City Convenience Leasing Pty Ltd v Boo

NCAT Appeal Panel|2014-03-17

The Applicant's application to adduce further evidence in the appeal 61Before examining the grounds on which Mr Soltan challenged the Tribunal's decision, we will describe his application for leave to call a further witness and the reasons why we rejected it. 62The witness in question was Mr Condell. He had not supplied any evidence to the Tribunal. Mr Soltan submitted that evidence of the circumstances surrounding the making of the Payment Plan Agreement was or might be relevant in order to resolve any ambiguity in its terms. For this reason, he claimed, Mr Condell's testimony as to his knowledge of the terms of the Lease and as to whether he believed that the rent stipulated in the Agreement was intended to be the current market rent was significant and should be admitted. 63We rejected this application for the following reasons (some of which Mr Ireland put before us): (a) because Mr Condell was not one of the Respondents, and was only their agent in making the Payment Plan Agreement, evidence as to his knowledge and intentions with regard to it was irrelevant; (b) by virtue of authorities such as Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, including particularly the passage at [40] quoted by the Tribunal, even the 'subjective beliefs or understandings of the parties about their rights and liabilities' do not 'govern their contractual relations'; and (c) it would be unfair and prejudicial to the Respondents to permit the Applicant to adduce this evidence, since they would have no opportunity to put on any evidence in reply. 64The arguments advanced by Mr Soltan in his written and oral submissions relating to the appeal itself derived from four separate sources: (a) certain provisions of the RL Act; (b) principles of contract law; (c) principles relating to estoppel; and (d) the rules of natural justice. It is convenient to examine them under these four heads, indicating in each case the substance of his arguments, Mr Ireland's responses to them and our decisions in relation to them.

Arguments based on provisions of the Retail Leases Act 65Mr Soltan pointed out that the overriding status accorded to this Act by section 7, which we have reproduced above at [34], expressly operated not only with regard to the terms of any retail shop lease but also with regard to 'any agreement or arrangement between the parties to a lease... to the extent that the provision would be void if it were in the lease'. 66It followed, he said, that any purported 'agreement or arrangement' as to the amount of the current market rent for the Premises that might be discernible within the Payment Plan Agreement would be void to the extent that it was inconsistent with the terms of section 19(1) of the Act (also reproduced above at [34]). He claimed that two such inconsistencies existed. 67The first was that the Agreement, according to the interpretation urged by the Respondents, purported to determine the current market rent for a period before it was entered into, commencing on the relevant rent review date (18 August 2012), but section 19(1)(b) stipulated that if the parties did not agree before this date as to the amount of such rent, it had perforce to be determined by a specialist retail valuer. 68In so arguing, Mr Soltan submitted that section 19(1)(b) imposed the requirement of determination by a specialist retail valuer in every case in which the parties to the lease had not agreed in advance - i.e., before the rental review date - as to what the current market rate should be. This followed particularly, he said, from the use of the words 'is to be' in the provision. Any agreement or arrangement regarding this amount that the parties might reach after the date when current market rent was payable under the lease would be void under section 7. 69Mr Soltan sought to support this argument by pointing out that in a comparable provision of the RL Act, section 32(1), the phrase 'what the actual amount of that rent is to be' in paragraph (a) denotes the subject matter of an agreement between lessor and lessee which must 'already' have been made. 70In our opinion, the interpretation of section 19(1)(b) urged by Mr Soltan is one that the terms of this provision permit. But it is not an interpretation that these terms require. The time at which it must be apparent that the lessor and lessee 'do not agree' is not specified. The words 'is to be' may be construed as meaning 'will be', but may also be taken to mean 'must be' or 'should be'. 71Mr Ireland submitted that the argument made by Mr Soltan, if accepted, would have highly detrimental consequences for the operation of retail leases. It would produce an outcome that was both 'entirely non-purposive' and contrary to the 'plain intention' of section 29(1)(b) that parties should be able to 'sort the matter out consensually and by agreement if they can'. 72Mr Ireland also drew our attention to the Note at the end of section 19(1). This states: 'The procedure provided by this section can be avoided if the parties can come to an agreement as to what the rent is to be.' 73A further argument put by Mr Ireland was that the Tribunal's decision in Alma Constructions Pty Ltd v C. D. Management Group Pty Ltd [2008] NSWADT 3 provided authority (notably at [36]) for the proposition that despite section 19(1)(b) an agreement as to current market rent may be made after the rent review date has passed. 74This case concerned the ascertainment of current market rent that became payable on the exercise of an option to renew a retail shop lease. The lease contained provisions on this topic, including the following three clauses:- 5.13 The landlord (the Applicant) or the tenant (the Respondent) can inform the other in writing at least 60 days before the rent review date that the rent that the landlord or tenant thinks will be the current market rent at the review date. 5.14 If the landlord and the tenant agree on a new rent then that rent will be the new rent beginning on the rent review date and the landlord and the tenant must sign a statement saying so. 5.15 If the landlord and the tenant do not agree on the amount of the new rent 30 days before the rent review date the current market rent will be decided by a valuer appointed under clause 5.16. 75The date of expiry of the lease was 30 June 2007. On 18 May 2007, which was both after the option had been exercised and less than 60 days before the 'rent review date', the applicant lessor wrote to the respondent purporting to determine the rent that would be payable. Because the respondent disputed this amount, correspondence between them continued for about six weeks. In its final letter, written on 30 July 2007 (i.e., after the new lease had commenced), the applicant maintained that they had not reached agreement as to the new rent. 76One week before sending this letter, the applicant had applied to the Tribunal for the appointment of a specialist retail valuer under section 31(1)(b) of the RL Act. The respondent objected to this appointment on the ground that agreement as to the rent had been reached. 77Subsections (1) and (1A) of section 31 of the RL Act are in the same terms as subsections (1) and (1A) of section 19, with the important exception that the former provisions apply in cases involving a retail shop lease 'that provides an option to renew or extend the lease at current market rent'. 78The Tribunal upheld the applicant's contention that in the correspondence that had taken place the parties had not reached agreement as to the rent and dismissed the respondent's objection to the appointment of a valuer. 79The following passages in the decision (at paragraphs [4], [5], [33], [34] and [36]) are relevant to the present appeal:- 4 It is common ground that the balance of clause 5 [i.e., clauses 15.16 et seq] is not relevant simply because the Retail Leases Act 1994 has now provided an overriding regime for the determination of current market rent. 5 It is also common ground that Retail Leases Act 1994 Section 31 provides the law and machinery for the determination of current market rent when the parties are unable to agree, and it is also common ground that the section overrides any contractual term, either to the contrary or providing its own regime, for the determination of current market rent - in other words, the section and the Act apply notwithstanding the terms of the lease contract. 33... it is not my view that one should attempt to apply a gloss on the meaning to be ascribed to the word "agree" in section 31(1)(b) - the word has a common or usual meaning importing a meeting of minds on the particular issue... 34 Consequently, I am of the view that the word "agree" where it appears in section 31(1)(b) has a common or garden variety meaning of reaching a similar opinion such that the offer made is acceptable to the offeree and there is a meeting of their minds. 36... it was suggested that clause 5.15 imposes a regime that entitles either party to apply to the Tribunal for the appointment of a specialist retail valuer. I agree with that submission but if it is suggested that the parties thereafter cannot reach an agreement then I reject that proposition. In my view, the parties to a retail lease can always reach an agreement - after all that is the whole purpose of the mediation regime; and the Note that appears at the end of section 31(1) supports that conclusion. In any event, it is not uncommon for parties to continue negotiations, even after (in a litigated matter) the court has reserved, such that if agreement is then reached then that disposes of the matter and there is no need for the court to deliver its reserved Judgment. 80We agree with these submissions made on the Respondents' behalf and would add only three comments. 81The first is that the interpretation for which Mr Soltan argued would produce the outcome that if the parties to a lease endeavoured strenuously to reach an agreement as to the current market rent before the contractual deadline (i.e. the rent review date) but did not succeed until one day after this deadline had passed, neither of them could treat their agreement as binding and the only safe course of action for them would be to seek a determination by a valuer. This is a highly inconvenient, if not absurd, outcome. 82Secondly, Mr Soltan's argument based on the words 'is to be' in sections 19(1)(b) and 31(1)(b) (which are in identical terms) was not put to the Tribunal in the Alma Constructions case. But the dicta that we have quoted, notably from paragraph [36], indicate that this argument would not have found favour. The sweeping statement in this paragraph that 'the parties to a retail lease can always reach agreement' is enough to demonstrate this. Furthermore, the Tribunal's reasons show manifestly that if it had discerned an agreement as to the amount of current market rent in the correspondence between the parties, it would have declared this amount to be the rent payable under the new lease and upheld the respondent's objection, even though this correspondence commenced after both the 'rent review date' stipulated in the lease and the date of exercise of the option and continued into the period of the new lease. 83Thirdly, the Note at the end of section 19(1), while not part of the text of the statute, may be taken into account as an aid to construction in the circumstances outlined in section 34 of the Interpretation Act 1987. These include where the provision is 'ambiguous or obscure'. If indeed section 19(1)(b) is ambiguous as to the time at which it must be found that the parties 'do not agree' as to the rent, the Note strongly suggests that an agreement between them should be treated as valid and binding, eliminating the need for a determination by a valuer, even though it was reached after the rent review date. 84Like the Tribunal, we consider that this ruling by us is sufficient to dispose of a further contention raised in the Notice of Appeal but not developed in Mr Soltan's submissions. This was that the Tribunal's finding of an estoppel against the Applicant was incorrect, on the ground that it 'stood in the face' of the Applicant's right to apply under section 19(1)(b) for the appointment of a specialist retail valuer. It is sufficient for us here to refer to the reasoning of the Tribunal on this matter, which we have summarised above at [55]. 85According to Mr Soltan, the second inconsistency between section 19(1) of the RL Act and the Payment Plan Agreement was that the alleged agreement within it as to the current market rent did not satisfy two aspects of the definition of 'current market rent' in section 19(1)(a). 86The first of these was that this agreement as to rent was not made between parties 'acting knowledgeably'. This was the case because at the relevant time Mr Richerdson was not aware of the rent review clause in the Lease and it should be presumed, on account of the Respondents' failure to call Mr Condell, that he was also not aware of this clause. 87In addition, Mr Soltan argued, any such agreement was not made 'without compulsion', because the Applicant was facing the prospect of eviction on the ground of unpaid rent. It accordingly had little choice but to accept all the terms of the Agreement. 88In our opinion, there are two answers to this line of argument. The first and most important is that the terms of section 19(1), as we understand them, do not require the parties, when reaching an agreement as to the amount of the current market rent, to apply the criteria for ascertaining this amount that are set out in paragraph (a). These criteria are only applicable when the procedure for determination by a specialist retail valuer has been invoked. The reference in paragraph (a) to the rent being 'determined' on an effective rent basis makes this clear. 89Secondly, there was, as Mr Ireland argued, no evidence before the Tribunal or before us that would warrant a finding that the parties to the Lease (as opposed to their agents) were not 'knowledgeable', or that the Applicant agreed to the Payment Plan Agreement under duress or compulsion. 90For the foregoing reasons, we reject the arguments made by Mr Soltan in reliance on the overriding impact of section 7 of the RL Act and the terms of section 19(1) of that Act.

Arguments based on contract law 91Mr Soltan submitted that the Tribunal made a number of errors in its application of principles of contract law. They related, he claimed, to its treatment of the Payment Plan Agreement as binding on the parties and to its decision that the rent stated in this Agreement was agreed by the parties to be the current market rent. We will deal with these two subject-matters separately. 92Whether the Payment Plan Agreement was binding. Mr Soltan submitted that despite the apparent acceptance by the Applicant of the terms of this Agreement (as evidenced in Mr Richerdson's email to Mr Condell dated 24 October 2012), it was in fact not binding on the parties, by virtue of the failure of either or both of two conditions subsequent contained in it. 93The first of these conditions derived, he said, from Mr Condell's statement in his email of 16 October 2012 to Mr Richerdson that he had 'discussed this proposal with the owners and they will only agree to this payment plan if it is strictly adhered to'. According to Mr Soltan, this statement incorporated into the Agreement a condition of 'strict adherence' with which the Applicant did not comply. Its non-compliance took the form of failing to make the payments of current arrears stipulated in the Payment Plan, with the consequence that as late as March 2013 the Respondents drew down on its bank guarantee, thereby receiving the sum of $71,250. 94We are singularly unimpressed by this argument. It appears to imply that so long as the Applicant maintained the payments required by the Plan it would be bound by the Agreement, but as soon as it defaulted it would no longer be bound. Furthermore, to interpret this statement in Mr Condell's email as designed to import a condition subsequent into the proposed Agreement is to misunderstand its role completely. The message from the Respondents that this statement was intended to convey was simply that they would be likely to enforce strictly the rights reserved to them under the Lease if the Applicant defaulted in making the required payments. 95The second condition subsequent that Mr Soltan claimed to have been present in the Agreement derived from the last sentence in Mr Condell's email of 16 October 2012. This was as follows: 'If we can reach an arrangement, I will draft a more formal agreement for you to agree to.' Mr Soltan submitted that this constituted a condition subsequent, which was not satisfied because neither Mr Condell nor anyone else on behalf of the Respondents sent a 'more formal agreement' to the Applicant for it to 'agree to'. 96In this context, Mr Soltan invoked the authority of the well-known High Court case of Masters v Cameron (1954) 91 CLR 353, arguing that the Payment Plan Agreement fell into the third category of putative contracts outlined in this decision, not (as the Tribunal had held) in the first category. 97The passages in Masters v Cameron on which he relied were paragraphs [9] to [12], [19] and [20] (at pp 360-363 and 366-367 of the report):- 9. Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. (at p360) 10. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common. Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v. Miller (1878) 3 App Cas 1124 when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: " . . . as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed" (1878) 3 App Cas, at p 1151: see also Sinclair, Scott & Co. Ltd. v. Naughton [1929] HCA 34; (1929) 43 CLR 310, at p 317... 11. Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own: Governor & c. of the Poor of Kingston-upon-Hull v. Petch [1854] EngR 995; (1854) 10 Exch 610 (156 ER 583). The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, as in Summergreene v. Parker [1950] HCA 13; (1950) 80 CLR 304 or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed. These possibilities were both referred to in Rossiter v. Miller (1878) 3 App Cas 1124. Lord O'Hagan said: "Undoubtedly, if any prospective contract, involving the possibility of new terms, or the modification of those already discussed, remains to be adopted, matters must be taken to be still in a train of negotiation, and a dissatisfied party may refuse to proceed. But when an agreement embracing all the particulars essential for finality and completeness, even though it may be desired to reduce it to shape by a solicitor, is such that those particulars must remain unchanged, it is not, in my mind, less coercive because of the technical formality which remains to be made" (1878) 3 App Cas, at p 1149 . And Lord Blackburn said: "parties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if on seeing the result in that shape they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think that the parties ought not to be held bound till they have executed the formal agreement" (1878) 3 App Cas, at p 1152 . So, as Parker J. said in Von Hatzfeldt-Wildenburg v. Alexander (1912) 1 Ch 284, at p 289 in such a case there is no enforceable contract, either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. (at p362) 12. The question depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape: Farmer v. Honan [1919] HCA 13; (1919) 26 CLR 183. Nor is any formula, such as "subject to contract", so intractable as always and necessarily to produce that result: cf. Filby v. Hounsell (1896) 2 Ch 737... 19. The third question refers to conduct of the male appellant after 6th December 1951 and before he finally refused to proceed with the purchase. By this conduct the respondent asserts that she was led to believe that a binding contract of sale and purchase existed between the appellants and herself and was led in that belief to change her own position substantially. He requested the respondent's sons, and they complied with the request, to leave work they were doing on the fencing of the property in the manner required by the signed document, and to help him clean up timber which had fallen as a result of a fire on the property. He took possession of a room in the house and brought some of his goods on to the property. He effected some structural alterations and additions to the house. He put down superphosphate and seed on the land and erected a tank, employing labour for the purpose. During all this time he was insisting upon the respondent being ready to hand over exclusive possession of the property on the date mentioned in the document, 15th March 1952; and in order to be in a position to do so she sold her sheep and bought a house in Perth. 20. It was certainly most unfortunate for the respondent that after all this the appellants should be at liberty to turn round, as they did when they encountered financial difficulties which had nothing to do with the respondent, and deny that they were legally bound to purchase "Bokhara". But their liberty to do this arose from the fact that the respondent had herself introduced the qualifying sentence into her portion of the document of 6th December 1951; and it may be remarked in passing that according to Way's evidence she had done so very deliberately, with an eye to the fact that the property had come to her under a will and she felt a need to consult her solicitor before completing a formal contract. Whilst undoubtedly the male appellant's conduct showed that he confidently expected the transaction to go through and realized that the respondent had a like expectation, it plainly could not have been intended by him or relied upon by the respondent as a representation that there was any other relationship between them than that which was to be found within the four corners of the agreement of 6th December 1951. The question as to estoppel must be answered in favour of the appellants. 98Relying in particular on the last two paragraphs, Mr Soltan argued that the Tribunal erred in stating that acts appearing to constitute partial performance of an alleged agreement may point towards the conclusion that it falls within the first of the Masters v Cameron categories. He quoted the following sentence of the Tribunal's decision at [23]: 'The parties carried the payment plan agreement into execution for the 2012-2013 lease year and it is not now to the point that a formal version of the agreement was not produced.' 99A further submission of Mr Soltan was that the Tribunal also erred (again at [23]) in stating that the Applicant's submission based on Masters v Cameron was 'contrary to Mr Soltan's position (and Mr Richerdson's) to the effect that while there is a dispute as to its extent, an agreement was made in respect of the payment plan'. He maintained that the Tribunal should instead have assessed the intention of the 'proponent' of the Agreement, Mr Condell, on the basis of the words that Mr Condell used. 100Mr Ireland's arguments in response to these contentions were that the Tribunal's analysis of this issue disclosed no error and that we should take account of two passages in the transcript of the Tribunal hearing on 4 November 2013. In the first of these (p 2, line 49, to p 3, line 15), Mr Soltan conceded, 'just to make everybody comfortable', that his client 'agreed to the payment plan', and repeated this concession when asked by DP Callaghan to make his position clear. At the end of the second passage (p 17, lines 38 to 50), DP Callaghan referred to this concession immediately after Mr Ireland had made the submission that Mr Richerdson, in his witness statement, acknowledged his acceptance of the Agreement. 101On this question, our interpretation of the correspondence constituting the Payment Plan Agreement accords with that of the Tribunal. The statement by Mr Condell on which Mr Soltan relied must be considered alongside the accompanying Payment Plan, which specified in detail the times and amounts of the payments expected to be made by the Applicant and the effect that these payments would have over five months in reducing the arrears of rent. It is significant also that the date of commencement of the Plan was specified as 1 October 2012, eleven days earlier than the email containing Mr Condell's statement. This is another factor suggesting that the parties intended the Agreement to be binding on them as soon as the Applicant's acceptance was communicated to the Respondents or their agent. 102Applying the principles stated in the passages that we have quoted from Masters v Cameron, we are accordingly satisfied that the Tribunal did not err in its classification of the Agreement. The fact that Mr Soltan made a concession during the Tribunal hearing in line with this classification supports this conclusion, but we would have arrived at it in any event. 103Whether the parties reached agreement as to the current market rent. In his submissions, Mr Soltan challenged each of the grounds on which the Tribunal decided that the rent stated in the Payment Plan Agreement was agreed by the parties to be the current market rent. He argued that the Tribunal erred in basing this decision on each of the following alternative grounds: (a) the express terms of the Agreement; (b) the 'inferred intention' of the parties; (c) an implied term; and (d) a 'supplementary agreement'. We will discuss each of these four alleged errors separately. 104The express terms of the Agreement. Citing paragraph [34] (which we have reproduced above at [79]) of the decision in Alma Constructions Pty Ltd v C. D. Management Group Pty Ltd [2008] NSWADT 3, Mr Soltan argued that in the Payment Plan Agreement there was no express agreement as to the current market rent because there was no 'meeting of the minds' of Mr Condell and Mr Richerdson. He added that the Tribunal itself recognised at [17] that a term of this nature was 'not explicit, at least in those actual words'. The Tribunal in fact pointed out that the Agreement did not set out monthly rent payments for the whole of the final year of the Lease or use the phrase 'current market rent'. Since this particular aspect of the Agreement was 'unambiguous', he maintained, the Tribunal should not have taken into account the 'surrounding circumstances' of the Agreement, or the context in which it was made, or the subsequent conduct of the parties. 105In the alternative, Mr Soltan argued that if we agreed with the Tribunal's statement (at [18]) that the Agreement was in fact ambiguous and for that reason considered it appropriate to take surrounding circumstances into account, we should still conclude that there was no agreement that the rent stipulated was the current market rent. This was for the following reasons: (a) Mr Richerdson testified that when conveying acceptance of the Payment Plan Agreement, he did not regard it as dealing with the current market rent; (b) the Respondents did not call Mr Condell as a witness; (c) we should therefore infer, as the Tribunal should have done, that he too would have said that he did not believe the Agreement to be concerned with current market rent. 106In response, Mr Ireland argued that at the time when the Applicant accepted the terms of the Payment Plan Agreement, the officers and agents acting on its behalf must be taken to have been aware of the relevant provisions of the Lease, including particularly clause 15. Accordingly, it was irrelevant that one such agent, Mr Richerdson, testified that he was not aware of them. In support of this proposition, Mr Ireland cited a statement by Young CJ in Eq in Zucker v Straightlace Pty Ltd (1986) 11 NSWLR 87 and the High Court's decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165. 107In Zucker, the statement (at pp 92-93) is as follows: 'It is also quite clear that where a purchaser's right to rescind depends upon contract that (sic), as a person is deemed to know what is in the contract he himself made, knowledge of a fact which the contract permits as the basis of rescission is sufficient without a realisation by the person that that right exists.' 108In Toll, Mr Ireland relied particularly on paragraphs [45] and [46] of the joint judgment of the Court. It is sufficient here to quote the following extracts from these paragraphs:- 45 It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents... whatever they might be... 46. The statements in the above authorities accord with the well-known principle stated by Scrutton LJ in L'Estrange v F Graucob Ltd... that "[w]hen a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not." 109Mr Ireland also relied on what the High Court in Toll (at [40]) called 'the principle of objectivity by which the rights and liabilities of the parties to a contract are determined'. He drew to our attention the Court's reaffirmation of this principle in a decision, Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7, delivered as recently as 5 March 2014. At paragraph [35] of that decision, the Court said (footnotes are omitted):- 35... this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating"[39]. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties ... intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience". 110By virtue of this principle, he submitted, the 'surrounding circumstances' that could properly be taken into account in construing any ambiguities in the Payment Plan Agreement would not include Mr Richerdson's subjective knowledge or intentions (or indeed those of Mr Condell) at the time when the Plan was agreed on. The fact that these individuals were agents of the parties, not the parties themselves, provided additional support for this proposition. 111In our opinion, one important and indeed obvious aspect of the situation existing during the period when the Payment Plan Agreement was proposed by the Respondents' agent and accepted by the Applicant's agent was not sufficiently emphasised in the Tribunal's decision or the parties' submissions. It is that this Agreement does not stand alone. It does not make legal or commercial sense unless it is read in conjunction with the Lease. 112Accordingly, there is a strong case for concluding that the appearance of the amount $31,827.27 beside the phrase 'Rental amounts' in the Payment Plan, when considered alongside Items 13.A and 16 and clause 5 of the Lease, signified that although neither of the parties had utilised the procedure for determining current market rent set out in clauses 5.13 to 5.15, the Respondents were now proposing this figure of $31,827.27 as the 'current market rent', payable throughout the final year of the Lease. If the monthly rent stated had been the same as was payable during the preceding year (18 August 2011 to 17 August 2012), this interpretation would not be available. But the proposed rental incorporated a 5% increase. 113Applying the criteria stated in the passage in Electricity Generation that we have just reproduced, we therefore see considerable merit in the view that a 'reasonable businessperson' would have attributed this meaning to the Payment Plan's stipulation of an increased rental, considered side by side with the relevant parts of the Lease. This is the case irrespective of whether the provisions of the Agreement under consideration should be characterised as ambiguous (which we believe to be the correct view) or unambiguous. 114It was of course open to Mr Richerdson, whether acting on his own initiative or under instructions from Mr Gebara, to claim that this figure of $31,827.27 did not represent current market rent and therefore did not have to be accepted by the Applicant. But Mr Richerdson did not do this. In his email response to Mr Condell, he simply accepted the 'payment proposal' unconditionally. It is strongly arguable that the 'reasonable businessperson' would be likely to infer from this that on behalf of the Applicant he agreed that this figure should be taken to represent current market rent and was therefore payable pursuant to items 13.A and 16 and clause 5 of the Lease. 115Having regard to the High Court's firm adherence to the principle of objectivity in interpreting contracts, the evidence indicating or suggesting that Mr Richerdson (and possibly also Mr Gebara: see the last paragraph of the Tribunal's summary of his evidence, quoted above at [25]) had forgotten, or were never aware of, the role played by current market rent in the Lease must be regarded as irrelevant. The same must be said of any inference, such as Mr Soltan invited us to draw, of ignorance of these matters on the part of the Respondents' agent. There was no evidence at all as to whether any of the Respondents themselves were aware at any time of this aspect of the Lease. 116The foregoing conclusions on this quite difficult question of interpretation are put forward only as more likely to be correct than the opposing position advanced by Mr Soltan - i.e. that because the Payment Plan Agreement made no reference to current market rent, the parties to it agreed only that the rent stipulated in it should be paid 'on account' until the current market rent, being the rent properly payable, had been agreed upon or determined by a valuer. We do not present these conclusions as the final basis on which we have decided this appeal because, for reasons explained below, we are clearly satisfied as to the correctness of a further ground on which the Tribunal found in favour of the Respondents. 117An 'inferred intention'. We have singled out this element of the Tribunal's decision as a matter requiring separate attention, even though the 'inferring' of the parties' 'intention' appears to us to be closely linked with the process of construing the express terms of an agreement. The principal reason why we treat this topic separately is that Mr Soltan advanced submissions specifically addressing it. 118His challenge to this aspect of the Tribunal's reasoning was based in part on the fact that relevant passages in the case on which the Tribunal chiefly relied at this point, Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407, had been criticised to some extent in subsequent decisions. 119Any doubts on this matter must, however, be regarded as resolved by the High Court in Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7. For present purposes, the Court's statement of principle at [35], quoted above at [109], does not differ materially from the passage (at [19]) that the Tribunal quoted from the Franklins decision. 120Mr Soltan argued also that the Tribunal 'erroneously misapplied' to the facts of the present case two phrases that appear in more or less identical form in both Franklins and Electricity Generation: namely, 'the commercial purposes of the transaction' and 'the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. 121With respect to these matters he made the following submissions: (a) the genesis of the Payment Plan Agreement was the existence of substantial arrears of rent; (b) its commercial purpose was to deal with these arrears; (c) its background included (i) the incorrect invoicing of rent, 'automatically' increased by 5% since 18 August 2012, by the Respondent's agent, (ii) the failure of both parties to invoke the rent review provisions of the lease and (iii) the absence of any evidence of knowledge of these provisions by the parties' agents; and (d) the context and market in which the parties operated included a standard practice among commercial managing agents of advising lessees just before or after a rent review date of the amount at which the lessor had assessed the current market rent. 122According to Mr Soltan, the Tribunal erred in failing to take these matters into account when determining the 'inferred intention' of the parties. 123In support of his arguments on this topic, Mr Soltan cited two paragraphs, [2-40] and [2-44] of Carter, The Construction of Commercial Contracts. 124It is true that the Tribunal did not describe as 'automatic' the 5% increase in the rent occurring under the Payment Plan Agreement. Mr Soltan suggested to us that it was in fact generated 'automatically' by a computer in TGC's office. But there is no evidence that this is how it occurred. 125It is true also that the Tribunal did not refer to what he claimed to be a 'standard practice' among commercial managing agents. We do not believe, however, that the existence of any such practice is necessarily a relevant factor in determining the particular question of construction that we are now considering. 126Contrary to Mr Soltan's submission, the Tribunal did refer in its decision to all the other matters that we have listed at [121]. There is no reason to believe that it did not also take them into consideration when applying the principles that it quoted from Franklins v Metcash. 127As we pointed out to Mr Soltan during the hearing, the two paragraphs from Carter, The Construction of Commercial Contracts, that he drew to our attention do not relate to 'inferred intention' in determining the meaning of contractual terms. Instead, they relate respectively to the question whether a pre-contractual statement forms part of the contract and to the classification of terms as conditions or warranties. 128For these reasons, we reject Mr Soltan's challenge to the Tribunal's decision in so far as it invoked the concept of 'inferred intention'. 129An implied term. Mr Soltan argued that the Tribunal erred at [19] in deciding that a term should be implied in the Payment Plan Agreement to the effect that the rent stated in it was the current market rent. He maintained that none of the requirements for such a term that the High Court outlined in the case cited by the Tribunal, B.P. Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20, was in fact satisfied. 130The specific points that he made in his written submissions about a term to this effect were as follows:- (1) It was not 'reasonable and equitable' because (i) it deprived the Applicant of its contractual and statutory right to have the current market rent determined by a specialist retail valuer; (ii) at the time when it would be implied, Mr Richerdson was not aware of the rent review provisions of the Lease; (iii) it was implied after incorrect invoicing of rent by the Respondents' agent; and (iv) the Applicant could not dispute the Respondents' position on this matter because it was at risk of being evicted. (2) It was not 'necessary to give business efficacy' because the desired effect of the Payment Plan Agreement would be achieved without its being treated as bearing on the current market rent. (3) It was 'not so obvious within' the Agreement and the emails between Mr Condell and Mr Richerdson. (4) There was no 'clear expression' of it within the Agreement. (5) It 'contradicted an express term' of the Agreement, namely, the provision that if the parties did not agree on the current market rent, it should be determined by a valuer. 131Mr Ireland did not address the question of an implied term to any significant extent. 132In our opinion, the first of these five contentions is not made out and the third and fourth appear to be based on misunderstandings of the criteria stated by the High Court. But there is merit in the second and fifth contentions. The Agreement would not have lacked 'business efficacy' simply because it did not purport to resolve the question of current market rent and, on the face of it at least, the suggested implied term did contradict an express term of a contract (the Lease) which we have held to be closely associated with the Agreement. 133For these reasons, we incline to the view that the Tribunal's ruling that an implied term arose within the Agreement was subject to error. As the Tribunal pointed out, however, this ruling was not essential to its decision in favour of the Respondents. 134A 'supplementary agreement'. In his written submissions, Mr Soltan argued that the Tribunal erroneously applied the passage that it quoted from Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 429 (we have quoted this passage above at [46]), for the following four reasons. 135First, the current market rent was a 'commercial essential', indeed the 'focal point' in the relations between the parties. But it was never discussed by them. Secondly, there was no clear basis for inferring a 'manifest mutual assent' between them, since the evidence showed instead that they simply overlooked it. Thirdly, 'implication or inference as stated earlier reveals no agreement'. Fourthly, statements indicating an awareness of the market review date of 18 August 2012 were never made by either party until the Applicant filed its Application on 16 August 2013. 136In his oral submissions, Mr Soltan argued that another reason why there was no 'mutual assent' between the parties that the new lease arising out of the Applicant's exercise of the option to renew had not been executed by it. 137Mr Soltan relied in this context on a Supreme Court case, Callaghan v Merivale CBD Pty Ltd [2005] NSWSC 985. Here a lessee sued successfully to recover overpaid rent, which the lessor had demanded without being entitled to do so. The passage in the judgment (at [27]) on which Mr Soltan placed particular emphasis was as follows:- 27 What the circumstances do indicate, rather than an agreement to accept the rent fixed by the lessor, is a misrepresentation (doubtless innocent), made on its behalf, that in the events that had happened the rent had been effectively fixed at the revised figure which could not be reconsidered under clause 6(c). The payments of the increased amounts made in consequence by the lessee were made under a mistake induced by that misrepresentation, and are recoverable... 138In submitting that the Tribunal, at [20], had stated and applied the law correctly in finding (as an alternative ground) that a 'supplementary agreement' had arisen out of the parties' of conduct, Mr Ireland relied on passages in the Court of Appeal's decision in Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61. The issue in that case was whether the respondent Council was entitled to require the appellant company, with which it had a contract for waste disposal, to remit to it a proportion of liquid waste fees that the appellant collected from third parties. In upholding the trial judge's decision in favour of the Council, the Court held that the appellant, by its conduct, had impliedly accepted an offer by the Council which included provision for the partial remission of these fees. 139The passages in the judgments on which Mr Ireland relied included the following extracts from the judgment of Heydon JA:- 74 Thus offer and acceptance analysis is a useful tool in most circumstances, and indeed is "normal" and "conventional" (Gibson v Manchester City Council [1979] 1 All ER 972 at 974 per Lord Diplock). But limited recognition has been given to the possibility of finding that contracts exist even though it is not easy to locate an offer or acceptance. In Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR [97326] at 11,117-11,118 McHugh JA (Hope and Mahoney JJA concurring) said: "It is often difficult to fit a commercial arrangement into the common lawyers' analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of 'offer', 'acceptance', 'consideration' and 'intention to create a legal relationship' which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship ... Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed." 75 Those passages were cited with approval by Ormiston J in Vroon BV v Foster's Brewing Group [1994] 2 VR 32 at 82-3... Ormiston J said at 81: "... I am prepared to accept ... that agreement and thus a contract can be extracted from circumstances where no acceptance of an offer can be established or inferred and where the most that can be said is that a manifestation of mutual assent must be implied from the circumstances. In the language of para. 22(2) of the Second Re-statement on Contracts: 'A manifestation of mutual assent may be made even though neither offer or acceptance could be identified and even though the moment of formation cannot be determined'." He concluded at 83: "there is now sufficient authority to justify the court inquiring as to the existence of an agreement evidenced otherwise than by offer and acceptance." 77 One further observation of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd is relevant: "it is an error 'to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed'. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract." ... 140Mr Ireland also cited the judgment of Ipp JA at [173]:- 173 In these circumstances, in my view, the fact that the appellant charged the higher fees is conclusive evidence that it agreed to all the conditions contained in the offer of 19 September 1991. When regard is had to the indivisible nature of the offer, the appellant's conduct, objectively viewed, was an unequivocal acceptance of the offer. The appellant accepted the benefits proposed, namely, the charging of the higher fees while using the Council's land. Those benefits could not be severed from the obligations proposed. Accordingly, by accepting those benefits the appellant accepted the Council's offer in accordance with its terms (cf Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd at 535). 141At the hearing, we suggested to the parties' representatives that the Applicant's 'irrevocable' exercise of the option to renew the Lease might be significant in the present context. This was effected on 15 April 2013, in a notice that was executed by the Applicant through the means of a signature supplied by Mr Richerdson. We suggested that this action could be viewed as part of a course of conduct by the Applicant signifying its acknowledgment that the rent stated in the Payment Plan Agreement was both the current market rent and the rent which, increased by 5% in accordance with the Lease, would be chargeable in the first year of the new lease. 142In response to this suggestion, Mr Soltan argued (a) that Mr Richerdson's exercise of the option could not be viewed in this light because of his evidence that he was unaware of the terms of the Lease and (b) that this exercise of the option during the permitted period of only three months was a 'commercial necessity' to keep the Applicant's business in operation. 143Mr Ireland submitted that at that time Mr Richerdson must have known the terms of the Lease, or must at least be deemed to have known them. He pointed out also that if at the time of exercise of the option the Applicant had been in breach of any term of the Lease the Respondents could have refused to grant a new lease. This consideration, he said, added to the 'unfairness' of the Applicant's conduct in seeking subsequently to depart from the parties' mutual understanding as to the amount of the rent payable. 144In our opinion, the Tribunal was correct in concluding that a supplementary agreement arose by virtue of the parties' course of conduct between the time when this agreement was concluded (October 2012) and the time when the Applicant sought to dispute this status (August 2013). This supplementary agreement confirmed the status of the rent agreed in the Payment Plan Agreement as being the rent payable during the last year of the Lease and therefore effectively the current market rent. 145We make the following additional observations. If there were any doubt as to whether a supplementary agreement of this nature had arisen by the time the option was exercised, the act of exercising it 'irrevocably' eliminated this doubt. Like the Payment Plan Agreement, the letter exercising the option was only intelligible if read in conjunction with the Lease. In particular, the rental amount initially due under the new lease, to which the Applicant conveyed its concurrence by exercising the option, was only ascertainable through consulting the terms of the Lease. The argument that the Applicant could claim not to be bound by this term of the new lease because Mr Richerdson, at the time of exercising the option, was not aware of the terms of the original Lease is simply not maintainable. Two authorities (mentioned above) that Mr Ireland cited make this clear: Zucker v Straightlace Pty Ltd (1986) 11 NSWLR 87 and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 146The outcome of our consideration of this issue is that, subject to the arguments (outlined below) relating to the rules of natural justice, this appeal must be dismissed. Our earlier opinion that, under the express terms of the Payment Plan Agreement properly construed, the rent stated for the final year of the Lease might well have been agreed to be the current market rent was deliberately not put forward as a firm conclusion. But we are satisfied that the subsequent conduct of the parties, including particularly the Applicant's 'irrevocable' exercise of the option to renew, constituted a supplementary agreement confirming this proposition. 147An alternative way of justifying this outcome, on which we do not formally rely as it was not put before the parties, involves the following propositions: (a) the Payment Plan Agreement did not fix the rent stated in it as the agreed amount of current market rent, but simply designated it as a rental to be paid 'on account' until the current market rent had been agreed or determined; (b) the Applicant therefore remained entitled, under clause 5 of the Lease, to invoke the statutory procedure for having this rent determined by a specialist rental valuer; (c) the Applicant's decision, however, to exercise the option to renew, signifying its agreement to pay rent under the new lease at the amount stated in the Agreement plus 5%, amounted to a waiver of this right to invoke the statutory procedure and/or a deemed acceptance of the rent stated in the Agreement as the current market rent.

Arguments based on estoppel 148Amongst a number of submissions put forward by Mr Soltan in challenging the Tribunal's decision that an estoppel arose in the Respondents' favour, it is necessary to mention only one. This is that there was no 'cogent evidence' to support the Tribunal's findings, at [28], that 'Both parties adopted an assumption as a term of their legal relationship to the effect that the monthly rate of rent would be $31,827.27 for the 2012-2013 lease year and the relevant current market rent', that 'The Applicant induced or acquiesced in the Respondents' adoption of that assumption...' and that '... the Applicant knew or intended that the Respondents were so acting'. 149On the footing that, as we understand the law on estoppel, any such 'assumption', 'inducement' and 'acquiescence' must be subjective, in the sense that a person or persons must be found to have assumed, induced or acquiesced (as the case may be), we incline to the view that this submission by Mr Soltan is well-founded. The evidence as to the subjective knowledge and intentions of the officers and agents of the parties is at odds with these findings by the Tribunal. 150These doubts as to the Tribunal's ruling on estoppel do not affect our decision as to how the appeal should be disposed of. The primary basis on which the Tribunal determined these proceedings in the Respondents' favour was that on an objective view of the Payment Plan Agreement, the rent stated in it was agreed to be the current market rent. We have stated that this may well be correct, but that the matter is put beyond doubt by the subsequent conduct of the parties. Neither of these grounds of decision depends on findings as to what the officers or agents of the parties knew or intended.

Arguments as to rules of natural justice 151Mr Soltan submitted that the Tribunal failed in its duty, imposed on it by section 73(2) of the Administrative Decisions Tribunal Act 1997, to observe the rules of natural justice. He referred also to sections 70 and 73(4)(c) of this Act, which were respectively to the effect that the Tribunal must provide to the parties to a proceeding (a) a reasonable opportunity to put forward their case and make submissions and (b) 'the fullest opportunity practicable to be heard or otherwise have their submissions considered in the proceedings'. 152The grounds on which Mr Soltan made this submission were that the Tribunal had based its decision on three grounds which had not been argued before it and to which it had itself made no reference during the hearing on 4 November 2011. These grounds (each of which has been examined earlier in the present decision) were as follows: (a) that the Payment Plan Agreement evinced an 'inferred intention' that the rent stated in it was the current market rent; (b) that a term to this effect should be implied; and (c) that the parties, by their subsequent conduct, reached an agreement to this effect. 153According to Mr Soltan, the Applicant, being unaware that any of these grounds might be relied on by the Tribunal in reaching its decision, was deprived of the opportunity to argue against them. 154With respect to each of these grounds, Mr Ireland argued that any failure by the Respondent or the Tribunal to bring them to the Applicant's notice during the Tribunal proceedings did not justify setting aside the Tribunal's decision because each of them was an alternative or subsidiary ground of this decision. The primary ground of this decision was, he said, that the Payment Plan Agreement, in its express terms, included an agreement between the parties that the rent stated in it was the current market rent. It did not matter that any one or more of these three alternative grounds might not have been brought to the Applicant's notice. 155In support of his claim that each of the three grounds identified by Mr Soltan was an alternative or subsidiary ground, Mr Ireland relied on the following phrases used by the Tribunal: (a) 'in other words', appearing near the end of paragraph [17], immediately before the concept of 'inferred intention' was introduced; (b) the following sentence at the commencement of [19] - 'If, contrary to my opinion, there were not such an express term, such a term would be appropriate to be implied in the payment plan agreement' - and (c) 'Additionally', appearing in paragraph [16] at the commencement of the Tribunal's description of what it found to be the 'supplementary agreement'. 156In support of his submission that reliance on an alternative or subsidiary ground that had not been notified to a losing party did not provide grounds for setting aside a decision, Mr Ireland relied on the Court of Appeal's decision in Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208. 157In addition, Mr Ireland argued that in both the written and the oral submissions that he had put to the Tribunal on behalf of the Respondents, he had claimed that the course of conduct adopted by both parties following their entering into the Payment Plan Agreement had given rise to a 'supplementary agreement' as defined by the Tribunal at paragraphs [16] and [20] of its decision. He relied on a number of passages in these submissions, including the following:- (i) The agreement as to the rent owing and paid for the last year of the Lease... is demonstrated unequivocally by the following material:... (c) the record of payments... confirming the invoicing and payment... of rent in the amount of $31,827 per month from October 2012 to the present. (Respondents' written submissions, filed on 1 November 2013) (ii) So in essence my point is simple, the payment plan and the subsequent - as documented by the subsequent course of conduct, the issue of tax invoices, the payment of rent triggered by those tax invoices over the last year, it's plain that there was agreement as to rent for the final year of the lease and it's significant that there is apparently no dispute about this particular matter. (Transcript, 4 November 2013, page 17, lines 32-36) 158We agree with Mr Ireland that the Tribunal put forward the three grounds in question as 'alternative' and 'subsidiary' and that for this reason the Applicant could not rely on any failure by counsel for the Respondents or the Tribunal to bring any of them to its attention as a sufficient basis, standing alone, for overturning the Tribunal's decision. 159According to our view of this case, however, one of these three grounds - namely, the existence of a 'supplementary agreement' - is not merely an 'alternative' or 'subsidiary' ground. It constitutes the line of reasoning on which we believe that the Tribunal's decision in the Respondents' favour should be upheld. For this reason, the question whether the Applicant was in fact sufficiently notified of this line of reasoning and given an opportunity to respond to it is important. 160In our opinion, these two conditions were satisfied. In addition to the two passages from the Respondents' submissions that we have just quoted, we rely on an additional passage in Mr Ireland's oral submissions at the hearing. It follows immediately on from references by him to the amount of rent quoted in the tax invoices sent by TGC to the Applicant between October 2012 and July 2013:- So there really can be no dispute as the fact, in my submission, that flowing on from this original payment plan that there was a course of conduct on the part of both parties in terms of payment of retail rent in this amount, levying of retail rent in this amount, designation of that as the amount of rent to be paid over the subsequent year. (Transcript, 4 November 2013, page 15, lines 37-41) 161Each of these submissions by Mr Ireland was advanced in circumstances where Mr Soltan had an opportunity to respond to them. Their references to a 'course of conduct' giving rise to an agreement between the parties were sufficient to put the Applicant on notice that this interpretation of an aspect of the facts of the case might play a role in the Tribunal's decision. 162For these reasons, we reject the Applicant's argument that this decision should be set aside on the ground that the Tribunal failed to observe the rules of natural justice.

Conclusion 163For the foregoing reasons, the appeal must be dismissed. 164We give the following directions with regard to the costs at first instance and on appeal. Any application by the Respondents for the costs of these appeal proceedings must be filed and served within 28 days, along with supporting submissions and any additional submissions they may wish to make as to the costs of the proceedings at first instance. Any submissions in reply by the Appellant must be filed and served within a further 28 days. These matters of costs will then be determined 'on the papers', pursuant to section 76 of the Administrative Decisions Tribunal Act 1997, unless the Appeal Panel decides that a hearing is required. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. 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: 28 April 2014

Administrative Decisions Tribunal Act 1997(NSW)

Introduction 1The decision under appeal ('the Tribunal's decision') was given in the Retail Leases Division of the Administrative Decisions Tribunal ('the Tribunal') on 26 November 2013. It is reported as City Convenience Leasing Pty Ltd v Boo [2013] NSWADT 268. 2In this decision, the Tribunal, constituted by Deputy President Callaghan, dismissed an Application for Original Decision ('the Application') that the Applicant, City Convenience Leasing Pty Ltd, had filed. The order sought was that the Tribunal should appoint a specialist retail valuer pursuant to section 19(1)(b) of the Retail Leases Act 1994 ('the RL Act'). 3The Tribunal reserved the question of costs, but gave directions for the filing of submissions on this matter. 4On 6 December 2013, the Respondents, who are Akau Boo, Vinh Quang Tran and Kim Chau Tran, filed an application for costs, with supporting submissions 5On 9 December 2013, the Applicant filed a notice of appeal against the Tribunal's decision. On 30 December 2013, it filed submissions responding to the Respondents' application for costs. 6On 1 January 2014, the Tribunal was abolished and its functions were taken over by the Civil and Administrative Tribunal of New South Wales ('NCAT'). The appeal proceedings thereupon became 'unheard proceedings' as defined in clause 6(1) of Schedule 1 of the Civil and Administrative Tribunal Act 2013. Clauses 7(1) and 7(3)(b) of this Schedule stipulate that such proceedings are to be heard by NCAT but determined as if that Act had not been enacted. 7On 20 January 2014, Principal Member Chesterman heard and dismissed an application by the Applicant for interlocutory orders that would have had the effect of staying the operation of the Tribunal's decision. He reserved the question of costs and gave directions for the filing of submissions before the hearing of the appeal itself. 8This hearing took place before us on 17 March 2014. Mr H Soltan represented the Applicant as its agent. Mr C Ireland of counsel appeared for the Respondents. 9Near the commencement of the hearing, Mr Soltan applied for leave to call a witness to give further evidence. We rejected this application. The grounds on which it was made and our reasons for rejecting it are outlined below. 10At the end of the hearing, we stated that we would reserve our decision. We also indicated that after we had delivered it, the question of costs at first instance and on appeal would be determined on the basis of written submissions.

The Tribunal's decision 35The Tribunal's decision was structured around four 'propounded reasons' that the Respondents advanced as independent grounds, each of them sufficient, for rejecting the Applicant's application for the appointment of a specialist retail valuer. Having outlined these reasons at [4], the Tribunal observed at [6] that counsel for the Respondents relied principally on the second and fourth of them. It proceeded therefore to discuss these two reasons first. We will do likewise. 36At [4], the Tribunal formulated the second 'propounded reason' as follows: '[T]he evidence confirms that there has been an agreement as to the actual amount of rent paid over the last year of the Lease as at $31,827.27 per month.' 37The Tribunal indicated at [16] that its acceptance of this argument stemmed from it having made the following two findings on the balance of probabilities:- a) Commencing at least on 16 October 2012 and continuing beyond 18 August 2013 the Respondents have invoiced the Applicant and the Applicant has effectively paid, rent for the subject premises at the rate of $31,827.27 per month since 17 August 2012. b) The terms of the payment plan agreement are predominantly presented by the email of 16 October 2012 from Mr Condell to Mr Richerdson and the payment plan itself which I have set out above. 38In its discussion of the second 'propounded reason', however, the Tribunal reached the conclusion that in the Payment Plan the parties agreed not only that the 'actual amount of rent' to be paid during the last year was $31,827.27 per month, but also that this was 'effectively' the 'agreed current market rent'. This conclusion involved rejection of an important contention advanced by the Applicant, which the Tribunal had summarised as follows at [6]:- On behalf of the Applicant, Mr Soltan does not dispute that an agreement was made as to the payment plan but contends that the agreement did not deal with market rent review. 39In reaching this conclusion, the Tribunal relied on three separate lines of reasoning. It described the conclusion as (i) 'part of the inferred intention in the agreement'; (ii) a term that would be 'appropriate to be implied in the payment plan agreement'; and (iii) arising from a 'supplementary agreement' between the parties. 40At [17], the Tribunal gave the following explanation of its finding of an 'inferred intention':- 17 The Respondents' second propounded reason asserts an agreement "as to the actual amount of rent paid over the last year of the lease as $31,827.27 per month" and the fourth propounded reason refers to such an agreement. Such a term is not explicit, at least in those actual words, in the principal documents constituting the payment plan agreement, being the email of 16 October 2012 from Mr Condell to Mr Richerdson and the payment plan itself. The actual words of that documentation do not detail monthly rent payments for the part of the 2012-2013 lease year beyond the time of the clearance of the debt the subject of the payment plan. Nor, it should be added, do those actual words refer to "current market rent" which is the concept referred to in s19 of the Retail Leases Act and in the subject lease in item 16 dealing with rent review at 18 August 2012. While there is evidence from Mr Richerdson to the effect that current market rent was not in his mind when he negotiated the payment plan agreement, the lease with its provisions concerning current market rent at 18 August 2012 was a significant part of the context or surrounding circumstances of that agreement. Also a significant part of that context was an obvious need then in the Applicant to achieve through the payment plan an agreement or an arrangement with the Respondents whereby the Applicant could avoid being dispossessed from the subject premises on account of substantial indebtedness to the Respondents under the lease . The opening section of the payment plan agreement in the heading refers to "Payment Plan ... commencing 1st October 2013" and under the sub-heading "Rental Amounts" refers, in relation to the Applicant, to $31,827.27. I have come to the view that particularly in respect of that part of the documentation, on a proper construction of the payment plan agreement, it should be read as referring to monthly rent of $31,827.27 as agreed to be paid for the entire 2012-2013 lease year and effectively as the agreed current market rent; in other words, such a term is part of the inferred intention in the agreement. Carter, The Construction of Commercial Contracts at [2-15], explains inferred intention thus: "'Inferred intention', in relation to a contract, refers to the parties' intention in relation to matters on which they have expressed no intention. In relation to such matters, inferred intention is presumed to be the parties' actual intention" 41At [18], the Tribunal sought to support this explanation by quoting from the judgment of Allsop P in Franklins Pty Ltd v Metcash Ltd (2009) 76 NSWLR 603 at [19]. In this paragraph, the President emphasised the need to give to commercial contracts a 'businesslike interpretation' and to avoid interpreting them 'pedantically or in a manner prone to defeat the evident commercial purpose'. 42Also reproduced at [18] was an extract from the judgment of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40], in which, as the Tribunal expressed it, the Court 'affirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined'. This passage is as follows:- 40 This Court, in Pacific Carriers Ltd v BNP Paribas, 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. 43Paragraph [18] of the Tribunal's decision concluded as follows:- I also add that in the payment plan, particularly in the opening section that I have referred to above, there is relevant ambiguity in the sense of language which is, in the context of rent beyond February 2013 or of current market rent, "ambiguous or susceptible of more than one meaning" as referred to by Mason J (as he then was) in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 (cf Western Export Services Inc. v Jireh International Pty Ltd [2011] HCA 45). 44 At [19], the Tribunal gave the following reasons for its alternative finding of an implied term to the effect that a monthly rental of $31,827.27 was the current market rent:- 19 If, contrary to my opinion, there were not such an express term, such a term would be appropriate to be implied in the payment plan agreement. I acknowledge that as Mason J said in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 346 that "the Courts are slow to imply a term" but considering the summary of the grounds for the implication of a term in B.P. Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at 26, cited by Mason J in Codelfa at 347, I am persuaded that such a term would be appropriate to be implied in the payment plan agreement. The grounds propounded in the B.P. Refinery case for the implication of a term are:

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