Jamaican Coffee kitchen Pty Ltd trading as Dushan & Shelby Trust v M20 Pty Ltd - [2022] NSWCATAP 203 - NSWCATAP 2022 case summary — Zoe

NSWNSWCATAP

Jamaican Coffee kitchen Pty Ltd trading as Dushan & Shelby Trust v M20 Pty Ltd

[2022] NSWCATAP 203

NCAT Appeal Panel|2022-02-22|Before: Blake AM

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2022-02-22

Before

Blake AM

Catchwords

[2005] NSWCA 261 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Camden v McKenzie [2008] 1 Qd R 39
[2008] ACTSC 68 Gould v Vaggelas (1985) 157 CLR 215
[1985] HCA 75 Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638
[1984] HCA 55 Manly Council v Malouf (2004) 61 NSWLR 394

Source

Original judgment source is linked above.

Catchwords

[2005] NSWCA 261 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Camden v McKenzie [2008] 1 Qd R 39[2008] ACTSC 68 Gould v Vaggelas (1985) 157 CLR 215[1985] HCA 75 Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638[1984] HCA 55 Manly Council v Malouf (2004) 61 NSWLR 394[2010] HCA 31 NSW Land and Housing Corporation v Orr [2019] 100 NSWLR 578[2019] NSWCA 231 NTT Australia Digital Pty Ltd v Cover Genius Services Pty Ltd [2020] NSWSC 1378

Judgment (120 paragraphs)

[1]

Introduction

There is no dispute between the parties that the following claims of JCK were before the Tribunal at first instance: 1. whether JCK is entitled to damages for breach of the deed of settlement (the deed of settlement claim); 2. whether JCK is entitled to compensation for pre-sublease misrepresentations by M20 and PC (the pre-sublease misrepresentations claim); 3. whether JCK is entitled to compensation for unconscionable conduct by M20 and PC (the unconscionable conduct claim); 4. whether JCK is entitled to an adjustment in rent (the rent adjustment claim); 5. the costs of the proceedings.
However, there is a dispute between the parties as to whether the following claims of JCK were before the Tribunal at first instance: 1. whether JCK is entitled to damages for breach of the sublease (the sublease claim); 2. whether JCK is entitled to rent relief pursuant to the COVID-19 Regulation (the rent relief claim).

[2]

Whether JCK is entitled to raise the sublease claim and the rent relief claim

As set out in [11(1)] above, JCK in the points of claim under the heading "Final Relief Sought" did not include claims for damages for breach of the sublease and for relief from the rent payable under the sublease. However, as set out in [11(2)(a)] and [11(2)(f)] above, JCK in the points of claim under the heading "Pleadings & Particulars" alleged that M20 and PC committed breaches of the sublease and PC failed to comply with the COVID-19 Regulation.
In their respective Points of Defence M20 and PC denied or did not admit the alleged breaches of the sublease.
In its Points of Defence PC denied that it had failed to comply with the COVID-19 Regulation by reason that JCK had failed to provide it with evidence that it was an impacted lessee and accordingly it was not obliged to renegotiate the rent payable under the sublease.
JCK under the heading "Contentions/Issues in dispute" in the Applicant's Facts, Chronology and Contentions included the following (at [23A] and [23G]): "A. Was the Sublessor required to clean the Common toilets at the Property after 8.pm, on weekends and public holidays?" "G. Is the Applicant an impacted lessee under the Covid-19 Regulation?"
In the second Sabapathy declaration, Mr Sabapathy said he sought rent relief from April 2020 to September 2020, and as he had paid the rent payable under the sublease he was in credit for the amount determined by the Tribunal to be the appropriate COVID-19 rent relief.
In the applicant's submissions, JCK: 1. submitted that, contrary to the sublease, PC did not clean the toilets on weekends and on public holidays prior to the deed of settlement; 2. sought rent relief of $60,128.76 by orders that it does not have to pay $30,126.46 in waived rent and that rent of $30,126.46 be deferred to be repaid over 24 months in equal monthly instalments commencing on the 14th day after the date of the Tribunal order.
The question of the claims being pursued by JCK was raised at the commencement of the original hearing before the Tribunal. Counsel for JCK said the Applicant's Facts, Chronology and Contentions should be treated as an opening. JCK declined to amend its points of claim. Counsel for M20 and PC objected to any claims being determined other than the six substantive claims for relief under the heading "Final Relief Sought" in the points of claim.
In the applicant's submissions, JCK referred to Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12 (Moustakas) where a majority of the High Court held that failure to amend will not necessarily preclude a verdict upon the facts as they have emerged.
In the respondents' submissions, M20 and PC referred to The Owners Strata Plan No 60182 v Bornzin [2019] NSWCATCD 30 (Bornzin) where, at [77], the Tribunal stated: "[77] Although the Tribunal is not a court of strict pleading and is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 38 (4) of the NCAT Act) it must apply principles of procedural fairness and natural justice, as well as giving parties a reasonable opportunity to be heard and have submissions considered (s 38 (5) of the NCAT Act). Ambush is not an acceptable feature of modern litigation and a party is entitled to know the case it has to meet: Bellingen Shire Council v Colavon Pty Ltd [2012] NSWCA 34 at [33]."
In the applicant's reply submissions, JCK distinguished Bornzin where during the course of the hearing the applicant in that case sought to develop a completely different legal basis for a claim which had never been raised prior to the final submissions. In contrast, the case of JCK was raised in opening. Further, each claim of JCK was identified in the Applicant's Facts, Chronology and Contentions tendered at the beginning of the hearing. At no point was there any objection taken to the evidence of JCK, M20's and PC's witnesses traversed all of the issues in their evidence in chief, and there was no objection to the questions being put to their witnesses which were clearly relating to each of the claims of JCK including the claims sought to be excluded from consideration.
In the respondents' reply submissions, M20 and PC said JCK's reliance on Moustakas was misplaced. It concerned the raising of new issues on appeal and the majority held that the plaintiff should not be permitted to depart from the case it had put against the defendant at trial. It would be repugnant to the requirement of procedural fairness to allow JCK to raise any additional claims.
Pursuant to s 38(4) of the NCAT Act, the Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. Further, pursuant to s 38(5) of the NCAT Act, the Tribunal is to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings.
We are satisfied that JCK sufficiently raised the rent relief claim in its points of claim. When the points of claim is read as a whole it is clear that JCK was not only raising the six substantive claims for relief under the heading "Final Relief Sought", but also (as previously mentioned) the claims for sublease damages and for rent relief for failure to comply with the COVID-19 Regulation under the heading "Pleadings & Particulars". While we accept the principle in Moustakas may have application to proceedings in the Tribunal, it has no application in these proceedings because the sublease claim and the rent relief claim being pursued by JCK were sufficiently raised in its points of claim when they are fairly read as a whole having regard to the principles in s 38(4) and (5) of the NCAT Act.
While we accept that the principles in Bornzin at [77] are applicable to proceedings in the Tribunal, we are not satisfied that they have any application to these proceedings. Given the sublease claim and the rent relief claim on a fair reading of the points of claim were being made and were answered in the points of defence, there was no ambush of PC by JCK. There would be no failure to comply with s 38(5) of the NCAT Act by not affording procedural fairness to M20 and PC if both these claims are determined. The evidence of the parties extended to both these claims. There has been no articulation by PC of any prejudice which would be suffered if both these claims are determined.

[4]

Introduction

It is convenient to deal with the sublease claim and the deed of settlement claim together.
The sublease claim and the deed of settlement claim were contested before the Tribunal and involved: 1. the following alleged breaches of the sublease by PC: 1. the failure to provide JCK with access to the unisex disabled toilets located on the ground floor behind the elevators; 2. the diversion of the air conditioner servicing the premises to the common area in or around December 2017 before entry into the sublease; 3. the locking of JCK out of the storage area without giving it the opportunity to remove its goods in or around May 2019; 4. the failure to maintain and repair the roof of the premises and keep the premises watertight; 5. the failure to clean the toilets seven days a week since February 2018; 1. the following alleged breaches of the deed of settlement by M20 and PC: 1. the locking of JCK out of the storage area without giving it the opportunity to remove its goods; 2. the failure to maintain and repair the roof of the premises since February 2018; 3. the failure to clean the toilets seven days a week; 4. the failure to do an additional clean of the common toilets each Saturday and Sunday night after trading; 1. losses totalling $228,180.90 by reason of the breaches of the sublease by PC and the deed of settlement by M20 and PC comprising the following items: 1. the cost of $116,016.90 to repair the damage caused by a water leak; 2. the cost of $4,400.00 to relocate the air conditioner vents; 3. $3,000 being 20% of electricity costs for nine months; 4. $1,564.00 for stock loss from the storeroom; 5. $42,900.00 for the cost of cleaning toilets and damages for having no access to the disabled toilets; 6. $60,000.00 for four months' rent during rain disruption.
The sublease, in which PC and JCK are referred to as "the Sublessor" and "the Sublessee" respectively, relevantly included clauses 9.1, 15.1, 27.1 and 27.2, and items 3(b) and 12 in the reference schedule: "9.1. Repair and Use Where any Air Conditioning Equipment, Fire Equipment or lifts or escalators are provided or installed in the Building or the Premises by the Sublessor: (a) the Sublessor must use reasonable endeavours to keep the Air Conditioning Equipment, Fire Equipment, lifts and escalators working and reasonably available for the use of the Sublessee (delays or stoppages due to repairs, maintenance, accidents, strikes or other unavoidable causes beyond the Sublessor's control excepted);" "15.1. Quiet Enjoyment The Sublessee paying the Rent and duly and punctually observing and performing the covenants, obligations and provisions in this Sublease on the part of the Sublessee to be observed and performed must and may peaceably possess end enjoy the Premises during the Term without any interruption or disturbance from the Sublessor or any other person or persons lawfully claiming by, from or under the Sublessor." "27.1 Right to Access Toilets The Sublessor agrees to provide as part of this sublease right to access to the unisex disable toilets, and a Male and Female toilet (the toilets) which are located on the ground floor behind the elevators. A direct point of entry (a door) will be provided to the tenancy to access the corridor and toilets." "27.2 Clean Toilets & Record Cleaning The toilets are cleaned nightly weekdays excluding public holidays by cleaners, the cost of which will be invoiced together with consumables and paid by the Sublessor. Beyond these times being after 8pm weekdays and weekends and public holidays the Sublessor will be responsible to install all consumables and clean the toilets." "REFERENCE SCHEDULE … ITEM 3(b) TOILET CLEANING FEE AND SUPPLIES WEEKDAYS ONLY $300 / week plus GST with CPI annual reviews 1 February and cost of supplies as invoiced … ITEM 8 OPERATING HOURS The operating retail hours 9.00 am to 11.00 pm Monday to Friday, Saturday, Sunday and public holidays as permitted by statute … ITEM 12 CONDITION OF PREMISES Subleased on an as is basis … …"

[5]

The deed of settlement provides: "(Lessor) M20 Pty Ltd & Praxis Capital Pty Ltd And (Lessee) Jamaican Coffee Kitchen Pty Ltd Deed of Settlement 23.8.19 1. Within 7 days of the Lessee obtaining a withdrawal of caveat or permission to register, the Lessor will endeavour to register the Sublease and the Head Lease in an agreed form or in the form that was presented at the time of the commencement of Lease; 2. Within 7 days the Lessors provide access to the storage area for the Lessee to remove their belongings and stock; 3. All default notices served by the Landlord/Lessors to date are withdrawn including any breach notices and invoices associated with those breaches/allegations, without prejudice to the Sublessor's right to re-issue such notices; 4. The Lessor to meet with the Lessee once a month to update on any disputes and to read water-meter. 5. The Lessee to pay water usage costs already served within 7 days. 6. The mediation is adjourned, and the parties will not take any adverse action against the other in relation to current complaints, issue or claims for a period of 3 months until mediation is concluded whichever first occurs. 7. The Sublessor will provide the Sub-lessee with a building report to confirm that the tenancy is watertight in accordance with the applicable building standard within 6 weeks. 8. The Sublessee to provide the Sublessor written copies of the service agreement that the Sublessee has entered into with all service providers in connection with the servicing of the grease trap, exhaust system, waste management and pest control within 7 days. 9. In accordance with Clause 27.2, the Sublessor will clean the common toilets 7 days a week and install a card recording that is a fixed to each entry door on the inside and the Sublessee will do an additional clean each Saturday and Sunday night after trading and sign the card."
The following two issues arise for determination of the sublease claim and the deed of settlement claim: 1. whether PC breached the sublease and M20 and PC breached the deed of settlement; 2. whether JCK suffered any, and if so what, loss by reason of any such breaches of the sublease and the deed of settlement.
For each of these issues it is convenient to summarise the evidence and submissions of the parties at first instance and on appeal before turning to their consideration and determination.

[15]

The He statement

In the He statement Mr He gave the following evidence: 1. during the term of the sublease, JCK has complained that water has leaked into the premises from time to time. Roofing contractors have been engaged each time there is a reported leak (at [18], [31]); 2. on 8 February 2019, Parramatta experienced a once in a hundred year weather event whereby water entered into the premises, resulting in the restaurant needing to be closed for a period of approximately two hours (at [20]); 3. on or around 8 February 2020, the premises again experienced water leakage following a further significant storm in the Parramatta area; the restaurant was closed for approximately three hours (at [28]); 4. he had become aware that JCK made an insurance claim against Alliance Australia Insurance Limited in relation to the damage it alleged it had suffered as a result of water leaks at the premises and he understood that the insurer paid to JCK an amount of $74,466.71 in relation to that insurance claim (at [34]); 5. the toilets are cleaned nightly on weekdays excluding public holidays (at [37]); 6. the cleaning contractor is Balanced Works as set out in a bundle of invoices for the period between 30 September 2019 to 30 November 2020 (at [38]-[39]); 7. JCK had access to the disabled toilets until around 17 May 2019. Around that time, he was directed by M20 to remove access to the disabled toilets as there had been ongoing damage and complaints that the toilets were being misused and they presented a danger (at [44]); 8. JCK is the only tenant that operates after hours; when the toilets are cleaned early Saturday and Sunday mornings, by night the toilets are often left with vomit or in an unclean state (at [54]); 9. in order for JCK to access the disabled toilets, it needs to request a key from either PC or M20. Mr Sabapathy was asked to pick up keys and to make sure that the toilets are not misused by JCK's customers (at [56]); 10. since December 2020, JCK has had access to the disabled toilets (at [57]); 11. PC has not altered the air conditioning ducting since the sublease was entered into (at [59]); 12. on or around 10 May 2019, he caused the storage area to be locked (at [68]); 13. on or around 16 May 2019, he provided access to JCK to remove its belongings and stock from the storage area (at [70]).

[24]

The alleged breach of the sublease - leaking of the roof

We understand that JCK alleges that PC breached cl 15.1 of the sublease by failing to maintain and repair the roof of the premises and keep the premises watertight.
We are satisfied that there was water ingress to the premises on the following dates: 1. on 18 December 2018, as set out in the Napoli declaration at [5]; 2. on 8 February 2019, as set out in the 14 February 2019 letter; 3. on 17 and 26 January 2020, 7 and 8 February 2020, 21 May 2020 and 7 August 2020, as set out in the 17 January 2020 email, the 30 January 2020 email, the 7 February 2020 email, the 22 May 2020 email, the 25 May 2020 email and the 7 August 2020 email; 4. on 28 July 2020 and 22 and 23 August 2020, as set out in the Napoli declaration at [5].
We are satisfied that PC was not negligent in its maintenance of the roof of the premises by reason of the work carried out in March, April and July 2019, and in February, June and November 2020 as recorded in the invoices of TeePee and Rize, the 14 February 2019 letter, and the 20 June 2020 letter.
In Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 (Martins Camera) Yeldham J held that a lessor had breached the covenant of quiet enjoyment in circumstances where water had entered the lessee's premises following heavy rain which caused the downpipes to overflow and water seep into the shop premises occupied by the lessee, and which caused damage to the lessee's stock. His Honour at 20 found that the water damage to the plaintiff's goods was a result of the blockage of at least one, and probably both, of the drains upon the roof area, due to dirt and rubbish generally, causing water to build up and enter the shop below. He was satisfied, notwithstanding that the rain was very heavy and that premises elsewhere were flooded, that, if such blockage had not occurred, the water would in all probability have dispersed without building up as it did, and that none, or certainly none of any consequence, would have entered the premises below. His Honour at 23 held that the covenant for quiet enjoyment entitled the lessee not merely to possession but to the enjoyment of the premises and that there would be a breach of this covenant if the lessee's ordinary and lawful enjoyment of the premises was substantially interfered with by the negligent acts or omissions of the lessor.
Martins Camera has recently been cited with approval: Ajaimi v Giswick Pty Ltd [2022] VSC 131 (Ajaimi) at [146]-[147].
In G v Armellin (2008) 219 FLR 359; [2008] ACTSC 68 (Armellin) at [106], [110]-[112] Bennett J relevantly made the following observations with respect to admissions: "[106] In considering the effect of admissions, courts have distinguished between admissions of fact and admissions of law. In Shine v Williams [2007] WASCA 194, the Court of Appeal of the Supreme Court of Western Australia considered the applicable rule, O 30, r 3(1) of the Rules of the Supreme Court 1971 (WA), (the WA Rules) which states: Where admissions of fact have been made on the pleadings or otherwise, any party may at any stage of a cause or matter apply to the Court for such judgment or order as upon such admission he may be entitled to, without waiting for the determination of any other question between the parties, and the Court may on such application make such order or give such judgment as the Court thinks just." [110] In Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 the High Court considered the distinction between admissions of fact and of law where admissions were made in a media release and in correspondence in terms of (at [19]-[20]): We apologise … This situation should not have occurred … this does not excuse Dovuro in failing in its duty of care to inform growers as to the presence of these weed seeds. We got it wrong in this case … Counsel also made concessions as to the existence of the duty of care in closing submissions at trial: Dovuro at [48]-[49]. [111] Justice Gummow (with whom McHugh and Heydon JJ agreed), expressed the view (at [68]), that a party may make an admission not only of a fact but also of a conclusion from facts but that to say that a party may undo an admission as "a mixture of fact and law, or even of law" (citing Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 231 per Mahoney JA) was to state the proposition too widely. Further, "a party may admit the facts from which a conclusion of law may then be drawn" (at [69]). However, a conclusion with respect to the legal standard, or its application, is for the court (at [70]-[71]). [112] Dovuro and Shine stand for the proposition that admissions will be valid insofar as they pertain to facts. Questions of law and concessions by a party concerning those questions of law remain for the Court to decide."
In the light of our finding that PC was not negligent in its maintenance of the roof of the premises we are not satisfied that PC breached cl 15.1 of the sublease by failing to maintain and repair the roof of the premises and keep the premises watertight.
This conclusion is not altered by the admission made by Mr He that JCK was entitled to some amount for water damage. Having regard to the principles in Armellin at [106], [110]-[112], this admission is properly to be characterised as a concession by JCK concerning a question of law and was a matter for the Tribunal to decide. For the reasons already, given we are satisfied that PC was not negligent in its maintenance of the roof of the premises and accordingly is not liable to JCK.

[39]

The applicable principles

The principles for the assessment of damages for breach of contract were recently summarised in Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31 (Sabouni) at [41]-[42] per Black J: "{41] The damages to which RBD is entitled, in respect of Mr Sabouni's breach of or repudiation of the Contract is the monetary sum which, so far as money can, represents "fair and adequate compensation for the loss or injury" which it sustained by reason of that breach or repudiation: Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 116 per Deane J. The Court must do the best it can to make a reliable assessment of damages, where damages are difficult to assess, including where a party has failed to lead the best evidence of damages: Commonwealth of Australia v Amann Aviation Pty Ltd above at 83, per Mason CJ and Dawson J, 125 per Deane J, 153 per Gaudron J. In Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 at [135], Beazley JA observed that: "Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provides for breach of contract, an award of damages … . Such damages should not be nominal only, notwithstanding that the award may be difficult to assess. …" (Citations omitted) [42] On the other hand, the case law also recognises that damages must be proved with a degree of precision which reflects the proof that is reasonably available to the parties: State of New South Wales v Moss (2000) 54 NSWLR 536 at [72]; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 at [38]. In Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 319, Pincus J noted that "if the evidence called on behalf of [the plaintiff] fails to provide any rational foundation for a proper estimate of damages, the Court should simply decline to make one". That approach was approved by Brooking J in JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 243 and by the Court of Appeal in Troulis v Vamvoukakis [1998] NSWCA 237 where Gleeson CJ observed that, where damages were susceptible of evidentiary proof, but there was an absence of raw material to which good sense may be applied, "[j]ustice does not dictate that … a figure should be plucked out of the air". That decision has been approved in subsequent cases, including McCrohan v Harith [2010] NSWCA 67 at [128], where McColl JA (with whom Campbell JA and Handley AJA agreed) held that an estimate of damages, in the nature of a "guess", should not be made where precise evidence of the damages suffered could have been adduced, but was not. I followed that decision in Re Hair Industrie Penrith Pty Ltd, Hair Industrie Merrylands Pty Ltd [2015] NSWSC 1578 at [20], on which I have drawn for the summary which appears above."

[41]

The failure to clean the toilets seven days a week

The issue of whether JCK suffered any, and if so what, loss by reason of the failure of JCK to clean the toilets seven days a week raises the following two questions: 1. whether JCK is entitled to a refund of the fees for the cleaning of the toilets paid to PC; 2. whether JCK is entitled to damages for the costs of cleaning the toilets on the weekends.
While item 3(b) of the reference schedule is not referred to in any clause of the sublease, we are satisfied that this item provides that the cleaning fee charged to JCK was $330.00 inclusive of GST per week for the cleaning of the toilets on weekdays.
As the amount of $330.00 inclusive of GST per week paid by JCK to PC was for the cleaning of the toilets on weekdays which was done, we are not satisfied that JCK is entitled to any refund of the cleaning fee which it has paid since March 2018.
As to the question of damages for the costs of cleaning the toilets on the weekends, it is necessary to separately consider the period from March 2018 to 23 August 2019 when the deed of settlement was signed, and the period since 23 August 2019. As to the earlier period comprising 77 weeks, the question is the cost of cleaning the toilets on the weekends. As to the later period, the question is the additional cost of cleaning the toilets on the weekends.
As to the earlier period, we are satisfied that there is sufficient evidence to enable a proper assessment of damages. Subject to one qualification, we accept the evidence of Mr Napoli in preference to that of Mr Sabapathy because it is more precise. The qualification is that the calculation of the staff cost of cleaning was based on 12 hours for a weekend being four hours for each of Friday, Saturday and Sunday nights. As we found that PC did not breach the sublease in respect of cleaning on Fridays, the calculation should have been based on eight hours each weekend. On this basis PC is entitled to $183.96 (8 hours x $21.00 x 9.5%) for each weekend, and $14,164.92 ($183.96 x 77 weeks) for this period.
As to the later period, we are not satisfied that JCK has established any loss. As the evidence called on behalf of JCK fails to provide any rational foundation for a proper estimate of damages, we decline to make one. JCK could have adduced evidence as to the additional time taken for cleaning the toilets because they had not been cleaned by M20 and PC, but did not do so. In these circumstances, making an assessment of damages would involve a process of guesswork.

[47]

The applicable provisions of the RL Act

Part 2 (ss 9-16) is headed "Entering into a lease". Section 10 deals with the right to compensation for pre-lease misrepresentations, and relevantly provides: 10 Right to compensation for pre-lease misrepresentations (1) A party to a retail shop lease is liable to pay another party to the lease (the injured party) reasonable compensation for damage suffered by the injured party that is attributable to the injured party's entering into the lease as a result of a false or misleading statement or representation made by the party, or any person acting under the party's authority, with knowledge that it was false or misleading. (2) The giving of a lessor's disclosure statement to a prospective lessee under a retail shop lease is considered to be the making of a representation by the lessor to the lessee as to the information in the disclosure statement. …
Section 11 deals with the lessor's disclosure statement, and relevantly provides: 11 Lessor's disclosure statement (1) At least 7 days before a retail shop lease is entered into, the lessor must give the lessee a disclosure statement for the lease (the lessor's disclosure statement) that complies with the following requirements - (a) the lessor's disclosure statement is to be in writing and is to be in or to the effect of Parts A and B of the form in Schedule 2 (the prescribed form), … (4) If a lease is entered into by way of the renewal of a lease, a written statement (a lessor's disclosure update) that updates the provisions of an earlier disclosure statement given to the lessee is, in conjunction with that earlier disclosure statement, considered to be a disclosure statement given for the purposes of this section at the time the lessor's disclosure update is given.
Part 7A Division 2 (ss 62C-62E) is headed "Misleading or deceptive conduct". Section 62C deals with the interpretation and application of Div 2, and relevantly provides: 62C Interpretation and application of Division (1) In this Division - misleading or deceptive conduct means conduct to which section 62D applies. …
Section 62D deals with misleading or deceptive conduct in connection with retail leases, and provides: 62D Misleading or deceptive conduct in connection with retail leases A party to a retail shop lease must not, in connection with the lease, engage in conduct that it is misleading or deceptive to another party to the lease or that it is likely to mislead or deceive another party to the lease.
Section 62E deals with the right to compensation, and provides: 62E Right to compensation A party or former party to a retail shop lease who suffers loss or damage by reason of misleading or deceptive conduct of another party may recover the amount of the loss or damage by lodging a claim against the other party under section 71.

[56]

The submissions of M20 and PC

In the respondents' submissions, M20 and PC made the following submissions: 1. they referred to Watson v Foxman (1995) 49 NSWLR 315 at 319; 2. the Tribunal would not accept the evidence of Mr Sabapathy in the first Sabapathy declaration at [24] for the following reasons: 1. it was standalone evidence of oral representations made some years before the first Sabapathy declaration; 2. the evidence was equivocal and lacking in precision; 3. little weight should be placed upon Mr Sabapathy's recollection of the alleged conversation in circumstances where, during cross-examination, he sought to respond to questions as to his recollection of a conversation by reference to documents not put before him; 4. the conversation alleged is incredible on its face. It is said to comprise a series of disjunctive representations of fact, volunteered in an entirely unprompted manner, by Mr Kyriacou and Mr He, the directors of both M20 and Praxis, apparently in an alternating procession. As a matter of ordinary human experience, that evidence of the alleged conversation is fanciful; 5. as was accepted by Mr Sabapathy under cross-examination, the content of the representations cannot be found in any of the contemporaneous documentation prepared in connection with the sublease; 6. even were this evidence accepted, JCK still cannot succeed on much of its pleaded claim; nothing in the alleged conversation conveys a representation by either respondent that: 1. the works to the premises were conducted in a "proper and workmanlike manner"; 2. the "building" had been "upgraded"; 3. the air conditioner was "purpose built for the Premises"; or 4. "table and chairs could be used at the Premises as a takeaway shop".
In the applicant's reply submissions, JCK said the evidence of Mr Sabapathy in the first Sabapathy declaration at [24] should be accepted. It referred to the "For Lease" sign in the front of the premises which relevantly stated "Access to Male/female amenities" and "New air conditioning". Mr He did not deny the conversation in his oral evidence.

[57]

Consideration and determination

In Watson v Foxman at 318-319, McLelland CJ in Eq noted the challenges confronting a plaintiff seeking to rely on oral representations in the context of cases of misrepresentation: "Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. … Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration."
We regard it as significant that the "For Lease" sign in the front of the premises contained an express statement of "New air conditioning". In the light of this statement it is likely that oral representation to the same effect would have been made by M20 and PC in negotiations prior to entry into the sublease.
However, having regard to the principles in Watson v Foxman at 318-319, we are not satisfied that any of the pleaded representations were made to Mr Sabapathy except that PC made the representation that the premises were fitted with a new air conditioning unit. There is a significant disparity between the evidence of Mr Sabapathy in the first Sabapathy declaration at [24] and the express representations which JCK alleges were made.

[63]

Consideration and determination

We note that, surprisingly, JCK made no claim that by the answer to question 17.1 in the lessor's disclosure statement PC engaged in misleading or deceptive conduct. This claim arises by virtue of the silence of PC.
We also note that the submissions of JCK did not address any implied representation as to the condition of the premises.
In Ajaimi at [126]-[127] M Osborne J set out the following principles for engaging in misleading or deceptive conduct under s 18 of the Australian Consumer Law (which is the statutory analogue to s 62D of the RL Act): "[126] Turning first to the claim by silence, silence may constitute misleading or deceptive conduct 'where it embodies a false representation or where there is a reasonable expectation that a relevant fact will be disclosed'.30 The essential question is whether, having regard to the circumstances constituted by acts, omissions, statements or silence, there has been conduct likely to mislead or deceive. It is clear that silence alone cannot give rise to a breach of s 18 of the ACL. In Addenbrooke Pty Ltd v Duncan (No 2), Gilmour and White JJ summarised the principles relevant to cases of silence: (a) conduct involving silence or nondisclosure may, in some circumstances, constitute misleading or deceptive conduct; (b) in considering whether conduct is misleading or deceptive, silence or nondisclosure is to be assessed as a circumstance like any other; (c) mere silence is unlikely to constitute misleading or deceptive conduct. However, remaining silent will constitute misleading or deceptive conduct if the circumstances give rise to a reasonable expectation that, if some relevant fact does exist, it will be disclosed; (d) the existence or otherwise of such a reasonable expectation is to be determined objectively; (e) it is not possible to categorise all of the circumstances in which a reasonable expectation of disclosure may arise. Such circumstances may exist, for instance when either the law or equity imposes a duty of disclosure, when a statement conveying a half-truth only is made, when the respondent has undertaken a duty to advise, when a representation with continuing effect, although correct at the time it was made, has subsequently become incorrect, and when the respondent has made an implied representation. (f) in commercial dealings, in assessing whether there is a reasonable expectation that a fact, if it exists, will be disclosed, it will often be the case that one party to a commercial dealing has more knowledge about a relevant matter than the other but will not, in accordance with ordinary commercial expectations, be guilty of misleading or deceptive conduct by failing to make that knowledge known to the other party. (citations omitted) [127] It is clear from the above that the landlord's silence alone is unlikely to constitute misleading or deceptive conduct. Further, the silence has to be assessed as a circumstance amongst many others, which relevantly in the present case includes a provision in the Lease that the Premises were leased in their present state and condition. It is not the case that, without more, a prospective landlord of premises must positively disclose defects in the premises to a prospective tenant such that if it does not, the landlord will be liable under the ACL for the failure to disclose that matter."
In Miller at [22] French CJ and Kiefel J said: "[22] However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. …"
Having regard to the principles in Ajaimi at [126]-[127] and Miller at [22], we are not satisfied that M20 and PC made any of the implied representations. The circumstances prior to entry into the sublease did not give rise to a reasonable expectation that PC would disclose anything about the prospective roadworks or the condition of the premises.

[70]

Consideration and determination

As we have found that PC made the representation that the premises were fitted with a new air conditioning unit, we are satisfied that it was false or misleading, and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and that JCK relied upon the express representations in entering into the sublease.
In Gould v Vaggelas (1985) 157 CLR 215 at 236; [1985] HCA 75 Wilson J relevantly restated the principles as to inducement including that, if a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract, there arises a fair inference of fact that he was induced to do so by the representation.
If we had found that PC had made any one or more of the other express representations and the implied representations we would have found that they were false or misleading, and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and that JCK relied upon the express representations in entering into the sublease.
In Ajaimi at [131] M Osborne J held that the measure of damages for breach of s 18 of the Australian Consumer Law in most if not all cases is the measure of damages representing the prejudice or disadvantage suffered in consequence of the party having altered their position under the inducement of the relevant representation; in broad terms this is analogous to tortious damages. This involves an analysis of the difference in the position as induced and the relevant counterfactual position.
Notwithstanding that JCK in its points of claim claimed that, had the express or implied representations not been made, it would have found alternative premises in the Parramatta district and thereby suffered loss, it adduced no such evidence, including that any such premises would have been less expensive or otherwise more advantageous than the premises the subject of these proceedings. Accordingly, even though we have found that one express representation concerning the airconditioning was made, was false or misleading, and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and that JCK relied upon the express representations in entering into the sublease, we dismiss the pre-sublease misrepresentations claim in the absence of any evidence of established loss. If JCK had established one or more of the other express representations and the implied representations had been made, and were false or misleading and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and caused or materially contributed to its entering into the sublease, we would have dismissed the pre-sublease misrepresentations claim in the absence of any evidence of established loss.

[72]

The applicable provisions of the RL Act

Part 7A Division 1 (ss 62A-62B) is headed "Unconscionable conduct". Section 62B deals with unconscionable conduct in retail shop lease transactions, and relevantly provides: 62B Unconscionable conduct in retail shop lease transactions (1) A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable. … (3) Without in any way limiting the matters to which the Tribunal may have regard for the purpose of determining whether a lessor has contravened subsection (1) in connection with a retail shop lease, the Tribunal may have regard to - (a) the relative strengths of the bargaining positions of the lessor and the lessee, and (b) whether, as a result of conduct engaged in by the lessor, the lessee was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the lessor, and (c) whether the lessee was able to understand any documents relating to the lease, and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the lessee or a person acting on behalf of the lessee by the lessor or a person acting on behalf of the lessor in relation to the lease, and (e) the amount for which, and the circumstances under which, the lessee could have acquired an identical or equivalent lease from a person other than the lessor, and (f) the extent to which the lessor's conduct towards the lessee was consistent with the lessor's conduct in similar transactions between the lessor and other like lessees, and (g) the requirements of any applicable industry code, and (h) the requirements of any other industry code, if the lessee acted on the reasonable belief that the lessor would comply with that code, and (i) the extent to which the lessor unreasonably failed to disclose to the lessee - (i) any intended conduct of the lessor that might affect the interests of the lessee, and (ii) any risks to the lessee arising from the lessor's intended conduct (being risks that the lessor should have foreseen would not be apparent to the lessee), and (j) the extent to which the lessor was willing to negotiate the terms and conditions of any lease with the lessee, and (k) the extent to which the lessor and the lessee acted in good faith. … (8) A lessor or lessee, or former lessor or lessee, who suffers loss or damage by reason of unconscionable conduct of another person that is in contravention of this section may recover the amount of the loss or damage by lodging a claim against the other person under section 71A. (9) If the matter of such loss or damage arises in connection with a matter the subject of proceedings in the Tribunal, the Tribunal may proceed to decide it, and in so doing may award such sum as it thinks fit. …

[73]

The applicable legal principles

In Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261 (World Best) at [120]-[121] Spigelman CJ (with Tobias JA at [183] agreeing) made the following observations with respect to unconscionable conduct within s 62B of the RL Act: "[120] Unconscionability is a well-established but narrow principle in equitable doctrine. It has been applied over the centuries with considerable restraint and in a manner which is consistent with the maintenance of the basic principles of freedom of contract. It is not a principle of what "fairness" or "justice" or "good conscience" requires in the particular circumstances of the case. … [121] … Even if the concept of unconscionability in s 62B of the Retail Leases Act is not confined by equitable doctrine, as the decisions under s 51AC of the Trade Practices Act (Cth) suggest, restraint in decision-making remains appropriate. Unconscionability is a concept which requires a high level of moral obloquy. If it were to be applied as if it were equivalent to what was "fair" or "just", it could transform commercial relationships in a manner which the Minister expressly stated was not the intention of the legislation. The principle of "unconscionability" would not be a doctrine of occasional application, when the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute about a retail lease arises."
The meaning of the term unconscionable conduct was recently considered by the High Court in Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18 (Kobelt). That case concerned the use of the term in s 12CB(1) of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) (which is substantially similar to the proscription contained in s 62B of the RL Act). Keifel CJ and Bell J (who participated in the majority) at [14] and [15] stated as follows (footnotes and references omitted): "[14[ The term "unconscionable" is not defined in the ASIC Act and is to be understood as bearing its ordinary meaning. The proscription in s 12CB(1) is of conduct in connection with the supply of financial services that objectively answers the description of being against conscience. The values that inform the standard of conscience fixed by s 12CB(1) include those identified by Allsop CJ in Paciocco v Australia and New Zealand Banking Group Ltd: certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and: "the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage". [15] It is the application of the last-mentioned value with which the appeal is concerned. In Kakavas v Crown Melbourne Ltd and Thorne v Kennedy it was said that a conclusion of unconscionable conduct requires not only that the innocent party be subject to special disadvantage, but that the other party must also unconscientiously take advantage of that special disadvantage. This has variously been described as requiring victimisation, unconscientious conduct or exploitation."
In Kobelt Gageler J (one of the majority) stated at [89]-[93] (footnotes and references omitted): "[89] Parliament's appropriation of that terminology in s 12CB shorn of the constraints of the unwritten law is indicative of an intention that conduct of the requisite gravity need not be found only in a fact-pattern which fits within the equitable paradigm of a stronger party to a transaction exploiting some special disadvantage which operates to impair the ability of a weaker party to form a judgment as to his or her best interests. The requirement to administer the standard in the totality of the circumstances taking account of the considerations identified in s 12CC is a further indication that the standard has potential application within a range of factual scenarios not all of which would be recognised in equity as giving rise to relief on the basis of unconscionable conduct. For example, whereas undue influence constitutes a distinct (albeit often overlapping) ground for relief in equity, under s 12CC(1)(d) the presence or absence of undue influence is one, and only one, of the considerations to be taken into account in determining whether conduct is or is not unconscionable. [90] Important to the resolution of this appeal, in my opinion, is that what Parliament's appropriation of the terminology of equity in the expression of the normative standard in s 12CB does not do is to authorise a court exercising jurisdiction in a matter arising under that section to dilute the gravity of the equitable conception of unconscionable conduct so as to produce a form of equity-lite. The appropriation of the terminology of equity does not allow a court to adopt a process of reasoning which starts with the equitable conception of unconscionable conduct, involving exploitation of a special disadvantage, and then uses considerations identified in s 12CC to water down the court's assessment of what amounts to a special disadvantage or to allow the court to arrive more easily at an assessment that conduct amounts to exploitation. [91] In Paciocco v Australia & New Zealand Banking Group Ltd, I referred to unconscionable conduct within the meaning of s 12CB as requiring "a 'high level of moral obloquy' on the part of the person said to have acted unconscionably". "Moral obloquy" is arcane terminology. Without unpacking what a high level of moral obloquy means in a contemporary context, using that arcane terminology does nothing to elucidate the normative standard embedded in the section. The terminology also has the potential to be misleading to the extent that it might be taken to suggest a requirement for conscious wrongdoing. My adoption of it has been criticised judicially and academically. The criticism is justified. I regret having mentioned it. [92] What I meant to convey by the reference was that conduct proscribed by the section as unconscionable is conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience. To that view of the statutory standard I adhere. [93] The judgment required of a court exercising jurisdiction in a matter arising under s 12CB is a heavy one. For a court to pronounce conduct unconscionable is for the court to denounce that conduct as offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society. Those values are not entirely confined to, or entirely removed from, the values which historically informed courts administering equity in the development of the unwritten law of unconscionable conduct. They include respect for the dignity and autonomy and equality of individuals."
In Kobelt, Keane J (one of the majority) stated at [118] (footnotes and references omitted): "[118] The use of the word "unconscionable" in s 12CB - rather than terms such as "unjust", "unfair" or "unreasonable" which are familiar in consumer protection legislation - reflects a deliberate legislative choice to proscribe a particular type of conduct. In its ordinary meaning, the term "unconscionable" requires an element of exploitation. The term imports the "high level of moral obloquy" associated with the victimisation of the vulnerable. As five members of this Court observed recently in Thorne v Kennedy, a finding of unconscionable conduct requires the unconscientious taking advantage of a special disadvantage, which has "been variously described as requiring 'victimisation', 'unconscientious conduct', or 'exploitation'". And in Kakavas v Crown Melbourne Ltd, this Court unanimously confirmed that "[h]eedlessness of, or indifference to, the best interests of the other party is not sufficient" to establish the "predatory state of mind" that must be shown."
In Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 409 (Stubbings) the High Court again considered the meaning of unconscionable conduct in s 12CB(1) of the ASIC Act. Gordon J at [56]-[58] observed: "[56] "Unconscionable" is not defined in the ASIC Act. Unconscionable conduct under s 12CB "is not limited by the unwritten law of the States and Territories relating to unconscionable conduct", a clear reference to the equitable doctrine of unconscionable conduct. The statutory conception of unconscionability is more broad-ranging than the equitable principles; it does something more. [57] Section 12CB of the ASIC Act, like equity, requires a focus on all the circumstances. The court must take into account each of the considerations identified in s 12CC if and to the extent that they apply in the circumstances. The considerations listed in s 12CC are non-exhaustive, but they provide "express guidance as to the norms and values that are relevant to inform the meaning of unconscionability and its practical application". They assist in "setting a framework for the values that lie behind the notion of conscience identified in s 12CB". "The assessment of whether conduct is unconscionable within the meaning of s 12CB involves the evaluation of facts by reference to the values and norms recognised by the statute, and thus, as it has been said, a normative standard of conscience which is permeated with accepted and acceptable community standards. It is by reference to those generally accepted standards and community values that each matter must be judged". [58] Put in different terms, the s 12CC considerations assist in evaluating whether the conduct in question is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience". A court should take the serious step of denouncing conduct as unconscionable only when it is satisfied that the conduct is "offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society."
Steward J at [155] said: "[155] There was no dispute concerning the governing test for when equity will bar a remedy because a party has acted contrary to conscience. The applicable principles were summarised by Kiefel CJ, Bell, Gageler, Keane and Edelman JJ in Thorne v Kennedy as follows: A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage 'which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests'. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring 'victimisation', 'unconscientious conduct', or 'exploitation'. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage. (footnotes omitted)"
The Tribunal should follow the principles articulated in Kobelt and Stubbings when determining a claim under 62B of the RL Act.

[88]

RL Act

Part 8 is headed "Dispute Resolution". Division 1 (s 63) is headed "Preliminary" and relevantly provides: 63 Interpretation (1) In this Part - … retail tenancy dispute means any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates, … …
Division 2 (ss 64-69) is headed "Mediation", and contains provisions dealing with the mediation of retail tenancy disputes.
Division 3 (ss 70-76A) is headed "Determination of claims by Civil and Administrative Tribunal". Section 70 contains definitions including: retail tenancy claim means any of the following: (a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned, being: … (ii) a claim for relief from payment of a specified sum of money, … (vii) a claim for the rectification of the lease or the lessor's disclosure statement, …
Section 72 deals with the powers of the Tribunal relating to retail tenancy claims, and relevantly provides: 72 Powers of Tribunal relating to retail tenancy claims (1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate - (a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings - … (iv) do or perform, or refrain from doing or performing, any specified act, matter or thing, … (e) an order (as permitted by section 72AB) requiring the rectification of the lease or the lessor's disclosure statement, … (f) an order - … (iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not, or … (g) such other order, in the nature of an interlocutory order of a kind referred to in paragraphs (a)-(f), as the Tribunal considers proper to be made in order to resolve or assist resolution of the dispute between the parties. …
Section 72AB deals with the power of the Tribunal to order rectification of a lease or disclosure statement, and provides: 72AB Power of Tribunal to order rectification of lease or disclosure statement In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is not to make an order requiring the rectification of the lease or the lessor's disclosure statement or deeming a disclosure statement to have been given (as provided by section 72 (1) (e) or (e1)) unless - (a) the order is made with the consent of the parties, or (b) the Tribunal is satisfied that the order is necessary to correct an error or omission, or (c) the Tribunal is satisfied that the order is necessary to give effect to the intention of the parties when the lease was entered into, or (d) the Tribunal is satisfied that the order is necessary to give effect to the actual disclosure of information between the parties.
Section 75 deals with the removal of court proceedings to the Tribunal, and relevantly provides: 75 Removal of court proceedings to the Tribunal … (2) In determining whether or not it is appropriate that a matter be dealt with by the Tribunal, a court is to have regard to the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court. …

[89]

COVID-19 Regulation

The COVID-19 Regulation commenced on 24 April 2020, was in force until 23 October 2020 when it was repealed and was amended by the Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) (COVID-19 Amendment Regulation) which commenced on 3 July 2020.
Clause 3 contained definitions of "business", "commercial lease", "impacted lessee", "lessor", "National Code of Conduct", "prescribed action", "prescribed period", and "the Act". Relevantly, "commercial lease" means a retail shop lease, "impacted lessee" is dealt with in cl 4, and "the Act" means the RL Act.
Clause 4 contained a definition of "impacted lessee", and relevantly provided: 4 Meaning of "impacted lessee" (1) A lessee is an impacted lessee if - (a) the lessee qualifies for the jobkeeper scheme under sections 7 and 8 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 of the Commonwealth, and (b) the following turnover in the 2018-2019 financial year was less than $50 million - (i) if the lessee is a franchisee - the turnover of the business conducted at the premises or land concerned, (ii) if the lessee is a corporation that is a member of a group - the turnover of the group, (iii) in any other case - the turnover of the business conducted by the lessee. …
Clause 6 relevantly provided that, if a lessee is an impacted lessee, a lessor must not take any prescribed action against the lessee on the grounds of a breach of the commercial lease during the prescribed period: cl 6(1).
Clause 7 dealt with the obligation to renegotiate rent and other terms of commercial leases before prescribed action, prior to the commencement of the COVID-19 Amendment Regulation did not include subcll (1A), (3A) and (3B), and provided: 7 Obligation to renegotiate rent and other terms of commercial leases before prescribed action (1A) This clause applies to a commercial lease to which an impacted lessee is a party (an impacted lease). (1) A lessor under an impacted lease must not take or continue any prescribed action against the impacted lessee concerned on grounds of a breach of the impacted lease consisting of a failure to pay rent during the prescribed period unless the lessor has complied with this clause. Note. This clause does not prevent parties to an impacted lease coming to agreements relating to the lease. For example, an impacted lessee may voluntarily agree to pay full rent during the prescribed period. The clause prevents the lessor taking unilateral prescribed action without complying with the requirements set out in subclauses (2)-(4). (2) Any party to an impacted lease may request the other parties to renegotiate the rent payable under, and other terms of, the impacted lease. (3) A party to an impacted lease must, if requested, renegotiate in good faith the rent payable under, and other terms of, the impacted lease. (3A) An impacted lessee must give the lessor the following in respect of the impacted lease - (a) a statement to the effect that the lessee is an impacted lessee, (b) evidence that the lessee is an impacted lessee. (3B) If the impacted lessee does not comply with subclause (3A), the lessor is taken to have complied with this clause. (4) The parties are to renegotiate the rent payable under, and other terms of, the impacted lease having regard to - (a) the economic impacts of the COVID-19 pandemic, and (b) the leasing principles set out in the National Code of Conduct. Note. See leasing principles No. 3-5, 7-10 and 12 in the National Code of Conduct. In particular, leasing principle No. 3 in the National Code of Conduct requires landlords to offer rent reductions, in the form of waivers or deferrals of rent, proportionate to lessees' reductions in turnover.
Clause 8 dealt with dispute resolution, and provided: 8 Dispute resolution (1) To avoid doubt, Part 8 (Dispute resolution) of the Act extends to an impacted commercial lease dispute as if it were a retail tenancy dispute within the meaning of that Part. (2) In this clause, impacted commercial lease dispute means any dispute concerning the liabilities or obligations (including any obligation to pay money) under a commercial lease to which an impacted lessee is a party, being liabilities or obligations which arose under the commercial lease concerning circumstances occurring during the prescribed period and includes a dispute regarding a renegotiation (or a failure to take part in a renegotiation) of rent payable under the commercial lease under clause 7.
Clause 9 specified when the Tribunal was to have regard to the leasing principles set out in the National Code of Conduct, and provided: 9 Tribunal and court consideration of National Code of Conduct leasing principles The Tribunal and any court, when considering whether to make a decision or order relating to any of the following, is to have regard to the leasing principles set out in the National Code of Conduct - (a) the recovery of possession of premises or land from a lessee, (b) the termination of a commercial lease by a lessor, (c) the exercise or enforcement of another right of a lessor of premises or land.

[90]

National Code of Conduct

The National Cabinet Mandatory Code of Conduct - SME Commercial Leasing Principles During COVID-19 (National Code of Conduct) was adopted on 7 April 2020.
The National Code of Conduct relevantly has the following purpose: "PURPOSE The purpose of this Code of Conduct ("the Code") is to impose a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, where the tenant is an eligible business for the purpose of the Commonwealth Government's JobKeeper programme. These principles will apply to negotiating amendments in good faith to existing leasing arrangements - to aid the management of cashflow for SME tenants and landlords on a proportionate basis - as a result of the impact and commercial disruption caused by the economic impacts of industry and government responses to the declared Coronavirus ("COVID-19") pandemic. …"
The National Code of Conduct provides for overarching principles: "OVERARCHING PRINCIPLES The objective of the Code is to share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to appropriately balance the interests of tenants and landlords. It is intended that landlords will agree tailored, bespoke and appropriate temporary arrangements for each SME tenant, taking into account their particular circumstances on a case-by-case basis. …"
The National Code of Conduct relevantly contains the following leasing principles: "LEASING PRINCIPLES In negotiating and enacting appropriate temporary arrangements under this Code, the following leasing principles should be applied as soon as practicable on a case-by-case basis: … 3. Landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals (as outlined under "definitions," below) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant's trade during the COVID-19 pandemic period and a subsequent reasonable recovery period. 4. Rental waivers must constitute no less than 50% of the total reduction in rent payable under principle #3 above over the COVID-19 pandemic period and should constitute a greater proportion of the total reduction in rent payable in cases where failure to do so would compromise the tenant's capacity to fulfil their ongoing obligations under the lease agreement. Regard must also be had to the Landlord's financial ability to provide such additional waivers. Tenants may waive the requirement for a 50% minimum waiver by agreement. 5. Payment of rental deferrals by the tenant must be amortised over the balance of the lease term and for a period of no less than 24 months, whichever is the greater, unless otherwise agreed by the parties. …"
The National Code of Conduct provides for mediation: "BINDING MEDIATION Where landlords and tenants cannot reach agreement on leasing arrangements (as a direct result of the COVID-19 pandemic), the matter should be referred and subjected (by either party) to applicable state or territory retail/commercial leasing dispute resolution processes for binding mediation, including Small Business Commissioners/Champions/Ombudsmen where applicable. …

[91]

CERP Rules

The Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) (CERP Rules) commenced on 9 April 2020.
Clause 5 relevantly provides a simplified outline of the jobkeeper payment: 5 Simplified outline The jobkeeper payment is intended to assist businesses affected by the Coronavirus to cover the costs of wages of their employees. The jobkeeper scheme starts on 30 March 2020 and ends on 27 September 2020. A business that has suffered a substantial decline in turnover can be entitled to a jobkeeper payment of $1,500 per fortnight for each eligible employee. It is a condition of entitlement that the business has paid salary and wages of at least that amount to the employee in the fortnight. A business that has suffered a substantial decline in turnover can also be entitled to a jobkeeper payment of $1,500 per fortnight for one business participant who is actively engaged in operating the business. …
Clause 7 dealt with when an entity qualifies for the jobkeeper scheme, and as in force between 24 April 2020 and 1 May 2020 relevantly provided: 7 When an entity qualifies for the jobkeeper scheme (1) For the purposes of paragraphs 6(1)(b) and 11(1)(c), an entity qualifies for the jobkeeper scheme at a time if: (a) on 1 March 2020, the entity carried on a business in Australia, or was a non‑profit body that pursued its objectives principally in Australia; and (b) the entity has satisfied the decline in turnover test at or before the time (see section 8). …
Clause 8 as in force between 24 April 2020 and 1 May 2020 set out the decline in turnover test relevantly provided: 8 Decline in turnover test Basic test (1) An entity satisfies the decline in turnover test at a time (the test time) if: (a) the entity's projected GST turnover for a turnover test period in which the test time occurs falls short of the entity's current GST turnover for a relevant comparison period (the comparison turnover); and (b) the shortfall, expressed as a percentage of the comparison turnover, equals or exceeds the specified percentage for the entity (see subsection (2)). … (2) The specified percentage for an entity is: (a) if the lower threshold applies to the entity (see subsection (3)) - 15%; or (b) if the higher threshold applies to the entity (see subsection (4)) - 50%; or (c) otherwise - 30%. …

[101]

Consideration and determination

In Sneakerboy (No 2), one of the issues was whether the Court should make any orders concerning the compliance by the parties with the COVID-19 regime and, if so, what those orders should be. Robb J at [7] noted that both parties accepted that the Court must make a finding as to the outcome of a notional renegotiation of the terms of the Lease that would have been required by the COVID-19 regime had the Lease not been terminated. His Honour at [10] further noted that the contest between the parties required the Court to consider the role of the Court in the COVID-19 regime and whether, in the case of disputes between landlords and tenants subject to the COVID-19 regime, the Court had jurisdiction to determine the variations that ought to be made to the lease.
Robb J at [58]-[87] set out or summarised cll 3, 5, 6, 7, and 8 of the COVID-19 Regulation, leasing principles 3, 4 and 5 of the National Code of Conduct and ss 66, 68, 70, 72, 72AB, and 75 to 76A of the RL Act. He relevantly made the following observations at [79]-[90] and [158]-[159]: "[79] It is not entirely clear what is to happen if the parties to a lease to which the COVID-19 regime applies do not succeed in renegotiating the lease, or a party refuses to enter into the renegotiation, or does not do so in good faith. … … [83] … but it may be observed that the consequences of an unsuccessful renegotiation under clause 7 of the COVID-19 Regulation, or the failure of parties to participate or to participate in good faith, do not fit neatly into the claims listed. Perhaps the consequences may fit into: "(ii) a claim for relief from payment of a specified sum of money"; or "(viii) a claim for the rectification of the lease". Given the technical meaning of rectification in equity, that concept would have to be considerably stretched by the Tribunal to encompass the compulsory renegotiation of the terms of a commercial lease in the manner required by clause 7 of the COVID-19 Regulation. [84] Section 72AB of the Retail Leases Act sets out the power of the Tribunal to order rectification of a lease in a manner that is generally consistent with the concept of rectification in equity, insofar as the power concerns the correction of an error or omission, or giving effect to the intention of the parties when the lease was entered into. Consequently, the Tribunal's power to rectify a lease will not extend to correcting a failed renegotiation under clause 7 of the COVID-19 Regulation. [85] The powers of the Tribunal relating to retail tenancy claims are set out in s 72 of the Retail Leases Act. The powers effectively mirror the description of the individual types of retail tenancy claim in s 70, with the result that it is not clear that the Tribunal is given power to effectively resolve disputes concerning the failure of the renegotiation process required by clause 7 of the COVID-19 Regulation. [87] … As I have said, the effect of clause 8 is not entirely clear. [89] … It seems at least to be clear that, if the renegotiation required by clause 7 fails, a party has a right to refer the dispute to mediation by the Registrar under the Retail Leases Act, and proceedings cannot be commenced in a court until the Registrar has certified that the mediation has failed, or the court is otherwise satisfied that the mediation it is unlikely to resolve the dispute. It is at least doubtful that the Tribunal has the necessary powers to resolve a dispute arising out of a failed renegotiation, even though it is possible that the drafters of clause 8 of the COVID-19 Regulation intended that disputes could be resolved in the Tribunal. [90] It is not necessary for the Court to decide now the circumstances in which this or any other Court might have jurisdiction to resolve any dispute arising out of a failed renegotiation under clause 7 of the COVID-19 Regulation. This Court is not given any specific power to do so, and it does not fit comfortably within this Court's historical jurisdiction that it be required to remake contracts on the basis of commercial considerations, although it must be acknowledged that it may do so to some extent under the Contracts Review Act 1980 (NSW). How this problem should be resolved must be left for the future when a case comes before the Court that requires its resolution.… [158] However, for the reasons that I have given above, the Court does not have jurisdiction to make orders varying the terms of commercial leases that are subject to the COVID-19 regime. It is for the parties to renegotiate the terms, and in the absence of agreement a dissatisfied party must refer the dispute to mediation by the Registrar. Thereafter, it may be that the Tribunal or the Court has some jurisdiction to resolve the dispute, but that is not a question that is in issue in these proceedings; and in any event, the course to be taken would depend upon presently unknown future circumstances. [159] The short minutes of order proposed by the Lessors simply includes an order that within seven days of the Court making the orders as a result of these reasons, the parties meet for the purpose of attempting to renegotiate in good faith the terms of the Lease pursuant to the COVID-19 Regulation. That is the only type of order that the Court can make in the present circumstances."
In NTT Ward CJ in Eq considered Schedule 5 ("Commercial leases - COVID-19 pandemic special provisions") to the Conveyancing (General) Regulation 2018 (NSW). Her Honour at [200]-[225] outlined the statutory regime and the decisions of Robb J in Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd [2020] NSWSC 996 and Sneakerboy (No 2). After setting out the parties' submissions, Her Honour at [298] decided that she would not permit the tenant to rely on the COVID-19 Regulation.
In First Renewable at [22] Lindsay J observed: "[22] I do not exclude the possibility that, in an appropriate case, the Court might grant, or withhold, discretionary relief or impose conditions (for example, upon an exercise of equitable jurisdiction or jurisdiction under section 129 or 130 of the Conveyancing Act) by reference to considerations of hardship identified by reference to the COVID legislation generally or, more particularly, the "leasing principles" and other provisions set forth in the "National Cabinet Mandatory Code": cf, Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No. 2) [2020] NSWSC 1141 at [97], [100] and [102]. However, care needs to be taken not to overreach the pragmatism manifested by the COVID legislation. Although the legislation invites a pragmatic approach to some questions, and encourages compromise solutions, at core it governs rights and obligations."
In Ryals Black J dismissed a winding up application. His Honour observed at [28] "there may be uncertainty as to the extent of the consequences of non-compliance with a lessor's obligation to re-negotiate the lease, or to do so in good faith under the COVID-19 Regulation."
In Raju at [55] the Tribunal held it did not have jurisdiction to grant relief under the RL Act or COVID-19 Regulation because it was not satisfied that the tenant was "an impacted lessee".
In Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774 (Darzi) at [142]-[143] Robb J made the following observations as to the consequences of the breach of the COVID-19 Regulation: "[142] In its submissions, Nolde relied on the observations that I made in Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 at [158] to the effect that the COVID-19 regime does not empower the Court to decide the appropriate rent to be paid under an impacted lease, if the parties are unable to renegotiate the lease and the dispute is not able to be resolved by mediation. I accept that there may be cases that must be addressed by the courts where this question arises in future. The difficulty is that, although it may appear to be a mathematical exercise to determine the appropriate reduction in rent by comparing the turnover figures for the current period with the equivalent figures for the 12 months prior, no principles have been established for determining the appropriate split between the waiver and deferral of rent, the appropriate period to allow the lessee to catch up on deferred rent, and whether an extension of the lease should be granted. For the reasons given above, I do not think that this question arises in the present case. That is because a failure by the lessor to comply with the requirements of clause 7 of any version of the COVID-19 Regulation will lead to a permanent prohibition on the lessor taking any prescribed action against the lessee for non-payment of rent while the lessee was an impacted lessee. The position may be different in cases where the lessor complies with clause 7 in good faith, but the parties to the impacted lease are unable to reach an agreement. [143] It is also unnecessary in this case for the Court to consider whether the NSW Civil and Administrative Tribunal would be empowered by s 72(1)(a) and (b) of the Retail Leases Act to determine the rent payable by an impacted lessee during the prescribed period: see Nolde's closing submissions pars 15 and 16."
In Darzi Group Pty Ltd v Nolde Pty Ltd (No 2) [2022] NSWSC 643 (Darzi (No 2)) at [45] Robb J referred to the uncertainty as to the power of the Tribunal to determine the amount of the rent reduction that should be made or the period over which deferred rent should be paid.
We are satisfied that the purported reliance by PC on the COVID-19 (No 3) Regulation was a mistake and that it intended to refer to the COVID-19 Regulation which was in force between 24 April 2020 and 23 October 2020.
In Manly Council v Malouf (2004) 61 NSWLR 394; [2004] NSWCA 299 (Manly Council) at [74] Tobias JA held the objective of the RL Act was to protect tenants, the RL Act was "beneficial legislation" and accordingly it should not be construed narrowly (with Mason P at [1] agreeing).
In Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638; [1984] HCA 55 (Khoury) Mason, Brennan, Deane and Dawson JJ made the following observation in relation to s 18 of the Insurance Act 1902 (NSW): "Section 18 is remedial in character and its language should be construed so as to give the most complete remedy which is consistent "with the actual language employed" and to which its words "are fairly open"".
Notwithstanding the principles in Manly Council at [74] and Khoury at 638, we are not satisfied that the Tribunal has power under s 72(1) of the RL Act to effectively resolve disputes concerning the failure of the renegotiation process required by cl 7 of the COVID-19 Regulation in relation to the payment of rent.
A successful renegotiation of a lease in accordance with leasing principles 3, 4 and 5 of the National Code of Conduct will result in the variation of the lease providing for the waiver of rent and the deferral of rent.
Where, however, there is a failed renegotiation of a lease or a breach by a landlord of the obligation to renegotiate a lease, then the Tribunal has no power to vary the terms of a lease. The Tribunal may make orders under s 72(1)(a) and (b) of the RL Act that a party to the proceedings pay money to a person specified in the order and that a specified amount of money is not due or owing by a party to the proceedings to a specified person. We accept that an order under s 72(1)(b) of the RL Act could give effect to an agreed or determined waiver of rent and that orders under s 72(1)(a) and (b) of the RL Act would give effect to an agreed or determined deferral of rent.
In the absence of principles based in the relieving statutory provisions for determining the appropriate split between the waiver and deferral of rent, the appropriate period to allow the lessee to catch up on deferred rent and whether an extension of the lease should be granted as recognised in Darzi at [142], there is no basis whereby the Tribunal can determine to the split between the amount of rent to be waived and deferred, and the period of the amortisation of the deferred rent. We agree for the reasons in Sneakerboy (No 2) at [84] that s 72A of the RL Act does not confer power on the Tribunal to waive or defer rent where there is a failed renegotiation under cl 7 of the COVID-19 Regulation.

[107]

The cross-examination documents

On 24 June 2020 PC sent a letter to Mr Sabapathy (the 24 June 2020 letter) which provided: "Notice to Comply with COVID Code On or about the 23 April 2020, you applied for relief under the Retail and Other Commercial Leases (COVI D-19) Regulation 2020 ("the Code"). On the 30 April 2020, Santoro & Co Pty Ltd, on behalf of the Sublessor, asked you to provide specific information and documents via the Sublessor's Rental Payment Proposal, COVlD-19 Pandemic Form ("Form"), to enable the Sublessor to determine whether you are an "impacted lessee" for the purposes of the Code and, if so, to assesses any downturn in turnover. On the 1 May 2020, you provided a completed Form and a letter from your accountant, however you did not provide the documents requested in the attachment to the Form. On the 20 May, you provided a copy of ATO JobKeeper enrolment and payment correspondence. On the 26 May 2020, Santoro & Co Pty Ltd wrote to you and re-requested documents referred to in the Form, including specific BAS statements, profit and loss statements and other information necessary to enable the Sublessor to verify the information that you provided in your Form and the letter from your accountant. The requested documents were not provided. On 1 June 2020, Santoro & Co Pty Ltd wrote to you again and advised that the information you had provided to date was insufficient to enable the Sublessor to determine whether you are an impacted lessee under the Code, and to assess any downturn in turnover. For the purposes of and in accordance with the Code, the Sublessor requires the following to determine whether you are an impacted lessee and to assess your turnover: a. your franchise or group status; b. tax returns and BAS's for the 2018/19 financial year; C. a copy of the ATO integrated client account to confirm the BAS amounts for the 2018/2019 financial year; d. BAS's for the 2019/20 financial year; and e. a copy of the ATO integrated client account to confirm the BAS amounts for the 2019/20 financial year to date. If you do not provide these by close of business Friday 26 June 2020, the Sublessor will conclude that you are not an impacted lessee for the purposes of the Code. The Sublessor reserves its rights under the sublease and at law."

[111]

Consideration and determination

In NTT at [313] Ward CJ in Eq considered the question of the proper construction of cl 4 of the COVID-19 Regulation: "[313] Furthermore, I accept that there is difficulty, as a matter of statutory construction, in construing cl 2 as embracing eligibility under s 8A when the instrument expressly refers only to eligibility "under sections 7 and 8". More specifically, I do see that to construe cl 2 as defining an "impacted lessee" as also including a lessee who qualifies under s 8A would require the Court to read additional words into the clause in order to give effect to what may be perceived to be the statutory purpose; and that to do so would be to favour impermissibly a construction that fills gaps disclosed in the legislation (noting, again, what was said in Taylor v Owners-Strata Plan No 11564 at [37]-[38]). Indeed, while it seems patent that the intention was to include eligibility under s 8A, it is not for the Court here to speculate on that matter, in circumstances where the plain and ordinary meaning does not disclose any patent ambiguity or absurdity, nor is this necessary to remedy or repair a perceived deficiency in the instrument as presently enacted."
Having regard to NTT at [313], the issue of whether JCK is an impacted lessee within cl 4 of the COVID-19 Regulation requires consideration of the following two questions: 1. whether it qualifies for the jobkeeper scheme under ss 7 and 8 of the CERP Rules; 2. whether its turnover in the 2018-2019 financial year was less than $50 million.
We note that PC has not made any submission as to whether JCK is an impacted lessee within cl 4 of the COVID-19 Regulation. Having regard to the unchallenged evidence of the 21 July 2020 letter and the accompanying Business Activity Statements, and the absence of any contrary submission by PC, we would have been satisfied that JCK was an impacted lessee within cl 4 of the COVID-19 Regulation for the following reasons: 1. on 1 March 2020 it carried on a business in Australia; 2. it qualified for the jobkeeper scheme under ss 7 and 8 of the CERP Rules because it satisfied the decline in turnover test - there was a 63% decline in GST turnover between 1 April 2018 and 30 June 2019 and 1 April 2019 and 30 June 2020; 3. its turnover in the 2018-2019 financial year was less than $50 million.
In Sneakerboy (No 2) at [120] Robb J held that, if the notional renegotiation required by cl 7(3) of the COVID-19 Regulation had occurred "as soon as practicable" after the commencement of the COVID-19 Regulation on 24 April 2020, and had been conducted in a good-faith manner, it would have been commenced in May 2020.
Robb J at [135]-[150] undertook an assessment of notional renegotiated rent and outgoings. His Honour at [135], [139], [143] and [148] said: "[135] The primary issue is the estimation of the reduction in rent that the parties would have agreed, the split of the reduced rent between rent that is waived and rent that is deferred, and the length of the amortisation period." "[139] I propose to act upon the basis that the financial information that Sneakerboy's solicitor annexed to his affidavit permits a reasonably accurate comparison between Sneakerboy's total turnover for the months of April to July 2019 and April to July 2020." "[143] The COVID-19 regime does not contemplate that the rent payable under retail leases will be proportionately reduced on the basis of separate monthly calculations comparing turnover with the equivalent month in the preceding year. It contemplates a single renegotiation for the COVID-19 pandemic period and a subsequent reasonable recovery period. However, the COVID-19 regime does not prevent the parties to a commercial lease from agreeing some other formula, or from initiating more than one renegotiation." "[148] I will accept Sneakerboy's submission that the subsequent reasonable recovery period should be no less than six months. That is all that Sneakerboy has asked for, and it does not seem to be a long time for Sneakerboy's trade to recover after the COVID-19 pandemic period. On that basis, the recovery period will end on 30 April 2021."
In NTT at [246]-[253] Ward CJ in Eq set out the submissions of the assignee of a commercial lease as to the notional renegotiation required by cl 7(3) of the COVID-19 Regulation. It was unnecessary for Ward CJ in Eq to consider these submissions.
We would have been satisfied that the 28 April 2020 letter, and the 17 August 2020 email and the attached 21 July 2020 letter and accompanying Business Activity Statements, were sufficient evidence to enable the notional renegotiation required by cl 7(3) of the COVID-19 Regulation.
In the light of the request for relief under the COVID-19 Regulation made by JCK on or about 23 April 2020 referred to in the 24 June 2020 letter and the fact that the National Code of Conduct requires that the leasing principles should be applied "as soon as practicable", we would have been satisfied that the notional renegotiation would have commenced within a few days of 23 April 2020. Since there was no requirement at 23 April 2020 for a lessee to provide evidence that it was an impacted lessee as was subsequently required from 3 July 2020 pursuant to cl 7(3)(b) of the COVID-19 Regulation, we would not have accepted that the notional renegotiation could not have commenced before the provision of the financial information attached to the 17 August 2020 email.
Having regard to the 24 June 2020 letter and the correspondence referred to in this letter, the 17 August 2020 email and the attached 21 July 2020 letter and accompanying Business Activity Statements, and the 16 September 2020 email, we would have been satisfied that PC breached the COVID-19 Regulation by failing to renegotiate the sublease in good faith.
Having regard to JCK's 63% decline in GST turnover between 1 April 2018 and 30 June 2019, and 1 April 2019 and 30 June 2020, and leasing principles 3, 4 and 5 in the National Code of Conduct, we would have been satisfied that the notional renegotiation would have resulted in a waiver of rent of $30,064.38, and a deferral of rent of $30,064.38 to be repaid over 24 months.
We would not have been satisfied that there is a utility in making any order for the deferral of rent as we understand that JCK paid the rent payable under the sublease between 1 April 2020 and 30 September 2020.
It follows that we would have found that JCK would have been entitled to an order under s 72(1)(a) of the RL Act that PC pay $30,064.38 by way of refund to JCK immediately.

[116]

The applicable legal principles

The general principles concerning the awarding of costs under r 38 of the NCAT Rules were considered by the Appeal Panel in Vella v Mir (No 3) [2020] NSWCATAP 17 (Vella (No 3)) at [28]-[33]: "[28] Clause 38 gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal must take into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: see, for example, Ruddock v Vadarlis [2001] FCA 1865 at [9]. [29] Where an application has been heard and determined on the merits and Clause 38 applies, the appropriate starting point for the exercise of the discretion is not that the parties are to pay their own costs. Rather, it is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour, subject to exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11. [30] In BNT Constructions Pty Ltd v Allen [2017] NSWCATAP 186 the Appeal Panel, having set aside a costs order made in the Consumer and Commercial Division, decided to re-exercise the costs discretion. Clause 38 was the applicable costs provision in that case. At [67] the Appeal Panel noted the following principles relevant to the exercise of the discretion: (1) the starting point is that a successful party should be entitled to an order for costs in his favour; (2) an award of costs is by way of an indemnity and not as punishment; (3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party; (4) the factors to be considered are not to be confined as to do so would constrain the general discretion; (5) the relative success of the parties on different issues and the time taken to determine them may be relevant; (6) the nature of the proceedings is relevant; (7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious. [31] Generally, costs are awarded in favour of the successful party based on the outcome of the proceedings as a whole, without differentiating between particular issues on which the party may not have been successful. That said, a different costs order may be made if the losing party succeeds on significant issues: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31]-[36]; Sydney Ferries v Morton (No 2) [2010] NSWCA 238 at [10]-[12]. The dollar amount of a particular claim does not determine its dominance in the proceedings. Rather, regard must be had to all of the work involved in prosecuting and defending the parties' various claims, including but not limited to the time taken up at the hearing. [32] In Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) (2011) 288 ALR 385, Campbell JA (with Macfarlan JA and Young JA agreeing) held at [107] that an issue or group of issues is "clearly dominant" when it is clearly dominant in the proceedings as a whole. In that case, the approach by counsel to analysing the percentage of costs between the parties - counting the proportion of paragraphs and pages devoted to each factual topic - was held at [84] to be "a highly artificial way of proceeding" which gave "a false air of mathematical precision". [33] In relation to separable issues, a successful party's entitlement to the whole of the costs of the proceedings should not be discounted to allow for another party's success in a separate issue that played a very minor part in the proceedings as a whole: Macourt v Clark (No 2) [2012] NSWCA 411 at [7]. Further, in Hawkesbury District Health Service Ltd v Chaker (No 2) [2011] NSWCA 30 at [14], the Court of Appeal held that the severability of one issue on which the successful party failed is not, without more, sufficient to warrant departure from the general approach. The exercise of discretion will often depend upon matters of impression and evaluation: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [11]."
The principles as to the apportionment of costs on an issue-by-issue basis were recently set out in Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 (MIBT (No 2)) at [6]-[8], [33]-[34] per Ward CJ in Eq.
For the purpose of r 38A of the NCAT Rules the amount claimed or in dispute is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57].

Parties

Applicant/Plaintiff:

Jamaican Coffee kitchen Pty Ltd trading as Dushan & Shelby Trust

Respondent/Defendant:

M20 Pty Ltd

Legislation Cited (12)

Australian Securities and Investment Commission Act 2001(Cth)

Retail and Other Commercial Leases (COVID-19) Regulation 2020(NSW)

Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020(NSW)

Trade Practices Act 1974(Cth)

Civil and Administrative Tribunal Act 2013(NSW)

Civil and Administrative Tribunal Rules 2014(NSW)

Competition and Consumer Act 2010(Cth)

Conveyancing (General) Regulation 2018(NSW)

Coronavirus Economic Response Package (Payments and Benefits) Rules 2020(Cth)

Insurance Act 1902(NSW)

Retail Leases Act 1994(NSW)

Contracts Review Act 1980(NSW)

Cases Cited (76)

010 (Cth), Sch 2 - Australian Consumer Law (Cth), s 18 Conveyancing (General) Regulation 2018 (NSW) Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) Insurance Act 1902 (NSW), s18 Retail Leases Act 1994 (NSW), ss 10, 11, 62B, 62C, 62D, 62E, 63, 66, 68, 70, 72, 72AB, 75, 76A Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW), cll 3, 4, 6, 7, 8, 9 (repealed) Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) Retail and Other Commercial Leases (COVID-19 Regulation (No 3) 2020 (NSW) Cases Cited: Aerolink Air Services Pty Ltd v Bankstown Airport Ltd [2022] NSWSC 587 Ajaimi v Giswick Pty Ltd [2022] VSC 131 Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 Collins v Urban [2014] NSWCATAP 17 Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774 Darzi Group Pty Ltd v Nolde Pty Ltd (No 2) [2022] NSWSC 643 First Renewable Pty Ltd v Nastevski [2020] NSWSC 1508 G v Armellin (2008) 219 FLR 359; [2008] ACTSC 68 Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75 Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638; [1984] HCA 55 Manly Council v Malouf (2004) 61 NSWLR 394; [2004] NSWCA 299 Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 NSW Land and Housing Corporation v Orr [2019] 100 NSWLR 578; [2019] NSWCA 231 NTT Australia Digital Pty Ltd v Cover Genius Services Pty Ltd [2020] NSWSC 1378; (2020) 19 BPR 40-711 Origin Concepts Pty Ltd v Wynne [2022] NSWCATAP 31 P8 Auto Ltd t/as European Automotive Ballina v Dolling [2022] NSWCATAP 41 PR v MDM [2020] NSWCATAP 151 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Re Ryals Hotels Pty Ltd [2020] NSWSC 1906 Robin Raju & Associates Pty Ltd v Kaplan Investments Pty Ltd [2021] NSWCATCD 90 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31 Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd [2020] NSWSC 996 Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 409 The Owners Strata Plan No 60182 v Bornzin [2019] NSWCATCD 30 Vella v Mir (No 3) [2020] NSWCATAP 17 Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12 Watson v Foxman (1995) 49 NSWLR 315 Yuen v Thom [2016] NSWCATAP 243 Texts Cited: National Cabinet Mandatory Code of Conduct - SME Commercial Leasing Principles During COVID-19 Category: Principal judgment Parties: Jamaican Coffee kitchen Pty Ltd trading as Dushan & Shelby Trust (Appellant) M20 Pty Ltd (First Respondent) Praxis Capital Pty Ltd (Second Respondent) Representation: Counsel: M Klooster (Appellant) J Pokoney (First and Second Respondents)

Cited By (7)

Hu v Roggeveen

Intelligent Building Pty Ltd v Ibrahim

Ngo v Sin & Partner Pty Ltd

TNAU Finery Pty Ltd v SuperBurrito Pty Ltd; SuperBurrito Pty Ltd v TNAU Finery Pty Ltd

Tuon v Popo Big Bowl Noodles Pty Ltd; Popo Big Bowl Noodles Pty Ltd v Tuon

Weiss v Agus

Wellness Bodycare Pty Ltd v Newtons Pharmacy Services Pty Ltd

The scope and nature of internal appeals

Internal appeals may be made as of right on a question of law and otherwise with leave of the Appeal Panel: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
An internal appeal is not a re-hearing of the original proceedings or a mere opportunity for a party dissatisfied with the outcome in the original proceedings to re-argue its case: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must establish an error of law has occurred, or otherwise an error of the type that it is appropriate to grant leave to appeal.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law, which relevantly includes whether there has been a failure to provide proper reasons, whether the Tribunal applied a wrong principle of law and whether there was no evidence to support a finding of fact.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance." (emphasis in original)
In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act.
In Collins, the Appeal Panel at [84(2)] stated as follows concerning exercise of that discretion: "[84] The general principles derived from these cases can be summarised as follows: … Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed;"
The Appeal Panel may decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing: s 80(3)(a) of the NCAT Act. Further, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including but not limited to any one or more of orders that the appeal is to be allowed, the decision under appeal is to be set aside, and the whole or any part of the case is to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel: s 81(1)(a), (c) and (e) of the NCAT Act.

Amended ground 3

The New South Wales Court of Appeal has expressly recognised the appropriateness of abbreviated oral judgments in busy trial courts whilst, at the same time, emphasising the requirement that, as a minimum, reasons be adequate for the exercise of a facility of appeal: see, for example, Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 (Soulemezis) at 260 per Kirby P. In the end the balancing act which needs to be undertaken in considering the sufficiency of a statement of reasons involves the adoption of, at the least, a minimum standard which places the parties in a position to understand why the decision was made sufficiently to allow them to exercise any right of appeal: see, for example, Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 (Beale) at 444 per Meagher JA.
In NSW Land and Housing Corporation v Orr [2019] 100 NSWLR 578; [2019] NSWCA 231 (Orr) Bell P at [66], [68], [70], [71] and [77] set out the following principles with respect to the adequacy of reasons of the Tribunal (with Ward JA at [109] agreeing): "[66] In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 (Bisley)." "[68] In terms of the former parameter, the quantity (or detail) of reasons, necessary for those reasons to be adequate may vary both with the nature of the decision maker, i.e. whether or not it is a court of tribunal, and, if the latter, possibly the type of tribunal, and the nature of the question being decided: Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24 at [56] per French CJ and Kiefel J (Wainohu). Thus even superior courts are not required to give reasons for every interlocutory decision: Wainohu at [56], [98], Hogan v Hinch (2011) 243 CLR 506; [2011] HCA 4 at [42]; Lodhi v Attorney General (NSW) [2013] NSWCA 433; 241 A Crim R 477 at [29]; R v Kay; Ex parte Attorney-General (Qld) [2017] 2 Qd R 522; [2016] QCA 269 at [27]) and other aspects of decision making such as findings on pure credibility or matters that necessarily call for estimation or impression may require less or only allow for limited reasoning to be exposed: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 280 but cf. Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34], Pollard at [65] and see the discussion in Resource Pacific at [48]−[58]." (emphasis in original) "[70] As to the latter parameter identified by Basten JA in Resource Pacific, namely the quality of reasons, it is generally accepted that the sheer volume of work undertaken by tribunals is such that a perhaps more relaxed standard of review of reasons with corresponding compensation for linguistic infelicities is appropriate than may be the case when an appellate court is hearing an appeal from another court." (emphasis in original) [71] That having been said, even in the less formal setting of a tribunal which has significant powers the exercise of which is capable of affecting the lives of citizens in profound ways, there are certain minimum characteristics that a Tribunal's reasons must possess. These are really supplied, in relation to the Tribunal, by s 62(3) of the CAT Act which, as noted at [52] above, requires there to be set out in reasons (when requested by a party): (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made. [77] These principles include the following: (i) "Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole": Re Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165; [2003] HCA 30 at [14] (Gleeson CJ); (ii) the court should not read passages from the reasons for decision in isolation from others to which they may be related: Re Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14]; 20 ATR 108 at 111; (iii) the reasons must be read fairly and as a whole: Ex parte Applicant at [147] per Kirby J; Wu Shan Liang at 291; Bisley at 251; (iv) the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error: Pozzolanic at 287; Wu Shan Liang at 272, 291; (v) there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips: Pozzolanic at 287, Wu Shu Liang at 272 and 291."
The observations in Orr at [66], [71] and [77] have been recently applied by the Appeal Panel: Origin Concepts Pty Ltd v Wynne [2022] NSWCATAP 31 (Origin) at [20]-[23]; P8 Auto Ltd t/as European Automotive Ballina v Dolling (P8) [2022] NSWCATAP 41 at [18].
In the JCK submissions, JCK referred to applicable legal principles including Soulemezis at 260, Beale at 444, and Orr at [77], and made detailed submissions which are unnecessary to set out as to the inadequacy of the reasons in the Tribunal Decision under the following four headings: 1. "Toilet cleaning costs"; 2. "Proper Construction & Breach of the Deed"; 3. "Misleading or deceptive conduct"; 4. "COVID 19 Relief".
In the M20 and PC submissions, M20 and PC referred to Orr at [66], [68] and [70], Origin at [20], and P8 at [18], and made detailed submissions which are unnecessary to set out as to the adequacy of the reasons in the Tribunal Decision in relation to the four claims identified by JCK.
During oral argument, we indicated to counsel for M20 and PC that our preliminary view was that the Tribunal Decision did not meet the minimum acceptable standard for reasons, and invited him to make submissions. He drew attention to Orr at [68], referred to the findings of the Tribunal being of a negative nature, and submitted that the failure to catalogue the evidence upon which reliance was placed by the Tribunal could be overlooked.
Having regard to the principles in Orr at [66], [68], [70], [71] and [77], we are satisfied that the Tribunal Decision did not meet the minimum acceptable standard for reasons, not only in relation to the four claims identified by JCK, but generally. The evidence in relation to each of the claims of JCK was not set out (Tribunal Decision at [1]). Without any indication of the evidence that was adduced, it is impossible to know the reasoning processes that led the Tribunal to make the following findings said to be based on that evidence: 1. "It is not adequately demonstrated upon the evidence" (set out at [14(3)] above); 2. "There is insufficient evidence to establish to the required evidentiary standard" (set out at [14(4)] above); 3. "the evidence admitted in this matter does not support a finding that the respondent has engaged in unconscionable conduct" (set out at [14(5)] above); 4. "It was not an enforceable contract involving consideration on the part of each of the parties" (set out at [14(6)] above); 5. "the evidence as provided by the applicant has not adequately demonstrated that any actual loss or damage was caused by this delay." (set out at [14(7)] above); 6. "The evidence establishes that the toilet cleaning obligations of the respondents have perhaps not been fully met, but there is insufficient evidence to properly base the claim made for "additional" cleaning costs." (set out at [14(7)] above); 7. "no probative evidence has been provided to support this aspect of the claim" (set out at [14(8)] above); 8. "is not supported by any acceptable expert evidence nor by any proper evidence as to expenditure" (set out at [14(9)] above).
We are satisfied that the principles in Soulemezis at 260 and Beale at 444 apply equally to decisions of the Tribunal. The paucity of reasoning in respect of the findings in [46] above was inadequate to place JCK in a position to understand why the decision was made sufficiently to allow it properly to exercise its right of appeal on any ground in relation to whether the evidence was sufficient to establish each of its claims.
For these reasons, we are satisfied that the Tribunal Decision as a whole did not meet the minimum acceptable standard for reasons. Accordingly, we uphold amended ground 3.

Whether to deal with the appeal by a rehearing or remit the whole or part of the proceedings for redetermination in the Consumer and Commercial Division

We raised with the parties whether we should deal with the appeal by a rehearing or remit the whole or part of the proceedings for redetermination in the Consumer and Commercial Division. The parties indicated that if we consider it to be appropriate they were content for us to dispense with a hearing and deal with the appeal by a rehearing on the evidence before the Tribunal.
Where the Appeal Panel conducts a rehearing under s 80(3) or s 81(1)(e) of the NCAT Act it is a hearing de novo, or "from the beginning": Yuen v Thom [2016] NSWCATAP 243 at [17]. In these circumstances, the Appeal Panel will make new findings of fact based on all the evidence, including the evidence that was before the Tribunal: PR v MDM [2020] NSWCATAP 151 at [25]. In the light of these principles the concession of the parties as to the power of the Appeal Panel to make new findings of fact in a rehearing under s 80(3) or s 81(1)(e) of the NCAT Act was properly made.
We are satisfied that it is appropriate to deal with all issues in the appeal by a rehearing by determining the claims of JCK on the basis of the evidence before the Tribunal at first instance, applying the following principles: 1. the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation: Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34] per Keane JA (with Philip McMurdo J at [64] and Douglas J at [65] agreeing; Aerolink Air Services Pty Ltd v Bankstown Airport Ltd [2022] NSWSC 587 (Aerolink) at [21] per Leeming JA; 2. we have considered each of the issues arising in respect of the claims of JCK, notwithstanding that we have determined an issue adversely to JCK, in case we are later found to be wrong: Aerolink at [110] per Leeming JA.
Before considering the claims of JCK, it is appropriate to set out the material that is available for the rehearing to determine the dispute between the parties as to the claims of JCK which were before the Tribunal at first instance.