Green Apple Global Pty Ltd v La Brasserie Investments Pty Ltd

NCAT Appeal Panel|2018-03-07

Solicitors: Allsop Glover Lawyers with Bowan & Makenzie (Respondent) File Number(s): AP 17/50515 Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 19 October 2017 Before: D Charles, Senior Member File Number(s): COM 16/54697

Introduction

This appeal involves a dispute concerning a lease in respect of a licensed bar/restaurant at Darlinghurst (premises). The respondent to the appeal was the lessor. The appellant was the lessee.
The lease, the subject of the dispute, was for an initial term of 10 years commencing on 18 January 2016 (lease). The lease was in writing.
On 16 December 2016, the respondent (as applicant) filed Retail Leases Application COM 16/54697 in the Tribunal. In that application, the respondent sought the following orders: Payment of all outstanding rent, forfeiture of a bank guarantee and recovery of possession of the property.

Notice of Appeal and submissions

The Notice of Appeal was filed on 21 November 2017, the appellant having said it received notice of the decision on 26 October 2017.
The appellant's grounds of appeal can be summarised as follows: 1. The respondent, as lessor, had contravened s 18 (Misleading and deceptive conduct) or s 22 (Unconscionable conduct) of the Australian Consumer Law (NSW) (ACL), the conduct being that the respondent had leased a licensed bar/restaurant and had failed to transfer the liquor license to the appellant as lessee. 2. Alternatively, the respondent had contravened s 62B(1) (Unconscionable conduct) or s 62D (Misleading and deceptive conduct) of the Retail Leases Act, 1994 (NSW) (RL Act) 3. The appellant had suffered loss of revenue, loss of profit and damages in consequence of such conduct and should not be required to pay rent or other losses claimed by the respondent.
In relation to why leave to appeal should be granted, the appellant said: 1. The decision was not fair and equitable because notice had been sent to an old address for service, the lawyers for the appellant having been "fired". Consequently, notices were not received and the appellant did not have a chance to lodge its claim. 2. The decision was against the weight of evidence because the premises had been advertised as licensed premises. The appellant referred to an unidentified affidavit of Ms Shi and said that it had suffered financial loss. 3. In respect of new evidence, the appellant said it had been unable to obtain information from its bank, apparently due to the account being frozen, and was seeking an explanation from its former solicitors about why the liquor license had not been transferred.
In support of these grounds of appeal, the appellant referred to the terms of the lease where the premises were described as a "licensed bar/restaurant premises". The appellant said that, prior to entering into the lease, it had not been informed that the lease did not include the liquor licence.
The appellant sought to rely on various documents which it asserted had been given to the Tribunal as evidence at the original hearing. This material included a statement of Ms Shi dated 16 October 2017 and a statement of Mr Xu dated 21 September. These documents, respectively, became MFI 1 and MFI 2 in the appeal. We will return to this matter below.
The appellant also sought to rely on new evidence consisting of statements from "Ariel" dated 15 January 2018 and "Tai" dated 13 January 2018 who were apparently employees at the Bluestone Chinese and Malaysia Restaurant, the business operated by the appellant at the premises. No suggestion was made to the Appeal Panel that this evidence was not reasonably available at the original hearing. Certainly, there was no evidence before the Appeal Panel to suggest this was in fact the case. Consequently, the new evidence will not be permitted in the appeal: see cl 12 of Sch 4 of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act) and Al Daouk v Mr Pine Furniture Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111.
In oral submissions, the appellant raised the following matters: 1. An application for an adjournment had been made at the original hearing which was not allowed. 2. The appellant had suffered hundreds of thousands of dollars loss by reason of the misleading and deceptive or unconscionable conduct. When asked by the Appeal Panel whether there was evidence of such loss, the only document identified was a "booking list" attached to the statement of Ms Shi, MFI 1, stating there was a loss of $334,017. 3. The liquor licence was not available for the premises as relevant fees had not been paid and it had been cancelled. 4. The appellant agreed that the rent awarded by the Tribunal was in fact unpaid however the appellant said that the failure to provide the liquor licence meant the appellant should not have been required to pay the rent. 5. The appellant should not be obliged to pay the cleaning cost because the premises and equipment were in a poor state when initially provided to it. In this regard the appellant referred to the statement of Ms Shi at paragraph 27, a matter also identified by the Tribunal in its decision at [13(4)].
The respondent filed a Reply to Appeal and provided written and oral submissions.
In the Reply, the respondent said that many of the grounds raised by the appellant did not raise questions of law. Rather, leave to appeal is required. The respondent also said that the appellant was given numerous opportunities in the first instance proceedings to make the allegations it now puts forward and to provide evidence in relation to those matters.
As part of its written material, the respondent provided copies of the original application, statements from witnesses originally relied upon, copies of orders and directions made by the Tribunal, a transcript of the hearing at first instance and the respondent's written submissions in opposition to the appeal.
The respondent made the following written submissions: 1. The appeal was lodged out of time. The respondent says it received the reasons for decision by email on 19 October 2017. However, the Appeal Panel notes the appellant said that it received a copy of the reasons by email dated 26 October 2017 (see Notice of Appeal Section 2). 2. The appellant does not identify any question of law for which there is a right of appeal. Rather, the appellant seeks to challenge the findings of fact, namely that it did not raise any defence and that any claim it wished to bring should be the subject of a separate application. This last matter might be categorised as an error of practice and procedure also requiring leave to appeal. 3. The appellant has not established grounds warranting the grant of leave to appeal and has not demonstrated it may have suffered a substantial miscarriage of justice. Having referred to the decision of the Appeal Panel in Collins v Urban [2014] NSWCATAP 17, the respondent said of the factors set out in Part B of the Notice of Appeal that the appellant had a chance to defend itself and to provide all evidence it wished to prior to the date of the original hearing. In those circumstances, there was no compelling reason why leave to appeal should be granted.
The respondent made the following oral submissions: 1. The Tribunal dealt with an application to adjourn the hearing and rejected the application. The application was identified as having been made at tscpt 13 line 5 and following. The respondent said that the rejection of the adjournment application is "in substance" recorded at [12] of the reasons. We note no suggestion was made in submissions that a formal ruling was made during the hearing although it would seem from the Member's comments at tscpt 13 commencing lines 8, 13, 20 and 24 that the Member considered and rejected the request for the reasons stated. 2. The respondent accepted that there was a defence by way of set off available to the appellant in respect of the respondent's claim. However, this right was not available in connection with rent having regard to the terms of cl 2.5 of the lease. 3. In respect of the rent, the respondent confirmed it had received payment of $16,000 in April 2017 from the appellant and had taken that amount into consideration when calculating unpaid rent. There was a second payment of $16,000 which had apparently not been processed by the appellant's bank and therefore was not received by the respondent. From discussions during the hearing between the Appeal Panel, the respondent and the appellant, it was common ground that the amount of rent calculated as outstanding had not in fact been paid. 4. In respect of the damages claim concerning the cost of cleaning and making good the plant and equipment which formed part of the lease, the respondent conceded there was no evidence to prove the state the plant and equipment was in at the start of the lease.
In reply, the appellant reiterated that the liquor license had not been transferred. The appellant referred to in paragraph 13 of the statement of Ms Shi (MFI 1). The appellant said there had been a request to transfer the licence and that it transpired the license had been cancelled in about June 2016. This, the appellant contended, meant that the premises could not be operated as licensed premises and that the appellant had consequently lost money. When asked, Counsel for the respondent indicated that the liquor license was not held by the respondent. Rather, it was held by a related company.

Consideration

There are four issues for determination in this appeal. These are: 1. Was the appeal filed in time? 2. Was the Tribunal in error in failing to deal with or refusing the adjournment application? 3. Was the Tribunal in error in making an award in favour of the respondent for unpaid rent and damages? 4. Was the Tribunal in error in rejecting or failing to deal with the appellant's claim relating to misleading and deceptive conduct and/ or unconscionable conduct because the appellant had failed to file its own application?
Relevant to the determination of some of these questions is the status of MFI 1 and MFI 2 and whether these documents were in evidence before the Tribunal.
There are a few preliminary points we should note.
First, there was no dispute that the appellant has a right of appeal on a question of law and otherwise requires leave. In this regard cl 12 of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) applies to the grant of leave, the principles applicable to such grant being set out in the decision of Collins.
Secondly, because the appellant was not represented by a lawyer, the Appeal Panel should have regard to the observations in John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. At [12] the Appeal Panel said: In circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally. It is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.

Was the appeal filed in time?

The appellant says that it received notice of the appeal by email on 26 October 2017. The notice of appeal was lodged on 21 November 2017.
There is no suggestion the Tribunal made orders and provided written reasons to the parties at the original hearing.
While the respondent says it received an email of the reasons for decision on 19 October 2017, there is no evidence to suggest the appellant also received an email on that date. The copy of the Notice of Order dated 19 October 2017 addressed to the appellant and attached to the appellant's Notice of Appeal shows that it was sent to an address in Castlereagh Street Sydney. It is uncertain who is at this address however it seems clear from the notice that it was not sent by email to the appellant on 19 October 2017.
The Notice of Appeal is itself a statement from the appellant's representative, Mr Xu, as to the date reasons for the decision was in fact received. There is no evidence to contradict this statement. In these circumstances, the Appeal Panel is satisfied the appeal was filed in time, namely 28 days after the appellant was notified of the decision to be appealed or given reasons for the decision: see r 25(4)(c) of the Civil and Administrative Tribunal Rules, 2014 (NSW) (Rules).

Was the Tribunal in error in failing to deal with or refusing the adjournment application?

In our view, a fair reading of the transcript indicates the Tribunal considered and refused the application for an adjournment.
The application was made orally by Mr Xu and is recorded at tscpt 13 line 5. The application was to adjourn to allow the respondent to provide "more evidence".
On that same page of the transcript at lines 8, 13, 20 and 24 the Tribunal identifies that the proceedings had been previously adjourned and that an opportunity has been given for the appellant to provide necessary evidence. It is clear from the directions previously made by the Tribunal that the appellant had been afforded numerous opportunities to file any evidence in support of its position and/or to file its own application. It is not necessary to recount the procedural history other than what we have set out above and that which is recorded in MFI 3.
Also evident from the transcript is that Mr Xu submitted that Ms Shi had attended earlier hearings and "didn't realise that today is a final hearing" (tscpt 15 line 41). To this the Tribunal referred Mr Xu to the notice of hearing which had been issued by the Tribunal. Mr Xu responded that the notice just said hearing, not final hearing (tscpt 16 line 1). Mr Xu also said his solicitor did not email the notice to him (tscpt 16 line 8).
It is clear the Tribunal rejected these further submissions in that the hearing continued.
The respondent referred the Appeal Panel to the reasons of the Tribunal at [13] being the basis for the Tribunal's decision to refuse the adjournment application. There the Tribunal said: In my opinion, the allegations of misleading and deceptive conduct and/or unconscionable behaviour are matters which could and should be the subject of a separate application by the respondent. The prior directions of the Tribunal made provision for the respondent to lodge a cross application in order to prosecute its claim. In fact, as the Tribunal file reflects, the respondent was legally represented at prior directions hearings including those on 7 April 2017 and 26 May 2017. As the Tribunal file discloses, directions were made on those occasions including for a cross application to be lodged by the respondent. Plainly, the respondent did not avail itself of the opportunity to bring its claim for relief against the lessor including damages for misleading and deceptive conduct and/or unconscionable behaviour. Presumably, the lessee now seeks to set off any entitlement it may have for damages arising from the allegations of misleading and deceptive conduct against the lessor's claim for rent arrears and 'make good' damages; however, in the absence of the lessee prosecuting its damages' claim in a timely manner (as the prior orders and directions contemplated) I am not disposed to entertain the assertions of such damages loss entitlement against the lessor's claim at today's hearing.
Having regard to the history of this matter, the number of times the matter had been listed for directions, the involvement of Ms Shi at earlier hearings and the fact the matter had been fixed for final hearing, in our view the decision to refuse the adjournment application is not shown to be erroneous. Further, while it is desirable for the Tribunal to formally deal with the adjournment application at the hearing and provide reasons (at the hearing or subsequently) dealing with all relevant submissions put forward by a party in requesting an adjournment application, when the reasons set out above are read in the context of the transcript of what was said at the hearing, we are not satisfied the reasons in this case are inadequate.
Accordingly, this ground of appeal fails.

Was the Tribunal in error in making an award in favour of the respondent for unpaid rent and damages?

There is no dispute that the amount awarded by the Tribunal for rent was in fact unpaid. This was acknowledged by the appellant at the hearing of the appeal.
As referred to above, clause 2.5 of the lease prevents any set off against the claim for rent. This clause provides: 2.5 Punctuality The lessee expressly agrees to make all payments due under this Lease including for Rent and outgoings, punctually on the date when each payment is due and shall not withhold will be entitled to withhold the whole or part of any such payment by way of deduction, set-off, counterclaim or otherwise.
There was no application filed by the appellant seeking orders in consequence of any alleged misleading and deceptive or unconscionable conduct. While the Tribunal may have had power to make an order in favour of the appellant to relieve it from an obligation to pay rent (see eg ss 72(b) and 72AA(b) of the RL Act) there must be a claim by an applicant seeking relief.
It follows that the Tribunal was correct to make an award for unpaid rent in favour of the respondent.
In relation to the claim which the Tribunal described at [1] as a claim for "damages to 'make good' order (sic) and repair in the retail lease premises", the Tribunal awarded the respondent the sum of $66,696.60.
This claim was not included in the respondent's original application. That application only sought orders for "payment of all outstanding rent, forfeiture of a bank guarantee and recovery of possession of the property".
As set out above, after this application was lodged, the Tribunal made an order preventing the respondent from forfeiting the lease and re-entering property. This order was later "dissolved" and an order was made requiring the appellant to deliver up possession. It is unclear why an order to deliver up possession was made at an interlocutory stage, even if the order preventing the respondent from affecting a forfeiture of the lease was set aside by reason of non-compliance with conditions. This is because the order effectively pre-empted the appellant pursuing its rights, such as to seek relief against forfeiture or other orders arising from the conduct of the respondent about which the appellant was then complaining. Be that as it may, the orders made 26 May 2017 were not the subject of an appeal.
We note in passing, there is no material before us to suggest that the original application was amended to permit the claim for damages. On the contrary, order 7 made 26 May 2017 suggests that the only matters for determination at a final hearing were the respondent's claim for outstanding rent and to determine any proceedings brought by the appellant by way of "cross application" (in respect of a claim for damages): see MFI 3. Again however, the appellant did not raise this issue in the present appeal.
However, in our opinion, the reasons for decision in respect of the respondent's claim for damages reveal a number of problems with the award.
The Tribunal had before it the statement of Ms Shi (MFI 1) and Mr Xu (MFI 2). Of these statements, the Tribunal said at [9]: The respondent lessee had provided no documents in accordance with the directions made on 28 July 2017; nevertheless, Mr Xu handed up at the hearing an affidavit of himself and an affidavit of another director of the respondent, Ms Yaming Shi, dated 16 October 2017. The applicant objected to the tender of the affidavits of Mr Xu and Ms Shi. However, I determined as a matter of procedural fairness, that I would allow Mr Xu to make oral submissions in answer to the applicant's case for damages and I also allowed him to refer to the (lately served) affidavit of himself and Ms Shi.
The Tribunal then said at [11]: I am not satisfied that the submissions of Mr Xu at today's formal hearing disclose any defence to the applicant's claim for damages. The affidavits handed up at today's hearing referred to the respondent's allegations against the applicant as regards deceptive and misleading conduct and unconscionable behaviour. This is said to arise by reason of the lessor advertising the retail shop premises with a valuable liquor license when it is put by the respondent that was not the case.
Of these allegations the Tribunal said at [12] that they were "matters which could and should be the subject of a separate application" by the appellant.
At [13] the Tribunal then said that it was "satisfied on the lessor's (largely uncontested) evidence that: 1. rent of $121,570.75 was outstanding: at [13(1)]; 2. the respondent had received $48,124.99 from the Bank Guarantee: at [13(7)]; and 3. an amount of $66,696.60 was payable as the "reasonable cost of remedying and/or repairing the (appellant's) breaches".
In making this last finding, the Tribunal accepted the evidence in the affidavit of Mr Asseraf that the appellant did not keep the leased premises "in good repair and condition", which was "supported by quotations from tradespersons and suppliers" as to the reasonable cost of remedying and/or repairing: at [13(5)-(6)].
In doing so, the Tribunal said at [13(4)]: The (appellant) submitted (referring to the affidavit of Ms Shi at paragraph 27) that the respondent left the premises in "good working condition" and in a good state of repair, or words to that effect; however, there is no evidence to support the assertions of good working condition and good repair and Ms Shi was not present at today's hearing to be cross examined on such assertions.
This is a curious finding for several reasons.
First, a review of the transcript indicates there were discussions about whether the appellant wished to cross-examine the respondent's witnesses: Member at tscpt 5 line 23-4. However, this matter was not finally resolved, the discussion between that Tribunal and Mr Xu turning to the issue of the respondent's non-compliance with the Tribunal's directions.
Secondly, it appears that the Tribunal only treated the affidavits MFI 1 and 2 as submissions at this part of its reasons despite what was said at [9], namely the Tribunal "would allow Mr Xu to make oral submissions in answer to the applicant's case for damages and (would allow) him to refer to the (lately served) affidavit of himself and Ms Shi".
While no doubt these issues arose from the late arrival of Mr Xu at the hearing and the failure of the appellant to serve its documents on time, these matters are indicators of an unsatisfactory hearing process.
Even if it is accepted that MFI 1 and MFI 2 were only received as submissions, it is clear from the statement of Ms Shi that the appellants were submitting that the plant and equipment, about which a claim for damages for breach of covenant was raised, were not in a clean state and/or were not in good working condition and good repair at the commencement of the lease: see paragraph 27 of Ms Shi's affidavit referred to in the reasons at [13(4)]. There, Ms Shi said: At the time we took over the restaurant, I carried out all repairs to be in a running status all machines and equipment have not being used for a long time. It's cost a lot to get going. For the repairs we totally disagree as I myself have done the repairs and left it in a working condition.
The obligation to repair is found in cl 5 of the lease - Maintenance Repairs Alterations and Additions. This clause relevantly provides: 5.1 General repairing obligation The lessee shall during the Term and any holding over, subject to fair wear and tear, keep the premises, the Lessee's Property and all of the Lessor's Property in the Premises in good repair and condition having regard to the condition of the Premises at the commencement of this Lease (emphasis added). … 5.3 Particular repairing obligations The Lessee shall, or Lessor may at the Lessee's Cost: (d) repair or where appropriate replace any of the Lessor's Property which are broken or damaged by the Lessee or by any of the Lessee's Employees. Unless the Lessor notifies the Lessee in writing to the contrary the Lessee agrees that such repairs and replacements shall only be carried out by the Lessor but at the Lessee's Cost; and (e) keep such of the Lessor's Property Services located within and exclusively servicing the Premises maintained, serviced and in good condition and repair, by professional and competent persons, fair wear and tear excepted.
Clause 5.4 allows the respondent to inspect and cl 5.5 allows the respondent to enforce the repairing obligations by notice served upon the appellant.
The "Lessor's Property" is defined in cl 1.1 to include: all plant and equipment, mechanical, Electrical or otherwise, fittings, fixtures, furniture, furnishings of whatever nature, including window, floor, ceiling and wall coverings, blinds and light fittings from time to time in the Premises or any part of them and owned by the Lessor
The obligation imposed upon the appellant by clause 5.1 was to keep in a "good repair and condition having regard to the condition of the Premises at the commencement of this Lease"
A fundamental aspect of the respondent's claim was that it must prove the condition of the premises at the commencement of the lease. In order to make an award for damages, the Tribunal was required to be satisfied of this fact. No finding was made in this regard.
Further, there is no evidence in the material provided by the respondent in this appeal, nor as far as we are aware to the Tribunal at first instance, that would support a finding as to the state of the premises or the plant and equipment at the commencement of the lease.
In the absence of a relevant finding, in our view the Tribunal was not in a position to award damages in the sum which it did. This is because the assessment of the reasonable cost of works necessary to return the premises to the state they were in at the commencement of the lease, fair wear and tear excepted, required an evaluation of the before and after position of the premises and the plant and equipment. Nothing in the quotations setting out the cost to make good nor in the affidavit and statement of Mr Asseraf provides evidence on this aspect of the claim. Unfortunately, it was simply not an issue identified or dealt with at the original hearing.
On this basis, the award for this sum should be set aside.
It might be thought, having regard to the absence of evidence, that this claim should otherwise be dismissed. However, in the circumstances of this case we are not satisfied that such a course would result in the just, quick and cheap resolution of the real issues in dispute. Rather, having regard to the anomalies during the hearing process, we think the better course is for the proceedings to be remitted to re-determine this aspect of the claim.
Finally, it seems to us the error we have identified, namely making an award for damages without making appropriate findings as to state of the premises when the lease commenced and the nature and extent of the alleged breach, constitutes an error of law. In addition, we are satisfied the appellant may have suffered a substantial miscarriage of justice and that, if it is necessary to do so, leave to appeal should be granted. This view is strengthened by the irregularity in the hearing process to which we have referred.
Accordingly, we will make orders to this effect.

Was the Tribunal in error in rejecting or failing to deal with the appellant's claim relating to misleading and deceptive conduct and/ or unconscionable conduct because the appellant had failed to file its own application?

Having regard to our conclusions above, this aspect of the case is unnecessary to decide.
However, we note that during the hearing of the appeal the respondent conceded that the appellant could raise a defence by way of equitable set-off a claim for damages arising from the alleged misleading and deceptive conduct and/or unconscionable conduct.
In our view, this concession was properly made. In so far as the Tribunal determined that a separate application was required, it was in error.
The principles of equitable set-off are dealt with in Meagher, Gummow & Lehane's Equity - Doctrines & Remedies, 5th Edition at [39-045] and following. For present purposes it is sufficient to mention of three cases to which the authors refer.
In D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10, Woodward J at 26 summarised the principles as to when set-off is available as follows: I believe that the relevant principles to be extracted from the authorities are as follows:-- (i) Failure in part to perform a contract, or defective performance of a contract requiring work to be done again or directly reducing the value of work done or goods supplied, may be raised as a defence to an action for money due under that contract: Allen v Cameron; Lowe v Holme; Mondel v Steel. (ii) Claims for money due under a contract and for damages for breach of the same contract (arising, for example, from delay) may be set-off against each other where the equity of the case requires that it should be so. This will depend upon how closely the respective claims are related, particularly as to time and subject-matter. The general conduct of the respective parties will, as always, be relevant to the granting of such equitable relief: Young v Kitchin, Newfoundland Government v Newfoundland Railway Co; Bankes v Jarvis; Hanak v Green. (iii) Even where one of the claims is not in terms based upon the contract, but it flows out of and is directly connected with it, a court may be prepared to recognize an equitable set-off: Piggott v Williams; Beasley v D'Arcy; Smith v Parkes; Morgan & Son v S Martin Johnson & Co; Hanak v Green (per Sellers LJ). (iv) The above statements of principle cannot be regarded as having universal application. They do clearly apply to contracts for work and labour, but special considerations are relevant in other areas such as bills of exchange: Glennie v Imri; James Lamont & Co Ltd v Hyland Ltd ; landlord and tenant: Fong v Cilli and carriage of goods Henriksens A/S v Rolimpex.
The second decision is AWA Ltd v Exicom Australia Pty Ltd (1990) 19 NSWLR 705. In that decision, Giles J considered the circumstances in which a defence by way of equitable set-off might be raised. At 711 his Honour explained there is a requirement "that the equitable set-off must go to the root of or impeach the title of the plaintiff's claim". His Honour referred to the decision of D Galambos and the statement of Lord Cottenham LC in Rawson v Samuel (1841) CR & Ph 161; 41 ER 451 and continued at 711-2: In Tooth & Co Ltd v Smith, Clarke J observed that a determination as to whether an equitable set-off exists in any particular case requires an examination of the closeness of the respective claims, and that no general rule can be laid down except by stating that such a set-off will arise when there exist circumstances that make it unjust or inequitable that a plaintiff should be permitted to proceed with his claim.
In explaining what was required in order for there to be available a defence by way of equitable set-off his Honour said at 712 E-F: The ultimate question is whether, bearing in mind the existence of Exicom's claim is not enough and that something more is needed, sufficient to warrant the intervention of equity to protect Exicom, it would be unjust or inequitable that AWA should be permitted to proceed with its claim.
The third decision is Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326. In that case the Court determined that a claim for damages in respect of conduct claim to be in breach of s 52 of the Trade Practices Act was capable of constituting an equitable set-off, a matter also accepted by Basten JA in Bitannia Pty Ltd v Parkline Constructions Pty Ltd (2006) 67 NSWLR 9 at [88].
The present case involved a claim by the respondent who sought damages arising from the alleged failure of the appellant to comply with its obligation to repair. The claim made by the appellant is that it had suffered loss and damage because the respondent had misrepresented the premises as being licensed and/or did not make available the licence either directly or through a related company and had therefore been unable to operate the premises and earn income in the manner contemplated. The appellant said it should not have to pay any amount to the respondent in these circumstances.
The title box in the lease on page 1 indicates that the property being leased was: the licensed bar/restaurant premises being part of Lot 28…
There was no dispute in this appeal that the premises did have attached to them a liquor license at the time the lease was to commence on 18 January 2016. There also appeared to be no dispute that there had been correspondence between the parties concerning the transfer of the liquor license to a representative of the respondent. It also appears the liquor license was, at one stage, cancelled because relevant fees had not been paid. However, there was a dispute concerning whether the respondent as landlord had any obligations to transfer the liquor licence pursuant to the lease or had engaged in conduct in contravention of the ACL or RL Act.
In these circumstances, it seems that it was arguable that a defence by way of equitable set-off could be raised in the present case. Accordingly, the absence of a separate application by the appellant was not a proper basis for declining to deal with the defence which had been raised in the appellant's affidavits.
While a defence by way of set-off is not available for the rent because of cl 2.5 of the lease, there is no impediment in the lease to prevent a set-off in respect of other claims.
It might be that these claims should ultimately be dismissed because the evidence provided was not sufficient to prove a proper entitlement to set off. However, this was a matter about which the Tribunal was required to rule and make a determination as part of the resolution of the respondent's application.
In this regard we note the Tribunal is entitled to determine both legal and equitable defences in resolving proceedings before it: see Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Ltd [2015] NSWSC 289 at [75]-[78].
It follows from our comments that when the proceedings are remitted to rehear the claim for damages arising from the alleged breach of the covenant to repair, the Tribunal will also be required to make appropriate rulings concerning any defence by way of equitable set-off properly raised at that time.
Finally, we note the appellant has repeatedly failed to comply or comply fully with the directions of the Tribunal concerning filing and serving its evidence. What directions should be made in respect of the remitted proceedings is a matter which we leave to the Tribunal to determine upon remittal. However, the appellant is not entitled to unlimited opportunities to present its case and it will need to ensure that it complies with any directions made in the remitted proceedings on a timely basis.

Orders

The Tribunal made an order that the appellant pay the respondent $140,142.36 within 28 days. This order should be varied to remove the award for damages of $66,696.66. Consequently, an award should be made for the unpaid rent of $121,570.75 less an amount of $48,124.99 (being the amount already received by the respondent under the bank guarantee), being a net amount of $73,445.76.
As the appellant has been successful in the appeal, and subject to any submissions the parties wish to make, it would seem inappropriate to make an order for costs because the appellant was represented by its director, Mr Xu.
The Appeal Panel makes the following orders: 1. To the extent necessary, leave is granted to appeal the decision to award the respondent $66,696.60. 2. The order made by the Tribunal on 19 October 2017 in application COM16/54697 is varied to read as follows: The respondent, Green Apple Global Pty Ltd is to pay the applicant, La Brasserie Investments Pty Ltd, the sum of $73,445.76. 1. The proceedings are remitted to re-determine the respondent's claim for damages arising from the alleged breach of the covenant to repair and any defence by way of equitable set-off as might properly be raised by the appellant, such proceedings to be determined in accordance with law.

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. Principal 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: 19 April 2018

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