Insightbox Pty Ltd v Jones Lang LaSalle

Supreme Court of NSW|2024-10-31|Before: Pike J

JUDGMENT

The plaintiff, (Insightbox) commenced these proceedings by statement of claim filed 13 August 2024.
The hearing before me on 31 October 2024 dealt with three notices of motion: 1. a motion filed by the second and third defendants, and joined in by the first defendant, dated 15 October 2024, which sought the summary dismissal of the statement of claim pursuant to r 13.4, or for each paragraph of the statement of claim to be struck out pursuant to r 14.28, of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR); 2. a motion dated 14 October 2024 in which Insightbox seeks a variety of relief, including the ejectment of the occupants of the Premises (defined below) and reinstatement of Insightbox's licence; and 3. a motion filed 24 October in which Insightbox seeks an order for the first defendant to release Insightbox's bond immediately.
The third of these motions fell away in circumstances where the second defendant has been trying for some time to return Insightbox's bond. At the commencement of the hearing, Insightbox confirmed the relevant bank account into which the bond should be paid.
The second motion in effect seeks final relief which is not appropriate at this stage. This left the motion for summary dismissal.
For the reasons set out below, I have determined that the statement of claim filed 13 August 2024 should be dismissed pursuant to r 13.4 of the UCPR.

Terms of Licence Agreement

Pursuant to cl 1(a)(i) of the Licence Agreement, TAHE was required to provide Insightbox with access to and the use of "Your Premises". "Your Premises" was defined in Item 4 of the Schedule to the Licence Agreement as "1 Dedicated Desk 01-022".
By clause 1(f) of the Licence Agreement, Insightbox acknowledged that JLL is authorised to act as the agent for TAHE and on its behalf, and that JLL does not incur any liability and accepts no obligations under the Licence Agreement in its own capacity.
The Licence Agreement also imposed various prohibitions on Insightbox, including, relevantly, prohibitions on: 1. "Monopolising the use of private and semi-private areas" within TQT (cl 2(f)(i)); 2. Sleeping at TQT (cl 2(g)(i)); and 3. Making "any physical alterations or repairs…including installation, alteration or relocation of any…furnishings, fixtures or equipment…or affixing wall hangings, or placement of any signage, floormats…" (cl 2(h)).
Pursuant to cl 9(c) of the Licence Agreement, Insightbox agreed to comply with "all material terms of the" Licence Agreement, and that, in the event that TAHE determines in its "absolute discretion (acting reasonably)" that Insightbox is in breach of a material term of the Licence Agreement, TAHE may terminate the Licence Agreement with "immediate effect" (cl 7(e)).
TAHE was also entitled to terminate the Licence Agreement if Insightbox breached of "any term" of the Licence Agreement and failed to "remedy that breach within reasonable notice of being requested…to do so" by TAHE (cl 7(b)). In these circumstances, TAHE had the right to terminate the Licence Agreement without further notice and had a general lien on all of Insightbox's property at TQT.

Overview of the proceedings and their history

The proceedings were commenced by statement of claim filed 13 August 2024. The substantive allegations are quite short. Paragraphs 1 to 16 are as follows: PLEADINGS AND PARTICULARS 1 On 21st August 2023, the plaintiff (INSIGHTBOX PTY LTD.) commenced a commercial contract to access and occupy a desk in a co-working office facility (The Quantum Terminal) managed by property agent (Jones Lang LaSalle (NSW) Pty Ltd) for owners (Transport Asset Holding Entity of NSW & Transport for NSW). Plaintiff 2 The plaintiff is a quantum technology startup whom the director (Anton Tutoveanu) is the -sole employee. The company (INSIGHTBOX PTY LTD.) was registered on 17th August 2023 primarily providing computer software applications as a business, particularly post-quantum cryptographic algorithms. Defendants 3 The first defendant (Agent) and second and third defendants (Owners) are the designated authorities of the state-owned facility (The Quantum Terminal). The Quantum Terminal 4 The co-working facility is located at 1 Eddy Avenue, Haymarket NSW 2000, purposed to house the local quantum technology business and academic community as part of Sydney's innovation district (Tech Central). Commercial Agreement 5 The contract (Agreement) specifies the terms of the commercial residency. The bond was to be $800 and rent $400+GST per month for 1 dedicated desk in the open plan office space (Lease). The tenant was granted 24 hour access to the facility and access to all 3 levels of the facility which were described as common areas (Licence). 6 Conditions (Terms) in the agreement inter alia included: a. No sleeping b. Force Majeure Occupancy 7 The plaintiff commenced occupation at the facility on 21st August 2023. Sleeping/ Unfair Term / Work, Health & Safety 8 The employee was suffering financial hardship (due to research scholarship underpayment) and had initially been sleeping in his vehicle. The employee had no private residence at the time of commencement. The employee required somewhere safe and warm to sleep at night. The employee also found it benefited his productivity to sleep at his place of work during the week. 9 On 23rd August 2023 the plaintiff visited TAHENSW office to negotiate the conditions (Terms) of the contract (Agreement). The employee (Anton Tutoveanu) was told by a Transport Asset Holding Entity of NSW staff (Owner) that "the contract would not be changed ... wing it, sleep there and not get caught." Disability 10 The plaintiff's sole employee (Anton Tutoveanu) has medical conditions of Autism (Level 1) and Post-traumatic Stress Disorder. He struggles completing work in a noisy environment where slight movements in the environment critically disturb his sustained workflow and concentration. 11 The Anti-Discrimination Act 1982 (NSW) & Disability Discrimination Act 1989 (Cth) legally entitles the employee to a reasonable workplace adjustment. The employee had sent multiple emails to the Centre Manager (Agent) requesting a ·reallocation of workspace to a quieter area of the facility with medical letters supporting his request. 12 On 28th August 2023 the Centre Managers (Agent) pressure the employee (Anton Tutoveanu) about his new workspace. A workspace adjustment wasn't formally provided despite emails and medical letters. He was told to leave the vacant, quieter area despite the contract permitting access and use as a common area. There was intimidation, "We will cancel your access if you don't move back to your assigned desk." Termination 13 On 1st September 2023 the employee's access to the facility was revoked without prior notice leaving the employee stranded and with his items locked inside the storage facility. Mediation Attempt 14 On 7th September 2023 the plaintiff contacted the NSW Small Business Commission to assist with the dispute and lockout. 15 On 30th January 2024 the defendants notified they were not willing to go in mediation. Dispute 16 Points of dispute include a. Zoning b. Lease or Licence c. Unfair Contract Term d. Work, Health & Safety e. Force Majeure f. Reasonable workplace adjustment g. Tenant's behaviour h. Ownership of State-Owned Facility
The orders sought were as follows: 17 Judgement a. Unconscionable conduct leading to serious harm and economic loss. b. Compensation i. Monetary (lump sum) ii. Subsidy (future rent reduction/wavier [sic]) iii. Asset leasehold (490 Pitt St, Haymarket NSW 2000) 18 Damages a. General damages b. 1 year loss of business's future economic growth c. Penalty (unfair term, WH&S breach)
As set out above, Insightbox also filed two notices of motion. The first motion, dated 14 October 2024, seeks, inter alia: 3 Order the ejectment of occupants at 490 Pitt St, Haymarket NSW 2000. 4 Order the compensation of any such relocation and inconvenience to those occupants. 5 Order possession of 490 Pitt St, Haymarket NSW 2000 to the plaintiff. 6 Order a lease arrangement for the duration for a period of over 50 years. 7 Order the reinstatement of licence to The Quantum Terminal. 8 Order general damages / relief. 9 Adjourn matter for a year to accurately calculate the economic loss to the plaintiff's company due to the defendants' unlawful termination and discriminatory conduct.
The second motion, dated 24 October 2024, seeks the release of the bond paid under the Licence Agreement to Insightbox. There is now no issue in relation to this.
On 15 October 2024, the second and third defendants filed a notice of motion seeking an order that the statement of claim be dismissed pursuant to r 13.4 UCPR on the basis that it is frivolous and vexatious and/or does not disclose a reasonable cause of action. In the alternative, the second and third defendants sought that each paragraph of the statement of claim be struck out pursuant to r 14.28 UCPR on the basis that it does not disclose a reasonable cause of action and/or has a tendency to cause embarrassment.
The hearing on 31 October 2024 principally concerned the second and third defendants' motion of 15 October 2024. At the hearing, counsel for the second and third defendants noted that she now also represented the first defendant, who joined in support of the motion for summary dismissal.
Insightbox relied on the following evidence at the hearing of the motion: 1. Affidavit of Anton Tutoveanu of 30 September 2024 and exhibit AT-1 to that affidavit; 2. Affidavit of Anton Tutoveanu of 5 October 2024 and exhibit AT-2 to that affidavit; 3. Affidavit of Anton Tutoveanu of 24 October 2024 and exhibit AT-3 to that affidavit; 4. Affidavit of Anton Tutoveanu of 24 October 2024 and exhibit AT-4 to that affidavit; 5. Affidavit of Anton Tutoveanu of 29 October 2024 and exhibit AT-5 to that affidavit; and 6. Exhibit REC-1, being a USB drive containing five audio files from 28 August 2023 to 13 October 2023.
The defendants relied on the following evidence at the hearing of the motion: 1. Affidavit of Jodi Ann Walkom of 14 October 2024 and exhibit JAW-1 to that affidavit; 2. Affidavit of Leah Anne Meek of 23 October 2024; and 3. Second affidavit of Jodi Ann Walkom of 24 October 2024 and exhibit JAW-2 to that affidavit.
At the conclusion of the hearing on 31 October 2024, Mr Tutoveanu indicated he wished to rely on written submissions which were subsequently provided. The defendants indicated they did not wish to provide a response. Subsequently Mr Tutoveanu sent an email to my chambers on 13 November 2024 which appeared to indicate that he wished to file an amended notice of motion, an amended statement of claim and further written submissions. No draft of this further written material was attached. My chambers responded to Mr Tutoveanu to the effect that if he wished to pursue this, he should provide copies of the further documents he wished to rely upon to the defendants so that they could then understand whether they wished to oppose the application.
On 18 November 2024, Mr Tutoveanu sent an email to my chambers stating: Notice of Motion (observe UCPR r 18.2(2)(b)). I appreciate the time-complexity of this case.
No documents were provided to my chambers.
By email dated 20 November 2024, Mr Tutoveanu sent a further email which simply stated "eta" and attached a PDF document entitled "Timetable" which set out a timetable of procedural steps that have occurred and, in lighter font, a proposed timetable for further steps.
In light of the fact that no proposed amended documents have been provided, I proceed to determine the defendants' motion.

Overview of competing positions

At the hearing before me, Mr Tutoveanu contended that there were several legal causes of action, namely: 1. Unconscionable conduct; 2. An unfair contract term; 3. The enlivenment of a force majeure clause (as Mr Tutoveanu was unable to afford a residential place to live, which was out of his control); 4. A discrimination claim (due to his sensory condition which was diagnosed as autism level one); and 5. Trust beneficiary obligations.
Written submissions were then received from Mr Tutoveanu on 7 November 2024, pursuant to orders I made at the hearing on 31 October 2024 after Mr Tutoveanu indicated, in reply, that he wanted to file further submissions.
First, Mr Tutoveanu contended that the termination of the Licence Agreement and removal of Mr Tutoveanu from TQT constituted unconscionable conduct. Mr Tutoveanu submitted that this conduct lacked empathy, did not prevent harm to Mr Tutoveanu as it is harmful to not let employees sleep somewhere safe, and placed him at risk of contracting hypothermia. Mr Tutoveanu submitted that his primary use of the Premises was to support the Insightbox business, and that his secondary activity, sleeping on the Premises, should be allowed as it sustained the primary activity.
In relation to the second claim, Mr Tutoveanu submits that the prohibition on sleeping on the Premises, contained in cl 2(g)(i) of the Licence Agreement, is void as it is an unfair contract term, contrary to s 23 of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth).
Third, and related to the first two claims, Mr Tutoveanu contended that his inability to afford residential accommodation in Sydney enlivened the force majeure term in the Licence Agreement, and thus the termination of the Licence Agreement due to his sleeping on the Premises was unlawful.
In relation to the discrimination claim, Mr Tutoveanu contended that he was entitled, under anti-discrimination legislation, "to be provided a reasonable adjustment to a workspace" so that he could "have an equal opportunity of utilising" the Premises.
Finally, Mr Tutoveanu contended that a trust existed, in which Insightbox was a beneficiary under a trust, whereby TAHE held the title of the Premises and the mere fact that Mr Tutoveanu created a "quantum tech start-up company" created an equitable interest.
Counsel for the defendants submitted that the statement of claim disclosed no reasonable cause of action and that the reasonable prospects of success were so low in this case that the dictates of s 56(2) of the Civil Procedure Act 2005 (NSW) (CPA) warrant summary dismissal.
In support of the submission that the relief sought by Insightbox could be "readily dispatched", the defendants contended that: 1. The facts disclose no basis for an order for possession; 2. The address named in the statement of claim is incorrect and is not the address of TQT; 3. The occupants of TQT cannot be ordered to be ejected and compensated as they are not party to the proceedings; 4. There is no basis for the Licence Agreement to be reinstated, given the events that have transpired between parties; 5. That a 50-year "lease arrangement" would be impossible as the TQT will cease operation at the end of this year; and 6. The adjournment sought to quantify the loss is not viable from a case management perspective.
Given the period since the licence was purportedly terminated, the defendants submitted that the only remaining relief that could reasonably be sought by Insightbox is a claim for damages as articulated in the statement of claim.
However, against this, the defendants submit that the statement of claim does not clearly articulate the facts which give rise to the causes of action pursued, and therefore the pleadings are vexatious and have a tendency to cause embarrassment and delay.
The defendants submit that there is no contractual relationship between Insightbox and JLL, as any contractual obligations were expressly excluded in the Licence Agreement in cl 1(f). JLL was only ever acting in its capacity as agent for TAHE.
Further, the defendants contend that the claim against Transport for NSW should be summarily dismissed as it is not a proper party to the proceedings and there is no cause of action stated against it in the statement of claim.
As to the causes of action against TAHE, the seemingly only proper party to these proceedings, the defendants contend that: 1. A claim that the prohibition on sleeping is an unfair contract term is bound to fail or lacks reasonable prospects of success because this prohibition is "an understandable and eminently suitable term for a commercial premise to enforce, irrespective of personal situations"; 2. Even if the sleeping prohibition could be construed as an unfair contract term, TAHE would have been entitled to terminate the Licence Agreement for the other breaches; 3. There are no reasonable prospects of success on loss, given Insightbox estimated its turnover to be $1000, the Licence Agreement was terminated within two weeks' of its commencement, and loss could have been mitigated by working elsewhere; 4. The facts do not disclose a reasonable cause of action for unconscionable conduct nor make clear what conduct is actually said to be unconscionable - further, the conduct should affect Insightbox directly rather than Mr Tutoveanu personally; and 5. A claim for discrimination is not founded on applicable provisions of legislation, and, even if it were, such a claim is bound to fail or lacks reasonable prospects of success.

Applicable legal principles

The Court has the power to dismiss proceedings generally if it appears to the Court that the proceedings are frivolous or vexatious or if no reasonable cause of action is disclosed (r 13.4 UCPR).
The Court has a similar power under r 14.28 UCPR to strike out the whole or parts of a pleading if it does not disclose a reasonable cause of action or has a tendency to cause prejudice or embarrassment.
The power to summarily dismiss proceedings where there is "no reasonable cause of action" must be exercised with caution and where there is a "high degree of certainty" as to the outcome: see Simmons v Protective Commissioner of NSW [2012] NSWSC 455 (Simmons) at [27] per Davies J.
The power must be interpreted giving due weight to the inclusion of the term "reasonable" and as subject to the statutory duty imposed by s 56(2) of the CPA: Simmons at [58].
Further, the Court will be justified in summarily dismissing proceedings to prevent the improper utilisation of Court resources by a plaintiff prosecuting proceedings "where a defendant demonstrates that those proceedings do not have reasonable prospects of success and all the plaintiff is able to do is demonstrate that the proceedings meet the bare threshold of not being certain to fail": Simmons at [64], cited in McDonald v Grech [2012] NSWSC 717 at [32]-[33] by Ward J, as the learned President then was.
Proceedings may be considered frivolous or vexatious where the proceedings have no real prospect of resulting in a substantial remedy and involve an unjustifiable expense or use of judicial resources: Jones v Sutton (No 2) [2005] NSWCA 203.
Pleadings may be struck out on the basis of having the tendency to embarrass, pursuant to r 14.28 UCPR, if the pleading is unintelligible, ambiguous or so imprecise in its identification of material factual allegations so as to deprive the other party of proper notice of the real substance of the claim: McGuirk v University of New South Wales [2009] NSWSC 1424 at [30] per Johnson J.

Determination

For the reasons set out below, I have determined that the defendants' motion of 15 October 2024 is successful and the statement of claim should be dismissed.
It must be acknowledged at the outset that this case is not about Mr Tutoveanu's personal predicament - that position invites compassion. The relevant issue is a legal one - whether the statement of claim should be summarily dismissed consistent with well understood principles.
As regards JLL, it is clearly stated in the Licence Agreement to be acting as agent for TAHE. There is nothing alleged that could arguably impose direct liability against JLL.
As regards Transport for New South Wales, nothing is alleged to disclose any cause of action against Transport for New South Wales. It is not a party to the Licence Agreement.
That leaves TAHE - the party to the Licence Agreement with Insightbox.
There is no dispute as to Mr Tutoveanu's conduct at the Premises. He moved to Level 2, to an area he was told he had no entitlement to occupy, erected partitions, moved belongings in and slept there. He refused to move when requested. In those circumstances, there can be no dispute that various provisions of the Licence Agreement were breached, including: 1. the prohibition on sleeping at the Premises - clause 2(g)(i); 2. the prohibition on monopolising other areas - clause 2(f)(ii); 3. that the plaintiff was only contractually entitled to occupy a particular desk on Level 1; 4. unauthorised affixing of signage to the walls (breach of clause 2(h)); 5. failure to rectify the damage caused to the walls when the signage was removed or to pay for such damage to be fixed (breach of clause 2(h)); and 6. causing nuisance, annoyance or interference to the Premises by erecting partitions and occupying the Level 2 area (breach of clause 2((d)(vi))).
A breach of any of these provisions entitled TAHE to terminate the Licence Agreement (clauses 7(e) and 9(c)). Only the prohibition on sleeping clause appears to be impugned.
The contention that the prohibition on sleeping is unfair is, in my view, hopeless. No plausible submission was advanced in support of it by Mr Tutoveanu by reference to the relevant provision of the ACL. Far from being unfair, the clause is a readily understandable one where the Premises provide licensees access to a particular office desk to carry out commercial operations. In any event, there were several other breaches of the Licence Agreement.
The contention that TAHE somehow engaged in unconscionable conduct is similarly unarguable. The provisions of the Licence Agreement are clear. TAHE has simply enforced these provisions. There is nothing harsh, unfair or capricious in TAHE so acting in the circumstances.
Mr Tutoveanu did not articulate, in any real or clear way, what conduct was said to be unconscionable as between TAHE and Insightbox.
The reliance by Mr Tutoveanu on the force majeure argument is misplaced. As I understood the argument, it was contended that Mr Tutoveanu's homelessness constituted a force majeure event. Clause 12k of the Licence Agreement contains a force majeure clause relieving a party from performing under the Licence Agreement if it is unable to act due to Force Majeure, which is defined in the usual way by listing a number of causes outside the control of a party. On no conceivable view of the law could such a clause have operation to somehow legally justify Insightbox's conduct.
In relation to the alleged discrimination claim, Mr Tutoveanu was unable to point to any section in any anti-discrimination legislation, or draw from any case law, to support his contention. Mr Tutoveanu admitted that this was not the primary cause of action. I cannot conceive of an argument entitling the plaintiff to the relief sought based on some alleged discrimination of Mr Tutoveanu. Even if there was such an argument, other issues would likely arise, including proper forum: see, for example, Maytom v Laundy [2024] NSWSC 817 at [34]-[43] per Meek J.
The contention that a trust existed where somehow Insightbox was a beneficiary and TAHE the trustee is similarly hopeless. No coherent submission was advanced in support it.
In the circumstances, the statement of claim does not disclose a reasonable cause of action. I have considered whether I should simply strike out the statement of claim and permit Insightbox an opportunity to seek to replead. I have decided against this course in circumstances where the underlying facts are clear and no conceivable cause of action in favour of Insightbox exists on those facts.
The proceedings also involve, at their highest, preventing Insightbox from accessing a desk to apparently carry out research work. Insightbox's annual turnover was disclosed to be minimal. Insightbox only occupied the Premises for about two weeks and has not occupied the Premises for approximately 14 months. Insightbox's real grievance appears to be that Mr Tutoveanu was not given a place to sleep. The Licence Agreement never provided for this. Pursuit of the proceedings in these circumstances is relevantly frivolous or vexatious.
The statement of claim should therefore be dismissed.
There is no reason why the plaintiff should not pay the defendants' costs of the proceedings.
The Court orders that: 1. The statement of claim be dismissed. 2. The plaintiff pay the defendants' costs of the proceedings.

Amendments 29 November 2024 - Typographical error in [39] corrected 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: 29 November 2024

Anti-Discrimination Act 1982(NSW)

Disability Discrimination Act 1989(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (8 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (5)