Longjing Pty Ltd v Perpetual Nominees Limited

Supreme Court of NSW|2019-05-15|Before: Hallen J, Powell J, Mr J

ng Pty Ltd (Plaintiff) Merry Ng (Cross-Defendant) Perpetual Nominees Limited (Defendant/Cross-Claimant) Representation: Counsel: Mr J A Raftery (Plaintiff/Cross-Defendant) Mr C N Bova and Ms B A Ng (Defendant/Cross-Claimant)

Solicitors: Somerset Ryckmans (Plaintiff/Cross-Defendant) Dentons Australia (Defendant/Cross-Claimant) File Number(s): 2016/269217

Introduction

HIS HONOUR: This case concerns, principally, a commercial lease of shops 203, 204, 205 and 206 ("the Premises"), in a retail shopping centre known as "Orion Springfield Central" ("the Centre"), situated at Springfield Lakes, in Queensland; whether the lease was validly terminated by the Defendant; and the consequences that follow upon termination of the lease.

The pleadings and the documentary evidence

The pleadings relied upon, in their final iteration, were an amended Statement of Claim, filed on 14 May 2019; a Defence to the amended Statement of Claim, filed on 30 April 2018; a first Cross-Claim and Statement of Cross-Claim, filed on 30 April 2018; and a Defence to the first Cross-Claim, filed on 5 June 2018.
(It was necessary to give leave to the Plaintiff to file the amended Statement of Claim. Although it appeared that it had been filed on 18 April 2018, the filing was described in JusticeLink as having been "Void" (for reasons not entirely clear). There being no dispute that it should be filed, the Court granted leave to file the amended Statement of Claim, which was done in accordance with the leave granted. The Court noted that, in the amended Statement of Claim to be filed, the Plaintiff would omit paragraphs 23 and 24 and the particulars (l) and (n) of paragraph 33: Tcpt, 13 May 2019, p 46(5) - p 47(16). The amended Statement of Claim, as filed, now forms part of the Court file.)
In the Defence to the amended Statement of Claim and in the Defence to the first Cross-Claim, some admissions were made in relation to the facts alleged and, where appropriate, I have included a number of the admitted facts as uncontested facts.
Prior to the commencement of the hearing, the Plaintiff's legal representatives provided the Court with three folders of documents, in date order, and consecutively paginated, comprising the relevant documents, upon which one, or both, parties relied. At the hearing, these folders were together marked as Ex. A. Subsequently, each party, without objection, added some documents to that Exhibit. Five folders of additional documents were also tendered, each being the Exhibit accompanying its corresponding affidavit. I have used the contents of the Exhibit, where appropriate, as the basis of some of the facts not in issue, and to which I shall refer.
Counsel also provided a statement of agreed facts which has been used as an aide memoire. Each also provided written submissions, both opening, and closing, which I have found very helpful.
I am grateful to all of the legal representatives of the parties for the efforts made in order to provide the Court with the documents, and also for the submissions. Co-operatively, they have made a commendable attempt to limit the real issues in dispute and to assist the Court in determining those issues.
Ultimately, the parties agreed that the issues to be determined were: 1. When did the Lease commence? 2. Was the Defendant entitled to terminate the Lease on account of the Plaintiff's breach of cl 10.4 of the Lease? 3. Did the Defendant engage in misleading or deceptive conduct or unconscionable conduct in terminating the Lease on 1 March 2016? 4. What is the quantum of damages suffered by the Defendant or by the Plaintiff (depending upon the Court's determination of the first three issues set out above)?

The Dramatis Personae

I shall limit the identity of the persons referred to in this section to the parties and to the principal witnesses. I shall name other persons who played a part in the events, and who are referred to, in passing, in the evidence.
In circumstances to which I shall come, the Plaintiff, Longjing Pty Limited, at all material times, was said to be the lessee of the Premises. Ms Ng was its sole director and the secretary, and the guarantor of the Plaintiff's obligations under the Lease. As earlier noted, she is named as the first Cross-Defendant in the first Cross-Claim and Statement of Cross-Claim.
Ms Ng swore one affidavit that was read in the proceedings and she was cross-examined. At all relevant times, she seems to have been the controlling mind of the Plaintiff, although it is clear that her husband, Eddie Fong Chung Ng, also participated in some of the events that occurred. He did not give evidence in the proceedings.
Hilton Edward Hedley was a leasing agent employed by Allied Property Group, a business that he had established, and which specialised "in retail project planning and leasing, site acquisitions and disposals, and retailer representation". He has had 20 years' experience in the commercial property industry and had negotiated both on behalf of tenants and on behalf of landlords: Tcpt, 13 May 2019, p 27(49) - p 28(16).
Mr Hedley had known Ms Ng and Mr Ng for a number of years prior to 2015. He had previously acted for them in connection with various lease transactions in New South Wales. Ms Ng and Mr Ng had owned, and operated, a number of Chinese restaurants in the Sydney Metropolitan Area.
It seems clear from Mr Hedley's affidavit evidence that Ms Ng was not an ingénue in relation to the leasing of retail premises.
The Plaintiff engaged Mr Hedley, as its duly authorised agent, for the purpose of dealing with, amongst others, the Defendant. In the subject transaction, he was to be remunerated, by way of commission, and was to be paid by the Plaintiff. "Because the deal was pulled", he had not received any commission, which was to have been paid to him "once the tenancies opened": Tcpt, 13 May 2019, p 30(4-13).
Mr Hedley could not state, precisely, the quantum of the commission he would seek, but thought that it could be either $25,000 or $50,000. He would only receive remuneration for the work that he undertook on behalf of the Plaintiff if it was successful in these proceedings.
It was not Mr Hedley's usual practice to read or understand the formal legal documents such as an agreement for lease or a lease, although he would understand the commercial terms: Tcpt, 13 May 2019, p 31(1-6).
Mr Hedley swore three affidavits that were read and he was cross-examined.
In about May 2015, the Plaintiff retained Space Cubed Pty Limited ("Space Cubed"), an architect and interior graphic designer, to perform certain work relating to the Premises. Mr Arran Woollams, of Space Cubed, was the relevant representative with whom the Plaintiff dealt. He did not give evidence in the proceedings but copy emails to, and from, him, are included in Ex. A.
Kevin Brennan was the engineering and project manager for the Plaintiff in respect of the Premises. He did not give evidence in the proceedings.
In or about mid-November 2015, the Plaintiff retained Alex Su, a commercial real estate agent based in Sunnybank Hills, Queensland, to assist with the marketing, and the obtaining of prospective sub-tenants/licensees of the Premises: Tcpt, 13 May 2019, p 57(16-27). Mr Su was not a witness in the proceedings, but copy emails to, and from, him, are included in Ex. A.
The Defendant/Cross-Claimant, Perpetual Nominees Limited, at all material times, as custodian and agent for Mirvac Funds Management Limited ("Mirvac") as trustee for the Springfield Regional Shopping Centre Trust, was, and remains, the owner of the Centre. Mirvac is a subsidiary of Mirvac Limited. (In the evidence, it was Mirvac, rather than the Defendant, to which counsel referred: Tcpt, 13 May 2019, p 29(14) p 30(2). (On occasions, during the hearing, the witnesses and the parties also referred to the Defendant as "Mirvac".)
Mirvac Projects Pty Limited ("Mirvac Projects") is, and was, at all material times, a wholly owned subsidiary of Mirvac Limited.
Glenn Dumbrell is the project leasing manager of Mirvac Property Group. Mr Dumbrell and Mr Hedley had known each other, professionally, for a number of years, and had worked together during the period 2003 to 2006. Mr Dumbrell was the first person to have discussions with Mr Hedley about the Centre and the lease of the Premises. He was not a witness in the proceedings.
From about May 2012, Mirvac Projects engaged Theo van Veenendaal as a development consultant. From about June 2012, he was engaged by Mirvac Projects to consult with its management and to work on the development of the Centre. His principal role in the development was to negotiate leases with key tenants. From about August 2015, he was involved in negotiating an Agreement to Lease and the Lease with the Plaintiff. His discussions with Mr Hedley commenced in about August 2015 and completed in late February or early March 2016. He affirmed two affidavits, read in the Defendant's case, and he was cross-examined.
From about 2013, Benjamin Conlon was the Portfolio Manager at Mirvac Projects in respect of the Centre. In that role, he had responsibility for "managing day-to-day activities for the Centre, including liaising with the centre management team, managing operational expenses, capital expenditure, leasing, marketing, administrative matters, managing tenant relationship[s] and asset strategy and forecasting". He also had "responsibility for Mirvac's dealings with the [P]laintiff …including instructing the solicitors for the [D]efendant in its dealings with the [Plaintiff], both in relation to negotiations and the subsequent dispute": Affidavit, Benjamin Conlon, 2 August 2018 at par 4. Mr Conlon swore two affidavits that were read in the Defendant's case and he was cross-examined.
It was to Mr Conlon that Mr van Veenendaal reported.
James Mutch was the Tenancy Co-ordinator Manager for Mirvac. According to Mr van Veenendaal, he was responsible for co-ordinating the works that the Defendant was required to perform within the tenancy area: Tcpt, 14 May 2019, p 121(41-47). He was not a witness in the proceedings.
Ms Manuella Di Rossi was the National Leasing Manager at Mirvac Property Group. She was not a witness in the proceedings.
The firm of solicitors acting for the Plaintiff and Ms Ng, until about 25 November 2015, was Raymond Lee & Co. Then, between 25 November 2015 and 2 March 2016, the Plaintiff retained Thomas Kung Lawyers, or Thomas Kung, to act on its behalf in respect of the lease of the Premises and to assist in drafting sub-leases/licence agreements for prospective sub-tenants/licensees of the Premises.
At all relevant times, the firm of solicitors acting for the Defendant, in the Lease transaction, was Gadens.
None of the lawyers, on behalf of any party involved in the transactions, was a witness, although many emails passing between them formed part of Ex. A.

Background Facts

The following facts, which trace the history of the events leading to this dispute, are not controversial. To the extent that any facts are disputed, what is stated under this heading should be regarded as findings of the Court. (It is not necessary, or practicable, to set out all of the events that occurred prior to the signing of the relevant lease documents. I have used the parties' statement of agreed facts and the admissions made in the oral evidence as a guide to identifying the relevant events.)
The discussions for the lease of the Premises commenced in late January 2015, when Mr Dumbrell approached Mr Hedley, to find a tenant to lease the Premises. Mr Dumbrell told Mr Hedley that he had been in discussions with Golden Vision Retail Pty Limited ("Golden Vision") in respect of the Premises but that those negotiations had reached a standstill. Mr Dumbrell enquired whether Mr Ng would be interested in leasing the Premises.
On about 4 February 2015, Mr Hedley attended a meeting at the Centre with Mr Dumbrell and Mr Ng.
At about this time, Mr Dumbrell also advised Mr Hedley that Shop MM5 was available, and that he thought it would be suitable for use as a large format Yum Cha restaurant. Mr Dumbrell then enquired whether Ms Ng and Mr Ng would be interested in the lease of that shop also.
On 5 February 2015, the Defendant provided a document headed "Orion Springfield Central … Retail Lease Proposal" which was said to be "subject to Lessor approval, availability and contract" for the Premises. In this document, it was made clear that "[t]hese premises do not exist and will need to be constructed": Ex A/1-30. A draft Floor Plan for the Premises was attached to the Proposal.
The "permitted use" identified in the Retail Lease Proposal was: "The operation of a retail store selling Asian groceries and vegetables and an Asian Hawker-Style Market selling pre-prepared and prepared to order Asian cuisine and beverages…"
On 18 February 2015, Mr Dumbrell, through Mr Hedley, provided a further proposal to the Plaintiff, in respect of the Premises: Ex. A/31-48. (It appears that the principal change related to the name of the area of the Premises.)
Also, on 18 February 2015, the Defendant provided a document headed "Orion Springfield Central … Retail Lease Proposal" which was said to be "subject to Lessor approval, availability and contract" for Shop MM5. In this document, it was also made clear that "[t]hese premises do not exist, and will need to be constructed". A draft Floor Plan, delineating MM5, was attached: Ex. A/49-62 to this Proposal.
In about mid-March 2015, the Plaintiff executed each Retail Lease Proposal.
On 23 March 2015, Mr Dumbrell sent an email to Mr Hilton confirming that there had been "Approval internally" and "Will now processes [sic] formally and instruct I would say by the end of the week": Ex. A/63.
On 26 March 2015, the Plaintiff paid to the Defendant a deposit of $64,166.70, which was apportioned as to $27,500 for the Shops and as to $36,666.70 for Shop MM5. (The parties' Statement of Agreed Facts, which was provided as an aide memoire states that the deposit was paid to "Mirvac". The affidavit of Mr Hedley made 5 October 2016, to which the Statement of Agreed Facts refers, and identifies as the source of that fact (at par 18)), "Mirvac" is defined to mean Mirvac Property Group (at par 6). In any case, there is no dispute that the Plaintiffs paid those sums, on that date. This document was treated as an aide memoir: Tcpt 15 May 2019, p, 187(44) - p 188(6)).
Under cover of a letter dated 24 April 2015, Gadens sent to Raymond Lee & Co a proposed Agreement for Lease, Lease and other documents for Shop MM5, for review by the Plaintiff, all of which documents were said to be subject to the Defendant's approval. The request was made that if the documents were in order, they should be executed and returned "as soon as possible". A cheque for $202.10, payable to Gadens, was also sought: Ex. A/66-67.
On 6 May 2015, Mr Hedley attended a design meeting with representatives of the Defendant.
On 7 May 2015, Mr Mutch sent an email to Mr Hedley noting the following timetable: "Initial Concept Design issue to Mirvac 15th may [sic] 2015 Handover of Tenancy to Commence Fitout 13th August 2015 Fit Out works to be completed by 8th October 2015"
On 19 May 2015, Mr Dumbrell provided Mr Hedley with plans, scale drawings and colour schematics from Mirvac, of the plans that had previously been submitted by Golden Vision, the previous proposed tenant, for the Premises.
On 20 May 2015, Mr Hedley attended an on-site meeting with Mr Mutch, other Mirvac representatives, Ms Ng and Mr Ng.
On 22 May 2015, Mr Woollams, of Space Cubed, sent Mr Hedley an email attaching a layout for the Premises.
In the weeks leading up to 21 July 2015, Mr Hedley had a conversation with Mr Dumbrell regarding the delay in the handover dates.
On 21 July 2015, Mr Angus White, the Development Manager, Mirvac, and Mr Hedley had an email exchange in which, amongst other things, Mr White confirmed "following our conversation today, your commitment to take handover of the store at Orion on 12th August 2015 and open on 7th October 2015 as per our agreed program": Ex. A/76-77.
Also, on 21 July 2015, Gadens sent an email, addressed to "Anson", with a copy to Raymond Lee & Co, regarding the Premises, in the following terms (Ex. A/79): "We refer to the above matter and are instructed by our client that the terms of the documents are now agreed… We have re-engrossed the documents to include the agreed amendments."
(At the hearing, the parties agreed that "Anson" was Anson Cheang, a solicitor at Raymond Lee & Co: Tcpt, 15 May 2019, p 185(25-37).
The email attached a copy of the Agreement for Lease of the Premises in marked-up form, the Agreement for Lease, in final form, of the Premises, Lease in marked-up form, and the Agreement for Lease, in final form, for Shop MM5. It was noted that the Defendant "had not had the opportunity to review the documents prior to them being issued and that the Defendant reserved its rights to make further amendments".
On 29 July 2015, Mirvac emailed a "Handover Notice" (Ex. A/84-85) to Mr Hedley which provided: "The Lessor hereby notifies the Lessee that as of the Handover Date set out below the above premises will become the sole responsibility of the Lessee for the commencement of the Lessee's works. Applicable dates are confirmed as follows: • Handover Date: 12th August 2015 • Date of completion of Lessee's works: 7th October 2015 • Trade Commencement Date: 7th October 2015 • Lease & Rent Commencement date The earlier of: (i) The day after the end of the Fitout Period; or (ii) Trade commencement date Before the Handover Date, the Lessee and/or its shopfitter is to contact James Mutch on 04XX XXX XXX to organise an inspection of the Premises. During the inspection, the Lessee or its shopfitter will be provided with a notice called 'Site Condition at Handover' which outlines the condition of the Premises as at the Handover Date. There will be a deemed handover of the Premises on the 'Handover Date' regardless of whether the Lessee or its shopfitter attend the inspection or access the Premises unless the Lessor provides a further Handover Notice in which case the Handover Date will be the date in the further Handover Notice. Please note however that access to the Premises to commence the Lessee's works will only be granted to the Lessee upon satisfaction of the following items marked with X: Lease Documentation Checklist X LEASE EXECUTED X PUBLIC LIABILITY INSURANCE, CERTIFICATE OF CURRENCY RECEIVED X BANK GUARANTEE RECEIVED Design and fitout checklist X FINAL DESIGN APPROVAL XTENANT TO PAY FEES AND SERVICES ADJUSTMENT COSTS  TENANT APPOINTED SHOPFITTER X SHOPFITTER PAPERWORK RECEIVED"
At the time the "Handover Notice" was issued, Mr Mutch and Mr Angus White, the Development Manager, Mirvac, informed Mr Hedley that the lease documentation had been finalised. Despite that having been said, it is clear that at that time, negotiations as to the Agreement for Lease and Lease were ongoing between the solicitors. There is no dispute that Mr White, at the relevant time, was employed by the group known as "Mirvac".)
On 30 July 2015, Gadens sent an email to Raymond Lee & Co, requesting those solicitors to "advise when we can expect to receive the executed lease documents for Shops 203-206 and Shop MM5 [sic]": Ex. A/73.
On 4 August 2015, Mr Hedley sent an email to Mr White regarding the contribution payable by the Defendant and suggested amendments to the Lease.
On 6 August 2015, at 9:07 a.m., Mr Hedley wrote to Mr Dumbrell noting "We are all meeting on site next Wednesday to finalise everything prior to taking handover…": Ex. A/89.
On 6 August 2015, at 5:15 p.m., by letter sent via email to Mr Lee at Raymond Lee & Co from Gadens, the Defendant elected to withdraw from offering the Plaintiff the leases due to the failure to return executed documents: Ex. A/93-94.
Another letter, also of the same date, in almost identical terms as that sent to Mr Lee, from Gadens to Mr Cheang at Raymond Lee & Co, noted (Ex. A/95): "You will appreciate that there is no binding agreement in place until the documents are signed by both parties. To date, the documents have not been signed by both parties."
Despite the withdrawal from the negotiations, Ms Di Rossi requested a meeting with Mr Hedley to discuss the Lease.
On about 7 August 2015, Mr Hedley had a meeting with Ms Di Rossi, and Sepideh Vahdat, a retail leasing executive for the Defendant, at which Mr Ng also attended. When Ms Vahdat and Ms Di Rossi raised concerns about the guarantors under the lease and whether the Plaintiff would be able to commence its tenancy fitout following handover, Mr Hedley responded (Affidavit, Hilton Hedley, 5 October 2016 at par 37): "I really can't understand why you have only decided to raise issues about the guarantors in August when the deals were approved back in March. I also don't understand why we are being pressured about a handover when the leases aren't even signed and in fact the deals have been terminated. This just seems to be another example of no-one within Mirvac speaking to the other side…"
Following the discussion referred to, Ms Di Rossi said that the Defendant had "terminated the lease as a precaution" and that she was happy to proceed with the negotiations for the Lease.
On 7 August 2015, Mr Hedley sent an email to Ms Vahdat regarding the shop design, guarantor and Lease: Ex. A/97
Between 7 August 2015 and 24 August 2019, Mr Hedley continued to liaise with the Plaintiff's designer and shopfitter to ensure that all requirements of Mirvac were being attended to and completed. He also continued to liaise with Mirvac's delivery team in relation to the tenancy design and handover.
On 11 August 2015, Mr Hedley informed Ms Ng and Mr Lee that Ms Di Rossi "is resubmitting these details to the CEO tomorrow": Ex. A/99.
On 24 August 2015, Mr Brennan sent Mr Hedley an email, which stated (Ex. A/106): "We confirm that we have been waiting on the owner's consent form to be filled out for the plumbing application which we requested on 4th August."
Following a meeting on 31 August 2015 between Mr Hedley, Mr van Veenendaal and Ms Justine Hughes, the Head of Retail Management, Mirvac provided the Plaintiff with Heads of Agreement for the Yum Cha restaurant, which was to be located at Shop 116A, rather than Shop MM5, as had previously been agreed. (For the same reason that has been outlined earlier in these reasons, it is unclear from the evidence whether Mr Hughes was employed by Mirvac, Mirvac Property Group, or another subsidiary. I do not think anything turns on this.)
On the same date, Gadens sent an email to Raymond Lee & Co stating that she had received instructions that the "parties have now reached agreement regarding the guarantor for Shops 203-206…". She also enclosed the "lease documents with the proposed changes shown tracked as well as the final from [sic] for signing by the parties": Ex. A/112.
On 18 September 2015, Raymond Lee & Co sent a letter to Gadens in respect of the Agreement of Lease and Lease: Ex. A/146-147. That letter stated: "We refer to the above and note that we are still waiting for copies of draft lease documents relation [sic] to the yum cha restaurant. We had expected to receive such documents by now however understand that lease of the yum cha restaurant and we have been advised to expect to receive draft lease documents shortly. In the meantime, we have also been advised as follows in relation to the lease by Kowloon City of Shop 203-206: 1. The Lessor will complete, at the Vendor's expense, the previously agreed scope of Lessor's works for Shops 203-206 including but not limited to all category one items. 2. The dates for the provision of plans, such as services layout plans do not need to be strictly comply with. We understand from our client that some plans have been previously provided including an initial concept drawing and layout plan. 3. We understand from our client that on a meeting with your client's representative, your client advised that it would require copies of lease documents executed by the Lessee to allow our client to commence fitout works on and from 28 September 2015. 4. We are instructed to confirm that the lease by Longjing Pty Ltd of Shops 203-206 Orion Springfield Central is to proceed only on the basis that an agreement for lease and lease satisfactory to our client with respect to the yum cha/Chinese restaurant is entered into with respect to premises satisfactory to our client within the Orion Springfield Central Shopping Centre. On the above basis, we attach hereto the following: 1. Copy of signed agreement for lease. 2. Copy of lease. 3. Copy of Lessor's disclosure statement. We note that such was the one initially issued by the Lessor. We note that some of the terms as contained in the original Lessor disclosure statement have been superseded by subsequent negotiations. 4. Signed Lessee's disclosure statement. We would be grateful if you would acknowledge receipt. We also note that the lease documents attached hereto are to be held in escrow."
In the "Disclosure Statement by the lessor" (Ex. A/162ZCL-162ZDB), the copy of which bears, on the final page, what appears to be Ms Ng's signature and the date 4 September 2015, in the box headed "Estimated commencement date of the lease", the date "10/09/2015" was inserted and described as "Actual". Similarly, in the box headed "Estimated handover date of the premises" "10/09/2015" was inserted and described as "Actual": Ex. A/162ZCL.
In the Disclosure Statement referred to, important is Part 3 "Works Fit Out and Refurbishment" and in the box headed "Date of handover (if different to the date the lease commences indicated at Item 5)," the date "10/09/15" was inserted and described as "Actual": Ex. A/162ZCO.
On about 18 September 2015, Ms Ng, on behalf of the Plaintiff, and in her capacity as a guarantor, executed the Agreement for Lease, and the Net Retail Lease, for the Premises. (Each of the Agreement for Lease and Net Retail Lease that was signed by Ms Ng, copies of which were sent by Raymond Lee & Co to Gadens on 18 September 2015, appear to be undated.)
On 21 September 2015, the Plaintiff provided the Defendant with a bank guarantee in the sum of $165,000.
On 24 September 2015, Mr Mutch sent an email to Mr Hedley and others (Ex. A/163) confirming the following dates : "3rd October - Handover (8 week fitout) 5th November - Entire shopfront completed with the Mall/Town Walk tenancies fully open and trading 28th November - Full completion of any outstanding works with all tenancies open and trading."
On 1 October 2015, Mr Hedley sent an email to Mr van Veenendaal asking for the contribution that the Defendant was to make. He noted "they are supposed to be taking handover on Saturday and won't be doing so until they have some money": Ex. A/167. (The reference to "taking handover this Saturday" is consistent with the email of 24 September 2015 from Mr Mutch.)
On 2 October 2015, the Plaintiff delivered to the Defendant the hard originals of the Agreement for Lease and the Lease.
On 8 October 2015, Gadens sent a letter to Raymond Lee & Co, in response to the letter dated 18 September 2015, which included: "1. We refer to your letter of 18 September 2015 and the original signed documents for the above Premises which were returned to our client directly on 2 October 2015. We are instructed that the matters raised in your letter of 18 September 2015 are not agreed by the Lessor. 2. We are further instructed that your client has requested that the Lessor release the first instalment of the Fitout Contribution to the Lessee. 3. Our client instructs us that the Premises will not be handed over to the Lessee or its fitout contractor and the first instalment of the Fitout Contribution will not be released to the Lessee (despite any contrary position in the Agreement for Lease) until your client acknowledges, accept and agrees that: (a) the final agreed terms between the parties for the Premises are as set out in the documents returned to the Lessor signed by the Lessee on 2 October 2015 (Agreed Documents); (b) the Lessee will not seek any further amendments to the Agreed Documents, subject to any amendments being required to correct any errors, to give effect to the Agreed Documents or to enable registration of the Lease. In this regard, we particularly refer you to paragraph 4 below; … 4. Our client advises that the original signed documents returned by your client include certain hand writing on page 26 of the Agreement of Lease which cannot be deciphered. Can you please confirm by return that this hand writing is not intended to vary the signed documents and, if so, please authorise us to replace this page in the signed documents held with a new clean page 26 (a copy of which is attached for your reference). 5. Please have your client confirm its agreement to the above by signing and returning the duplicate of this letter before close of business on Thursday 8 October 2015."
On 9 October 2015, Mr Hedley sent an email to Ms Ng, Mr van Veenendaal and Raymond Lee & Co (Ex. A/187A), stating: "Merry, Theo and I have just spoken and the reality of finalising the outstanding legal terms by today - are slim. The payment for the fitout contribution should hit your account today, but maybe not be until Monday. Theo and I have agreed that the opening date will be pushed back (so no longer the 5th of November), and that realistically we all work together in starting on site as soon as possible, and opening as soon as possible, rather than committing to new dates that will just be missed again. I will explain to Leigh the builder that he will not be starting on site this weekend. Theo suggested a meeting on Monday with all of us to go through where we are at and to provide you both with a degree of comfort as to where we are heading. I'll come back to you once a time has been set. If any progress is made today on any of the above I will let you know, otherwise have a nice weekend and I'll see you Monday."
On 13 October 2015, in a letter from Raymond Lee & Co to Gadens, it was confirmed that the Plaintiff had not accepted the terms put forward in the letter dated 8 October 2015 from Gadens, but that there had been certain without prejudice discussions between the parties and that some amendments to the Lease would be made (particularly referring to Shop MM5 no longer being available): Ex. A/187ABA-187ABB.
On about 14 October 2015, Mr van Veenendaal attended a meeting with Mr Hedley, during which meeting, a conversation to the following effect took place (Affidavit, Theodorus van Veenendaal, 24 July 2018 at par 20): "[Mr Hedley]: There is additional work that needs to be done, such as the mechanical exhaust and fire services. Mirvac should pay for this work. [Mr van Veenendaal]: This work was never part of the Lessor's Works but we will do the additional work as Lessor's Works, if Longjing agrees to pay an extra $10,000 in rent, and reduce the incentive payment for the Yum Cha Restaurant. We will handover the Premises on 19 October 2015, and Longjing can commence the fitout works then. This will mean the Opening Date will be 14 December 2015."
On 14 October 2015, Raymond Lee & Co sent a letter dated 13 October 2015 to Gadens. That letter stated: "I refer to your letter of the 8th of October 2015 received by e-mail at 3pm on that date requiring our client's instructions and confirmation to the matters contained herein by 5pm on Thursday the 8th of October 2015. Our client was unable to and cannot accept and agree to the terms set out in your letter of the 8th of October 2015. In this regard, we are instructed that matters, particularly Point 3 (d) is incorrect. It had always been the case that our client was to lease Shop 203 to 206 and Shop MM5 and our client had made plans and arrangements and made commercial decisions on this basis. Subsequent to our client making arrangements with respect to the leasing of both of the premises, we are instructed that your leased Shop MM 5 to a retail tenant for your client's own commercial gain, not having regard to our client's position. We have been advised that your client has been unable to commit to other possible premises within the Centre to allow our client to open a yum cha restaurant. Without prejudice to our client's rights, we are instructed that our respective clients have recently undertaken discussions. We are instructed that the Lease with respect to Kowloon City and the yum cha restaurant are to remain as "hand-in-hand" however, in the event that your client is unable to confirm the terms of a deal with respect to the lease of the yum cha restaurant premises by the 1st of July 2016, at premises satisfactory to our client and on terms satisfactory to our client then our client requires an amount of $350,000.00 plus GST by way of compensation. This would be in addition to the amount of compensation of $50,000.00 plus GST which, we understand, your client has agreed to reimburse or pay to our client due to the premises at MM 5 now not being available to our client. We look forward to hearing from you in relation to the above."
On about 14 October 2015, Mr Hedley and Mr van Veenendaal agreed to make certain amendments to the Agreed Documents ("the Amendments"). The Amendments included, amongst other things (Ex. A/188, 190-91): 1. A variation to the Agreement for Lease to reflect that "the Lessee's contraction [sic] will take physical possession" of the Premises on 19 October 2015, and the "rent commencement date" was to be 14 December 2015; 2. A variation to the Agreement for Lease to alter the scope of the Lessor's Works; and 3. A variation to the Lease to increase rent by $10,000 per annum for the term of the Lease.
On 15 October 2015, Mr Hedley sent an email to "Merry and Raymond" confirming that "Mirvac will pay Leigh directly for the work he is doing and pay their contractor for the work they are doing…Please confirm you accept this and if so we can have it sorted out asap so that your fitout can start today": Ex. A/187B.
On 15 October 2015, the Defendant paid the Plaintiff $313,500, being 33 per cent of the total "Fitout Contribution" (as defined in the Agreement for Lease).
In an email from Mr van Veenendaal to Mr Hedley sent 16 October 2015 (Ex. A/188), the following appears: "Hi Hilton Further to recent conversations, I confirm the following in response to your request for further contribution to the Lessee's fitout and in relation to Raymond Lee & Co's email below: The additional works for Kowloon that you have requested the Lessor to undertake is as follows: Item Cost Notes Under slab drainage works $35,000 Work undertaken by Lessee's Contractor Gas and potable water $26,565 Work undertaken by Mirvac Wet & Dry Fire $59,141 Work undertaken by Mirvac Addition support for Exhaust Hoods $20,000 Work undertaken by Lessee's Contractor A/C changes $104,000 Work undertaken by Mirvac Electrical $11,213 Work undertaken by Mirvac Additional Mech Ventilation $20,000 Work undertaken by Mirvac Total $275,919

It is proposed that the following variations be made to the Agreements for Kowloon and Hong Kong Yum Cha to cover these additional tenancy fit out costs: Mirvac will pay for the costs of the works outlined above; The incentive for Hong Kong Yum Cha to be reduced by $100,000 and the rent increased by $5,000 p.a. for the ten year term of the lease; The rent for Kowloon be increased by $10,000 p.a. for the ten year term of the lease; If Mirvac is unable to confirm an alternate premises for the Hong Kong Yum Cha restaurant premises by the 1st July 2016 satisfactory to your client (acting reasonably) Mirvac will pay your client an amount of $300,000.00 plus GST by way of compensation which include the $50,000 plus GST which Mirvac has agreed to pay to your client due to the premises at MM5 now not being available to our client and the costs incurred in relation to that tenancy; and The Lessee's Contraction [sic] will take physical possession of the Kowloon Premise [sic] (Shop 203-206) on Monday 19th October 2015 and the rent commencement date will be 14th December 2015."

(The parties agreed that the word "Contraction" should be read as "Contractor": Tcpt, 13 May 2019, p 35(23-25).)
On 16 October 2015, Mr Hedley forwarded to Ms Ng and Raymond Lee & Co, a copy of Mr van Veenendaal's email. Ms Ng responded as follows: "Hilton and Raymond, We agreed to the proposed response below and please proceeding accordingly."
Mr Hedley forwarded to Mr van Veenendaal Ms Merry Ng's email, writing: "Theo Please see below and instruct Gadens accordingly. Can you please ensure the second instalment of the contribution is paid asap as the builder will be on site Monday."
On 16 October 2015, Ms Ng, on behalf of the Plaintiff, and on her own behalf, agreed to the amendments. Her agreement was noted in an email from her to Mr Hedley and to Raymond Lee & Co, sent on 16 October 2015, a copy of which was provided to Mr van Veenendaal on the same date.
On 19 October 2015, Gadens sent an email to Raymond Lee & Co, with attachments that: 1. included replacement pages for the Agreement for Lease and Lease to reflect the Amendments; and 2. sought the written confirmation by Ms Ng on behalf of herself and the Plaintiff that she, and it, acknowledged, accepted and agreed that the final terms between the parties for the Lease of the Premises were as set out in the Agreed Documents.
The letter, stated, amongst other things: "1. We refer to your email of 14 October 2015 in response to our letter of 8 October 2015. 2. We are instructed that the parties have had further discussions regarding the Premises and the proposed lease for a Yum Cha Restaurant at the Centre. We are instructed that the parties have agreed the following: (a) … (b) The rent for the first year of the Term for the Premises is to be increased to $242,858.10 per annum which will be payable on and from 14 December 2015. Again, to document this we propose to amend the signed Agreement for Lease (page 2) and the Lease (page 5) by inserting the attached replacement pages. Please provide us with your client's authority to insert the proposed replacement pages by return. …"
There was attached a document (Ex. A/218) that stated: "Item 11 Opening Date 5 November 14 December 2015 Item 12 Opening Contribution $1,500.00 Item 13 Design Approval Fee $800.00
On 19 October 2015, Mr van Veenendaal sent Mr Hedley an email and, with an attachment entitled "Handover Notice" (Ex. A/221). The email stated: "Please see attached signed Handover Notice acceptance form for S203/206, Kowloon City. Handover has been accepted by the tenant as of the 19th October 2015."
To the email was attached a document headed "Site Inspection Handover". The date of the Site inspection was said to be 16 October 2015 and appears to have been accepted on behalf of the Plaintiff: Ex. A/222.
Ms Ng admitted (in paragraphs 3 and 5 of her affidavit of 10 April 2019), that on about 19 October 2015, the Defendant "formally handed over the [Premises] to the Plaintiff in order to enable the Plaintiff to begin "the lessee's fitout works".
On 23 October 2015, Raymond Lee & Co sent to Gadens (with a copy to Ms Ng and Mr Hedley) an email on the following terms: "Thank you for your email and your letter of 19 October. In relation to Point 2 of your said letter, we are instructed that the parties had agreed that in the event that a Lease is entered into with respect to Premises for use a Yum Cha Restaurant, your client will reimburse our client for expenses thrown away relating to the proposed Lease of Shop MM5 by way of a payment to our client of $50,000.00 plus GST. We note that we had raised this in an email to you on 13 October but had not been addressed by you. After receipt of your letter of 19 October, we had raised this with our client's agent who had confirmed that this had been agreed to and expected an amended letter from you reflecting such arrangement. Would you urgently confirm by return email that such an arrangement is correct and is agreed to by your client. We advise that subject to your confirmation of the above, our client is making arrangements with respect to the Advice Certificates required, the execution of the amended pages of the Lease and the Agreement for Lease and the Registration Fees for delivery to your client."
On 26 October 2015, Gadens sent another email to Raymond Lee & Co attaching an amended copy of the letter referred to above, which was said to reflect a further agreement between the parties. The email referred to a chain of emails, all sent on 23 October 2015, being an email from Mr Hedley to Mr van Veenendaal; an email from Mr van Veenendaal to Mr Hedley; and an email from Raymond Lee & Co to Gadens. Also included was an amended copy of the letter dated 19 October 2015 to reflect further agreement between the Plaintiff, the Defendant and Ms Ng. (Relevantly, paragraph 2(b) of the letter dated 26 October was the same as paragraph 2(b) of the 19 October letter.) The letter required Ms Ng, as the sole director and secretary of the Plaintiff, to acknowledge, accept, and agree to, the terms of the letter dated 26 October 2015 by signing and dating a copy of the letter: Ex. A/195-197.
The letter dated 26 October 2015 specifically stated that "The rent for first year of the Term …which will be payable on and from 14 December 2015".
On 26 October 2015, the Defendant paid the Plaintiff $313,500, being the second instalment of 33 per cent of the total "Fitout Contribution" (as defined in the Agreement for Lease).
On 30 October 2015, Raymond Lee & Co sent to Gadens, by email (and, apparently, by courier), the copy letter dated 26 October 2015, and the further amended pages of the Lease and Agreement for Lease for the Premises, both signed by Ms Ng (which were said to have been provided to replace the pages in the previous document). The letter was also said to enclose the signed Legal advice report, Financial report and a cheque to the Department of Natural Resources and Mines. In relation to the amended pages to the Lease and Agreement to Lease, whilst the "Commencing Date" (Item 7) and the "Terminating Date" (Item 8) remained incomplete, the "Opening Date" (Item 11) was stated to be 14 December 2015. However, in the definitions, "Lease commencing date" was said to mean "the Fitout Access Date": Ex. A/231A-231M.
In the "Legal advice report", which is a document required to be completed by a legal practitioner, in this case Raymond Lee, and which was signed by Mr Lee on 23 October 2015 and by another person, perhaps, Jenny Zhuang (the signature is indecipherable) on 30 October 2015, the legal practitioner confirmed that he had provided, and the "lessee/assignee" certified that "I have received the explanations referred to… and have understood them", and advice on, among other things, the "term of the lease", and "consequences of the prospective lessee/assignee … breaching lease conditions": Ex. A/231J - 231K.
It appears that on 30 October 2015, Ms Ng as "sole director [and] secretary of Longjing" did acknowledge, accept and agree to the terms of the letter dated 26 October 2015 from Gadens: Ex. A/197.
By email dated 16 November 2015 sent to Mr van Veenendaal, Mr Hedley forwarded an email from Leigh Weber, who was carrying out the fitout works on behalf of the Plaintiff, in which he explained the reasons for the delays and proposed that "due to delays out of our control … the works will not be completed on the 14/12/15. I suggest a time extension from Mirvac" (earlier in the email, the extension proposed was "until 23/12".): Ex. A/236-238.
In an email sent on 17 November 2015, from Raymond Lee to Gadens, a request was made to "urgently provide to our office a copy of the Agreement for Lease and the Lease executed by your client…". Shortly thereafter, Gadens responded that "[T]he documents have not yet been signed by the Lessor and are still being processed…" Ex. A/241A-241B.
On 18 November 2015, Mr van Veenendaal sent an email to Mr Hedley under the heading "Request for time extension for works to Kowloon City" and stated "I have asked Mirvac to look into the claim … We need to ensure that the tenant opens as close to the 14 December as possible": Ex. A/246.
On 19 November 2015, a new shop location for the yum cha restaurant was agreed.
On 20 November 2015, an error in relation to the Marketing Levy in the signed lease documents was detected and a request was made for an amendment to Item 12 of the Reference Schedule.
On 23 November 2015, Mr Hedley sent an email to TKA Lawyers stating that the Plaintiff "requires the services of a solicitor in Brisbane to act on its behalf to prepare sales contracts and licence agreement for a number of food court tenancies…There are 7 businesses in total, so that will be 7 sales contracts and 7 licence agreements…": Ex. A/259A.
Also on 23 November 2015, Mr Hedley sent an email to Mr van Veenendaal stating the following (Ex. A/260): "As mentioned to you last week and the week prior, we urgently require copies of the executed agreements for Kowloon City. It is preventing LongJing [sic] entering into licence agreements with proposed operators and it's reaching the point where one of these tenants is losing interest. …"
(There was no evidence given by the Plaintiff of any "proposed operators" or of any tenant losing interest.)
On 24 November 2015, the Defendant executed the counterpart of the Agreement for Lease and the Lease for the Premises and provided it to the Plaintiff.
It was agreed, at the hearing, that amendments to the Lease that had been signed on 18 September 2015 by the Plaintiff and Ms Ng were inserted into the Lease that was signed by each of them as agreed amendments were made: Tcpt, 15 May 2019, p 216(8-46).
As has been stated earlier in these reasons, between 25 November 2015 and 2 March 2016, the Plaintiff engaged Thomas Kung or Thomas Kung Lawyers to act as its solicitors in respect of the Premises and to assist in drafting sub-leases/licence agreements for prospective tenants of the Premises. The Plaintiff also engaged in the same period Mr Su, to assist with marketing and obtaining prospective tenants for the Premises.
On 18 December 2015, the Plaintiff had not opened any part of the Premises for trading.
On 21 December 2015, Daryl Gabagas, a Development Manager at Mirvac, sent an email to Hala Nagy, an accounts payable manager at Mirvac, Fizzah Salahuddin, a development assistant (finance) at Mirvac, and Rod Moynahan, the National Director, Retail Delivery, at Mirvac, stating: "Further to our discussion on Friday, Mirvac Retail have requested that… Longjing Pty Ltd be paid urgently If payment is not made before Christmas closure this would result in Mirvac been [sic] in breach of agreement with both Tenants …"
On 21 December 2015, Mr Gabagas sent an email to Fizzah Salahuddin and Rod Moynahan stating: "A bit of Good [sic] and bad news. Only Diamond Properties will be paid this week and Longjing on the 6th"
Also on 21 December 2015, Mr Moynahan sent an email to Mr van Veenendaal, Andrew Paterson and Mr Mutch stating: "We have been begging to corporate and Treasury and no luck for Longjing."
The final fitout works were completed on 23 December 2015.
On 11 January 2016, Melanie Hodge, the Centre Manager, sent an email to Mr van Veenendaal, in which she stated (EX. A/663): "Just spoke with Merry [Ng], they haven't opened as the licence with the sub-tenant has not been finalised and is going back and forth. She will be at the centre on Wednesday and will meet with me to go through it further and hopefully have more news. She is hoping they will open on Friday or Next [sic] week."
On 11 January 2016, the Defendant paid the Plaintiff $220,000, being the third instalment of 23 per cent of the total "Fitout Contribution" (as defined in the Agreement for Lease).
On 12 January 2016, Mr van Veenendaal forwarded Ms Hodge's email to Mr Hedley with: "Hi Hilton, What's the status of this". Mr Hedley responded later that same day with: "People are only now coming back from their break and shops will tentatively be opening in stages likely from this Friday or Monday of next week": Ex. A./663.
On 13 January 2016, Ms Hodge sent an email to Mr Conlon and Mr van Veenendaal, which stated (Ex. A/665A): "… Just spoke with Merry from Kowloon. She has been advised by Hilton that rent is not payable until she opens and was unaware of the current invoice and outstanding amount of $19k. She advised they have not finalised the details with the sub-tenants and are not expected to open for another week or two. She has not made payment for the furniture although believes it is in the country and at the store."
On 14 January 2016 at 7.05 p.m., Ms Hodge sent an email and an attachment being a tax invoice for outstanding rent to Ms Ng. Ms Hodge's email stated (Ex. A/667A-667B): "… Further to our discussion yesterday please see attached a copy of the tax invoice for outstanding rent. Please advise when payment of $19,170.42 is to be expected."
On 14 January 2016 at 7.37 p.m., Ms Ng forwarded Ms Hodge's email to Mr Hedley. Mr Hedley forwarded on the email to Mr van Veenendaal at 7.41 p.m. stating (Ex. A/667A): "… Can we discuss this please. Thanks …"
On 22 January 2016, the Defendant served a Notice to Remedy Breach of Covenant ("the Breach Notice") (Ex. A/692) on the Plaintiff, that relevantly stated: "Breach Notice. On behalf of the Lessor we enclose a Notice to Remedy Breach of Covenant (Notice) relating to the breaches that have occurred under the Lessee's lease of the above premises, namely: 1. The Lessee's failure to open the Premises for business during the core trading hours of the Centre in accordance with clause 10.4(a)(1) and clause 45.1 of the Lease, for the period 18 December 2015 up to and including 22 January 2016; and 2. The Lessee's failure to make payment of Rent and other occupancy charges totalling $15,553.98 (Arrears)… Opening the Premises for trade. We are instructed that the Lessor considers 7 days from the date of service of this letter to be a reasonable timeframe within which the Lessee is to commence trading at the Premises. If the breach is not remedied within this period, the Lessor reserves its rights to terminate the Lease without further notice to the Lessee. Time for Payment of Arrears. On behalf of the Lessor we demand payment of the Arrears by the date which is 14 days from the date of this letter. Payment must be made to the office of the Centre Manager. Consequences if Arrears are not paid. Please note that if full payment of the Arrears is not made on or before the date which is 14 days after the date of this letter, the Lessor reserves its legal rights in relation to the recovery of the Arrears and the breach by the Lessee of its obligations under the Lease. Those rights may include institution of court proceedings for recovery of the arrears together with interest, without further notice to the Lessee. …"
The Breach Notice provided: "With reference to the lease of the Premises between Perpetual Nominees Limited… and the Lessee… and the covenants by the Lessee: 1. under clause 3 of the Lease, to pay to the Lessor the Rent in advance, on or before the first day of each month, without set-off, counter-claim, withholding or deduction; 2. under clause 7 of the Lease, to pay for all services specific tenancy charges, services and electricity charges; 3. under clause 9 of the Lease, to pay GST on any supply under or in accordance with the Lease; and 4. under clause 10.4 and clause 45.1 [sic] of the Lease, to keep the Premises open for business during the core trading hours of the Centre, and the breach by you of those covenants by failing to make those payments and failing to open the premises for business during the period 18 December 2015 up to and including 22 January 2016, the Lessor gives you notice and requires you to remedy those breaches by opening the Premises for trade… and by paying to it the amount outstanding…"
Mr Conlon gave instructions for the Breach Notice to be issued to the Plaintiff. He said he did so because "the tenant wasn't trading and hadn't paid rent": Tcpt, 14 May 2019, p 170(3-11).
On 22 January 2016, Mr Hedley sent an email to Mr van Veenendaal which had attached to it the notice of 22 January 2015, and which stated: "Really??".
Mr Hedley gave evidence that he was "sure [I would have advised her to pay [the outstanding rent] immediately": Tcpt, 13 May 2019, p 65(9-12).
(This evidence is inconsistent with Ms Ng's evidence, which I do not accept, that she did not know that the Plaintiff was required to pay rent, or that the Defendant could deduct the outstanding rent from the Bank guarantee so that it did not actually have to pay the rent: Tcpt, 13 May 2019, p 78(29-44). It is also inconsistent with her evidence, which I also do not accept, that he told her that "We don't even need to pay the money. Nothing we owe to Mirvac, we're not owing Mirvac anything": Tcpt, 13 May 2019, p 80(49) - p 81(1). It was also inconsistent with Ms Ng's evidence that Mr Hedley told her not to worry about the rent: Tcpt, 14 May 2019, p 95(27-29).
On 28 January 2016, Ms Merry Ng sent an email to Ms Hodge, which stated (Ex. A/694): "Apologies for missing your call yesterday and for not giving you an updates on the late opening. We also want to get Kowloon City open as quick as possible and we are doing our best to finalising all the legal matters now. We will have some of the furniture, like stools delivered tomorrow and the rest will follow early next week and the opening should follow after. I will confirm again the date prior to the opening date."
On 1 February 2016, Mr Hedley sent to each of Mr Kung, Mr Su and Ms Ng an email which stated: "Alex, this is all super urgent as Merry is now under extreme pressure by Mirvac to open these tenancies Please ensure these contracts are signed and returned as soon as possible and that these tenants open next week. There is no reason for them not to open as they are fully fitted out and ready to go. Please also provide a written update on the balance of the tenancies and quite [sic] to re-advertise for the remaining shops."
On 3 February 2016, there was a meeting between Mr Hedley, Mr van Veenendaal and Mr Conlon. At this meeting, Mr Hedley outlined the progress that had been undertaken so far in relation to ascertaining the potential licensees; Mr Hedley outlined that there were three or four that could open within a relatively short period of time; and he expected the Premises to be open within approximately 2 weeks. Mr Conlon stated that "Termination is not an outcome that Mirvac desires" and asked how much more time did the Plaintiff require to remedy the breach, to which Mr Hedley responded "Two weeks from today would be sufficient for Longjing to open the Premises for trading": Tcpt, 13 May 2019, p 65(49) - p 66(25).
Mr Conlon submitted, under cross-examination, that at the meeting, it was agreed that if the Plaintiff opened with four licensees and operated one shop itself, within the agreed time frame, then the Defendant would not terminate the Lease: Tcpt, 14 May 2019, p 175(19-24).
Under cross-examination, Mr van Veenendaal stated that at the meeting, no agreement was reached that if the Plaintiff opened with four licensees and operated one shop itself, within the agreed time frame, then the Defendant would not terminate the Lease. He expressed this several times in answer to questions put to him: Tcpt, 14 May 2019, p 151(8-11, 21-26, 42-47).
His evidence, under cross-examination by counsel for Longjing and also in answer to my question on the topic, was that the agreement that had been reached at the meeting was that Mr Hedley had, at the meeting, indicated he would "come back to us within 24 hours to say what - to say which tenancies he would have open": Tcpt, 14 May 2019, p 150(46) - p 151(4), p 152(7-8). This evidence appears consistent with an email dated 3 February 2016, at Ex. A/708A, from Mr Hedley, to which reference is to be made. This was pointed out to counsel for Longjing during the course of the hearing: Tcpt, 14 May 2019, p 154(47) - p 155(4)).
Under cross-examination, Mr van Veenendaal also stated that such an agreement had been made on, or at least by, 15 February 2016, pursuant to the letter sent by Gadens to Raymond Lee & Co on that date, which outlined the agreement that had been reached: Tcpt, 14 May 2019, p 148(32-33). (The content of that letter is outlined later in these reasons.)
On 3 February 2016 at 1:56 p.m., Mr Hedley sent an email to Mr Su and Mr Kung as follows (Ex. A/708A): "Alex and Thomas, I met with Mirvac today and I need to provide them with an update as to when the operators of the shops will be opening within Kowloon City. Alex, can you please speak to all of the tenants and seek confirmation of when they will be opening Remember that we agreed to certain terms based on these operators opening asap Thomas, Can you please send me return email confirming how many contracts have been issued and when you are expecting these to be signed and returned. As you know this project was completed on 23 December and as of today no one has opened."
On 3 February 2016 at 2:46 p.m., Mr Hedley sent an email to Mr Kung, Mr Su and Ms Ng which stated (Ex. A/708B): "Alex Can you please call Thomas and clarify these details It's becoming urgent that these operators are trading as our mutual client LongJing are paying rent to Mirvac and no income is coming in. Alex I need a written update from you as to the status of these deals and future tenants."
On 4 February 2016, Mr Conlon and Mr van Veenendaal received an email from Ms Meri Suleman, the Retail Lease Administrator, in which she wrote (Ex. A/ 709): "Hi Ben and Theo, The time for the Lessee to remedy the breach pursuant to the notice expires at 5pm, tomorrow Friday 5 February 2016. Has there been any progress? If not, please advise how the lessor proposes to move forward. The options are as follows: 1. Terminate the lease; 2. Commence action against the lessee to recover the rent / monies owing; or 3. Allow the lessee more time to remedy the breach. Gadens will need to prepare the notice / letter (if required) and it would therefore be prudent to advise them of the option the lessor is likely to pursue as soon as possible to allow them sufficient time to prepare the documentation (if required). Let me know if you need any further information."
On 5 February 2016, Mr Conlon responded to Ms Suleman's email in the following terms (Ex. A/710): "Sorry for the late reply. ... Kowloon were supposed to be sending us a letter regarding the dates for trade for each of their shops within Kowloon. Let's just hold fire on this until we see the letter."
In an email dated 8 February 2016, sent by Raymond Lee & Co to Gadens, the Defendant was informed that "4 Licence Agreements have been issued … our client anticipates that 4 of the 7 shop [sic] will be open and trading by 28 February 2016": Ex. A/712.
In an email dated 10 February 2016, Mr Hedley advised Mr van Veenendaal that "more ads are appearing in the Chinese, Vietnamese and Korean newspapers this weekend…I'll keep you posted in [sic] the level of enquiry": Ex. A/725.
On 15 February 2016, Gadens sent correspondence to the Plaintiff and Ms Ng that relevantly stated (Ex. A/ 737-738): "We are instructed by our client that it has been in direct negotiations with the Lessee regarding the breaches specific in the Notice to Remedy Breach. As a result of these negotiations the parties have agreed the following: The Lessee has advised the Lessor that, pursuant to the Permitted Use and clause A7.1 of the Lease, the Lessee has entered into four licence agreements… 1. The Lessee has also advised that it will operate its own food stall within the Premises bringing the total number of food stalls within the Premises to five (Food Stalls). In reliance on the Lessee's representations as set out above, the Lessor agrees to allow the Lessee further time within which to open the Premises for business and to keep the Premises open for business. The Lessor will allow the Lessee until 5.00pm on Sunday 28 February 2016 to have all of the Food Stalls operational, open for trade and to thereafter remain open for trade in accordance with clauses 10.4 and A5.1 of the Lease. Nothing in the preceding paragraphs or the negotiations had between the Lessee and the Lessor waives the Lessee's obligations further to clause A7.1 of the Lease. Without limitation, the Lessee is required to provide to the Lessor the written certification required further to clause A7.1(3) of the Lease. The Lessor reserves its rights in this regard; 2. The Lessee must make payment of the Arrears listed in the Notice to Remedy Breach on or before 5.00pm on 28 February 2016 (or the next business day thereafter); and 3. In the event the outstanding Arrears are not received in full as cleared funds by the Lessor from the Lessee before 5.00 pm on 28 February 2016 (or the next business day thereafter), the Lessor will call on the Bank Guarantee further to clause 21.2 of the Lease to recover its loss, without 2further notice to the Lessee. In the event that the Lessor calls on the Bank Guarantee, the Lessee must comply with clause 21.3 of the Lease and replace the Bank Guarantee or the proportion of the Bank Guarantee recovered by the Lessee within 7 days of receiving notice from the Lessor to do so. Failure to comply with the Revised Obligations If the Lessee does not comply with the Revised Obligations by the time and dates set out in this letter, we are instructed that the Lessor reserves its legal rights in relation to the termination of the Lease. We are also instructed that if the Lessor proceeds to terminate the Lease, the Lessor will also withdraw its offer to the Lessee for Premises known as Shops 262 to 264 trading as Hong Kong Yum Cha."
Ms Ng gave evidence that she had received a copy of the letter dated 15 February 2016 and that she understood that it was an important letter; that it contained revised obligations that the Defendant required the Plaintiff to comply with; that there had been discussions regarding the breaches specified in the Breach Notice; that as a result of statements made by the Plaintiff to the Defendant, the Defendant was prepared to give the Plaintiff "further time within which to open the premises for business and to keep the premises open for business"; that the Plaintiff had until 5:00 p.m. on Sunday 28 February 2016 "to have all food stalls operational, open for trade and thereafter to remain open for trade"; and that if the Plaintiff did not pay the outstanding arrears of rent, "on or before 5:00 p.m. on 28 February 2016 or the next business day thereafter", the Defendant would call on the bank guarantee and if that occurred, the Plaintiff "was required to comply with the Lease and replace the Bank guarantee or the proportion of the bank guarantee with the amount that had been claimed"; and that if the Plaintiff did not comply with the revised obligations, by the time and date set out in the letter, "Gadens were instructed that Mirvac reserved its legal rights in relation to termination of the Lease": Tcpt, 14 May 2019, p 102(16) - p 104(37).
On 19 February 2016, Raymond Lee & Co sent a letter dated 18 February 2016, to Gadens, that relevantly stated (Ex. A/751-752): "… We are instructed that our client had not advised that our client had entered into four License Agreements with respect to food stalls however, as set out in our e-mail to you of the 8th of February 2016 four Licence Agreements had been issued to prospective licencees [sic]… We also note that the Lessee proposes to operate the bar rather than a food stall. Would you please provide us with a statement of the 'Outstanding Arrears'. We will then confirm our client's instructions in relation to this. We have been instructed by our client that payments have been made to the Lessor on or prior to entering into the Lease and our client wishes to ensure that such amounts have been taken into account."
Under cover of an email dated 24 February 2016, sent by Gadens to Raymond Lee & Co, the statement of outstanding arrears was provided.
On 24 February 2016, Mr Greenwood sent an email to Mr Lee which relevantly stated : "We note your advice that Licence Agreements have been issued to prospective Licensees but not yet executed. … We continue to reserve our client's rights."
On 25 February 2016, Mr Hedley sent an email to Raymond Lee & Co and Ms Ng as follows (Ex. A/825): "I spoke with Theo from Mirvac this morning and they require urgently a response to Gadens most recent letter. Can you please go back to them and confirm the following (Merry you will need to review the below and either amend or give Raymond formal instructions), however based on advice received from Longjings Brisbane based lawyer Thomas Kung we can confirm the following: Two tenants will open on the 3rd of March, being the Chinese Sizzle Place operator in tenancy 4, and the bar. We anticipate but cannot confirm at this stage that a 3rd operator will open the following week, being the Malaysian operator in tenancy 3. That agreement is close to being finalised and we will let you know as soon as its executed. We have received an offer for the Asian Grocery site to be run as a combination of butcher with Asian grocery items - can you please confirm your acceptance of this amended usage for this tenancy (we note that it will be subject to Lessors final design approval). We will await your instructions regarding this usage prior to confirming the licence with the proposed tenant. Longjing will keep Mirvac updated in writing via Hilton Hedley of Allied Property Group on progress with respect to the other license agreements every 48 hours so you are up to date as to where each deal is upto. There have been 2 weeks of full page colour advertisements in the Chinese Newspaper and enquiries and inspections are occurring regularly. We also confirm that a cleaner has been engaged to clean the tenancy as requested by Mirvac last week."
On 28 February 2016 by 5:00 p.m., the Plaintiff had not opened any of the Premises for trading and had not paid rent.
On 29 February 2016, Mr Hedley received an email which indicated that a prospective licensee had received a copy of the Breach Notice. He forwarded the email on to Mr Van Veenendaal noting that it had "poisoned" a deal (Ex. A/840): "Naturally the question is: How did a potential tenant for Kowloon City get their hands on this letter? It has just poisoned a deal. We need to discuss."
There is no evidence about how the copy Breach Notice came into the possession of the prospective licensee. However, as stated earlier, the allegation that the Defendant had given it was withdrawn at the hearing.
On 29 February 2016, in an email sent to Gadens by Raymond Lee & Co (Ex. A/838), it was confirmed that a licence that had been expected to be executed by a third party, on 26 February 2016, had not been executed "due to unforeseen circumstances" but was "due to be signed tomorrow" and that "other Licences are progressing". The email concluded: "As your client may appreciate from inspecting the Premises, our client has made substantial progress and investment in the Premises. Our client looks forward to its continuing relation with your client."
Shortly thereafter, Gadens responded (Ex. A/838-839): "1. We note your advice that Licence Agreements have been issued to prospective Licensees but not yet executed; 2. We note your advice that the Lessee proposes to operate the bar rather than a food stall; 3. Please find the statement of outstanding arrears attached. We continue to reserve our client's rights."
On about 29 February 2016, Ms Ng received an email from the solicitor of a potential licensee which enclosed a copy of the Breach Notice. Mr Hedley then forwarded the email referred to in the previous paragraph to Mr Van Veenendaal in which he stated: "Naturally the question is: How did a potential tenant for Kowloon City get their hands on this letter? It has just poisoned a deal. We need to discuss."
On 1 March 2016, the Defendant served a notice of termination of lease ("the Termination Notice") (Ex. A/848-850) that, relevantly, stated : "Perpetual… hereby gives you notice, pursuant to clause 18 of the Lease described below, that as a result of the Lessee failing to comply with the Notice to Remedy Breach of Covenant dated 22 January 2016 within a reasonable time, the Lessor hereby terminates the Lease. The termination will take effect on service of this Notice on the Lessee."
In the Termination Notice, the Lease referred to was one said to have been "signed by the Lessee on 2 October 2015", the "Commencement" was said to be 14 December 2015 and the "Expiry" was said to be 13 December 2025.
On 3 March 2016, at 6:12 p.m., Mr Hedley sent an email to Ms Hughes and to Mr van Veenendaal requesting "you undo or reverse the breach". He pointed out that the losses that the Plaintiff was likely to suffer was $1.4 million and stated that "the domino effect of this is catastrophic": Ex. A/909.
There is evidence that whilst the Plaintiff was in negotiations with a number of different potential licensees, none of them had signed any proposed Licence Agreement sent by, or on behalf of, the Plaintiff. As Ms Ng put it, "I believe you're in negotiation at that time and you hoping that that will happen": Tcpt, 14 May 2019, p 106(17-26).
I note that on 3 March 2016, in an email exchange between Thomas Kung Lawyers and Mr Hedley, it was said that on 1 March and 2 March 2016 respectively, two potential licensees had each signed a "licence to occupy". On 3 March 2016, Mr Hedley forwarded that email to Ms Hughes, and copied in Mr van Veenendaal: Ex. A/909-911. It is difficult to accept that what was stated correctly records what had occurred as no such "licence[s] to occupy" formed part of the Plaintiff's evidence relied upon at the hearing.
In her evidence, in answer to questions from the Bench, Ms Ng said (Tcpt, 14 May 2019, p 110(12-31): "Q. Ms Ng, I'm having some difficulty understanding some of your evidence. You told Mr Bova that you had several conversations I think principally with Mr Hedley A. Yes. Q. in which he told you that effectively Mirvac would be satisfied if you opened one or two shops. Is that what you told me? A. At the later stages yes, when we are very late. Q. Yes, and A. Because they push up to open as - yeah. Q. Yes, and you told Mr Bova that the conversations that you had with Mr Hedley about this matter A. Yes. Q. were contradicted by, for example, the letter sent to you I think on 15 February 2016. A. Yes. Q. You also told Mr Bova that your conversation with Mr Hedley in your affidavit A. Yes. Q. was a conversation that you recollect? A. That I - yes. Q. That you remember, and also that I think you said you thought that the conversation occurred after the letter of 15 February 2015 from Mirvac to you. A. Yes. Q. You also said to Mr Bova that despite all of this A. Yes. Q. series of events A. Yes. Q. you did not open any shops at all. Have I understood your evidence correctly? A. Yes I did not. I was late but I intend to open it but I was there on the day that, that, that they put the, the barricade on the shop. Q. The simple fact is A. Yeah. Q. as I understand your evidence, is that even if you believed that you only had to open one shop A. Yes. Q. you didn't even open one shop, did you? A. Not on time. Q. That is, you did not open one shop by 5pm on 28 February 2016? A. No. Q. Do you agree or disagree? A. (No verbal reply) Q. You did not open any shop A. Yes. Q. by 5pm on 28 February 2016, is that right? A. Yes. Q. And you knew that whether it was one shop or all of the shops that was the last date by which you were required to open one or more than one of the shops. Have I understood your evidence correctly? A. Yes."
On 11 May 2016, the Defendant re-let the Premises to a new tenant.

The Lease Documents

Counsel for the parties identified the following provisions of the Agreement for Lease of the Premises (Ex. A/261-304): 1. The Reference Schedule - identified the Defendant as "The Lessor", the Plaintiff as "The Lessee" and Ms Ng as "The Guarantor" (Items 2, 3 and 4); "The Fitout Period" - Eight (8) weeks (Item 8); "The Opening Date" as 14 December 2015 (Item 11); 2. Agreed Terms (Clause 1), which defined: "Fitout Access Date means the date specified in the notice given by the Lessor under clause 4.2. Fitout Contractor means a contractor engaged by the Lessee to carry out the Fitout Works (or any part of them) and includes its employees and subcontractors. … Fitout Period means the period of time set out in Item 8 commencing on the Fitout Access Date. … Fitout Works means the works to be carried out by the Lessee to the Premises to fit out and stock the Premises for the Lessee's occupation and use. Fitout Contribution means the sum of $950,000.00 plus GST. … Lease means the lease of the Premises between the Lessor and the Lessee to be granted under this agreement in the form of Annexure A. Lease Commencing Date means the Fitout Access Date. … Lessor's Works means the development of the Centre in accordance with the Development Plan and the Fitout Guide… … Opening Date means the date set out in Item 11. … Rent Free Period means the period starting on the Lease Commencing Date and ending on the earlier of:- (a) the last day of the Fitout Period; and (b) the day on which the Lessee first trades from the Premises. 1. Clause 3 referred to "Lessor's Works" and provided that the Defendant was required to carry out works to the Premises. 2. Clause 3.4 referred to "Works Completion Date" "(a) The anticipated time for Substantial Completion of the Lessor's Works is the Opening Date. …" 1. Clause 4.2 - Fitout Access Date (a) The Lessor must give to the Lessee a notice specifying: (1) the Fitout Access Date; and (2) the last day of the Fitout Period. (b) The notice under clause 4.2(a) must be given at least fourteen (14) [days] before the Fitout Access Date specified in it. (c) The Lessor may vary the Fitout Access Date by notice to the Lessee. (1) less than 5 Business Days after the date on which the variation notice is given; or (2) earlier than the date set out in the notice given under clause 4.2(a). … (e) The Fitout Access Date must be a date which allows for expiration of the Fitout Period on or before the Opening Date. 1. Clause 4.3 - Lessor's Works during Fitout Period (a) The Lessee acknowledges that the Lessor may complete the Lessor's Works during the Fitout Period and the Lessee may not make any Claim arising out of the Lessor's activities in that regard, subject to the Lessor complying with clause 4.3(c). (b) The Lessee and Fitout Contractor must not interfere with or delay the activities of the Lessor and the Lessee and the Fitout Contractor must submit to the reasonable directions of, and be under the control of, the Lessor. 1. Clause 4.6(a) - Access: 4.6 Access (a) If: (1) the Lessor has approved the Fitout Plans and Specifications; (2) the Lessee provides evidence to the Lessor that the Lessee has obtained all required Lessee's Approvals; (3) the Lessee has complied with clauses 5 and 13 and provided the documents required under those clauses; (4) the Fitout Contractors have completed the Lessor's required safety induction processes; and (5) the Lessee has paid the Design Approval Fee, any amounts payable under clause 3.6 and any amounts payable under the Fitout Guide the Lessor must, from the Fitout Access Date, provide the Lessee with access to the Centre on such days and during such hours as the Lessor reasonably determines to enable the Lessee to carry out the Fitout Works in accordance with the approved Fitout Plans and Specifications. 1. Clause 4.7 - Conduct of Fitout Works (a) The Lessee must cause the Fitout Works to be carried out: (1) promptly after the Lessee obtains access to the Premises under clause 4.6; (2) in accordance with: (A) all Lessee's Approvals; (B) the approved Fitout Plans and Specifications (including any conditions of that approval) (C) the Fitout Guide; (D) the Lessor's reasonable directions (including, for example, directions about the way in which the Lessor's Fitout Contractors take access to the Premises or conduct in the Fitout Works); (3) in a good and workmanlike manner by experienced contractors approved by the Lessor (which must not be unreasonable withheld); (4) at its own costs in all respects. (b) The Lessee must complete the Fitout Works and stock the business ready for commencement of trade by the Opening Date. To avoid doubt, the obligation of the Lessee under this clause 4.7(b) is an essential term of this agreement, the breach of which entitles the Lessor to take action including termination of this agreement and/or claiming on the Bank Guarantee. 1. Clause 4.9 - Commencement of Trading Except with the prior approval of the Lessor (which is at its absolute discretion), the Lessee must:- (a) not trade from the Premises before the Opening date; (b) trade from the Premises on and from the Opening Date. 1. Clause 6.1 - Fitout Contribution - Payment by Lessor Subject to clause 6.4 and the Lessee not being in default of this Agreement or the Lease, the Lessor will pay the Fitout Contribution to the Lessee as a contribution to the Lessee's Costs of carrying out the Fitout Works, payable by way of instalments 1. Clause 7 - Rent Free 7.1 Lessor to Allow (a) This clause 7.1 applies despite any provision of the Lease. (b) Subject to clause 7.2, the Lessor waives the Lessee's obligation to pay Rent, Lessee's Proportion of Operating Costs and Marketing Levy during the Rent Free Period when the Lessee has provided to the Lessor: (1) the Lease in triplicate duly executed by the Lessee and if applicable, the Guarantors; (2) the Bank Guarantee in accordance with clause 21 of the Lease; (3) the certificates of currency in accordance with clause 12 of the Lease; (4) if the Lessor's waiver under this clause is consideration for a taxable supply, a tax invoice in accordance with clause 9 of the Lease; and (5) where required by the Lessor, any other Costs, certificates, documents or other items to be provided by the Lessee under or in relation to the Lease on [or] before the Lease Commencing Date. 7.2 refund of Waived Amounts If this Lease is at any time terminated by reason of the Lessee's default, the Lessee must immediately pay to the Lessor the Waived Amount as a liquidated debt. 7.3 No Prejudice The Lessee's obligation to make a payment under clause 7.2 does not affect any other rights or remedies which the Lessor may have against the Lessee in respect of the termination of the Lease. 1. Clause 9.1 provided: 9.1 Grant With effect from the Lease Commencing Date, the Lessor must grant to the Lessee and the Lessee must take from the Lessor a lease of the Premises for a term commencing on the Lease Commencing Date at the rent and on the covenants, terms and conditions contained in the Lease. 1. Clause 9.2(a)(1) provided that "simultaneously with the execution and delivery of this agreement, the Lessee must deliver to the Lessor or the Lessor's solicitor the Lease in triplicate correctly executed by the Lessee and the Guarantors (if any)." 2. Clause 9.3 provided: 9.3 Lessor and Lessee bound (a) The obligations of the Lessor and the Lessee under the Lease are not conditional or dependent upon the preparation or execution of the Lease and are not affected by any default or delay in or waiver or extension of time for the preparation and execution of the Lease. (b) Until the Lease has been prepared and executed I accordance with clause 9.2 the Lessor and the Lessee shall be deemed to take the benefit of and be bound by the provisions of the Lease as if all formalities relating to the preparation and execution of the Lease had been complied with. 1. Clause 12.1 provided: 12.1 Liability of Guarantor (a) The Guarantor acknowledges that the Lessor has entered itno this agreement at the Guarantor's request. (b) The Guarantor is liable to the Lessor if the Lessee breaches this agreement or the Lease and must pay the Lessor any money for the Lessor's loss arising from the Lessee's breach of this agreement or the Lease. (c) The Guarantor, as a separate undertaking, indemnifies the Lessor against the Lessor's loss arising from the Lessee's breach of this agreement or the Lease. 1. Clause 13 provided: 13.2 Use of Bank Guarantee The Lessor may, without notice to the Lessee, recover from the Bank Guarantee any Cost incurred or loss suffered by the Lessor if the Lessee breaches this agreement or the Lease. 13.3 Replacement The Lessee must either replace the Bank Guarantee or the proportion of the Bank Guarantee recovered by the Lessor in accordance with clause 13.2 within 7 days of receiving notice from the Lessor to do so. 1. Clause 17 provided - Default 17.1 Events of Default (a) The following events are events of default: (1) breach of agreement - either party commits or permits to occur any breach or default in the due and punctual performance of any of the provisions of this agreement; (2) Insolvent - a party is insolvent; and (3) mortgage powers - any of the business affairs or undertaking of a party is taken over by a receiver under any mortgage, charge or debenture. (b) If an event of default occurs: (1) the non-defaulting party may terminate this agreement by notice in writing to the other party; (2) the termination will be effective from the date of the notice; (3) any termination will not affect any action or other right or remedy of the non-defaulting party; and (4) on giving notice, the non-defaulting party will be freed and discharged from any action or demand by or obligation under this agreement. 17.2 Notice of Default Before exercising any right under clause 17.1, the non-defaulting party must give written notice to the defaulting party setting out details of the event of default which has occurred. 17.3 Content of Notices A notice given under clause 17.2 must require the defaulting party to: (a) rectify the event of default within a reasonable time if the event of default is capable of rectification; or (b) pay compensation to the reasonable satisfaction of the non-defaulting party (as specified in the notice) in lieu of rectification if the event of default is not capable of rectification but that payment of compensation will result in the non-defaulting party being restored to the position in which it would have been had the event of default not occurred. within the period reasonably specified by the non-defaulting party in the notice (that period to be at least 15 Business Days). 17.4 Compliance with Notice If: (a) the notice given under clause 17.2 requires the defaulting party to comply with either clause 17.3(a) or clause 17.3(b); and (b) the defaulting party complies fully with the notice, the non-defaulting party must not exercise any right under clause 17.1 or any other provision of this agreement as a result of any default which has occurred. 17.5 Damages If a party terminates this agreement under clause 17.1 then the party will be entitled to recover damages from the defaulting party. 1. Clause 18 provided: 18.1 Form of Notice A notice given by a party under this agreement: (a) must be in writing; (b) may be signed by the solicitor for that party or any person authorised by the party (and in the case of the Lessor can be given by its tenancy co-ordinator or project manager); (c) is sufficiently served on a party if left at or posted to the address or sent to the facsimile number of that party set out in Item 2, 3 or 4; and (d) following the Fitout Access Date, is sufficiently served on the Lessee if left at the premises. 18.2 Time of Service A notice is taken to be given: (a) if sent by post, on the fourth day after posting; and (b) if sent by facsimile, on the next Business Day after it is sent unless the sender is aware that the transmission is impaired. 1. Clause 21.5 provided: 21.5 Entire Agreement This agreement comprises the whole agreement between the parties in relation to the letting of the Premises and supersedes all previous negotiations, understandings and agreements.
Neither counsel relied on Clause 16 of the Agreement for Lease (a matter I raised at the hearing): Tcpt, 15 May 2019, p 209(17-23). Clause 16 provided a process for dispute resolution, as follows: "16 Disputes 16.1 Dispute resolution If a Dispute arises (excluding any dispute as to the proper construction of the terms of this agreement or breach or termination of this agreement) a party may not commence any court or other proceedings relating to the Dispute (but excluding urgent interlocutory relief) unless that party has first complied with this clause 16."
Accordingly, as the proceedings continued, nothing more needs to be said about it.
Counsel for the parties identified the following provisions of the Lease of the Premises (Ex. A/305-374): 1. The Reference Schedule - identified the Defendant as "The Lessor", the Plaintiff as "The Lessee" and Ms Ng as "The Guarantor" (Item5); The Term - Ten (10) years (Item 6); The Commencing Date (Item 7) was not completed; The Terminating Date (Item 8) was not completed; The Rent (Item 9); The Core Trading Hours (Item 13); 2. Clause A1.5 of the Lease provided: Assignment and Sub-Licensing, stated "[t]he Lessee may assign this licence to a person to whom the Lessee assigns the Lease if that assignment of the Lease has been approved by the Lessor". 1. Clause A5.1 - Extended Trading Hours A5.1 Extended Trading Hours (a) Subject to clause A5.1(b), it is agreed that whilst the business conducted at the Premises continues to trade as "Kowloon City" then despite the provisions of clause 10.4(a)(2) and 10.4(a)(4) the Lessee may trade from the Premises between the hours of 11.00am and 9.00pm seven days a week (unless prohibited by law) at no extra costs to the Lessee. For the avoidance of doubt, if the Lessee trades after 9.00pm on any day the Lessee will be required to pay the Lessor's Costs in accordance with clause 10.4(a)(4). (b) The Lessee must: (1) only allows [sic] its customers to enter the premises from the Town Walk entrance to the premises during such extended trading hours; (2) close the internal mall entrance to the Premises whenever the internal mall is closed to the public during such extended trading hours; (3) notify Centre Management prior to the Lessee proposing to trade outside of the Core Trading Hours; and (4) despite clause A5.1, ensure that lights both within and external to the Premises are on and are illuminating the premises during the Centre's Core Trading Hours. (c) Clause 10.4(c) is deleted and replaced with the following: "(c) The Lessor is not required to provide the Lessee with access to the common areas (including toilets) outside the Core Trading Hours or outside the extended trading hours in clause A2;" 1. Clause A7.1 - Consent to Licence Parts (a) It is agreed that whilst Longjing Pty Ltd CAN 167 130 181 is the Lessee under the Lease then despite the provision of clause 14.1(b) the Lessee may licence part only (and not the whole) of the Premises to a maximum of six (6) licensees (other than franchisees) provided that the Lessee: (1) gives to the Lessor prior notice of the Lessee's intention to licence a part of the Premises to a licensee; (2) is not in default under this Lease other than a default that has been remedied by the Lessee or waived by the Lessor; (3) certifies in writing to the Lessor that:-: (A) the licensees's proposed use of that part of the Premises is strictly in accordance with the terms of the Permitted Use; (B) the terms of the licence agreement are consistent with this Lease; (C) the licence agreement terminates on the earlier of: (i) a day not later than one day before the Terminating Date; and (ii) earlier termination of this Lease; and (4) Indemnifies and keeps the Lessor indemnified against all Claims arising from the: (A) occupation and use of the Premises; and (B) conduct of the licensee's business from the Premises (b) The Lessee acknowledges that a licence which is allowed to be granted under this clause:- (1) operates in contract only and does not grant an estate or interest in the Premises to the licensee; (2) does not operate as an assignment of this Lease or the grant of a sublease; (3) does not in any way affect the enforceability against the Lessee of the Lessee's covenants and obligations under the Lease; and (4) must not contain provisions which would cause the Lessee to be in breach of its covenants and obligations under this Lease and to the extent it would, the relevant provisions of the Licence are of no force or effect. (c) The Lessor may accept payment from the Licensee of the Rent or other amounts owing by the Lessee under this Lease without prejudicing or affecting the Lessor's rights against the Lessee or affecting the operation of any provisions of this Lease or being deemed to have consented to an assignment or sublease of this Lease to the Licensee. 1. Clause 1 - Agreed terms - "Agreement for Lease; "Commencing Date"; "Core Trading Hours" Agreement for Lease means the deed entered into between the Lessor and the Lessee contemporaneously with this Lease. Commencing Date means the commencing date set out in Item 7. Core Trading Hours means the core trading hours of the Centre set out in Item 13(b) but excludes those hours on Christmas Day, Good Friday and any other public holiday which the Lessor designates from time to time. 1. Clause 2.1 provided: 2.1 Grant Subject to the provisions of this Lease, the Lessor: (a) leases the Premises to the Lessee; and (b) grants to the Lessee the right to use the Services and the Common Areas in common with others for the Term commencing on the Commencing Date and terminating on the Terminating Date. 1. Clause 3 - Rent provided: 3.1 Rent (a) The Lessee must pay the Rent to the Lessor by equal monthly instalments in advance. (b) The Lessee must pay: (1) the first instalment on the Commencing Date; and (2) thereafter an instalment on the first day of each subsequent month of the Term. (c) If necessary, the Lessor and Lessee must apportion the first and last instalments of rent on a daily basis. 1. Clause 3.2 was headed "Turnover Rent". It provided that (a) "if Item 9(b) says that the Lessee is obliged to pay Turnover Rent, the Lessee must pay Turnover Rent to the Lessor in addition to the Rent"; and that (b) the Turnover Rent for each Accounting Year is the positive amount, if any, in accordance with a formula that was outlined in the clause, and does not need to be repeated in these reasons. 2. Clause 6 - The Term of the Lease was incomplete except as to the year. 3. Clause 7 - Utilities provided: 7.1 Specific tenancy charges The Lessee must pay: (a) to the relevant authority all rates, taxes and other charges imposed on or in relation to the Lessee's use of the Premises, the Lessee's Property and Permitted Use; and (b) to the Lessor, to the extent not included in clause 7.1(a), the Lessor's Costs for trade waste, water and the other Costs which the lessor reasonably determines to have been incurred in respect of the Premises as a result of the Lessee's use of the Premises. 7.2 Services (a) The Lessee must pay for all Services separately connected and supplied to the Premises or connected and supplied to the Centre and separately metered to the Premises, including water, electricity, gas and telephone. (b) The Lessee must pay for the Cost of the Installation of meters to separately service the Premises if: (1) required by the Lessor (acting reasonably); or (2) requested by the relevant Authority. (c) The Lessee must pay the Lessor for all Services supplied to the Premises by the Lessor. If a Service is supplied to multiple premises in the Centre and not separately metered, the Lessee must pay its share of the Lessee's cost of supplying that Service. The Lessee's share is the proportion that the gross lettable area of the Premises stands to the gross lettable area of all premises in the Centre that unmetered Service from time to time. 7.3 Payment of electricity charges (a) The Lessor advises that, for the purposes of section 20F of the Electricity Act 1994: (a) the electricity consumed by lessees of the Centre in their premises is metered separately to the electricity consumed in the Common Areas; (b) some air conditioning equipment provides conditioned air to both Common Areas and to premises occupied by lessee of the Centre; (c) the electricity that is consumed by the air conditioning equipment which provides conditioned air to both Common Areas and to premises occupied by lessees of the Centre is apportioned on a floor areas basis; (d) the total Common Areas electricity consumption is worked out by deducting form the toal electricity consumed at the centre, the sum of: (1) the electricity consumed by lessees of the centre in their premises; and (2) that part of the electricity consumed by the air conditioning equipment that is apportioned to premises occupied by tenants of the Centre; and (3) the Lessee must pay its proportion of the electricity consumed in the Common Areas in the manner described in clause 7.3. 1. Clause 10.4 (a) and (d) provided: 10.4 Core trading hours (a) The Lessee: (1) must keep the Premises open for business during the Core Trading Hours unless prohibited by law; (2) must not open the Premises for business outside the Core Trading Hours without the Lessor's prior consent; (3) must not open the Premises for business if prohibited by law; and (4) must pay the Lessor's Costs of opening the Centre at the Lessee's request outside the Core Trading Hours. … (d) If the Lessee does not observed its obligations under clause 10.4(a)(1), then for each hour (or part of an hour exceeding 15 minutes) that the Lessee is in breach, it must pay to the Lessor the sum of $100.00 as any by way of additional rent. 1. Clause 14.1 provided: Clause 14.1 Consent (a) The Lessee must not assign this Lease without the Lessor's prior consent (such consent not to be reasonably withheld). (b) Except or an assignment with the Lessor's consent under clause 14.1(a) or a licence with the Lessor's consent under clause 14.9, the Lessee must not part with the possession of the Premises. (c) To avoid doubt, the Lessee may not sublet the whole or part of the Premises. 1. Clause 15.1 provided: 15.1 Quiet Enjoyment Except as this Lease otherwise provides, the Lessee may peacefully occupy the Premises for the term without interruption or disturbance by the Lessor provided the Lessee pays the Rent and other money payable and complies with the Lessee's obligations under this Lease. 1. Clause 18 provided: 18 Default 18.1 Essential Terms The obligations of the Lessee under clauses 3, 6, 7, 8, 9, 10.1, 10.4, 11.2, 11.4, 11.5, 12.1, 12.2, 14.1, 14.7 and 21 of this Lease are essential terms. Other obligations under this Lease may also be essential terms. 18.2 Lessor's Right to Terminate The Lessor may terminate this Lease if the Lessee: (a) Is Insolvent; (b) ceases or threatens to cease to carry on business from the Premises; (c) repudiates this Lease; (d) does not comply with an obligation under this Lease (and if the Lessor is required to send a notice under any law in relation to that breach, the Lessee does not comply with that notice). 18.3 Damages (a) If the Lessor lawfully terminates this Lease for any reasons (including, for example, for breach of a non-essential term), the Lessor may recover from the Lessee any loss Cost or damages in connection with: (1) the Lessee's breach of this Lease; and (2) the termination of this Lease including:- (3) the Lessor's loss of the benefit of the Lessee performing the Lessee's obligations under this Lease from the date of termination until the Terminating Date; and (4) the value of any Incentive paid or allowed to the Lessee or the Lessee's predecessor in title under this Lease (including, for example, any cash incentive, rent free period or redcued rent period). (b) If the Lessor terminates this Lease, the Lessor must take reasonable steps to mitigate the Lessor's Cost, loss or damage. 18.4 No waiver (a) The Lessor's failure to exercise the Lessor's rights or delay in exercising the Lessor's rights arising from the Lessee's breach is not a waiver of that default. (b) A demand for or acceptance of any overdue payment does not prevent the Lessor from exercising or enforcing the Lessor's other rights under this Lease. 18.5 Performance of obligations (a) Subject to clause 18.5(b), the Lessor may at its election perform any obligations of the Lessee under this Lease which the Lessee fails to perform and:- (1) may for that purpose enter onto the Premises; and (2) the Lessee must pay to the Lessor any Cost which the Lessor incurs in performing the obligation immediately upon demand by the Lessor. (b) Before exercising its powers under clause 18.5(a), the Lessor must give notice to the Lessee of its failure to perform the obligation and allow the Lessee a reasonable opportunity to remedy its failure. However, the Lessor does not need to give a notice or allow an opportunity in the case of emergency. 1. Clause 20.1 and 20.2 provided: 20.1 Liability of Guarantor (a) The Guarantor acknowledges that the Lessor has entered into the Lease at the Guarantor's request. (b) The Guarantor is liable to the Lessor if the Lessee breaches this Lease and must pay the Lessor any money for the Lessor's loss arising from the Lessee's breach of this Lease. (c) The Guarantor, as a separate undertaking, indemnifies the Lessor against the Lessor's loss arising from the Lessee's breach of this Lease. 20.2 Extent of Liability The Guarantor is liable under clause 20.1 even: (a) if the Lessor does not make a demand of or sue the Lessee; (b) if this Lease is varied; (c) if this Lease is unregistered; or (d) after this Lease ends, for any breach that occurred before this Lease ends or arises from this Lease ending. 1. Clause 21.1 provided: 21.1 Giving of Bank Guarantee The Lessee must give the Bank Guarantee to the Lessor on or before the Commencing Date." 1. Clause 21.2 provided: 21.2 Use of Bank Guarantee The Lessor may, without notice to the Lessee, recover from the Bank Guarantee any Cost incurred or loss suffered by the Lessor if the Lessee breaches this Lease. 1. Clause 21.3 provided: 21.3 Replacement The Lessee must either replace the Bank Guarantee or the proportion of the Bank Guarantee recovered by the Lessor in accordance with clause 21.3 within 7 days of receiving notice from the Lessor to do so. 1. Clause 25.7 provided: 25.7 Entire agreement This Lease and the Agreement for Lease comprises the whole agreement between the parties in relation to the letting of the Premises and supersedes all previous negotiations, understanding and agreements. 1. Clause 25.9 provided: 25.9 Construction In the interpretation of this Lease no rule of construction applies to the disadvantage of one party on the basis that that party prepared the Lease.
(It has been necessary to refer all of these Clauses as they were referred to by one or both of the parties during the course of the proceedings.)
Mr Hedley, although he did not read the Agreement for Lease or the Lease, said that he understood that there was a rent free period which commenced after the opening of the relevant restaurants and which was distinct from the fitout period in which the tenant took possession in order to fit out the Premises: Tcpt, 13 May 2019, p 31(11) - p 32(25).

The verbal representations that are relied upon by the Plaintiff

According to Mr Hedley, on 22 January 2016, he had a conversation with Mr Van Veenendaal in which the latter was asserted to have said in relation to the Breach Notice that: "Don't worry. We are just protecting ourselves in the event Longjing never opens the food court. As long as you get 1 or 2 shops open then this will all go away."
During the same conversation Mr Hedley says that he said: "We are yet to agree a revised opening date given we only completed the fitouts on the 23rd of December… The 1 month deposit bond Longjing have already paid covers this period anyway so technically we are not in breach because of any shortfall in the rent. Once we agree a revised opening date we can start paying rent from then…."
Mr van Veenendaal is said to have responded : "Mate it will not be a problem. I'm not worried about the rent arrears as we can pay that from the bond… If they just see progress with getting the food court open for trading all will be good. I know you guys are doing everything to get it open and finishing the job 2 days before Christmas doesn't help things."
It was submitted that the representations said to have been made by Mr van Veenendaal, that the Defendant would not exercise its rights under the Breach Notice, was that if the Plaintiff showed it was taking steps to open at least one, or two, food stalls, and would satisfy, or pay, the rental arrears from the deposit bond, or bank guarantee, the Defendant would not seek to rely upon the Notice. (The Plaintiff referred to these as "the January Representations".)
Mr van Veenendaal denied that he made any of the January representations said to have been made by him.
Mr Hedley also gave evidence that on 15 February 2016, he had another meeting with Mr van Veenendaal, and Mr van Veenendaal had said: "Regarding the breach notice all we need to see is that you have at least one licensee signed up very soon. As for the rental arrears we can pay this from the bank guarantee or from the deposit bond provided for the yum cha restaurant." "As I have told you, don't worry about the default notice. We will not terminate as long as you show that you will be able to have one licensee signed up soon. We just need to see that you are close. We know the first licensee is the hardest to get and that after that people are happier to sign up."
The Plaintiff referred to these representations as "the February Representations".
Mr van Veenendaal denied that he made any of the February representations said to have been made by him. He said that whilst he was aware of the contents of the Breach Notice, he did not have any discussion with Mr Hedley about its contents on 22 January 2016. He accepted that there were discussions on 3 February 2016 in relation to the time by which the Plaintiff was to open the Premises and make payment of the arrears listed in the breach notice: Tcpt, 14 May 2019, p 135(35) - p 136(44).
It was in relation to the January representations and the February representations that the parties were in substantial dispute.
Counsel for the Plaintiff criticised the evidence of Mr van Veenendaal and Mr Conlon, noting the similarity of one paragraph (paragraph 43) of Mr van Veenendaal's affidavit with one paragraph (paragraph 16) of Mr Conlon's affidavit.
I have, of course, remembered what was written by Palmer J in Macquarie Developments Pty Ltd & Anor v Forrester & Anor [2005] NSWSC 674, at [90]: "Save in the case of proving formal or non-contentious matters, affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both of the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason. Where the identity of evidence is due to collusion, the devaluation of the evidence is justified but where, as in the present case, the identity of evidence is due entirely to a mistake on the part of a legal adviser, a witness' credit and a party's case may be unjustly damaged."
In this case, the criticism made of the two witnesses, whilst relevant, is not as critical since there are contemporaneous documents relating to the February 2016 meeting, to which reference has been made. In this regard, as was written by Keane JA (as his Honour then was) in Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136, at [34]: "…usually, 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." (Footnote omitted)
I accept the following evidence given by Mr van Veenendaal about the meeting on 3 February 2016 at Tcpt, 14 May 2019, p 141(25-30): "A. The meeting was to discuss the breach notice. The meeting was there to try and get an understanding of what action Longjing would take to actually have the shops open and to pay the rent, so that was the purpose of the meeting. The result of that meeting was that Mr Hedley made a representation that a number of shops would be open and we gave Mr Hilton - Mr Hedley time in which to come back to us and actually tell us how he would remedy that."
Where, as here, part of the case is based upon what are said to be verbal representations, the well-known words of McLelland CJ (in Eq) in Watson v Foxman (2000) 49 NSWLR 315 at 318-319 must be remembered: "Where the conduct is the speaking of words in the course of the 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 seemed 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 of self-interest as well is 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.".
The seriousness of what is asserted, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding, are all considerations that affect the answer to the question whether the representations alleged by the Plaintiff have been proved to the reasonable satisfaction of the Court.
I am not persuaded that either the January representations or the February representations were made by Mr van Veenendaal. Most importantly, whilst there was a large amount of email correspondence passing between Mr Hedley and Mr van Veenendaal, there is not one email in evidence in which any of the representations was referred to. Mr Hedley, after initially indicating he did not recall, conceded as much in cross-examination: Tcpt, 13 May 2019, p 61(47-48), 72(34-50) - p 73(1), p 73(37-43). Nor were instructions given to the Plaintiff's solicitors in accordance with the alleged representations: Tcpt, 13 May 2019, p 72(47) - p 73(35). Nor are there any contemporaneous notes created, which, under cross-examination, Mr Hedley also conceded: Tcpt, 13 May 2019, p 73(41) - p 74(4).
It is highly likely that had such conversations occurred, a reference to them would have been included in the email correspondence passing between Mr Hedley and Mr van Veenendaal, or they would have been the subject of the correspondence between the solicitors. In this regard, on 8 February 2016, Mr Lee sent an email to Ms D Mountney (the solicitor at Gadens) noting that "our respective clients have held discussions in relation to the matter and outstanding issues" There was no mention made of the January representations: Ex. A/712.
Importantly, in the email sent by Mr Hedley to Mr Lee and to Ms Ng and Mr Ng on 25 February 2016, again there was no reference to any representations of the type asserted. When the Court asked Mr Hedley about the failure to include a reference to any of these representations in that email, he responded, at Tcpt, 13 May 2019, p 74(26-42): "Q. Having written that email to both the lawyer and Mr and Mrs Ng, there's no reference in that document to any conversation with Mr van Veenendaal where you say that he said that if one or two shops were open by 28 February Mirvac would not enforce its rights? A. Yes. Q. Can you tell me why that is? A. Well, I guess we can only [rely] on documents from lawyers not verbally from agent to agent. Q. No, but-- A. I mean, there's no point in me telling Mr Lee or Ms Ng something that contradicts something that we'd received from their lawyers on the same day. I, I think the basis of it was Mr van Veenendaal was telling me for me not to tell everybody else because we wanted to maintain the pressure of getting these shops opened. If I was to go and tell Ms Ng just get one or two open, the pressure would be off and who knows how long it would take to lease them."
It is hard to accept the evidence of Mr Hedley if, as is submitted, the representations were intended to be relied upon, and were relied upon, by the Plaintiff and by Ms Ng. The evidence is also inconsistent with his subsequent evidence in answer to a further question from counsel for the Defendant, at Tcpt, 13 May 2019, p 75(10-14), that: Q. Is it the case that you, excuse the colloquial term, but took with a grain of salt, anything that Mr van Veenendaal said, but understood that the legal position was set out in the formal correspondence from Gadens? A. I - if anything I, I took what he said more so 'cause he was the one running the project.
Whilst it is true that the Plaintiff endeavoured to keep the Defendant up to date with the progress made in respect of the licences, that progress does not refer simply to steps taken to open one or two shops, but required information about the negotiations being conducted with a number of potential licensees.
In relation to the February representations, what was said to be required was to show that "you will be able to have one licensee signed up soon. We just need to see that you are close". In each case, that is not what subsequently occurred.
I am far from persuaded that the contemporaneous records of the Plaintiff keeping the Defendant updated are consistent with the January representation and February representation having been made.
If that were not enough, there are additional reasons not to accept the evidence of Mr Hedley in relation to the January representations. These include: 1. Mr Hedley could not remember when the conversation relied upon with Mr van Veenendaal occurred (Tcpt, 13 May 2019, p 61(22-31)); he could not remember whether it was before, or after, the Breach Notice was issued (Tcpt, 13 May 2019, p 61(50 - p 62(18)), and he then placed the conversation before the Breach Notice was issued (Tcpt, 13 May 2019, p 63(43-45), p 64(26-29)). 2. Mr Hedley only "vaguely" recalled having a conversation with Mr van Veenendaal in January 2016 in relation to the Breach Notice issued (Tcpt, 13 May 2019, p 61(40-42)). 3. Mr Hedley did not keep a note of the conversation that was said to have taken place (Tcpt, 13 May 2019, p 61(44-45)), despite accepting that his practice was "sometimes" to take notes of (or send emails, or text messages relating to) important conversations, but "usually" to communicate in writing and if it was important to send an email or a text straight away (Tcpt, 13 May 2019, p 28(29) - p 29(12)). One would have thought this was an important conversation. 4. The substance of the conversation that he remembered was that "As long as you get a few of the shops open you'll be okay" (Tcpt, 13 May 2019, p 61(50) - p 62(3)). See also Tcpt, 13 May 2019, p 62(5-7), in particular Mr Hedley's recollection being "the best I can do". 5. Mr van Veenendaal's evidence of this conversation is more plausible. Mr van Veenendaal denied the conversation as set out in paragraphs 69-69 of Mr Hedley's first affidavit took place and said that the conversation with Mr Hedley occurred immediately after receipt of Mr Hedley's email which stated "Really??" (Ex. A/688) and Mr Hedley told Mr van Veenendaal "This is bullshit" (Tcpt, 13 May 2019, p 131(43)).
Furthermore, even if the January representations were made as is alleged, the simple fact is that the Plaintiff did not even open one shop, then or at any time.
In relation to the February representations, the following should be noted: 1. These representations are not said to have been made at the meeting between Mr Hedley, Mr van Veenendaal and Mr Conlon on 3 February 2016, which meeting, ultimately, led to the agreement set out in the letter dated 15 February 2016 to which reference has been made. 2. Mr Hedley accepted that the letter dated 15 February 2016 reflected the position that had been reached as at 15 February 2016 (Tcpt, 13 May 2019, p 70(50) - p 71(2)). 3. Mr Hedley did not recall having any conversation with Mr van Veenendaal on 15 February 2016 which was contrary to the position set out in the letter dated 15 February 2016 letter (Tcpt, 13 May 2019, p 71(4-6)) or that was inconsistent with the letter (Tcpt, 13 May 2019, p 71(8-11)). 4. The letter dated 15 February 2016 is wholly inconsistent with any other agreement or representations having been made. 5. Mr Hedley did not accept that if Mr van Veenendaal had represented that only or two food stalls needed to be open, he would have told Mr Lee or instructed Mr Lee to respond to the 15 February 2016 letter to that effect (Tcpt, 13 May 2019, p 73(3-17)). 6. On 25 February 2016, Mr Hedley conveyed to Mr Lee a conversation that he had had with Mr van Veenendaal but did not say anything to Mr Lee that Mr van Veenendaal had told him that if one or two shops were open by 28 February 2016, then Mirvac would not enforce its rights (Tcpt, 13 May 2019, p 74(11-42)).
Furthermore, on one aspect of the evidence, Mr Hedley appears to have been factually in error. He gave the following evidence at Tcpt, 13 May 2019, p 64(9-12)): Q. Just so I get the chronology right, the conversation you had with him preceded this breach notice and the purpose for your email really was that the breach notice was inconsistent with an earlier conversation that you'd had? A. That's correct, and he, and he said it in, in front of Ms Ng as well."
Ms Ng admitted, however, that she had not been present, but that Mr Hedley had told her of the conversation alleged to have had with Mr van Veenendaal (Tcpt, 13 May 2019, p 80(7-24)). (In this evidence, it is clear that Ms Ng realised, by January 2016, that the Plaintiff was late in opening the Premises.)
Any conversation of the type suggested was also inconsistent with the email dated 1 February 2016, from Mr Hedley to her, in which he stated that "Merry is under extreme pressure by Mirvac to open these tenancies": Ex. A/704.
I also do not accept Ms Ng's evidence regarding the payment for furniture. In the email dated 13 January 2016 sent by Ms Hodge, to which reference has earlier been made, there is a specific reference to Ms Ng having told Ms Hodge that payment for the furniture was not made: Ex. A/665A. I do not accept her denial of this conversation (Tcpt, 14 May 2019, p 96(38) - p 97(20)).

The Plaintiff's Submissions

So as to follow some of the submissions to which reference will be made, it is necessary to refer, first, to the RSL Act as it was in 2015. (The RSL Act has been amended by the Retail Shop Leases Amendment Act 2016 (Qld). As the parties did, I refer to sections of the RSL Act as they were in 2015, and in present tense, noting the provisions referred to may differ from the current Act, or may no longer exist.) The object of that Act is said to be "to promote efficiency and equity in the conduct of certain retail businesses in Queensland: s 3.
Section 11 of the RSL Act specifies when a lease is entered into. It is the earlier of either the date the lease becomes binding on the parties, or the date the lessee enters possession of the shop.
Section 18 of the RSL Act provides that if, under the Act, a duty is imposed or an entitlement is conferred on a lessor or lessee under a retail shop lease, the duty or entitlement is taken to be included in the lease.
A provision of a retail shop lease is void if it purports to exclude the application of a provision of the RSL Act that applies to the lease: s 19.
Section 46A(1) of the RSL Act provides that "a lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable".
In relation to the date on which the Lease commenced, the Plaintiff contended that although the Lease became valid and binding on the parties from 24 November 2015, it "was yet to commence" by 22 January 2016 (the date the Defendant issued the Breach Notice) or by 1 March 2016 (the date the Defendant terminated the Lease) because the Defendant had failed to serve the notice in accordance with Clause 4.2 of the Agreement for Lease (which was said to be a "collateral agreement": Tcpt, 15 May 2019, p 191(39) - p 192(47). Thus, even though the Lease was binding, there was no date set for the Plaintiff to open the Premises or to commence to pay rent to the Defendant. On that basis, the Breach Notice was invalid as was the termination of the Lease by the Defendant. It followed that the termination was wrongful and constituted a repudiation of the Lease, which repudiation the Plaintiff had accepted.
Counsel submitted that there was a difference between the date when the Lease was entered into, and the "Commencement Date" of the Lease, and that the Court was required to determine the "Commencement Date" of the Lease by reference to the Agreement for Lease.
Counsel pointed out that the "Lease Commencing Date" specified in the Lease had been left blank: Ex. A/305; Ex. A/309. Whilst the Plaintiff received the Lease executed by the Defendant on 24 November 2015, that was not the "Commencement Date", which was specifically defined in the Agreement for Lease as being "the Fitout Access Date", which had earlier been defined as "the date specified in the notice given by the Lessor under clause 4.2".
Compliance with Clause 4.2 was said to be mandatory - "must give to the Lessee a notice" - and the notice was required to specify certain things identified therein. Furthermore, any notice served had not been served on the Plaintiff in accordance with Clause 18.1 of the Agreement for Lease. That Clause required the notice given under the Agreement for Lease to be served in a particular way.
The notice relied upon by the Defendant was sent, by email, to Mr Hedley. The sending of the notice to Mr Hedley did not comply with the Defendant's obligations pursuant to the Agreement for Lease with the result that there was no Lease Commencing Date.
It was then submitted that, in any event, the notice that was sent by the Defendant provided that the Fitout Access Date was 19 October 2015. It followed that pursuant to the Agreement for Lease, the "Lease Commencing Date" must also have been 19 October 2015. However, the date upon which the Defendant signed the Lease and provided it to the Plaintiff was 24 November 2015. It would "make a commercial nonsense" for the "Lease Commencing Date" to be a date prior to the Lease having become binding on the parties. If the Lease became binding on the parties on 24 November 2015, no notice was served upon the Plaintiff thereafter. (A notice was sent on 16 October 2015 but that was not a notice that complied with the Lease or Agreement for Lease.)
The Defendant, by executing the Lease agreed to be bound by its terms, one of which was clause 4.2. It did not comply with that clause by serving the required notice. Therefore, so it was submitted, although the Plaintiff and the Defendant had entered into the Lease, the trigger for determining the Lease Commencing Date was the date the notice was given by the Lessor under clause 4.2. As no notice had been given, the Lease had not commenced.
It was then submitted (possibly in advance of the likely submission from the Defendant) that the Plaintiff did not waive the requirement for notice to be given to it.
By way of further submission, counsel stated that, at least, until 16 November 2015, there were works being undertaken by the Defendant in respect of the Premises. Possession was required to be exclusive for there to have been a "Commencing date" within the meaning of the RSL Act and when the Plaintiff entered into possession on 19 October 2015, it was not granted exclusive possession, as the Defendant was still on site carrying out works that it was required to complete: Ex. A/236-238.
Furthermore, counsel for the Plaintiff said that "there is one other potential date for the lease commencement date and that is if notice - if the agreement for lease is taken to be the notice, then notice is required 14 days before the fitout access date, so the agreement for lease was provided on 24 November. In those circumstances, the fitout access date would be 8 December 2015, and that would mean that the end of the fitout period which seems to be the same as the opening date would be 2 February 2016, a date after the Breach Notice": Tcpt, 15 May 2019, p 238(10-16).
Counsel for the Plaintiff submitted that the manner in which the parties proceeded, and how they treated their contractual arrangements, including the payments that were made by the Defendant to the Plaintiff, should be ignored: Tcpt, 15 May 2019, p 206(33) - p 207(29).
(I should mention, in passing, that there was some discussion about the meaning of the term "opening date", but ultimately the parties agreed that it was "the date on which, or by which the Premises were to be opened and trading": Tcpt, 15 May 2019, p 236(50) - p 237(3)).
In relation to the second issue, namely, whether the Plaintiff was in breach of the Lease as a result of the Plaintiff's failure to open the Premises during Core Trading Hours, the Plaintiff submitted that since the Lease had not commenced, it was not required to pay rent and other occupancy charges or to open the Premises during Core Trading Hours. It followed that the Plaintiff was not in breach of the Lease, and that it was, in fact, the Defendant which had repudiated the Lease by issuing the termination notice and then by terminating it.
In oral submissions, it was put at Tcpt, 15 May 2019, p 191(31-33): "Whilst the lease was binding there was no set date for [the Plaintiff] to open the shops or pay rent and on that basis the breach notice and termination were invalid and repudiations of the lease."
It was also submitted that even if the Plaintiff did not open the Premises during Core Trading Hours, that did not entitle the Defendant to terminate the Lease. Clause 10.4(d) of the Lease provided the Defendant's remedy, which was damages, calculated in accordance with that Clause. When reference was made to Clause 18 (which provided that Clause 10.4 was an essential term), counsel for the Plaintiff submitted that the two Clauses were inconsistent because they provided inconsistent remedies.
By way of alternative submission, counsel accepted that having issued the Breach Notice, if the asserted breach was sufficiently serious, the Defendant could terminate the Lease. However, he submitted that, here, the breaches relied upon were not sufficiently serious.
In relation to the third issue, namely whether the Defendant was entitled to terminate the Lease for breach on 1 March 2016, the Plaintiff contended that there was an inconsistency in the Lease between Clause 10.4(d) and Clause 18.1. The former Clause provided the clear remedy for the breach of Clause 10.4(a)(1), namely a payment to the Defendant for each hour that the Premises were not opened during Core Trading Hours. Clause 18.1, on the other hand, provided that Clause 10.4 was an essential term.
The Plaintiff also contended that a breach of Clause 10.4(a)(1) ought not be held to be a fundamental breach because, when considering the factual scenario objectively, the Plaintiff had not abandoned the Premises. Only upon abandonment would the Defendant have been entitled to terminate the lease for a fundamental breach.
It followed that the notice given by the Defendant on 22 January 2016 ought to have requested the Plaintiff to open the Premises during Core Trading Hours and should have stated that the failure to do so would result in the requirement for the Plaintiff to pay the Defendant $100 for each hour that the Premises were not opened.
The Plaintiff also submitted that the requirement to pay rent and other expenses was waived by the Defendant as it had been stated that there would be a call on the Bank Guarantee, which, if such a call was made, would have required the Plaintiff to replace the Bank Guarantee within seven days.
Counsel also submitted that the Notice of Termination stated that the Lease was to be terminated "as a result of the Lessee failing to comply with the Notice to Remedy of Covenant dated 22 January 2016", which suggested that the Defendant did not rely upon clause 18.2(b) of the Lease. As clause 18(b) of the Lease was not referred to in the Breach Notice, or the Termination Notice, the Defendant ought not to be entitled to rely upon that provision.
Counsel submitted, despite the terms of the Lease, that a clause requiring a shop to remain open during core trading hours had previously been held not to be an essential term of the Lease: Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81. He maintained, in his opening written submissions, that: "… where clause 10.4 is referred to in clause 18.1 it ought to be read as a reference to clause 10.4(a)(2) - 10.4(a)(4). Clearly, clauses 10.4(b) and 10.4(c) do not relate to obligations of the Lessee and could not be held to be essential terms. Further, clauses 10.4(a)(2) to 10.4(a)(4) are in the nature of fundamental breaches. That is for the following reasons: a. in the event the Shops were opened outside the Core Trading Hours, as considered in clause 10.4(a)(2), that would increase the potential liability and/or costs of Perpetual. The liability may arise as a result of Perpetual not having cleaners available to clean spills which may result in a claim for personal injury damages and the additional costs would potentially be cleaners and staff. Therefore, to act in such a way would be a fundamental breach; b. similarly, opening the Shops when prohibited by law, in contravention of clause 10.4(a)(3), would also provide an additional liability on Perpetual; and c. failure to make the required payment, pursuant to clause 10.4(a)(4), would be similar to a failure to pay rent and would have exposed Perpetual to additional costs. … In the event clause 10.4(d) was read as contended by Perpetual; it would be entitled to terminate the Lease if Longjing did not open the Shops for 15 minutes during the Core Trading Hours. It follows that the notice provided by Perpetual on 22 January 2016 ought to have requested Longjing to open the Shops during Core Trading Hours and that the failure to do so would result in the requirement for Longjing to pay Perpetual the sum of $100 for each hour that it was not opened."
In relation to the failure to pay rent, it was submitted that the Defendant was not entitled to terminate the Lease as the requirement to pay rent and other expenses had been waived, the Defendant stating that it would call on the Bank Guarantee which would require the Plaintiff to replace the Bank Guarantee within seven days.
In relation to the fourth issue, namely whether the Defendant's conduct, in terminating the Lease, was unconscionable pursuant to s 46A of the RSL Act or pursuant to s 20 and/or s 21 of the the AC Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth), or misleading or deceptive conduct, the Plaintiff relied on the following provisions.
(The phrase "misleading or deceptive conduct" was used in written submissions, and throughout the course of the hearing; indeed, it was a part of one of the issues to be determined. I note that neither the Plaintiff nor Defendant relied on the specific legislative provisions pertaining to "misleading or deceptive conduct" as they appear in s 18 of the AC Law. The phrase "misleading or deceptive conduct" was left undefined. For a recent discussion of those principles, see H20 Learning Pty Ltd v Swim Loops Pty Ltd t/as Jump Swim Schools [2019] NSWDC 165.)
Section 20 of the AC Law provides: "A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time."
Section 21 of the AC Law provides: "(1) A person must not, in trade or commerce, in connection with: the supply or possible supply of goods or services to a person (other than a listed public company); or the acquisition or possible acquisition of goods and services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. … (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section (4) It is the intention of Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the term of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract."
The Plaintiff relied upon the following facts as demonstrating the unconscionable conduct of the Defendant: 1. The Defendant, through its agent, made the January representations and the February representations; 2. The Defendant acted unreasonably when it terminated the Lease as the Plaintiff had expended considerable resources by improving the Premises, and by readying them for opening. It was unconscionable for the Defendant to terminate the Lease at a time when it knew of the efforts being made and the expenses incurred by the Plaintiff to ready the Premises for opening and when it was consistently being informed of the progress the Plaintiff was making in respect of obtaining licensees to open food stalls within the Premises. (Reliance was placed on emails sent on 23 February 2016, and on 29 February 2016 (each of which emails have been referred to earlier).
(A third matter (relating to the Defendant having provided a copy of the Breach notice to a third party which was a potential licensee), that had been relied upon in the Plaintiff's outline of submissions, was abandoned during the hearing.)
Finally, on the issue of damages, counsel for the Plaintiff submitted that the Defendant, having repudiated the Lease, which repudiation the Plaintiff accepted, entitled the Plaintiff to damages.
In his closing written submissions, counsel maintained: "The claim for the amount which Longjing has incurred is based upon Ms Ng's evidence as to the sums paid, the bank statements, the Commercial Building Contract with Hammer Brothers Pty Ltd dated 8 October 2015 and the Loan Agreement with Property IQ No 3 Pty Ltd dated 1 December 2015." (Footnotes omitted)
He added that the purpose of the Lease was for the Plaintiff to run one of the Shops itself and to licence the remaining shops. The profit it expected to make was the difference between the amount it received from each of the licensees and its fiscal obligations under the Lease. He also submitted that the Court should find that the Plaintiff "would have entered into the … licences".
He concluded by stating, in writing: "As a result of the repudiation by Perpetual, Longjing suffered lost profits in the sum of $521,770.18. A copy of the calculation is at annexure A. Given the Shops are located within the Orion Shopping Centre, Longjing submits that once opened the Shop would have been occupied throughout the Lease. It follows that there should be no, or minimal, reduction on the claim for loss of profits."

The Defendant's Submissions

The Defendant's answer to the Plaintiff's contention that although the Lease was valid and binding on the parties from 24 November 2015, it had not "commenced" by 22 January 2016 (being the date the Defendant issued the Notice of Breach) or 1 March 2016 (being the date the Defendant terminated the Lease) because no notice was issued by the Defendant in accordance with clause 4.2 of the Agreement for Lease, was that the Lease Commencement date was either (a) 19 October 2015, being the date that the Defendant formally handed over the Premises to the Plaintiff to begin the Fitout Works as defined; (b) 24 November 2015, being the date on which the Defendant executed the Lease and sent it to the Plaintiff; or (c) 14 December 2015, being the rent commencement date. It was put, however, that whilst the Lease became binding on 24 November 2015, the parties were entitled to, and did, choose a commencement date prior to that date. The "Commencement Date" chosen by them was 19 October 2015, that being the "Fitout Access Date".
(I should mention, although not referred to by either counsel, that there is some support for the Defendant's submission that the parties were entitled to, and did, choose a commencement date prior to that date. In the Disclosure Statement referred to, Part 3 "Works Fit Out and Refurbishment", in the box headed "Date of handover (if different to the date the lease commences indicated at Item 5.1)", the date stated as the "Date lease commences" at Item 5.1, and the "Date of handover" at Item 7.1, is "10/09/2015"): Ex. A/162ZCO.)
The Defendant submitted that reliance on clause 4.2 of the Agreement for Lease was misplaced because any requirement to give a notice pursuant to clause 4.2 was superseded by the Plaintiff giving the signed documents to the Defendant on 2 October 2015; by the Defendant granting access to the Premises on 19 October 2015 to enable the Plaintiff to undertake its "Fitout Works" (as defined in the Agreement for Lease); and the agreement made by the parties that the "Opening Date" (as defined in the Agreement for Lease) would be on 14 December 2015, later amended to 24 December 2015 (on and from which date the rent would commence to be payable).
The "Fitout Period", was defined in the Agreement for Lease as 8 weeks, commencing on the Fitout Access Date. Working from what was to be the Opening Date, 8 weeks previous, was 19 October 2015.
The Defendant also relied upon the undisputed fact that during the period between 2 October 2015 and 14 December 2015, the Defendant had paid $627,000 to the Plaintiff on account of the Fitout Works (as defined in the Agreement for Lease) that had to be carried out by the Plaintiff.
Counsel also submitted that if notice was required to be given by the Defendant to the Plaintiff, pursuant to clause 4.2 of the Agreement for Lease, the requirement was waived by the Plaintiff because the parties had agreed that the "Fitout Access Date" was 19 October 2015 and the last day of the "Fitout Period" was 13 December 2015. It was also submitted that the Plaintiff was estopped, by its conduct, from contending that no notice under Clause 4.2 of the Agreement for Lease had been given or that that the Lease had not commenced.
Alternatively, to the extent that notice was required, it was given by the email dated 16 October 2015, which email included the relevant information that was required by Clause 4.2. On the proper construction of Clause 4.2 of the Agreement for Lease, notice was only necessary to be given if the Fitout Access Date and the last day of the Fitout Period were not known.
The Defendant submitted that there was no inconsistency between Clauses 10.4(d) and 18.2(d) and that the two clauses operated concurrently. Clause 10.4(d) was an agreed damages clause, being a contractual term that quantified the amount of damages payable for a designated breach of the Lease, whilst Clause 18.2(d) gave the Defendant the right to terminate the Lease for breach of Clause 10.1(a) of the Lease (upon the giving of a notice to remedy required by law and the failure of the Plaintiff to comply with that notice).
The Defendant's position was simply that it was entitled to damages for the Plaintiff's breach of Clause 10.4(a)(i) of the Lease, and also entitled to terminate the Lease in accordance with Clause 18.2(d) of the Lease.
The Defendant submitted that none of the representations relied upon by the Plaintiff should be found to have been made. Even if they had been, reliance and causation had not been established in circumstances where the Plaintiff failed to open even one or two shops prior to 5:00 p.m. on 28 February 2016.
Moreover, even if what were described as "the January Representations" had been made (which was denied), they were overtaken by events including the agreement reached on 15 February 2016, which was contrary to those representations.
The Defendant accepted that in the event that the Court accepted that if the contentions advanced by the Plaintiff, namely that the Lease had not "commenced" and that the Defendant was not entitled to terminate the Lease for a breach of Clause 10.4(a) of the Lease, the letter dated 1 March 2016 was not a repudiation of the Lease or the Agreement for Lease because the Defendant's termination of the Lease in accordance with what it considered its contractual right to do so did not evince an absence of readiness and willingness to perform the Lease. There was no allegation that the Defendant would not perform its obligations under the Lease in the event that its termination was held to be wrongful. Moreover, there was no suggestion that the Defendant was in breach of the Lease prior to 1 March 2016.
In relation to the claims made by the Plaintiff, the following table, and the response to each claim made by the Defendant, is instructive (with editorial corrections): With respect to other payments made by Longjing, if Longjing is successful, Perpetual agrees with the amount of $192,500.00 for the reasons set out in the table below. Item Amount claimed by Longjing Amount Perpetual agrees with Explanation Initial deposit to Mirvac for 1 month rent of two deals for foodcourt and the yumcha restaurant $64,166.00 $27,500.00 Disagree - The deposit in respect of the Shops was $27,500.00. From total rent of $700,000 pa + GST Bank guarantees - 6 months' rent for Kowloon City $165,000.00 $165,000.00 Agree - The Defendant accepts that this amount was paid. Architectural designer & Engineering consultant $75,000.00 $0 Disagree - The amount claimed does not appear to be substantiated by evidence. Council & Liquor Licence $12,000.00 $0 Disagree - The amount claimed does not appear to be substantiated by evidence. Equipment $50,000.00 $0 Disagree - The amount claimed does not appear to be substantiated by evidence. Furniture $10,000.00 $0 Disagree - The amount claimed does not appear to be substantiated by evidence. Advertisements on local newspaper/online/RE Agent $20,000.00 $0 Disagree - The amount claimed does not appear to be substantiated by evidence. Other related expenses for travelling $60,000.00 $0 Disagree - The amount claimed does not appear to be substantiated by evidence. Not Agree - $456,166.00 Agree - $192,500.00

In relation to outstanding payments, the following table depicts the claims made by the Plaintiff and the Defendant's response thereto: With respect to other outstanding payments, if Longjing is successful, Perpetual agrees with the amount of $1,432,386.40 for the reasons set out in the table below: Item Amount claimed by Longjing Amount Perpetual agrees with Explanation Money owing to Hammer Bros $1,267,386.40 $1,267,386.40 Agree - This is the agreed contract price between the Plaintiff and Hammer Bros for the fit out of the Shops, and includes payments made to Hammer Bros by the Plaintiff of $670,000. Loan to Property IQ No 3 Pty Ltd $458,491.66 $0 Disagree - There is no evidence that the loan was used by the Plaintiff in relation to or for the purpose of the Premises. Loan to Merry/director on bank guarantee and deposit $229,166.00 $165,000.00 Disagree -The Defendant agrees with the amount of the bank guarantees of $165,000. It does not agree with the deposit of $27,500.00 because to the extent that the Plaintiff argues that the Lease never commenced, by Clause 19 of the lease proposal (Ex. A/3), where the Plaintiff does not proceed with a lease, the deposit is forfeited. Spacecubed design for yum cha restaurant $15,000.000 $0 Disagree - The amount claimed does not relate to the Premises. Not Agree - $1,970,044.30 Agree - $1,432,386.40

In relation to its claim for damages, the Defendant claimed the amount of $252,936.03. The Plaintiff accepted that that this is the amount payable under the Cross-Claim in the event that the Cross-Claim succeeded. As has been outlined earlier in these reasons, this amount is agreed.
The Defendant, in relation to the claim against Ms Ng, submitted that pursuant to Clauses 12.1(b) and 12.1(c) of the Agreement for Lease and Clauses 20.1(b) and 20.1(c) of the Lease, Ms Ng was liable to the Defendant and that she was required to indemnify the Defendant in the amount of $252,936.03.
In relation to the Plaintiff's claim for damages, counsel for the Defendant submitted that in the event the Court concluded that the Lease had commenced on 19 October 2015, the Defendant was entitled to terminate the Lease.
Even if this was wrong, the letter dated 1 March 2016 was not a repudiation of the Lease or the Agreement for Lease because the Defendant's termination of the Lease in accordance with what it considered its contractual right to do so did not evince an absence of readiness and willingness to perform. Furthermore, it had not been alleged by the Plaintiff that the Defendant would not perform its obligations under the Lease in the event that its termination was held to be wrongful. Moreover, there was no suggestion that the Defendant was in breach of the Lease prior to 1 March 2016.
It was noted that the Plaintiff itself was in breach of the Lease, even if the Defendant's purported termination on 1 March 2016 was repudiatory. The Plaintiff was not entitled to claim "damages calculated as the profit that Longjing would have earned during the duration of the Lease" (as asserted in the amended Statement of Claim, at [38]) i.e. loss of bargain damages) because a party may only recover damages for loss of bargain where that party, itself, was in a position to perform its side of the bargain. If it were otherwise, it could not sensibly be said that it was the other side's conduct which caused the loss of the profit involved in the bargain. That advantage could not have been obtained even if the other side had fulfilled its obligations: Highmist Pty Ltd v Tricare Ltd [2005] QCA 357 per Keane JA (as his Honour then was) with whom Jerrard JA and Cullinane J agreed, at [61].
Finally, counsel for the Defendant submitted that even if Longjing is entitled to claim loss of bargain damages, no damages would be awarded because Longjing has suffered no loss. This is because on its own analysis the Lease was loss-making. Longjing's alleged profit of $521,770.18 is swamped by its alleged costs of $1,970,044.30 or $1,919,367.43.
It was noted that the object of damages in this context is to put Longjing in the same position as though the Lease had been performed (i.e. loss of bargain damages is the difference between the value of the unperformed obligations of the promisor and the contract price, or money equivalent).
It was also noted that if Longjing was put in the same position as though the Lease had been performed, then it would have lost approximately $1.45 million.

The Law

In Willmott Growers Group Inc v Wilmott Forests Ltd (2013) 251 CLR 592; [2013] HCA 51, at [39]-[40], French CJ, Hayne J and Kiefel J (as her Honour then was) wrote: "…it is now firmly established that a lease is a species of contract. As Deane J said in Progressive Mailing House Pty Ltd v Tabali Pty Ltd, '[a] lease for a term of years ordinarily possesses a duality of character which can give rise to conceptual difficulties. It is both an executory contract and an executed demise' (emphasis added). Hence, as Mason J said, 'the ordinary principles of contract law, including that of termination for repudiation or fundamental breach, apply to leases'. The rights and duties which a landlord and tenant have under a lease are bundles of rights and duties which together can be identified as species of property. The origins of those rights and duties lie in the contract which the landlord and tenant or their predecessors in title made. In every case, the rights and duties of the landlord and tenant, whether as an original party to the lease or as a successor in title, stem from the contract of lease and any later contract made in relation to that lease. When a company is the landlord, the rights and duties which that company has in respect of the lease are properly described as 'property of the company that consists of ... a contract'. The landlord's rights and duties are a form of property; those rights and duties 'consist of', in the sense of derive from, the contract of lease." (Footnotes omitted)
Gageler J wrote at [62]: "Progressive Mailing House Pty Ltd v Tabali Pty Ltd confirmed that, save perhaps in exceptional cases, a right to the exclusive possession of land for a term is given by contract between the lessor and the lessee. The legal consequence, that rights conferred and obligations imposed by a contract that is a lease become attached to the respective estates or interests in land of the lessor and the lessee, does not detract from the underlying legal character of a lease as a species of contract…." (Footnotes omitted)
Keane J wrote at [107]: "The first to third respondents relied upon the decision in Tabali to support the propositions that a lease is essentially a contractual interest, dependent on the continued subsistence of the contract between lessor and lessee, and that as such it is susceptible of annihilation upon the termination of the contract. In this regard, they invoked the statement of Deane J in Tabali: '[O]nce it is accepted that the principles of the law of contract governing termination for fundamental breach are, as a matter of theory, applicable to leases generally, there is no difficulty in applying them in the present case in much the same fashion as to an ordinary executory contract: "[i]f the contract is avoided or dissolved ... the estate in land falls with it"'. (Footnotes omitted)
At common law, a breach of an essential term of a lease entitles the party who is not in breach to terminate the lease, without notice (see Walsh Investments Pty Ltd v SCK Properties Pty Ltd [2016] QCA 258; Progressive Mailing House Pty Ltd v Tabali (1985) 157 CLR 17 at 55).
Section 124 of the Property Law Act 1974 (Qld) provides: "(1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, obligation, condition or agreement (express or implied) in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice - (a) specifying the particular breach complained of; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and (c) in case the lessor claims compensation in money for the breach, requiring the lessee to pay the same; and the lessee fails within a reasonable time after service of the notice to remedy the breach, if it is capable of remedy, and, where compensation in money is required, to pay reasonable compensation to the satisfaction of the lessor for the breach. ... (8) The notice mentioned in this section shall be in the approved form. (9) This section applies to leases made either before or after the commencement of this Act, and shall have effect despite any stipulation to the contrary."
It is clear that s 124(1) does not create a right of re-entry or forfeiture. It imposes a pre-condition on the exercise of the right that is conferred by a lease. The right is exercisable for a breach of a covenant, obligation, condition or agreement in the lease. Section 124(1) is engaged only where a right of re-entry or forfeiture is to be exercised on the basis of a breach or breaches of the lease.
In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115, at 135; [2007] HCA 61, at [44], the plurality wrote that the term repudiation is used in different senses. Their Honours wrote: "First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. ... Secondly, it may refer to any breach of contract which justifies termination by the other party. ... There may be cases where a failure to perform, even if not a breach of an essential term ... manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words." (Footnotes omitted)
As a matter of general law, the question when the Lease commenced requires a consideration of what was communicated between the parties by their words and their conduct, and whether, objectively assessed, that led to the conclusion that they intended to create a legally binding relationship and that they had agreed to all the terms that the law requires as essential for that purpose.
Lord Wright wrote in G Scammel & Nephew Ltd v HC and JG Ouston [1941] AC 251, at 268: "The object of the court is to do justice between the parties, and the court will do its best, if satisfied that there was an ascertainable and determinate intention to contract, to give effect to that intention, looking at substance and not mere form. It will not be deterred by mere difficulties of interpretation. Difficulty is not synonymous with ambiguity so long as any definite meaning can be extracted. But the test of intention is to be found in the words used. If these words, considered however broadly and untechnically and with due regard to all the just implications, fail to evince any definite meaning on which the court can safely act, the court has no choice but to say that there is no contract. Such a position is not often found."
Section 11 of the RSL Act relevantly provides: "A retail shop lease is entered into on whichever is the earlier of the following dates - (a) the date the lease becomes binding on the lessor and lessee; (b) the date the lessee enters into possession of the leased shop."
In this case, Ms Ng accepted that the Plaintiff entered into possession of the Premises on about 19 October 2015: by her affidavit made 10 April 2019, at [3], Ms Ng stated "[o]n or about 19 October 2015, the Defendant formally handed over the Property to the Plaintiff" and at [5], "[o]n or around 19 October 2015, Mirvac proceeded with the handover to Longjing for Shops 203-206 to begin the lessee's fitout works". By her counsel, it was accepted at Tcpt, 15 May 2019, p 186(6-12) that "on 19 October the defendant formally handed over the premises to the plaintiff to begin the lessee's fit out works". Mr Hedley also agreed that from the middle to end of October 2015, the Plaintiff was allowed into occupation of the Premises to "do their [sic] works": Tcpt, 13 May 2019, p 32(49) - p 33(1-2). In an email dated 16 October 2015 from Mr van Veenendaal to Mr Hedley, it was stated that "[t]he lessee's [contractor] will take physical possession of the… Premises on Monday 19th October 2015…": Ex. A/188. He later agreed, under cross-examination, that it was on 19 October 2015 that the Plaintiff took physical possession of the Premises: Tcpt, 13 May 2019, p 43(38-41).

Determination

I shall deal with the four issues that were identified by the parties. Naturally, what follows should be read in the context of the findings of fact identified earlier in these reasons.

(a) When did the Lease commence?

Looking at the two relevant documents being the Agreement for Lease and the Lease, I am satisfied that the "Lease Commencing Date" meant the "Fitout Access Date" and that the "Fitout Access Date" meant the date on which the Plaintiff obtained access to the Premises.
In the present case, there can be no doubt that the Fitout Access Date was 19 October 2015. Ms Ng admitted so much in her affidavit and there is other evidence to which reference has been made that confirms that it was on that date the Plaintiff entered into possession of the Premises to commence the fitout works.
In addition, that date accords with the RSL Act which provides that one of the dates that a retail shop lease is entered into is the date the lessee enters into possession of the leased premises.
It is impossible to accept the submission of the Plaintiff that the Lease Commencing Date cannot be a date prior to the Lease becoming binding on the parties. That the RSL Act refers to "the earlier of the following dates" makes clear that a lessee may enter into possession before the date the lease becomes binding on the lessor and the lessee.
In addition, I have earlier referred to Ex. A/162ZCO being part of the Disclosure Statement which in Part 3 "Works Fit Out and Refurbishment" stated in the box headed "Date of handover (if different to the date the lease commences indicated at Item 5), which suggests that the parties contemplated the same possibility.
If those matters were not enough, in Whitlock v Brew (1968) 118 CLR 445, a case in which a purchaser of land agreed to lease the land to a third party upon entering into possession of the land, Kitto J wrote at 456: "As regards the term of the lease, it sufficiently appears, I think, that the commencing date is to be the date when the purchaser obtains possession."
In Selever v Klaskova (Supreme Court of New South Wales, Powell J, 15 March 1988, unrep) Powell J wrote, at [7]: "… It is true to say that an agreement for lease, to be valid and enforceable, must mention the term, and from what day it is to commence, otherwise there is no complete agreement … However, it is not impossible to limit the commencement of the contemplated term upon a contingency; it is sufficient if the date of commencement should be capable of being definitely ascertained at the time the proposed lease takes effect in interest or possession."
Recently, in Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185, at [154]-[168], Basten JA held that an objective approach to contractual interpretation frees the courts from the constraining influence of reflecting upon the actual intention of the parties; and that such an approach controls factual disputes relating to pre-contractual negotiations and post-contractual conduct.
I reject the Plaintiff's submissions that because notice in writing was not given in accordance with clause 4.2 of the Lease, that there was no "Lease Commencing Date". The parties themselves agreed that the Plaintiff would take possession on 19 October 2015, and it did so. They also agreed that the last day of the Fitout period was 13 December 2015, which was subsequently extended. Both these matters are unarguable on the evidence. In addition, in October 2015, the Plaintiff had received $627,000 from the Defendant. It received another $220,000 in January 2016. To suggest that the Lease had not commenced does not accord with the actions of the parties themselves. It would be commercially unrealistic to conclude that no Lease had commenced in the light of the parties' conduct.
To the extent that it is relevant, I am satisfied that the reasonable bystander would conclude, from the parties' words and conduct, that the Lease commenced when the Plaintiff went into possession.
It does not matter that the Plaintiff was not given exclusive possession of the Premises. The purpose of it being given possession was so that it could carry out the fitout works.
One also asks, in the circumstances of this case, following agreement having been reached on 16 October 2015, what would have been achieved by the service of a notice. Clause 4.2 required the notice to specify only two things, namely, the Fitout Access Date, and the last day of the Fitout Period, both of which dates had already been agreed by the parties and were known to the Plaintiff.
In the event that I am wrong in reaching the conclusion set out above, I am satisfied that the email sent by Mr van Veenendaal to Mr Hedley on 16 October 2015, contained that information. Although that notice was not given "at least fourteen (14) [days] before the Fitout Access Date specified in it", the parties had been negotiating terms for several months. Strict compliance with clause 4.2, therefore, was not necessary.
The submissions made by the Defendant, which I shall not repeat, and which are set out above, are far more persuasive than those of the Plaintiff on this first issue.

(b) Was the Defendant entitled to terminate the Lease on account of the Plaintiff's breach of cl 10.4 of the Lease?

As stated, the Plaintiff's arguments on this issue depend on the finding of inconsistency between Clause 10.4 and Clause 18.2(d). I am not satisfied that there is any such inconsistency. The two clauses simply deal with different aspects of a breach and operate concurrently. Clause 10.4(d) provided the method by which damages could be calculated - it was an agreed damages clause. As was submitted by the Defendant, it "is a contractual term which quantifies the amount of damages payable by a promisor for designated breaches of contract: see Carter's Breach of Contract at [12-27]". Clause 18.2(d) provided the Defendant with the right to terminate the Lease for breach of an essential term, one of which was Clause 10.1(a) of the Lease (upon the giving of a notice to remedy required by law and the failure of the Plaintiff to comply with that notice). The Defendant gave such a notice.
Again, the facts of the case, as set out, lead to me being unpersuaded that the Defendant was not entitled to terminate the Lease. The Plaintiff did not pay rent. It did not assert that the Defendant should call on the Bank to satisfy outstanding rent. To the extent that the Defendant stated that it would do so and require the Plaintiff to replace the Bank Guarantee, or the proportion of the Bank Guarantee recovered by the Defendant, the statement was made in the context of the Plaintiff not complying with the Breach Notice, which required the Plaintiff to pay to the Defendant the amount outstanding. The statement did not relieve the Plaintiff of the obligation to pay rent.
Furthermore, the failure to open the Premises during "Core Trading Hours" had continued from 24 December 2015 until 22 January 2016. It continued then until 1 March 2016. Even then, there was no specific indication when trading would commence. All that the Plaintiff seemed to be doing was making suggestions about when licenses might be signed, not when the Premises would be open for business during core trading hours. It follows that the answer to the question is Yes.

(c) Did the Defendant engage in misleading or deceptive conduct or unconscionable conduct in terminating the Lease on 1 March 2016?

I have earlier referred to the evidence of the representations and explained the reasons why I do not accept the evidence regarding the January representations or the February representations. It was these representations that formed the cornerstone of the Plaintiff's claim of unconscionable conduct and misleading or deceptive conduct.
In my view, there was no such conduct otherwise. The Defendant's representatives asked the Plaintiff's representative to advise the period of time the Plaintiff required to remedy the breaches. The Plaintiff indicated 14 days, initially from 3 February 2016. The agreement reached on 16 February 2016 provided for 12 more days from that date, until 28 February 2016. Even then, an additional day elapsed before, on 1 March 2016, the notice of termination was given.
I am simply not satisfied that any conduct by the Defendant, as alleged by the Plaintiff, was misleading or deceptive conduct or was unconscionable conduct.

(d) What is the quantum of damages suffered by the Defendant or by the Plaintiff (depending upon the Court's determination of the first three issues set out above)?

The quantum of the Defendant's damages, in the circumstances, was agreed in the sum of $252,936.03. There should be judgment for the Defendant against the Plaintiff for that amount on the Cross-Claim.
There was no suggestion that Ms Ng, as guarantor of the Plaintiff's obligations, would not be liable.
In light of the conclusions, it is unnecessary to deal with the Plaintiff's claim for damages as the Statement of Claim will be dismissed.
Although there were no submissions made on costs, there is no reason why the usual costs order should not be made. Also, an order should be made dealing with the exhibits.
In the circumstances, the Court: 1. Orders that the Plaintiff's Statement of Claim be dismissed. 2. Orders that there be judgment for the Cross-Claimant against each of the Cross-Defendants in the sum of $252,936. 3. Orders that the Plaintiff pay the Defendant's costs of the Statement of Claim. 4. Orders that the Cross-Defendants pay the Cross-Claimant's costs of the Cross-Claim. 5. Orders that the Court Books be returned. 6. Orders that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (rule 31.16A and rule 33.10) and Practice Note No SC Gen 18.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 August 2019

Retail Shop Leases Act 1974(Qld)

Australian Consumer Law Competition and Consumer Act 2010(Cth)

Retail Shop Leases Act 1994(Qld)

Retail Shop Leases Amendment Act 2016(Qld)

At a glance

Court

Decision date

Before

Source

Judgment (20 paragraphs)

Parties

Legislation Cited (7)

Cases Cited (16)