Retail Tenancies List, Fair Trading Act, Application for interim injunction, Alleged misleading deception and unconscionable conduct relative to notice to quit, no serious question to be tried, costs

1. Application for injunction dismissed.
2. Adjourned to directions hearing 18 February 2000.
3. No order as to costs.

For the Applicant: Mr M. Redfern of Macpherson and Kelley

For the Respondent: Ms A. Rumba of Abbott Stillman and Wilson

1. Mr Bakker is carrying on his jewellery business at Room 101, 10th Floor of 113 Swanston Street, Melbourne. He has conducted his business there since 1987 At no time during his occupancy of those premises has he had a lease for a term of years. He has occupied the premises at all times as a tenant from month to month.
2. Sometime ago as I understood the evidence, approximately a year ago it became evident that moves were afoot to sell the property. He made enquiries and it seems that the sale options which he conceded were available involved the purchase of individual tenancies or the purchase of entire floors rather than merely the opportunity to purchase the building as a whole.
3. He made enquiries along these lines from Mr Mark McClelland of Fitzroys, the estate agents who had acted as letting agents and managing agents of the property for some years. His enquiries entailed on a number of occasions asking for a Section 32 Vendor's Disclosure Statement which was in the event never forthcoming.
4. Meanwhile it appears he purchased premises in the nearby Manchester Unity Building, which he has arranged to have refurbished. Work has been underway for some months already and refurbishment of the Manchester Unity premises will not be completed for some time yet because of the high value of the stock items which Mr Bakker keep and the particular requirements of his business demand very extensive renovation and refurbishment. Moreover, he says that he has had problems with the stonework of the building and they further retarded completion of the renovation. Meanwhile he says that some seven or eight months ago Mr McClelland had discussions with him as to his security of tenure in the Capital Centre at 113 Swanston Street Melbourne and the likelihood that he would have to relocate. Mr McClelland, according to Mr Bakker told him he would be given a reasonable time to relocate.
5. On 10th of December Mr McClelland hand delivered a notice purporting to terminate the tenancy from month to month and requiring the premises to be vacated on 9 January 2000. Mr Baker says that he was most dissatisfied in the circumstances and attacks Mr McClelland for failing to honour his assurances. Mr McClelland said the building had been sold and he is doing what he had to do. In subsequent discussion it appears Mr McClelland had informed the tenant that the sale included condition that the premises must be sold with vacant possession. Later on the 21st of December 1999, Mr Baker was served with a notice to quit and requiring the premises to be vacated by 31st of January 2000. The letter also asserted that Mr Bakker's rent was substantially in arrears.
6. On the 1st of February Mr Bakker received a letter from the landlords solicitors Abbott Stillman & Wilson, dated 28 January 2000 asserting that he had no right to possession and was required to vacate immediately. Subsequently Mr Baker instructed Macpherson and Kelley to act for him. In a facsimile transmission from Abbott Stillman & Wilson to Mr Baker's solicitors stated that the locks of premises would be changed at 6.30 a.m. on the 3rd of February, that is tomorrow morning. This application has therefore been brought on as a matter of urgency.
7. I should add for completeness that after the service of the purported notice to quit by the agent in December 1999, the five tenants on the tenth floor had a meeting and forwarded a letter dated 14th of December 1999 to Mr McClelland referring to the history of the matter and stating that "under the current circumstances we are willing to vacate by 31st of March 2000. Please confirm."
8. It is clear that this proposal was not accepted. In the event it seems Mr Bakker also obtained off the record legal advice from a barrister who said he was not an expert in this area of law but suggested to Mr Bakker that he, Mr Baker "was in a strong position". In the result then, Mr Bakker did not engage his present solicitors until receiving the last of the correspondence to which I have made reference, that is, the letter dated the 28th of January hand delivered on the 1st of February.
9. Mr Redfern who appears on behalf of Mr Baker submits that in the circumstances his client was the victim of misleading and deceptive conduct contrary to Section 9 of the Fair Trading Act 1999 and further the conduct of landlord and his agent has been unconscionable within the meaning of the "unwritten law" and hence prohibited by Section 7 of the Fair Trading Act 1999. Mr Redfern referred me to a decision of Batt J. (as he then was) in the Olex Cables case but due to the urgency of the matter he was unable to provide the text of His Honour's judgment.
10. Mr Redfern concedes that since his client at no time held a tenancy for a period of not less than one year, the premises are not retail premises within the meaning of the Retail Tenancies Reform Act 1998 and his client is not the holder of a retail tenancies lease within the meaning of that Act. Accordingly the entitlement to relief if it exists must be under the terms of the Fair Trading Act 1999.
11. Mr Redfern submits that this dispute being a dispute between landlord and tenant is in terms of Section 107(1) a dispute or claim arising between a purchaser, a possible purchaser of goods or services and a supplier or possible supplier of goods or services. The definition of "services" in Section 3 of the Act is a wide enough to encompass the grant of estates and real estate. I did not understand Ms Rumba who appears on behalf of the respondent landlord to dispute the suggestion made by Mr Redfern that this dispute is a fair trading dispute under the meaning of Section 107(1) of the Fair Trading Act and hence within the Tribunal's jurisdiction under Section 108 of that Act.
12. The authority to grant an interim or to use traditional language "interlocutory injunctions" as is sought here is to be found in Section 123 of the Victorian Civil and Administrative Tribunal Act. Mr Redfern has indicated the willingness to be of his client to offer an undertaking as to damages.
13. As I understood Mr Redfern's submissions he did not attack the validity according to general principles of the notice to quite given on the 21st of December 1999. He submitted in the circumstances described it is unconscionable on the part of the landlord to rely upon the strict legal rights and further that so far as landlord through its agent has given Mr Bakker to understand that he would have adequate time in which to relocate his business, the landlord had engaged in unconscionable conduct. In those circumstances he submitted that the injunction sought should be granted.
14. Ms Rumba submits that there has been no misleading and deceptive conduct because in a general sense Mr Bakker was aware that vacant possession would be required of the premises very soon as a result of the notice given on the 10th of December. The deadline signed in that letter namely the 9th of January was put back to the 31st of January by the formal notice to quit served under cover of the solicitor's letter. This period in all the circumstances she submitted was reasonable.
15. Mr Redfern said that his client should not be penalised for delay because any delay his client had been guilty was not demonstrated to have induced any prejudice so far as the landlord is concerned. There was no evidence of the landlord undertaking any additional liability during the period since Mr Bakker received the first demand for possession of the premises on the 10th of December 1999. Mr Bakker said apart from the discussion with the barrister and the meeting with other tenants on the floor producing a proposal which was rejected by the landlord he had done nothing until retaining Mr Redfern's services within the last day or so. He told me that he had to work long hours to meet the orders which his business had in the pre-Christmas period and continue a workable orders throughout January rather than be concerned with the issue of
16. It is I think is well accepted that to obtain an interim injunction pursuant to Section 123 of the Victorian Civil and Administrative Tribunal Act 1998 one must demonstrate things which one would be required to demonstrate to a court to obtain an interlocutory injunction in similar circumstances, that is first that there is a serious question to be tried and secondly that the balance of convenience favours the grant of the injunction.
17. In the circumstances in which this application has come on I have heard the evidence of one side only. Mr McClelland has not been heard at all. On the other and in a proceeding such as this, one does not seek to determine disputed issues of fact, at any rate questions of fact which are dependent upon the credibility of witnesses and their reliability and their recollections. It follows therefore for the purposes of today's hearing I should accept as true everything which Mr Bakker has told me despite the fact that Mr McClelland may have a different version of events.
18. First I have to ask myself whether in the circumstances it is demonstrated that there is a serious question to be tried as to whether this landlord has acted unconscionably or has engaged in misleading and deceptive conduct. Regrettably in considering what might be described as unconscionable conduct under the unwritten law" as the landlord as described in Section 7 of the Fair Trading Act whilst Mr Redfern has furnished me with the reference to a. judgement of Batt J. (as he then was) in the Olex Cables case he does not have the text. It follows therefore that I must be guided by my own recollections on the subject as reliable or unreliable as they may be.
19. It cannot be the case that whenever there is conduct between parties to a contract which is in accordance with its terms subjectively "unfair" there is jurisdiction independent of statute to modify the arrangements between the parties Section 109 of the Fair Trading Act grants the Tribunal special additional powers in what it defines as "consumer disputes" and "trader trades disputes", neither of which this proceeding is, to make any order it considers fair". This provision for "palm tree justice" in consumer and small commercial disputes would have been necessary if there was a jurisdiction created by the Common Law or Equity and exemplified in the Olex Cables case to restrain any "unfair" enforcement of powers given by a contract.
20. In any event, even if I accept that there is such a principle, it is not obvious to me that in the circumstances described, namely that this tenant has been aware for a considerable period of time that his tenure of the premises is uncertain holding a tenancy only from month to month that it is unconscionable for the landlord to avail itself of the very entitlement given by that arrangement namely to terminate upon one month's notice given. Moreover, Mr Redfern himself surprised at the length of time that the refurbishment in the Manchester Unity Building, part of which has been acquired by Mr Baker has taken. There is no reason to think that Mr McClelland, the agent would necessarily be acquainted with the very special requirements that Mr Bakker apparently has in relocating his premises. In an ordinary business in commercial terms six weeks does seem a not unreasonable time for a monthly tenant to relocate. It has not been demonstrated by Mr Bakker that Mr McClelland had any insight into his business or that he was aware, if it be the fact, that his business required a much more extensive period to relocate than the average.
21. Accordingly even if I settle for the widest proposition as to what amounts to unconscionable conduct I am not satisfied that there is a serious question to be tried. As what I have said on that score indicates, likewise, I am not persuaded that there is a serious question to be tried as to whether there has been misleading or deceptive conduct. A retail business, a retail business which is conducted in premises which are subject to a monthly tenancy, would receive a reasonable period of time to relocate if given six weeks notice. I am not persuaded that this does amount to the contradiction the assurance given by Mr McClelland
22. Further, I think that the conclusion is reinforced by the knowledge that even although a distinct date for the recovery or possession was not given until a fairly late stage, it must have been obvious to Mr Bakker, and would be obvious to any reasonable observer, to any reasonable person in Mr Baker's position, that as time went on after his discussion with Mr McClelland, the date on which possession would be likely to be recovered would be getting closer rather than further away.
23. The fact that the property was known to be on the market and that a situation of uncertainty persisted for many months after the initial discussion should to my mind have alerted a reasonable tenant to the need to prepare for the move. In those circumstances I am not satisfied that there is a serious question to be tried and therefore it is unnecessary for me to proceed to consider the admission of the balance of convenience. Had I been of the opposite opinion, I would nevertheless have been reluctant, to say the least, to grant an injunction in the present circumstances having regard to the applicant's delay. True it is that there is no evidence as to precise consequences for the respondent landlord which the making of this application at so late a date has had. In the very nature of things the landlord is not in a position to call any evidence; but it is common ground that these premises have been sold and sold with vacant possession. If there is to be a problem in that regard it is a matter of common sense that the later problem emerges the more likely it is that it will cause serious legal difficulties and impair the sale. Mr Bakker knew that things were serious when he got a notice to quit from the landlord's agency. If he was in any doubt about that it should have been dispelled by the receipt of the solicitor's letter just before Christmas. Instead, he took no effective action whatsoever. He raised these issues with the landlord and received no assurances. It is in the circumstances, to my mind, quite wrong for him to have left his application so late and independent of the other considerations that I have already mentioned, that in itself might have been reason to deny equitable relief. For all those reasons I dismiss the application for injunction order.

1. I have just given my reasons for declining to grant relief by way of an interim interlocutory injunction under Section 123 of the Victorian Civil and Administrative Tribunal Act 1998 on the basis of jurisdiction bestowed upon the Tribunal under the Fair Trading act 1999. As a consequence, Ms Rumba, solicitor for the respondent landlord has sought an order that her client's costs be paid by the applicant tenant who failed to obtain the injunctive relief. She says that in the circumstances this application was brought on at the last possible moment and that the failure of the application demonstrates its lack of merit. In those circumstances her client's costs should be paid.
2. Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 governs the award of costs in those circumstances. Sub-section (1) states: the general principle is that costs lie where they fall.
3. Sub-sections (2) and (3) set out a very large range of matters which would justify the Tribunal in departing from that general rule and making such costs order as seems just. At a seminar conducted in retail tenancy matters in Leo Cussen Institute a leading arbitrator and practitioner in the retail tenancy area, Mr Golvan QC, summarised Section 109 by saying that it grants total discretion as to costs. I made so bold in a fairly early decision under the Retail Tenancies Reform Act 1998 to say that in the retail tenancies List an analysis of the nature of proceedings, which is one of the matters specifically referred to in Section 109(3) would demonstrate proceedings these proceedings are inter-parties litigation between commercial parties. The ordinary rule in retail tenancy matters should be that costs follow the event. That is the same rule which applies in a court where a plaintiff seeks an interim interlocutory injunction and fails upon the basis of not demonstrating a serious question to be tried it has to be orders that the plaintiff must pay the defendants costs.
4. In my view however there are grounds for caution in applying that view to this proceeding and of course that view is not commanded universally supported in the Tribunal. Judge Davey the Vice-President in charge of this List has disapproved. More significantly I think this is an application under the Fair Trading Act and not under the Retail Tenancies Reform Act. A monthly tenancy, is a much less valuable property than a tenancy for a term of years which is by definition the subject matter of the jurisdiction under the Retail Tenancies Reform Act. I have been very critical of the way the applicant tenant in bringing this proceeding. Nevertheless, as Mr Redfern correctly observed there is much at stake for his client. I must also consider that the affect of the delay in bringing the application has had a perverse positive effect in that Ms Rumba had to leave her office no doubt at great inconvenience and come directly to the Tribunal to the hearing. On the other hand she has been spared the extensive preparation, the costs of preparing a brief to Counsel, paying his or her fee and the like.
5. In the circumstances therefore I think the general rule as set out in Section 109(1) that costs lie where they fall is the one that should govern her and accordingly there be no order as to costs.