the same reasoning, the category Music Players would have to be interpreted as including television sets, computers and music boxes even though these items are expressly mentioned in the definitions of Electricals, Office & Computer Equipment and Gifts respectively. This approach to interpretation of the Schedule would be a serious impediment to the regulation of competition within the Market. 117Mr Docker relied also on the principle of contractual interpretation identified by the Latin maxim noscitur a sociis . He cited the following passage from the judgment of Spigelman CJ in Lend Lease Real Estate Investments Pty Ltd v GPT RE Ltd [2006] NSWCA 207 at [30 - 32]:- 30 The general principle of the law of interpretation that the meaning of a word can be gathered from its associated words - noscitur a sociis - has a number of specific sub-principles with respect to the immediate textual context. The most frequently cited such sub-principle is the ejusdem generis rule. The relevant sub-principle for the present case is the maxim propounded by Lord Bacon: copulatio verborum indicat acceptationem in eodem sensu - the linking of words indicates that they should be understood in the same sense. As Lord Kenyon CJ once put it, where a word "stands with" other words it "must mean something analogous to them". ( Evans v Stevens (1791) 4 TR 224; 100 ER 986 at 987... 31 However, as Lord Diplock put it in Letang v Cooper [1965] 1 QB 232 at 247: "The maxim noscitur a sociis is always a treacherous one unless you know the societas to which the socii belong." 32 There is no such difficulty here. Unless the expression "assumption of obligations" is confined to "alienation", most of the adjoining words would be otiose. The reading down of general words is one of the most common mechanisms applied in the course of legal interpretation. The Court should not give one word in an interrelated, overlapping list of expressions a meaning that is so broad as to be inconsistent with adjoining words or that renders those words irrelevant. 118Mr Docker argued that this passage was directly applicable to the interpretation of the definition of Music Players. There was no difficulty in identifying the ' societas to which the socii belong' because the items specifically identified in the definition - iPods, MP3 players and MP4 players - were 'exclusively or predominantly music players' and were 'sold as such'. Because this could not be said of iPhones, he said, they were outside the scope of the phrase 'all types of music players'. 119My conclusions. Having carefully considered the competing submissions on this question, I have concluded that those of Mr Docker are to be preferred. In general, I agree with his reasoning and would add only a few brief observations. 120This case illustrates in an interesting way how technological advances may pose difficult challenges for those drafting or interpreting commercial documents. The dividing line between telephones and music players seemed perfectly clear five or six years ago. In January 2008, when the relevant, and still current, version of Sydney Markets' Classification Schedule was issued, that line had started to become blurred. But it was not until July 2008 that it became well known in Australia that a mobile phone which also functioned as a music player (and indeed as an Internet communications device) was widely available for purchase. 121Considerations such as these add weight, in my opinion, to Sydney Markets' contention that the Classification Schedule should be interpreted in a way that assists Sydney Markets to maintain control over the level of competition within the Market. An expansive approach to interpretation, such as Mr Hand argued for, does not promote this aim. It has the potential to encourage individual standholders to seek to widen the scope of goods that they are authorised to sell in ways that might not be immediately obvious on reading the Schedule, thereby jeopardising Sydney Markets' attempts to maintain a coherent strategy with regard to competition. 122I do not agree with Mr Hand's response to Mr Docker's submission that if iPhones are an example of Music Players they must also belong within the categories Cameras & Equipment, Office & Computer Equipment and Watches & Clocks. Mr Hand's claim that in contrast to the category Music Players these would be 'irrelevant' categories does not appear to me to have any logical foundation. 123Properly interpreted with due regard to the surrounding documentation (i.e., the Occupancy Agreement, the Rules and the rest of the Classification Schedule) and to the commercial context, the phrase 'all types of music players' in the definition of Music Players in the Schedule does not, in my judgment, include iPhones.
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.
The other orders sought by the Applicants 155As already stated, the Applicants sought in their Applications (a) declarations that both the notice of intended termination dated 5 August 2010 and the notice of suspension dated 16 November 2010 were void and of no effect, (b) a declaration that Sydney Markets' exclusion of them from their stands on 17 November 2010 was a breach of their Occupancy Agreements and (c) an order that Sydney Markets provide them with access to these stands in accordance with these Agreements. I will deal briefly with these claims as their practical implications at this stage are limited. 156I agree with Mr Hand that the only breaches of the Agreements by the Applicants that occurred, according to the evidence, before the notice of intended termination of 5 August 2010 took place on 25 and 30 July 2010. These were the dates on which Mr Benic purchased iPhone-labelled covers from them (see [74 - 81]). But following these breaches, which the Applicants admitted at the hearing, no notification of them as required by clause 22.3(a)(1) of the Occupancy Agreement was served on the Applicants prior to service of the notice of intended termination itself. It follows that the notice of intended termination was not validly served. 157I also agree with Mr Hand that, even if the notice of intended termination had been valid, the notice of suspension dated 16 November 2010 would not have been. Clause 24.1 of the Occupancy Agreement provides for such a notice to be served when (a) a notice of intended termination has been served and (b) Sydney Markets is satisfied that the recipient of this notice has shown sufficient cause why the Agreement should not be terminated. But the ground stated in the notice of suspension was that the Applicants had failed to show cause in this manner. I am not convinced by Mr Docker's opposing argument that clause 24.4(c) of the Agreement effectively overrides the precise requirement set out in clause 24.1(b). 158It follows from this that the Applicants should have a declaration that Sydney Markets' exclusion of them from their stands on 17 November 2010 was a breach of their Occupancy Agreements. 159I recognise that relief in the nature of a declaration is a discretionary remedy and that the Applicants' admitted breaches of the Agreements, and indeed of their undertakings to the Supreme Court, could provide grounds for refusing these declarations. But Sydney Markets, having set out detailed procedures for terminating or suspending the Applicants' rights of occupation, was in duty bound to follow these procedures. The evidence shows that they did not do so. 160An order, such as the Applicants have also claimed, that Sydney Markets should provide them with access to their stands in accordance with the Occupancy Agreements appears unnecessary to me. This is because they already have such access pursuant to Order 3 of the Amended Notice of Decision dated 17 December 2010, recording the interim decision of the Tribunal on 9 December. There was no evidence at the hearing before me that Sydney Markets had taken any subsequent steps to deny them access. 161The Applicants also sought an order for costs. Section 77A of the Retail Leases Act 1994 provides that the costs of Tribunal proceedings brought under this Act are governed by section 88 of the Administrative Decisions Tribunal Act 1997. Under that section, the parties pay their own costs unless the Tribunal determines that it would be 'fair', having regard to matters listed in subsection (1A), to make an order for costs. 162At this stage, the only observations that I will make on this topic are as follows. The Applicants have failed to obtain the relief of primary significance for them, though they have succeeded to a limited degree. The case that they advanced in seeking the relief of primary significance had significant merit and could not be said, to quote the wording of paragraph (c) of section 88(1A), to have involved 'a claim that has no tenable basis in fact or law'. But since other matters that subsection (1A) identifies as relevant in this context may not be known to me, it is appropriate that the parties should have an opportunity to seek a costs order. The orders that I make will therefore include directions whereby any party may apply for a costs order.
Conclusion 163The outcome of the foregoing reasons is that in each of these proceedings the Applicants should have declarations in terms of orders (2) and (3) of the orders sought by them in their Applications to the Tribunal. But their claims for orders (1) and (5) are dismissed. It will be recalled that they abandoned their claims for order (4). 164In addition, directions are given to deal with two matters that require further consideration, for reasons set out above at [154] and [162]. The first is whether any declaration may usefully and properly be made, and if so in what terms, defining the types of 'accessories' for 'music players' that constitute 'Authorised Goods' which the Applicants are entitled, under their agreements with Sydney Markets, to sell at the stands occupied by them at the Market. The second is whether any order for the payment of the costs of these proceedings should be made, and if so, in what terms. 165The directions given provide opportunities for the parties to make written submissions on these matters. My decision on any such submissions will be 'on the papers', under section 76 of the Administrative Decisions Tribunal Act 1997, unless I consider that a further hearing is required. 166Finally, it is appropriate for me to discharge the interim orders made by the Tribunal on 9 December 2010. 167For the foregoing reasons, my orders are:- In each of these matters (files 105191 and 105196), the following orders are made:
I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 May 2011
Cai & ors
Sydney Markets Ltd
(2007) 69 NSWLR 603
(1933) 49 CLR 507
(2004) 219 CLR 165
[2004] HCA 52
Declarations made that the notices of intended termination and suspension were void and that exclusion was a breach of the Occupancy Agreement; claims for declaration that iPhone accessories are authorised goods and for access order dismissed; application otherwise dismissed; interim orders discharged; directions given for further submissions on the precise scope of authorised accessories and on costs, to be determined on the papers.