Hoang v Hungry Jack’s Pty Ltd

Medium Neutral Citation: Hoang v Hungry Jack’s Pty Ltd [2026] NSWSC 775

Hearing dates: 26 November 2025

Date of orders: 3 July 2026

Decision date: 03 July 2026

Jurisdiction: Equity - Real Property List

Before: Pike J

Decision: (1) The parties are to confer to seek to agree on orders in accordance with these reasons and provide any agreed orders to my Associate by no later than 17 July 2026.
(2) In the event that agreement cannot be reached, the parties are to each provide to my Associate, by no later than 17 July 2026, the orders for which they contend, together with submissions in support of those orders of no more than five pages.
(3) Any submissions in reply, of no more than three pages, are to be provided to my Associate by no later than 24 July 2026, upon which I will determine the remaining issues on the papers.

Catchwords: LEASES AND TENANCIES — construction of a registered lease — market rent review — whether “premises” included building and improvements constructed by tenant — whether lease was a ground lease — distinction between “land” and “premises” — effect of definition of premises — whether rent to be assessed by reference to land only or land, building and improvements — review of expert determination — Retail Leases Act 1994 (NSW)
REAL PROPERTY — fixtures — building constructed by tenant on leased land — whether building formed part of land — object and degree of annexation — whether building was a tenant’s fixture — whether tenant had right to sever and remove building — effect of lease provisions requiring lessor notice on expiry or determination
CONTRACTS — construction of commercial lease — objective intention of parties — entire agreement clauses — whether antecedent agreement for lease incorporated into lease as varied — surrounding circumstances of registered lease
CONSUMER LAW — statutory unconscionability — allegation that landlord sought rent in respect of building constructed by tenant — enforcement of lease as properly construed — absence of special disadvantage — no conduct outside accepted standards of commercial behaviour — Australian Consumer Law, s 21

Legislation Cited: Australian Consumer Law, s 21
Retail Leases Act 1994 (NSW)

Cases Cited: Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd (2015) 90 NSWLR 367; [2015] NSWCA 275
Chief Commissioner of State Revenue v Shell Energy Operations No 2 Pty Ltd [2023] NSWCA 113
Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd (2023) 113 NSWLR 80; [2023] NSWCA 280
City of Subiaco v Homebase Management Pty Ltd [2015] WASCA 54
Coveney v Asbestos Injuries Compensation Fund Ltd [2024] NSWCA 317
Hinchcliffe v The Earl of Kinnoul (1838) 5 Bing N C 1; 132 ER 1004
Manly Council v Malouf t/as Fusion Point (2004) 61 NSWLR 394; [2004] NSWCA 299
Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64
Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2024) 281 CLR 338; [2024] HCA 27
Progressive Mailing House Pty Ltd v Tabali (1985) 157 CLR 17; [1985] HCA 14
Pyrmont Point Pty Ltd v Westacott (2016) 91 NSWLR 170; [2016] NSWCA 33
Sargent v ASL Developments Ltd (1974) 131 CLR 634; [1974] HCA 40
Taylor v Johnson (1983) 151 CLR 422; [1983] HCA 5
TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576; [2010] HCA 49
Union Fidelity Finance (Aust) Pty Ltd v Renauf [2025] NSWSC 356

Texts Cited: Nil

Category: Principal judgment

Parties: Thanh Tram Hoang (Plaintiff)
Hungry Jack’s Pty Ltd (Defendant)

Representation: Counsel:
A Fernon SC (Plaintiff)
T Castle SC and A Schatz (Defendant)
Solicitors:
Chedid Storey Legal (Plaintiff)
HWL Ebsworth Lawyers (Defendant)

File Number(s): 2024/00422396

Publication restriction: Nil

JUDGMENT

1. As its name suggests, the defendant/cross-claimant (HJPL), operates a Hungry Jacks Restaurant at 93-99 Manning Street, Taree on the mid north coast of New South Wales (the Site). HJPL occupies the Site pursuant to a registered lease. The plaintiff/cross defendant (Ms Hoang), is the current registered proprietor of the Site, having acquired it on 16 May 2015.

2. The parties are at odds as to how the rent payable by HJPL to Ms Hoang is to be calculated. HJPL contends that the rent is to be calculated by reference only to the ground on which the restaurant building is located. Ms Hoang contends that the rental should be calculated by reference to the ground as well as the building and improvements constructed on it.

3. The difference in rent between the parties’ competing approaches is in the order of $83,000 per annum. That difference is significant, particularly given the number of years remaining under the lease if the available options are exercised.

4. The arguments raised by the parties focussed on basic principles of property law concerning fixtures as well as the proper construction of the lease documents which I describe below. HJPL also propound a case based on unconscionability.

5. The proceedings were heard on 26 November 2025. Tim Castle SC and Alexander Schatz appeared for HJPL. Andrew Fernon SC appeared for Ms Hoang. The proceedings were conducted efficiently such that the matter could be dealt with in one day. The parties are to be commended in this regard.

6. Only one witness was cross-examined – Ms Hoang. No credit issues arose as I understand it.

7. For the reasons set out below, I accept Ms Hoang’s contentions and reject those advanced by HJPL. The parties are to seek to agree orders to give effect to these reasons. Any remaining disputes will likely be determined on the papers.

The facts

8. Some factual matters were in dispute between the parties. The parties were also, to some extent, at odds as to which facts could be taken into account by the Court in determining the issues raised.

9. I set out below my factual findings. I deal later in these reasons with the facts that are relevant to the issues.

10. The chronology begins in about 2003/2004. At that time, the Site was owned by Taree Shopping Centre Pty Ltd (TSC).

11. The Site is 1,511 square metres in area and is located on the corner of Manning Street and Wynter Street in Taree. It is adjacent to Manning Mall shopping complex, on what was then the fringe of Taree’s commercial precinct. At that time, the Site was vacant land and used as a car park.

12. In early 2004, HJPL obtained development approval to develop a Hungry Jack’s fast food restaurant on the Site by the construction of a single storey building with a gross floor area of 265 square metres.

13. On or about 31 March 2004, HJPL and TSC entered into an Agreement for Lease (AFL) in relation to the Site.

14. The AFL tendered by HJPL at the hearing was executed by HJPL but not by TSC. It is also undated. Ms Hoang disputed that the AFL tendered by HJPL was in fact the final AFL. This was because, in the Lease as ultimately entered into (which I deal with below), the only reference to the AFL is in cl 8.6(b), which relevantly permits HJPL to erect and maintain advertising signs “as specified in the Agreement for Lease or as otherwise agreed to by the Lessor”. There was, however, nothing in the AFL tendered by HJPL dealing with advertising signs.

15. I am satisfied on the evidence that the AFL tendered by HJPL was likely the AFL executed between the parties. The document is executed by HJPL. Mr McMahon who negotiated the AFL for HJPL made an affidavit identifying the document tendered as the AFL. He was not cross-examined. Further, the lease attached to the AFL tendered by HJPL contains the same cl 8.6(b) as the executed Lease (defined below). The fact that the AFL, as tendered, does not appear to contain any provisions intended to be picked up by cl 8.6(b) of the Lease is not, in my view, so unusual or significant, as to cast any real doubt on whether the AFL as tendered is in fact the correct document.

16. The AFL permitted HJPL to carry out “Construction Works” for the purpose of constructing the Building, defined as the free-standing drive through restaurant.

17. Clause 7.9 of the AFL provided:

7.9 Ownership of Construction Works

(a) The Parties acknowledge that subject to the provisions of the Lease, the Building Structure is from the Commencement Date the property of the Lessee. All other fixtures, fittings, the Air-Conditioning Equipment, cooking and refrigeration equipment, kitchen benches and furniture is and shall remain the property of the Lessee.

(b) If the Lessor serves the Lessor Notice in clause 15.1 stating that it requires the Building Structure to remain, then from the date of expiration or earlier determination of this Agreement the Building Structure will be the property of the Lessor.

18. It is not in dispute that HJPL subsequently constructed the Building. The term Building Structure is defined in the AFL to mean “the Building structure and fabric, roof and cladding and the plumbing, electrical and hydraulic base building services installed in the Building”.

19. A photograph of the Site, taken from the 2015 Information Memorandum pursuant to which Ms Hoang bought the Site, appears below:

20. An aerial view of the Site, again taken in 2015, appears below:

21. There is no suggestion in the evidence that there have been any significant changes to the Building, since it was constructed in 2004. The above photographs thus accurately depict the Building and its location on the Site.

22. A lease dated 13 December 2004 was executed between HJPL and TSC and subsequently registered on title (Lease).

23. The Commencement Date of the Lease is 1 July 2004. The Lease is for a term of ten years with two five year options. The Building was constructed by the time the Lease commenced.

24. The Lease includes a definition of “Agreement for Lease” being “the agreement for lease between the Parties dated 31 March 2004 for the construction of the Premises”. The only reference to this defined term in the Lease is in cl 8.6(b) dealing with the erection of advertising.

25. I deal with the other relevant provisions of the Lease (and the AFL) later in these reasons when dealing with the issues to be decided.

26. TSC transferred ownership of the Site to Moss Capital Pty Ltd (Moss Capital) on 17 July 2013.

27. On 12 June 2014, Moss Capital and HJPL signed a Variation of Lease (First Variation) attaching a document entitled “Renewal of Lease” (Renewal of Lease) setting out the substantive terms of the variation. The First Variation was registered on title in early September 2014.

28. The First Variation increased the rent to $99,493.31 per year on and from 1 July 2014. The Renewal of Lease document recorded that HJPL had exercised the option.

29. The Information Table in the Renewal of Lease was in the following terms:

30. It is to be observed that the Information Table records that the Retail Leases Act 1994 (NSW) (RLA) applies. Clause 8.1 of the Renewal of Lease contains a warranty by HJPL that the RLA applies for the Further Term for the reason stated in Item 10. This has significance for some of the arguments advanced by the parties which I deal with later in these reasons.

31. On 3 July 2014, Moss Capital and Eleanor Funds Management Limited () signed a transfer transferring ownership of the Site to EFM.

Can you please clarify, when assessing the market rent for Hungry Jack’s restaurant in Taree did you take into consideration that the lease is a ground lease, that is, Hungry Jack’s constructed the building?

44. The next day, Mr Paxinos responded:

Yes, I am aware of the lease and that Hungry Jack’s constructed the building. I assessed the subject property on the Market Review basis shown in the lease as clause 3.2.

45. On 11 March 2019, Ms Hoang gave notice that the base market rent effective as of 1 July 2019 under the lease was $119,873 per annum (ex GST). In the same letter, Ms Hoang stated she was exercising the option as at 1 July 2019. Since this time the base rent has been paid in accordance with this notice.

46. On 21 February 2024, Ms Neis emailed Ms Hoang notice of HJPL’s exercise of the option to commence on 1 July 2024 for five years.

47. On 12 March 2024, Ms Hoang sent a notice of market rent to HJPL as determined by Herron Todd White (HTW), in the amount of $195,000 per annum. The notice attached a report. HTW was instructed by Ms Hoang.

48. HJPL then engaged its own valuer – Robertson and Robertson – who issued a report on 3 April 2024, determining market base rent of $112,000 per annum. The report expressly states that it has been prepared on the basis that the Lease is a ground lease, with the improvements being built by HJPL and disregarded as part of the review.

49. Another valuer was then jointly engaged by the parties. On 1 August 2024, Ms Hoang terminated the engagement of that valuer.

50. On 13 November 2024, Ms Hoang commenced these proceedings. HJPL filed its cross-claim on 29 April 2025.

51. By her statement of claim filed 10 March 2025, Ms Hoang seeks a variety of relief, including that the valuation issued by Mr Paxinos on 5 March 2019 be set aside and that an independent valuer be engaged to determine market rent, in accordance with cl 3.2 of the Lease and the Court’s declarations, as at 1 July 2019 and 1 July 2024.

52. By its cross-claim filed 29 April 2025, HJPL seeks 12 declarations. Central among these are that the Lease is not a lease of the Building and Improvements (being the other improvements on the Site relating to the operation of the Hungry Jack’s restaurant).

53. A declaration is also sought that the Building and Improvements form part of the “Lessee’s Property” as defined in cl 1.1 of the Lease and/or “Tenant’s Property” for the purposes of the Second Variation. Further, or alternatively, a declaration is sought that the Building and Improvements form part of the Lessee’s fixtures and fittings as described in cl 3.2(c)(4)(G) of the Lease.

The rent review clause

54. Central to the issues for determination is the rent review clause in the Lease – cl 3.2 which is in the following terms:

3.2 Market Review of Base Rent

(a) Not less than 3 months prior to each Market Review Date or the commencement of any further term, either the Lessee or the Lessor may give the other Party a written notice ("clause 3.2(a) notice") stating the Party's assessment of the current annual market rent of the Premises as at the Market Review Date having regard to the directions contained in clause 3.2(c)(iv).

(b) If the Party receiving the clause 3.2(a) notice considers the assessment of Base Rent not to be the current annual market rent of the Premises, and the Parties otherwise fail to agree upon the current annual market rent to apply, the Party receiving the clause 3.2(a) notice may give the other Party notice that it disagrees with the Party's assessment of the current annual market rent within one month after the receipt of the clause 3.2(a) notice. Thereafter the Base Rent to apply from the Market Review Date shall be determined in accordance with clause 3.2(c).

(c) If the Parties do not agree on the current annual market rent of the Premises to apply from the relevant Market Review Date, it must be decided by a valuer who:

(1) is appointed by the Parties (if, however, they do not agree on who to appoint within 6 weeks after the notice under clause 3.2(b) is given, the valuer is to be nominated at either Party's request by the president of the Institute);

(2) is a full member of at least 5 years standing of the Institute;

(3) at the time of appointment is both experienced and actively engaged in valuing similar retail premises;

(4) must:

(A) decide what is the current annual market rent for the Premises, excluding rental values which have been escalated to a predetermined amount in accordance with movements in the CPI or any other index, that would reasonably be expected to be paid for the Premises on the relevant Market Review Date if they were unoccupied and offered for renting for the Permitted Use and having regard to other matters relevant to the assessment of the current annual market rent;

(B) have regard to the terms of this Lease and assume that all the terms, covenants and conditions imposed upon the Lessee have been complied with;

(C) assume a letting for a term equivalent to the balance of the Term remaining unexpired from the relevant Market Review Date;

(D) take into account rental concessions and other benefits being frequently and normally offered to prospective lessees of similar unoccupied retail premises;

(E) have regard to any improvements, alterations or fit out works made in the Premises at the request of the Lessee;

(F) disregard any value attached to goodwill created by the Lessee's occupation of and business conducted from the Premises;

(G) disregard the value attached to the Lessee's fixtures and fittings on the Premises;

(H) have regard to the Lessor's interest in the receipt of rent and the accepted fact that as between the Parties the Lessor's interest in the observance by the Lessee of its Lease obligations are better protected than under a lease with an average lessee due to the stability, standing and responsibility of the Lessee;

(I) disregard any rent free periods, rental fees or moneys received pursuant to any sub-lease or other sub-tenancy agreement or occupational arrangements;

(5) give a "speaking valuation" (that is, the valuer must give to each of the Parties detailed written reasons for his or her determination and must specify the matters to which he or she had regard for the purposes of making his or her determination); and

(6) act as an expert (and not as an arbitrator) whose decision is final and binding on the Parties.

(d) The amount decided by the valuer shall be the Base Rent from and including the relevant Market Review Date.

(e) The costs incurred in the determination of the current annual market rent by the valuer pursuant to this clause 3.2 shall be borne by the Parties equally.

(f) The Lessee shall continue to pay the Base Rent payable immediately prior to the relevant Market Review Date until a determination of the new Base Rent is made pursuant to this clause 3.2, following which any necessary adjustment, or any underpayment or overpayment on account of the new Base Rent shall be made on the next monthly date for the payment of an instalment of Base Rent under this Lease.

(g) If either Party fails to give notice of the current annual market rent pursuant to clause 3.2(a) within the time period specified, the Lessor shall forfeit its right to review the Base Rent as at the relevant Market Review Date.

HJPL’s contentions

55. HJPL contends that in carrying out the market review of base rent under cl 3.2 of the Lease, the valuer is required to ignore the Building and other improvements on the Site. HJPL says that this result can be reached by any of the following three ways:

(a) the demised “Premises” under the Lease, on its proper construction, was the Site only and not the Building and other improvements; (b) the Building and other improvements are not part of the Site, as there was no intention to permanently affix it, at the time of construction; and (c) alternatively, the Building and other improvements is a “Lessee’s fixture” and is therefore excluded from the rent review calculation under cl 3.2(c)(4)(G) of the Lease.

56. Ms Hoang disputes each of these contentions.

57. These contentions are best considered against a background of the relevant provisions of the Lease and the AFL.

The provisions of the Lease and the AFL

58. Ms Hoang was, of course, not a party to the AFL or the Lease as originally executed. She purchased the Site in 2015 at a time when the Second Variation was to be entered into as disclosed in the Sale Contract.

59. I consider the significance, if any, of this below.

60. The AFL permitted HJPL to construct the Building and other improvements. Clause 7.9 of the AFL provided:

7.9 Ownership of Construction Works

(a) The Parties acknowledge that subject to the provisions of the Lease, the Building Structure is from the Commencement Date the property of the Lessee. All other fixtures, fittings, the Air-Conditioning Equipment, cooking and refrigeration equipment, kitchen benches and furniture is and shall remain the property of the Lessee.

(b) If the Lessor serves the Lessor Notice in clause 15.1 stating that it requires the Building Structure to remain, then from the date of expiration or earlier determination of this Agreement the Building Structure will be the property of the Lessor.

61. Clause 11 of the AFL provided:

11 LESSOR'S RIGHTS IN LAND

11.1 Dealings with Land

(a) Nothing contained in this Deed shall prevent the Lessor from selling, transferring, assigning or encumbering the Lessor's interest in the Land or from creating any interest in the Land PROVIDED THAT the Lessor complies with the requirements of clause 11.1(b).

(b) If the Lessor proposes to sell, transfer or assign its interest in the Land, the Lessor will, prior to the sale, transfer or assignment, arrange for the purchaser, transferee or assignee to enter into a deed with the Lessee in which it covenants to perform the Lessor's obligations under this Deed.

(c) Upon execution of the deed referred to in clause 11.1(b) by all parties to it, the Lessor shall, on and from the date of the deed, be released from the future performance of its obligations to the Lessee under this Deed, but shall not be released from any breach of this Deed arising prior to that date.

62. Such a clause is readily understandable in circumstances where the AFL is an interpartes agreement that does not run with the Land.

63. Clause 15 of the AFL provided:

15 LESSOR NOTICE AND YIELDING UP PREMISES

15.1 Lessor to give notice

(a) If this Deed is terminated pursuant to the provisions contained in this Deed, excepting clause 14, the Lessee must comply with the Lessor's notice in clause 15.1(b).

(b) Not less than 6 months and no more than 9 months prior to expiration or sooner determination of this Lease the Lessor may serve a notice on the Lessee stating that the Lessee shall on the expiration or sooner determination of the Lease:

(i) yield up the Premises by removing any improvements existing on the Land to the condition of a green field site; or

(ii) leave the Building Structure on the Land; or

(iii) yield up the premises to the condition required by the Lessor

("Lessor's Notice").

15.2 Lessee to yield up premises

(a) If the Lessor serves the Lessor Notice on the Lessee, then the Lessee must yield up the Premises to the condition stated in the Lessor's Notice.

(b) The Lessee's obligation to yield up the Premises in accordance with clauses 15.1(b) and 15.2(a) is subject to the Lessee obtaining an Acceptable Development Consent.

64. The AFL defines “Premises” as “the whole of the Land including the Building which is set out in the Plan”. In turn, “Land” is defined as “the Land described in Schedule 1” which schedule states “Lot 1 Sec A in DP 5971 being Auto Consol 13097-200 (current folio identifier)”.

65. The Lease contains the following definitions:

"Building'' means the building structure erected upon the Land containing or forming part of the Premises, or the building of which the Premises forms part (as the case may be) and where the context admits, any part of the building.

“Land” means the land described in the title reference on the cover sheet to this Lease [which states Lot 1, see A DP 5971 and Lot A DP318376 being the whole of the land in Auto Consol 13097-200].

“Lessee's Property” means all property on or in the Premises which is not the property of the Lessor and includes all fittings, fixtures, plant, equipment, machinery, the Air-Conditioning Equipment, signage and stock in trade used by the Lessee in the conduct of its business.

“Premises” means the Building and all other structures described in Item 3. [which simply provides Premises: Cnr Manning and Wynter Streets, Taree, NSW].

66. The term of the Lease, as originally executed, was ten years, with two five year options.

67. The grant of lease in cl 2 is of “the Premises”.

68. Clause 13.1 of the Lease deals with alterations to the Premises and provides:

13.1 Alterations

(a) Subject to clause 13.1(b), the Lessee may make any structural or other alterations or additions to the Premises, the Appurtenances, Air-Conditioning Equipment or other services benefiting the Premises for the purpose of the conduct of the Lessee's business without requiring the consent of the Lessor but shall first submit to the Lessor full detailed drawings and specifications of the proposed works and particulars of the materials proposed to be used.

(b) Any proposed alterations or additions referred to in clause 13.1(a) shall not result in the occupation by the Premises of a greater area of the Land than is occupied by the Premises as at the commencement of this Lease.

69. Clause 19.6 permits HJPL to maintain ducting and signage and provides:

19.6 Lessee's right to maintain ducting and signage

The Lessor as beneficial owner grants to the Lessee full right and liberty from time to time and at all times to install, maintain, repair and replace:

(a) all new signs (illuminated or otherwise) erected on any part of the Land or the Premises;

(b) all intake ducting and exhaust ducting systems causing air to be propelled by mechanical or motorised means through the same erected or any part of the Land or the Premises,

and to do any act or thing that may be necessary or required to enable the Lessee to install, maintain, repair or replace the same and to enter upon so much of the Land in the vicinity of the signs and systems as is reasonably required to enable the Lessee to exercise its rights under this clause. The rights hereby granted are held by the Lessee as rights appurtenant to the estate of the Lessee under the Lease.

70. Clause 22 deals with default. Clause 22.4 gives the Lessor the right to terminate the Lease in certain circumstances. Under cl 22.5(a)(2) the Lessor may then re-enter into and take possession of the Premises and eject HJPL. Clause 22.6 deals with Lessee’s Property in the following terms:

22.6 Lessee's Property

Subject to clause 23.6, upon the Lessor re-entering the Premises whether consequent upon default or otherwise the title to any of the Lessee's Property left by the Lessee in or on the Premises shall immediately upon the expiration of 14 days following re-entry pass to the Lessor and the Lessee shall after that period forever quit any claim to the same. During the 14 day period the Lessor may at the cost of the Lessee store the Lessee's Property at a place other than in the Premises. The Lessor shall not be liable for any loss or damage occasioned to any of the Lessee's Property so removed from the Premises.

71. Clause 23 provides as follows:

23. TERMINATION

23.1 Lessee to yield up premises

The Lessee shall upon the expiration or sooner determination of the Lease yield up the Premises:

(a) in a clean, tidy and tenantable condition; and

(b) and, subject to obtaining any required approvals, remove all signage.

23.2 Not used

23.3 De-imaging of Premises

Notwithstanding anything to the contrary in this Lease, the Lessee shall have the right at its own cost and expense within the 30 days after the expiration or sooner determination of this Lease to make physical changes in the construction and features of the Premises which distinguish it as a place at or from which the brand products and services of "Hungry Jack's®" are sold or provided so as to remove those identifying trade images (including trade marks, service marks, copyrights, trade names, slogans, designs, logos, distinctive building designs and other architectural features) and the Lessee may at its option remove, alter or modify (but without limiting the generality of the foregoing):

(a) any trade marks or panels to any free standing sign erected on the Land and replace the panels removed with blank panels PROVIDED THAT the Lessee shall only be required to disconnect (which is to be done only by experienced tradesmen) and make safe any power supply to any such sign and shall not be required to remove the sign itself or any power lines or pylons erected for the purposes of supplying power to the sign; and

(b) alter or remove any other distinctive sign or portion of a sign erected on or in the Premises.

In removing any signage or making any physical changes to the Premises in accordance with this clause 23.3, the Lessee shall only be required to leave the Premises in a clean and tidy condition and shall not be required to make good any damage caused to the Premises by any such removal or alteration.

23.4 Not used

23.5 Air-Conditioning Equipment

The Lessee and the Lessor acknowledge that the Air-Conditioning Equipment is installed at the expense of the Lessee and shall be the property of the Lessee until expiry or earlier determination of this Lease whereupon ownership of the Air Conditioning Equipment shall pass to the Lessor.

23.6 Lessor notice to yield up Premises

(a) Subject to clauses 23.6(b) and 23.6(c), not less than 6 months and no more than 9 months prior to expiration or sooner determination of this Lease the Lessor may serve a notice on the Lessee stating that the Lessee shall on the expiration or sooner determination of the Lease:

(1) yield up the Premises by removing any improvements existing on the Land; or

(2) leave the Building Structure on the Land; or

(3) yield up the premises to the condition required by the Lessor

(“Lessor Notice”).

(b) If the Lessor serves the Lessor Notice on the Lessee, then the Lessee must yield up the Premises to the condition stated in the Lessor Notice.

(c) The Lessee's obligation in clause 23.6(b) is subject to the Lessee obtaining an Acceptable Development Consent.

(d) Notwithstanding clause 23.6(a), if this Lease is terminated for Lessee default, then the Lessor can serve the Lessor Notice at any time.

72. Clause 30.5 contains a standard entire agreement clause.

73. The First Variation is in the context of HJPL having exercised the option to renew the Lease. The recitals to the Renewal of Lease state that “the Landlord and the Tenant have agreed to renew the Lease for the Further Term on the conditions of this Deed”.

74. The Renewal of Lease provides that the “Landlord leases the Premises to the Tenant... for the Further Term”.

75. “Premises” is defined in the Information Table as the “whole of the land comprised in Auto Consol 13097-200” (item 6).

76. The Variation Table in the Renewal of Lease amends the Lease in certain respects.

77. The Terms and Conditions section of the Renewal of Lease further defines Premises to mean “those premises described in item 6 otherwise more accurately defined in the Lease”.

78. Having regard to cl 8.1 of the Terms and Conditions and the Information Table, HJPL warrants that the RLA applies to the Lease for the Further Term for the reason in Item 10.

79. Clause 9.2 contains an entire agreement clause in the following terms:

9.2 Entire agreement

The Lease, this deed, and, if the Retail Legislation applies, the disclosure statement given by the Landlord to the Tenant, constitute the parties’ entire agreement concerning the Further Term and the Tenant's continued occupation of the Premises. Any previous agreements, understandings, representations and negotiations in relation to the Further Term or the Tenant's continued occupation of the Premises prior to entering into this deed have no effect.

80. In substantive effect, the Second Variation granted a new lease for a further term of 5 years commencing on 1 July 2019 and ending on 30 June 2024, with three 5 year options.

81. The Renewal and Variation of Lease contain relevantly identical or similar terms to those contained in the First Variation and Renewal of Lease, including the definition of Premises, the applicability of the RLA and an entire agreement clause. It also inserted a new cl 33 into the Lease requiring HJPL to refurbish “the Premises and the Tenant’s Property”. The term “Tenant’s Property” is not defined.

Ground Leases

82. A central plank in the arguments made by HJPL was a contention that the Lease was a ground lease – a species of lease which has been known to commerce and the common law for centuries: Hinchcliffe v The Earl of Kinnoul (1838) 5 Bing N C 1; 132 ER 1004.

83. I was referred to the decision of City of Subiaco v Homebase Management Pty Ltd [2015] WASCA 54 (Homebase). At [6], Martin CJ (with whom Newnes JA agreed) identified the characteristics of a ground lease as follows:

…A commercial arrangement pursuant to which the tenant is given the right to possession of the relevant land on the basis that it will carry out improvements on the land which will enhance its use and which will revert to the landlord at the expiry of the lease. …

Martin CJ went on at [6] to say:

…Obviously the rental negotiated by the parties to such leases will take account of the extent of their respective rights and obligations including, in the case of the tenant, the obligation of carry out improvements which will revert to the landlord upon the expiry of the lease, the costs of which must therefore be amortised over the period of the lease. That commercial characteristic of a ground lease usually has the consequence that, where the improvements to be carried out by the tenant are substantial, the tenant will require a long-term lease, in order to amortise and recover the costs of those improvements over the life of the lease. …

84. These observations were made by Martin CJ in the context of a court, in proceedings concerning the construction of a commercial contract, knowing the commercial purpose of the contract.

85. I do not regard anything said by Martin CJ in Homebase as suggesting that, in any lease that may be described as a ground lease, market rent is to be assessed by ignoring any value attaching to permanent structural or other improvements to the premises made at the expense of the tenant. The question is always one of the intention of the parties discerned from the provisions of the lease construed in accordance with ordinary principles. It is by that process that the terms of the commercial arrangement are ascertained.

86. Central to Martin CJ’s conclusion in Homebase as to the intention of the parties was a 2007 amendment to the lease which provided that the assessment of market rent be carried out “ignoring any value attaching to the permanent structural or other improvements to the Leased Premises made at the Lessee’s expense”.

Do the Premises as defined include the Building and improvements?

87. HJPL contend that the Premises as defined in the Lease, are the Site or “ground” only, and do not include the Building and other improvements. As I understood the argument, if the Building and other improvements are not part of the Premises, they do not fall within cl 3.2 of the Lease at all.

88. There was no dispute, as I understood the arguments, that the exercise is one of construction of the Lease to be undertaken as at the time the current contractual terms came into effect, namely the time of the Second Variation: see Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd (2023) 113 NSWLR 80; [2023] NSWCA 280, at [11] per Bell CJ and at [86] per Leeming JA (Kirk JA agreeing).

89. Ordinary principles of construction apply to leases: Progressive Mailing House Pty Ltd v Tabali (1985) 157 CLR 17 at 29 (Mason J), 40 (Brennan J) and 53 (Deane J). Those ordinary principles are well understood. I recently summarised those principles in Union Fidelity Finance (Aust) Pty Ltd v Renauf [2025] NSWSC 356 at [75]-[80] as follows:

[75] Three core principles emerge from what French CJ, Hayne, Crennan and Kiefel JJ said in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35]:

1. 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.

2. That requires 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. That, in turn, is facilitated by an understanding of the genesis of the transaction, the background, the context and the market in which the parties are operating.

3. 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. The contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience.

[76] Notwithstanding these three core principles, as French CJ, Nettle and Gordon JJ stated in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [48], “ordinarily this process of construction is possible by reference to the contract alone”.

[77] As Allsop P observed in Onesteel Manufacturing Pty Ltd v Bluescope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1 at [61], the analysis is an objective one that can produce only one true meaning. The process of construction is not a process necessarily concluded by logical reason or a priori analysis. It involves the weighing of differing considerations partly logical and partly intuitive (though rational) leading to a choice. Analysis of competing arguments assists in that process, but the “correct” answer is not arrived at merely by seeing which side has the greater number of “good” points.

[78] As Leeming JA observed in Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561 (Zhang v ROC) at [53], the starting point is to determine the literal or grammatical meaning or meanings of the clause. Second, one determines the legal meaning of the clause. Whereas here, there are several clauses of the agreement to be construed, it is clear that every provision must be read, together and construed with the others, so as to render, as far as possible, the provisions harmonious with each other: see Herzfeld and Prince, Interpretation (3rd ed, 2024, Thomson Reuters) at [22.30] and the cases cited therein. This is with a view to the legal meaning reflecting a measure of internal coherence: see HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342 (HP Mercantile) at [134] per Leeming JA.

[79] Where there is more than one available legal meaning, a court looks at the text, context and purpose with a view to determining which potential meaning best accords with those considerations. An iterative process is called for – checking each of the rival meanings against the other provisions of the document and investigating its commercial consequences.

[80] As Leeming JA further observed in HP Mercantile at [134]:

…The process of working through the consequences of the competing literal or grammatical meanings enables a court to assess whether either party’s preferred legal meaning gives rise to a result that is more or less internally consistent and avoids commercial absurdity.

(see also Zhang v ROC at [80]-[87]).

90. For the reasons set out below, I do not accept HJPL’s contentions.

91. The Second Variation defines Premises to mean “those premises described in Item 6 otherwise more accurately defined in the Lease”. Item 6 states Premises are the “whole of the land comprised in Auto Consol 13097-200”.

92. The Lease defines “Premises” as “the Building and all other structures described in Item 3” (emphasis added). Item 3 of the Reference Schedule refers simply to an address – Cnr Manning and Wynter Streets, Taree, NSW – and does not describe any other structures.

93. Building is defined to mean “the building structure erected upon the Land containing or forming part of the Premises, or the building of which the Premises forms part (as the case may be) and where the context admits, any part of the building”.

94. Land is defined to mean “the land described in the title reference on the cover sheet to this Lease” which is “Lot 1, sec A DP 5971 and Lot A DP 318376 being the whole of the land in Auto Consol 13097-200”.

95. HJPL contended that expanding the definition of Premises by the other defined terms yielded the following result, which it was contended was nonsensical:

Premises means [the building structure erected upon (the land described in the title reference on the cover sheet to the Lease) containing or forming part of Premises, or the building of which the Premises forms part (as the case may be) and where the context admits, any part of the building] and all other structures described in [Cnr Manning and Wynter Streets, Taree, NSW].

96. Ms Hoang’s rhetorical retort is that it is HJPL’s construction that is nonsensical, ignoring the clear reference to Building in the definition of Premises in the Lease.

97. In my view, a reasonable person in the position of the parties at the time of the Second Variation would have understood the parties to mean that the Premises included the B****uilding and the other structures or improvements on the Site. The Premises were not confined to the Site itself, divorced from any structures or improvements upon it.

98. That conclusion emerges most clearly from the words used, and in particular the reference to Building in the definition of Premises in the Lease: “the Building and…”. The construction propounded by HJPL skips over, or ignores, those words.

99. I do not agree that the plain meaning of the words used by the parties is nonsensical. The definition of “Premises” in the Second Variation directs attention to the definition in the Lease. The words “otherwise more accurately defined” suggest that the definition in the Lease is the more precise one. That definition clearly defines Premises as the “Building and all other structures described in Item 3”. The fact that no other structures are described in Item 3 does not create a problem, as HJPL sought to suggest. It simply means that it is just the Building. That is, the Premises comprise the Building. This is the result of giving the words used their literal meaning.

100. I accept that, as the Court of Appeal observed in Coveney v Asbestos Injuries Compensation Fund Ltd [2024] NSWCA 317 at [86], the ordinary literal meaning is not always the legal meaning. In the present case, however, it is.

101. Reference to the terms of the AFL do not, in my view, assist. The AFL was entered into some ten years prior to the Second Variation. It is not incorporated into the terms of the Lease. Whilst the Lease makes reference to the AFL in cl 8.6(b), the effect is only to pick up any relevant rights in relation to signage and like matters contained in the AFL. There are none. The Lease also contains an entire agreement clause. The definition of “Agreement for Lease” in the Lease refers to it as being the agreement for the “construction of the Premises”, reinforcing that the Premises is the Building.

102. There is no suggestion that the terms of the AFL were an extrinsic background matter, or a fact known to the parties to the Second Variation, at the time they entered into it.

103. The Second Variation also contains an entire agreement clause which makes no reference to the AFL.

104. In any event, cl 7.9 of the AFL does not assist HJPL. It is expressly subject to the provisions of the Lease. As set out below, those provisions do not provide for enduring ownership of the Building by HJPL. Further, cl 11.1 of the AFL permits the Lessor, as owner, to sell its interest in the Land or create any interest in the Land, provided that the Lessor complies with cl 11.1(b). That clause requires the Lessor to ensure that the purchaser signs a deed with HJPL covenanting to perform the lessor’s obligations under the AFL. There is no evidence that this occurred when TSC sold its interest. It is also clear that nothing was done in that regard when Ms Hoang bought the Site.

(a) clause 12, which requires HJPL to have Ms Hoang recorded as the “owner” on relevant insurance policies, including policies concerning the Building; (b) clause 8.6, which provides that HJPL may erect signs and the like “on any part of the outside of the Premises (including the roof)”; (c) clause 13, which permits HJPL to make alterations to the Premises, the Appurtenances, Air Conditioning Equipment and other services benefiting the Premises without requiring the consent of the Lessor – there would be no need for such a provision if the Building was not part of the Lease; (d) clause 19.6, which expressly states that the “Lessor as beneficial owner” grants to HJPL full right to install new signs “erected on any part of the Land or the Premises” thereby drawing a distinction between Land (Site) and Premises; (e) clause 23.3, which permits HJPL to de-image the Premises after the expiration or determination of the Lease; and (f) clause 23.5, which expressly acknowledges that the Air Conditioning Equipment shall be the Property of HJPL until the expiry or earlier determination of the Lease – there is no equivalent or similar provision for the Building.

109. The introduction of cl 33 into the Lease through the Second Variation, dealing with refurbishment, does not assist HJPL. That provision draws a distinction between the Premises and the “Tenant’s Property”.

110. The entire agreement clause in the Second Variation, cl 9.2, refers to the disclosure statement under the RLA as forming part of the agreement between the parties. The provision of such a statement is obviously predicated on the RLA applying. That is confirmed by the Information Schedule in both the First Variation and the Second Variation, and reinforced by a warranty from HJPL to this effect.

111. The relevant disclosure statement states that the Lease “was”, not is, a ground lease.

112. Relatedly, it is also clear that the RLA has no application to vacant land. Physical premises are required to form part of the lease for it to be subject to the RLA: Manly Council v Malouf t/as Fusion Point (2004) 61 NSWLR 394; [2004] NSWCA 299.

113. I do not accept HJPL’s contention that the parties were mistaken as to the RLA applying.

114. The issue received very little attention in the submissions both written and oral.

115. As I understood it, HJPL’s contention was based, in part, on the fact that the size of the entire site slightly exceeds 1,500 square metres. The actual Building Structure is, however, much smaller. The 2004 documents suggest it is in the order of 265 square metres, with the remaining area appearing to be made up of a car park.

116. Whilst s 5(a) of the RLA provides that the RLA does not apply to shops that have a lettable area of 1,000 square metres or more, “lettable area” is defined in s 3 so as not to include “car parking spaces”.

117. It was also suggested that the effect of the Second Variation was to create a lease of 35 years (2004 to 2039) and thus should be excluded under s 6(1)(b) of the RLA – which excludes leases for a term of 25 years or more. I do not agree. It seems to be an attempt to turn back time.

118. The Second Variation was entered into on 4 March 2015 between HJPL and EFM. Its effect was to create a new lease for a Further Term of 5 years commencing on 1 July 2019. Three five year options were also granted. The total term is 20 years, and thus below the 25 year maximum.

119. The circumstances of the present case are readily distinguishable from that considered by the Court of Appeal in Pyrmont Point Pty Ltd v Westacott (2016) 91 NSWLR 170; [2016] NSWCA 33.

120. Further, HJPL warrants that the RLA applies.

121. All of these matters reinforce what is, in my view, the clear outcome on ordinary principles of construction. They further justify the conclusion that I have reached as a matter of construction.

Is the Building and other improvements part of the Site?

123. The essence of this aspect of HJPL’s contentions is that the Building and other improvements are not part of the Site as there was no intention to permanently affix it, at the time of construction. In essence, HJPL contends that they were not fixtures.

124. This argument proceeded by reference to the principles of property law as to what amounts to a fixture. The argument was separate, as I understood the submissions, to a consideration of the terms of the Lease as varied.

125. Before considering the relevant legal principles and their application to the facts, I simply observe that there seems to me to be potentially some tension between this aspect of HJPL’s case and the repeated reference to the fact that the Lease was or is a ground lease. I have set out above, by reference to Homebase, the essential characteristics of a ground lease. As Martin CJ explained, a key characteristic of such a lease is that the tenant carries out work at its own expense which will revert to the landlord upon the expiry of the lease.

126. Yet, this part of HJPL’s argument proceeds on the basis that the Building was always HJPL’s property and will not revert to the owner of the Site. As the argument ran, a landlord cannot lease to a tenant what the landlord does not own and conversely there is no need for a tenant to lease from the landlord something that the tenant in fact owns.

127. Understandably, there was no dispute as to the relevant principles with respect to fixtures.

128. In TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576; [2010] HCA 49 (TEC Desert), French CJ, Gummow, Heydon, Crennan and Kiefel JJ stated at [23]-[26]:

[23] Accordingly, some statement of basic principle is appropriate. In the seventh edition of Megarry and Wade’s The Law of Real Property, the following appears:

“The meaning of ‘real property’ in law extends to a great deal more than ‘land’ in everyday speech. It comprises, for instance, incorporeal hereditaments; and it includes certain physical objects which are treated as part of the land itself. The general rule is ‘quicquid plantatur solo, solo cedit’ (‘whatever is attached to the soil becomes part of it’). Thus if a building is erected on land and objects are permanently attached to the building, then the soil, the building and the objects affixed to it are all in law ‘land,’ ie they are real property, not chattels. They will become the property of the owner of the land, unless otherwise granted or conveyed.”

[24] To this may be added the statements by Conti J in National Australia Bank Ltd v Blacker. There, with reference to a number of decisions, including that of Walsh J in Anthony v The Commonwealth, he said:

“There is a variety of general principles which should be considered in assessing whether an item of personal property has become attached to land in a manner designed to achieve a specific objective or a variety of objectives, such as to become a part of the realty and therefore, a fixture. Whether an item has become a fixture depends essentially upon the objective intention with which the item was put in place. The two considerations which are commonly regarded as relevant to determining the intention with which an item has been fixed to the land are first, the degree of annexation, and second, the object of annexation.”

[25] As noted above, in the Court of Appeal, reliance by analogy was placed upon the law respecting “tenant's fixtures”. That law concerns the rights of persons who have limited interests, such as life interests and leases for a term, or their personal representatives, to sever and remove from the land what admittedly are fixtures in the sense of the term as just discussed. Unless and until that right of severance and removal is exercised, the fixtures form part of the realty.

[26] Upon this aspect of the subject, it is said in Megarry and Wade:

“Prima facie, all fixtures attached by the tenant are ‘landlord's fixtures’, ie must be left for the landlord at the end of the lease. But important exceptions to this rule have arisen, and fixtures which can be removed under these exceptions are known as ‘tenant's fixtures’. This expression must not be allowed to obscure the fact that the legal title to the fixture is in the landlord until the tenant chooses to exercise his power and sever it. The tenant may do so only during the tenancy or (except in cases of forfeiture or surrender) within such reasonable time thereafter as may properly be attributed to his lawful possession qua tenant.”

(Emphasis added.)

129. In Chief Commissioner of State Revenue v Shell Energy Operations No 2 Pty Ltd [2023] NSWCA 113, Kirk JA (with whom Adamson JA and Griffiths AJA agreed), summarised the position in the following terms (at [94]):

So much is also consistent with the law relating to how something becomes a fixture. Whether or not something is a fixture turns in particular on the degree to which the thing is affixed to the land, and “whether it has been fixed with the intention that it shall remain in position permanently or for an indefinite or substantial period … or whether it has been fixed with the intent that it shall remain in position only for some temporary purpose”: Coroneo at 712; see further TEC Desert at [24]. Thus a chattel might be physically affixed to the land but not be regarded as a fixture because there is not the requisite intention. In such a case the thing does not become part of the land for legal purposes. The same result can come about by statutory provision: see Vopak VSCA at [38]-[42]. Such a thing would in general retain its legal character as a chattel: ibid at [42].

(Emphasis added.)

130. HJPL’s argument was that there was no reason to infer that, in 2004, the parties intended that a Hungry Jack’s building shell would remain on the Site, as a permanent improvement, once the Lease ended. The focus thus appeared to be on the object of the annexation. Nothing was said about the degree of annexation. This is understandable in circumstances where we are talking about a building constructed from scratch on the Site.

131. Reliance in this regard was also placed on cl 7.6 of the AFL.

132. I do accept HJPL’s contentions in this respect.

133. The objective intention was, in my view, quite clear. It was that the Building would remain in place for a substantial, and perhaps indefinite, period – at least for the term of the Lease. Whether it remained on the Site for any longer period than the term of the Lease was to be determined by the Lessor at the end of the Lease. The Lessor has the right to issue a Lessor Notice setting out whether it required all or part of the Building to be removed or left in place. The Lessee (HJPL) has no such right. HJPL’s rights were limited to de-imaging the Premises: see cl 23.3 of the Lease.

134. Nothing in cl 7.6 of the AFL alters this conclusion. It is subject to the terms of the Lease.

135. Contrary to HJPL’s contentions, there is every reason to conclude that the parties intended that the Building would remain on the Site, as a permanent improvement, once the Lease ended.

Is the Building a Lessee’s fixture?

136. As set out above, cl 3.2(c)(4)(G) provides that, in carrying out the Market Base Rent review, the valuer must “disregard the value attached to the Lessee’s fixtures and fittings on the Premises”.

137. HJPL contended that if the Building was part of the Site because it was a fixture, it was a Lessee’s fixture within this clause and thus must be disregarded.

138. The Lease does not contain a definition of “Lessee’s fixture”. Clause 1.1 of the Lease defines "Lessee's Property” as Property “on or in the Premises which is not the Property of the Lessor and includes all…fixtures…used by the lessee in the conduct of its business.” The Second Variation refers to “Tenant’s Property” but does not define that term.

139. HJPL’s arguments under this head appeared to rely on both the general law with respect to tenant’s fixtures as well as the definition of “Lessee’s Property”.

140. As to the former – tenant’s fixtures – I have extracted above what the High Court said in TEC Desert.

141. It is difficult to see how it could be contended that the Building is a tenant’s fixture. HJPL has no right to sever it from the Site and remove it. Whether the Building is to be removed is a matter to be determined by the Lessor.

142. There can be no suggestion, in my view, that the Lessor is obtaining a property windfall from HJPL in this regard.

143. I am also not satisfied that the Building falls within the definition of Lessee’s Property (or Tenant’s Property assuming this is what the parties intended in the Second Variation). To fall within the definition, it must be property “on or in the Premises”. Yet, as set out elsewhere in these reasons, “Premises” is defined as the Building itself suggesting that Lessee’s Property was intended to be something other than the Premises itself, ie the Building. The refurbishment obligation inserted into the Lease by the Second Variation expressly recognises this distinction.

Unconscionable conduct

144. The unconscionable conduct claim is an alternative claim – it only arises if the Court finds that, on the proper construction of the Lease, the “annual market rental of the Premises” for the purposes of cl 3.2 includes an assessment of rental payable on the Building and other improvements.

145. For the reasons set out above, I am satisfied that the market rental includes an assessment of the rental payable on the Building and other improvements. The claim therefore arises for consideration.

146. The claim is of statutory unconscionability under s 21 of the Australian Consumer Law (ACL).

147. As stated in HJPL’s opening submissions:

The unconscionability arises if HJPL is required to pay rent for a Restaurant which it constructed and owns. It is axiomatic that community standards ought not require a person to pay rent in respect of their own property – otherwise they are required to pay twice: once to construct the building, and secondly to rent it. Not only did the prior landlords not seek to charge such rent, the plaintiff from 2015 to 2024 did not do so either.

148. It was further contended that Ms Hoang has decided, nine years into the Lease, to extract an opportunistic rent from HJPL in respect of the Building and other improvements. The opportunism is said to arise in part because the drafting of the AFL and the Lease is not aligned in relation to the express provisions governing ownership of the Building Structure and all other fixtures, as stated in cl 7.9 of the AFL.

149. Reliance was placed, by analogy, on the equitable principles providing relief in relation to mistake, as explained in Taylor v Johnson (1983) 151 CLR 422; [1983] HCA 5 (Taylor v Johnson) – that it is unconscionable to rely upon a party’s mistake about its contractual rights. The primary submission was that s 21 of the ACL does not require the establishment of knowledge on the part of Ms Hoang of that mistake as would be required in equity, because s 21 is not confined by the unwritten law relating to unconscionable conduct: see s 21(4)(a). Alternatively, it was contended that Ms Hoang had constructive knowledge of the terms of the AFL, and cl 7.9, because she or her lawyers could have sought a copy of it.

150. Ms Hoang contended that the unconscionable conduct claim was misconceived. She submitted that it arises only from Ms Hoang's enforcement of the Lease.

151. There was no dispute as to the relevant principles applicable to s 21 – they were recently discussed by the High Court in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2024) 281 CLR 338; [2024] HCA 27 at [50]-[60] per Gageler CJ and Jagot J; [100]-[101] per Gordon J; [232]-[234] per Edelman J; [282] per Steward J; [314] per Gleeson J; and [340] per Beech-Jones J.

152. I am not satisfied that Ms Hoang in claiming market rent which includes an assessment of the rental payable on the Building and other improvements, is engaging in unconscionable conduct.

153. Ms Hoang gave evidence, which I accept, that she was not aware of the terms of the AFL at the time of purchasing the Site. She read the registered documents on title and also engaged a solicitor to advise her in relation to the purchase. It appears that Ms Hoang is also a solicitor. She was not aware of the terms of the AFL. Ms Hoang also denied that she rushed the decision to purchase – she made the decision in a three week period with the benefit of a solicitor. I reject any suggestion the decision was rushed. I accept Ms Hoang’s evidence that she relied on her mother’s commercial property experience, the Information Memorandum, and the other documents before her, and that she was comfortable with the decision.

154. The case is far removed from Taylor v Johnson. Ms Hoang was not aware that HJPL was acting under the mistake contended, assuming that was the case. She was not even aware that the base rent was being calculated on the basis that the Lease was a ground lease. In relation to Mr Paxinos’ 2019 valuation, he expressly stated that the rent was calculated in accordance with cl 3.2 of the Lease, without elaboration.

The validity of the 2019 valuation

162. The effect of the conclusions that I have expressed above is that the 2019 Valuation carried out by Mr Paxinos was not carried out in accordance with cl 3.2 of the Lease.

163. Ms Hoang contended that, in these circumstances, the 2019 Valuation was not enforceable or binding on her, and that another valuer should be appointed to determine the market rent in accordance with cl 3.2 of the Lease.

164. HJPL contended in its defence to the statement of claim that the 2019 Valuation was final and binding on the parties and that Ms Hoang has no basis under the Lease or at law to dispute it retrospectively. HJPL also pleaded the March 2019 correspondence between HJPL and Mr Paxinos, which I have set out above. HJPL asked whether Mr Paxinos was aware that HJPL had constructed the Building. Mr Paxinos responded that he was, and that he had assessed the market rent in accordance with cl 3.2 of the Lease. HJPL further pleaded that Ms Hoang thereafter confirmed that the 2019 Valuation would be adopted to determine the market rent for the period from 2019 to 2024.

165. The point received only modest attention during the written and oral submissions of the parties.

166. Ms Hoang relied on Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd (2015) 90 NSWLR 367; [2015] NSWCA 275 (Belvino) to contend, that if the valuation was not carried out in accordance with the relevant contract, it was capable of review, notwithstanding that the contract stated that it was final and binding.

167. HJPL contended that Belvino supported its case in that it was clear that Mr Paxinos had carried out a valuation, and further that Ms Hoang by adopting the 2019 Valuation as the basis for determining the market rent for 2019 to 2024, had made an election. HJPL submitted that it was now too late to challenge the 2019 Valuation.

168. Ms Hoang gave evidence, which I accept, that she did not respond to the emails between HJPL and Mr Paxinos as she was unfamiliar with the term “ground lease” and was comfortable because Mr Paxinos had assured the parties that he had assessed the property based on cl 3.2 of the Lease.

169. Belvino is authority for the proposition that where an expert appointed by the parties has not performed the task that he/she was required to do under the contract, the expert’s determination will not be final and binding and will be open to review: see Bathurst CJ (with whom Beazley P and McColl JA agreed) at [74] to [87]. Where the alleged error concerns the construction of the contract, the question is whether the parties, objectively ascertained, intended the expert to determine the correct construction of the contract.

170. I did not understand HJPL to advance a submission that the proper construction of the Lease – and in particular whether the market rent was to be determined having regard to the structures on the Site – was a matter to be determined by Mr Paxinos. In any event, I would reject such a contention. There is nothing in the circumstances to conclude that the parties intended to leave this issue up to the appointed expert.

Yes, I am aware of the lease and that Hungry Jack’s constructed the building. I assessed the subject property on the Market Review basis shown in the lease as clause 3.2.

173. No one questioned Mr Paxinos as to what he understood cl 3.2 of the Lease required. Ms Hoang simply assumed that the valuation had been carried out in accordance with the Lease.

174. It was not otherwise contended that Ms Hoang is estopped from contending that the 2019 Valuation is not valid and binding.

175. For these reasons I am satisfied that the 2019 Valuation is not binding on the parties.

Conclusion and orders

176. The parties were agreed that I should not make any final orders or deal with costs. The parties should therefore confer to seek to agree orders to give effect to these reasons. Absent a request for an oral hearing, I will deal with any remaining issues on the papers.

177. The Court orders that:

178. The parties are to confer to seek to agree on orders in accordance with these reasons and provide any agreed orders to my Associate by no later than 17 July 2026.

179. In the event that agreement cannot be reached, the parties are to each provide to my Associate, by no later than 17 July 2026, the orders for which they contend, together with submissions in support of those orders of no more than five pages.

180. Any submissions in reply, of no more than three pages, are to be provided to my Associate by no later than 24 July 2026, upon which I will determine the remaining issues on the papers.

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