M.W.H Contracting Pty Limited v Quynh; Quynh and v M.W.H Contracting Pty Limited

NCAT Consumer and Commercial|2021-09-01

Sean Lytton v North Bondi RSL Club Limited [2011] NSWADT 86 Tonto Homes Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 Texts Cited: NIl Category: Principal judgment Parties: In COM 20/27505: M.W.H Contracting Pty Limited (Applicant) Cam Quynh Tu Karen Loi Tu (Respondents) In COM 20/49112: Cam Quynh Tu and Karen Loi Tu (Applicants) M.W.H Contracting Pty Limited (Respondent) Representation: Counsel: Mr T Bateman (Applicant) Mr A Smorchevsky (Respondents) Solicitors: Sydney Legal Advisors (Applicant) Frank Low Yeung (Respondents) File Number(s): COM 20/27505; COM 20/49112 Publication restriction: Nil

Introduction

There are two applications to be determined by the Tribunal in this matter. They arise out of what is now a former lease of two story premises at Ultimo (the premises). The downstairs area of the premises was used for the retail sale of takeaway food while the upstairs was used as a residence.
The premises, which are believed to be more than 50 years old, have been owned by Ms Cam Quynh Tu and her sister, Karen Loi Tu for approximately 35 years.

Background

For the 35 years in which the respondents have owned the premises, the ground floor has been used as a takeaway food shop operated by different tenants while the upstairs has been used as a residence or rest area.
From May 2003 until the respondents entered into the subject lease with the applicant on 19 December 2014, the premises were leased to Hung Chu Tui and Ping Chung Lo (existing tenants) for use as a Chinese restaurant. Since 2011, Kho & Lee Property Pty Ltd (the agent) have managed the premises for the respondents.
Mr Hodges first enquired about leasing the premises in about 23 October 2014 when he had a conversation with an employee of the agent. On 30 October 2014, a Mr Vincent Ho (Mr Ho), who was employed at the time by the agent, sent Mr Hodges a copy of the then current lease with the existing tenants.
Over the course of the next week, Mr Ho referred Mr Hodges to the existing tenants for information regarding outgoings, fit out costs and any rent free period rent reduction for the purposes of a fit out period.
On 14 November 2014, Mr Hodges sent an email to Mr Ho, in which he provided comments on a lease advice Mr Ho had sent to him. Mr Hodges said he would like to alter the requirement that any future fitout changes to the premises other than like-for-like must be approved by the lessor. He said Council did not need to approve "like for like" changes. Mr Ho replied that that seemed reasonable as long as the work was professional, it did not structurally damage the property and was made good at the end of the lease.
Mr Ho sent me Hodges a retail disclosure statement on 24 November 2014 in which the permitted use was described as "restaurant/café". A second disclosure statement was provided to Mr Hodges on about 9 or 10 December 2014. The disclosure statement describes the premises as including an "upstairs and downstairs," and states that the fit out works were to be carried out by the applicant at its own cost.
The lease, which commenced on 19 December 2014, describes the permitted use of the premises as "Juice bar and café". The ground floor of the premises is the retail area from where the applicant conducted its business. The upstairs is a residence where the applicant's director, Mr Michael Hodges (Mr Hodges) resided while the lease was on foot.
Shortly after the lease commenced, the applicant provided the respondents with a bank guarantee in the amount of $12,933 (bank guarantee). In the first quarter of 2015 the applicant purchased equipment for the premises and undertook fit out works. These included the installation of a number of benches, a sink and hand basin, and the upgrading of a range hood and ventilation system. On 31 March 2015, a certificate of compliance was issued by Kras Engineering Pty Ltd in respect of the kitchen exhaust ventilation system.
Around the end of March 2015, an officer from the City of Sydney Council (Council) attended the premises. He requested the applicant to submit a building certificate application for works that it had undertaken at the premises. The building certificate application, prepared by Mr Hodges, was signed by the respondents on 1 April 2015. The application states that it was being used "to obtain a building certificate for existing buildings/structures infrastructures that have been erected without approval" and in relation to "unauthorised building work" for a "café fit out and installation of replacement ventilation unit" carried out in "March 2015". The application was submitted to Council by Mr Hodges in early April 2015.
On 9 and 20 April 2015 the Council notified the applicant that it required a number of documents for the purposes of assessing the application. These included a "Building Code of Australia (BCA) report by an appropriately qualified consultant to determine BCA compliance and whether or not a clause 94 upgrade under the Environmental Planning and Assessment Regulations 2000 is triggered".
On 21 April 2015, Mr Hodges by email asked Mr Ho to provide him with. Certification for the premises in order to respond to Council's request. Mr Ho replied by email the same day saying he would "chase the owner and solicitor again."
Mr Hodges says that as a result of information provided to him by the Council, including compliance issues at the premises, he was of the understanding that he could not trade operate the business from the premises or that it was unsafe for him to do so from that time, or both.
Having not received a response from the respondents' agent, in May 2015 Mr Hodges engaged a Mr Peter Antcliffe from Building Certificates Australia Pty Ltd to provide him with advice. In an email dated 2 June 2015 (the Antcliffe email), Mr Antcliffe informed Mr Hodges that the premises did not comply with many of the clauses of the BCA, and that the works undertaken by the applicant appeared to be minor in the scheme of things. He also said that a building code report would cause more issues in that it would disclose to Council the level of non-compliance with the building. The main area of concern, according to Mr Antcliffe, was the lack of fire rating from the residential unit above in that there appeared to be no fire separation between the levels. He said there were other issues with the premises including the protection of openings in the rear structures, the existing stair and the need for handrails. While he had not looked in the residential part of the premises, Mr Antcliffe said the issues are more related to the café in its separation from the residential part of the building.
On 18 June 2015, Mr Hodges informed Mr Ho by email of Council's requirements and the process for assessing the building application. He informed Mr Ho that it was his, Mr Hodges, belief that this was not his issue to resolve. A day later Mr Ho, by email, informed Mr Hodges that he would speak with the owner and get back to him but in the meantime, the applicant was required to continue to pay rent.
On 25 June 2015 Mr Hodges had a telephone conversation with an employee of the agent, most probably Mr Ho, informing that person that the applicant was still not trading the premises and could not do so until Council received the report. He enquired about the respondent's response to getting the report.
Again on 25 June 2015, Mr Hodges sent an email to Mr Ho proposing that the respondents obtain a BCA report in order to identify those parts of the premises that did not comply with the building code. He also stated in the email that he believed "any BCA issues for the building would arise no matter what the premises was used for" and that the applicant was entitled to a rent abatement until the issue was resolved.
The next day, Mr Ho responded to Mr Hodges by email. He said that after "multiple deliberations" with the respondents and their solicitor, they advise that "legally they're not obliged to assist in the building compliance of the property."
A Council officer attended the premises on 2 July 2015. According to Mr Hodges, the officer informed him that until the building code report was received by Council, he could not trade from the premises.
On 3 July 2015 Mr Hodges received an email from Council. The email reads as follows: Reference is made to the site inspection of today with [name provided] of this office. It has been noted that the (sic) your building consultant, Peter Anncliffe (sic) of Building Certificate Australia is currently on leave for another two weeks and that report will be completed upon his return. In this regard, and at your request, I have extended the time with which to submit the outstanding compliance assessment report for another 30 days. Some of the issues of concern include but not limited to the following: The fire separation between the shop in the residence above (fire resistant ceiling, light fittings and openings); Adequate fire resistance to the external walls/glazing, along the north western wall particularly in the vicinity of the eternal (sic) stairs; Compliance of the mechanical ventilation (MV) with AS 1668:2012 Fire resistance level/separation of the mechanical ventilation ducting; Height of the MV ducting above roof level; Point of egress in the event of fire from the residential dwelling to the street; Smoke alarms, fire blankets, portable fire extinguishers etc; Rear stairs from shop premises to natural ground level (non - slip treads, risers and goings); Provision for a dedicated hand wash basin within 5m from where food is handled; and Kitchen to be constructed in accordance with AS 4674:2004.
Due to Mr Antcliffe being unavailable to deal with the matter, in August 2015 the applicant retained a Mr Patrick Doherty of NSW Building Approvals to prepare a BCA compliance assessment report in relation to the premises.
Mr Doherty attended the premises on 12 August 2015 and issued his report on 17 August 2015 (Doherty report). In that report, Mr Doherty said the premises were "constructed under superseded building codes and is approximately 50+ years old." The report states that BCA Building Classification for the premises is as follows: (Class) 6 (ground floor cafe, previous use - Chinese Restaurant) (Class) 4 (residential unit consisting of one bedroom)
The executive summary in the Doherty report says the following: I have been engaged to carry out an audit of the subject completed ground floor works and provide a BCA fire safety report and Clause 94 review in relation to request from City of Sydney. The building has a current approved use approved by City of Sydney and therefore is not considered a 'change of use' under Clause 93 and Clause 94 of the Environmental Planning and Assessment Regulations. The use attracts a Class 6 and 4 classifications under the current BCA. Pursuant to Clause 94 of the Environmental Planning and Assessment Regulation 2000 an assessment of the building has been undertaken; The measures contained in the building are inadequate to protect persons using the building and to facilitate their egress from the building in the event of fire, or to restrict the spread of fire from the building to other buildings nearby. It has been determined that parts of the building must be brought into conformity with the Building Code of Australia. There are some issues requiring specific attention, the following requirements should be incorporated into the design of the building, details to be submitted with the future Building Certificate and or Development Application.
The Doherty report then sets out recommended works which could be undertaken "(based) on the non-compliance matters identified in comparison to the current Deemed-to-Satisfy provisions of the BCA and in order to provide a satisfactory level of BCA compliance." The recommended works included fire protection and separation which are described in these terms: 1. External walls that are less than 3.0m from an exposed fire source feature must achieve an FRL of 90/90/90. Given the construction of the building, particularly to the rear ground floor addition and exposure to adjacent fire source features, it is considered that the building is insufficient with regard to the required Fire Resistance Levels. The lightweight rear external wall and any beam or column incorporated in it, would not achieve an FRL not less than 90/90/90. The 'rear ground floor doorway' is also required to be protected by -/60/30 fire door set. Note; All new structural elements shall be designed and certified by a professional Structural Engineer (NPER) in accordance with either Clauses B1.1, B1.2 & B1.4 of the BCA. Upon completion of works, the primary building elements should be examined by a qualified structural engineer to ensure that these elements achieve the acceptable FRL in accordance with table 5; Section C1.1, BCA. 2. The complete ground floor ceiling of the building are to be separated from the residence, by construction complying with Clause C2.9 BCA- Floor / ceiling - between the cafe tenancy and the residence above; A floor/ceiling system incorporating a ceiling which has a resistance to the incipient spread of fire to the space above itself of not less than 60 minutes; or Have an FRL of at least 30/30/30; or Have a fire-protective covering on the underside of the floor, including beams incorporated in it, in the floor is combustible or of metal. Certification attesting that a fire rated ceiling has been installed in accordance with AS 1530.4 and Specification Cl.8 of Building Code of Australia 2015. Additionally. In relation to lighting, fire rated kits has (sic) been used throughout the ceiling.
Other works recommended in the report relate to access and egress and also services and equipment. The latter included the provision of smoke alarms within the first floor residence complying with the Australian Standard.
A copy of the Doherty report was provided to the agent by the applicant and submitted to Council by Mr Hodges on 23 August 2015.
Council informed the applicant on 25 August 2015 that until the remedial works identified in the Doherty report were undertaken, it could not assess the building certificate application.
Shortly after receiving this notification from Council, Mr Hodges engaged Building Code Professionals Pty Limited to provide advice on and review the Doherty report. Grant McGrath of that company inspected the premises on 17 September 2015 and provided a report on 2 October 2015 (McGrath report). In the report, Mr McGrath expressed the opinion that in relation to the fire rating upgrading works listed in point 1 of the Doherty report, this was considered to be "a base-building issue" and "that should the City of Sydney Council issue a fire order on the property, these upgrading works would need to be addressed by the building owner." In relation point 2 of the Doherty report, he said this: The existing plasterboard ceiling installed within the Ground Floor Level of the building (as referenced in point 2 of Recommended Works the NSW Building Approvals BCA Compliance Assessment report) would have been installed as a result of the conditions of development consent issued by the City of Sydney Council under DA 44/84/0559. This Development Approval granted consent to the use of the Ground Floor Level as a take away food shop and the First Floor Level as an associated residential flat - copy attached. It is our considered opinion that should the City of Sydney Council issue a fire order on the property, these upgrading works would need to be addressed by the building owner.
Mr Hodges says that between February 2015 and December 2015 he did some work to the premises in order that he could commence trading, which he did in January 2016,. The works said to have been completed by him in that period are described as follows: 1. installation of a replacement compliant exhaust ventilation system; 2. installation new smoke detectors and fire safety measures such as fire extinguishers; 3. replacement of sink outside commercial kitchen including replacement of benchtop and particleboard cabinetry; 4. replacement of egress opening on front entry door to Premises; 5. replacement of existing polycarbonate awning underneath stairs to the upstairs residence with a metal sheeting; 6. construction of a stairway from rear of building to courtyard; 7. installation of water spray arm in kitchen area; 8. replacement of hand basin mixer tap in toilet area; 9. installation of soap and paper towel dispensers around all sink areas; and 10. installation of fabricated ramp between kitchen and store room to eliminate trip hazard
A Council officer attended the premises in November 2016 and informed Mr Hodges that Council intended to issue a Notice of Intention to Issue a Fire Order in relation to the premises. The same month, Mr Hodges advertised the applicant's business for sale. He says this was as a result of financial stress and the compliance issues affecting the premises.
Council issued to the respondents a Notice of Intention to Issue a Fire Order in relation to the premises on 10 January 2017 (proposed fire order notice). That notice included a copy of a proposed fire order. Relevantly the notice stated that an inspection of the premises in November 2016 revealed that they were "deficient in fire safety and egress facilities". The proposed fire order notice, which was addressed to the respondents, under the heading "Circumstances in which an order number 6 can be given" said this: Provisions for fire safety or fire safety awareness are not adequate to prevent fire, suppress or prevent the spread of fire or ensure or promote the safety of persons in the event of fire; Maintenance or use of the premises constitutes a significant fire hazard.
Attached to the proposed fire order notice was a list of reasons for the giving of the order. These related to the general condition of the building which was considered to be unsafe due to its construction and lack of fire resistant materials, means of egress for occupants to evacuate from the first floor in the event of a fire, and the state of fire services and equipment. This included the fact that the building is used as a residential dwelling on the first floor and does not have appropriate measures in place to alert occupants to a fire and evacuate safely.
The proposed fire order notice required the respondents to make representations to Council within 21 days as to why the proposed fire order should not be given, or in relation to the terms of or period of compliance with the proposed fire order.
The applicant did not trade from the premises from January 2017, the month in which it received the notice of proposed fire order, until the termination of the lease in September of that year. According to Mr Hodges, this was because the applicant had been formally put on notice of the risks posed by the premises and he was concerned about the ramifications for any business insurance.
Ms CQ Tu (Ms Tu) was the respondent who provided instructions to the agent in relation to the premises. Ms Tu acknowledges that she did not read the notice of proposed fire order but did instruct a Mr Park, an employee of the agent, to arrange for it to be investigated and to take care of it.
On 21 February 2017 Mr Park received an email from Council. The email attached the notice of proposed fire order and said that unless the respondents required additional time to consider the matter, Council would proceed to issue the proposed fire order. The same day, Mr Park sent the proposed fire order notice to Mr Hodges by email. In it he asked Mr Hodges to "kindly attend to the order immediately" and that he should "note the urgency of the notice and (the applicant's) requirements as part of the lease agreement."
Also on 21 February 2017, Mr Hodges sent an email to Mr Park. In it he informed Mr Park that the proposed fire order notice had been issued to the respondents as owner of the premises, and as the owners was their responsibility. He requested the owners to "fulfil the obligations in leasing… a building that is compliant with Council's requirements." He added: "I will expect a reduction in rent from today onwards until these matters are resolved, as I now cannot trade in a non-compliant building."
The next day, Mr Park sent an email to Mr Hodges. In it he referred Mr Hodges to the lease terms and noted that the exhaust system had been upgraded by the applicant and that he may wish to refer the matter to a fire consultant for further advice. He then said that "either way (the respondents) will require the fire compliance certificate as per the lease."
Later that day, Mr Hodges responded by email. He said that his fire consultant had already advised that it was the respondents' responsibility for compliance with any Council order, and the exhaust system had been installed in accordance with the Australian Standard. He also asked Mr Park to advise the clause in the lease which says that the applicant is required to provide a fire compliance certificate. He then added that the fire compliance certificate has to be provided by the owner and any necessary upgrades to make the building compliant. Mr Hodges also reiterated that he expected a rent reduction as he was not able to trade in a non-compliant building.
In late February 2017, the applicant received an offer from Studentpal Pty Ltd (Studentpal) to purchase its business for $70,000.
On 28 February 2017 Mr Hodges sent an email to Mr Park informing him that he had an offer for the business which you would like to accept. He requested that Mr Park forward documents to the respondents to seek their approval for a new tenant of the premises. Attached to that email was a completed commercial tenancy application form, an ASIC search and a letter from a person said to be employed by Studentpal. In the letter, the employee explained that Studentpal was a Chinese student service centre and that the premises were to be used as a student canteen. The employee also said he would be managing the premises and he gave a brief description of his work history in the hospitality industry.
There then followed the following email exchange between Mr Hodges and Mr Park: 1. 3 March 2017 - Hodges to Park Hi Chong Any news on the proposed tenant? I would suggest it is in the landlord's best interest to get this matter progressed as soon as possible. Kind regards, Michael 1. 6 March 2017 - Park to Hodges Hi Mick, Good to see you at the office today. We are trying to make contact with the landlords to discuss the application. In the meantime, let's get this fire order sorted as discussed. Best regards, Chong Park 1. 7 March 2017 - Hodges to Park I just found out that my fire guy is on leave this week, so I should get the quote early next week. With regards to the tenant application, this needs to be sorted out ASAP, as I simply can't afford to lose another buyer of my business. If you want I can wait at the landlords home address and ask them myself. I appreciate your help in this matter. Kind regards, Mick 1. 9 March 2017 - Hodges to Park Hi Chong I have tried to call you a few times and left a message with your office reception. Can you please advise me on the status of the tenant application. I appreciate your help in this matter. Kind regards, Mick
Mr Hodges said he attended the office of the agent on 6 March 2017 to get an update on the progress of the new tenant approval by the respondents. He also said that on 9 March 2017 he phoned the office of the agent and left several voicemail messages for his call to be returned in relation to an update on the proposed new tenant approval. He also attended the agents office on 6 March 2017.
Mr Park informed Mr Hodges on 30 March 2017 that approval had been granted for assigning the lease to Studentpal. Mr Hodges says he was advised on 3 April 2017 Studentpal that no longer wished to proceed with the purchase of the business. He says that based on multiple conversations he had with a representative of Studentpal, its decision not to proceed with purchase of the business was due to what he described as the extensive time in which it was taking the respondents to approve the lease assignment.
Council issued the formal fire safety order to the respondents on 7 April 2017 (fire safety order). The order is not in evidence but there is no dispute that it was issued or as to its contents.
A few days later Mr Hodges was informed by someone from the agent's office that the respondents were arranging for a contractor, JWC Group Pty Ltd (JWC), to attend the premises and undertake certain work. This included the replacement of the ground floor ceiling. Mr Hodges was asked to provide copies of drawings that he had obtained in 2016.
On 27 April 2017, the respondents obtained a quote from JWC to upgrade the fire protection and separation works of the retail and residential areas at the premises (fire protection work). The amount quoted was $37,000+ GST. In relevant part the quotation reads as follows: Quotation for Upgrade of Fire Protection / Separation Cafe and Residential Upstairs (2 Mary Ann St-Ultimo) Scope of Works Internal Works Disconnect existing LED downlights and smoke detectors, Disconnect off ceiling and clean out existing cafe range hood (retain on-site), Demolish existing cornice, 50m2 of ceiling and furring channels to all areas under upper floor (Note: Existing roof and ceiling above this will be left as is) Provide new fire rated cones above each LED (18x) downlights. Provide new suspended ceiling supports (to be hung from existing structure), Provide new fire rated ceiling (2x 13mm Fyrechek) with fire rated caulking to seal perimeters behind cornice, Provide new 90mm cornice to perimeter of new ceiling, Painting to new ceiling/cornice and minor patch painting to top 100mm of walls if required, Reinstate existing downlights. Provide new smoke detectors (6of.). External Works Demolish and remove existing roller shutter door (dispose of off-site), Provide new 1.98m high gate / doors to replace roller shutter. Certification Works Annual fire safety certificate, Kitchen exhaust system, New fire rated ceiling. Sub TOTAL $37.000.00+GST
JWC commenced work on the premises in early May 2017. By 10 May 2017 it had issued two invoices to the agent for 70% of the quoted works which totalled $25,900 plus GST.
On 30 May 2017 Mr Park sent an email to Mr Hodges. In it he informed Mr Hodges that the applicant was 20 days behind in its rent and that $6113.05 needed to be paid by 18 June 2017. He also said that there were outgoings of $2005.80 due by the applicant.
The next day Mr Hodges replied by email in which he said this: Thanks for the email. As you are aware there are currently renovations that have been going on since Friday the 5th of May 2017 and the shop part of the lease has not been able to be used from this time. The shop part of the lease is worth at least 60% of the value of the lease and I would think a fair reduction in rent would be $100/day that the shop part has been unusable. As of today, the time the shop has been unusable is 27 days, so the amended amount owing is $8118.85 - $2700 = $5418.95. I will be able to pay the amended amount early next week, however, please be aware that the amount owing would still be reducing by $100 per day until the works are completed. Please give me a call if you want to discuss further.
On 1 June 2017, Mr Park said that he had forwarded the rent reduction request to the respondents and that he would advise Mr Hodges once "we hear back".. He added: "However in the meantime, you are still required to pay the rent to comply with the lease terms. Could you please make the payment asap as this matter is of high urgency."
Mr Hodges responded to Mr Park the same day. He described as "quite absurd" the request that he pay the full rent "when the income producing components of the lease is not usable and has been unusable for the last 28 days." He added that his "income has now been severely affected, and the earliest (he) can pay will be next week."
Mr Park also responded by email the same day, that is, on 1 June 2017. He said that "we are aware of the residential and retail component of the property" and "as mentioned in the last email the rents still need to be paid and on time. The compensation you are calculating have (sic) not been finalised and we are awaiting instructions."
A second offer to purchase the applicant's business was received on 17 July 2017 from Young's Chinese Kitchen. The purchase price was $39,888. Mr Hodges says that he sent an email to the agent requesting the consent of the respondents' to the assignment of the lease.
In an email to Mr Hodges dated 20 July 2017, Mr Park advised that the fire protection work had been completed. He said the "grand total for the work was $37,000 plus GST… The owner has paid $28,490. The owner's lawyers has (sic) advised (the applicant is) liable for part of the costs $12,210 as per the lease."
Mr Hodges replied to Mr Parks email on 21 July 2017. Mr Hodges said that he "had legal advice that it was the owners responsibility for compliance with any Council Order and the fact that it is structural issue, means that it is the owner's full responsibility as per the terms of the lease." He added "please send me through the owners lawyers advice on the matter and I can forward to my solicitor for comment."
The next day Mr Park sent an email to Mr Hodges informing him that he would request further instructions but added that "the rent needs to be paid in full $11,914.50" and (the applicant) it is 38 days behind. Any adjustment can be done once all parties agree. Failure to pay the rent will be a breach of the lease agreement. This may also jeopardise your ability to assign the lease."
On 31 July 2017, in an email to Mr Hodges, Mr Park informed him that the request for the lease assignment needed to be sent to the respondents' solicitor, which was done. On 7 August 2017, the respondents approved the assignment of lease.
Mr Park sent an email to Mr Hodges on 1 September 2017. It simply said, "Please see attached invoice for outgoings." Attached to the email was a tax invoice on the agent's letterhead address to the applicant. The invoice was for $40,700 inclusive of GST. The description in the invoice was "Fire Order Compliance." The email was copied to the solicitors acting for the incoming lessee.
On 8 and 14 September 2017 the following email exchange took place between the applicant's solicitor, John Fitzpatrick, and the respondents' solicitor, Alan Yeung: 1. Mr Fitzpatrick to Mr Yeung Dear Alan, 1. I Just left you a message. Please call me when you have a chance. 2. Our client is prepared to pay $15,368.77 for Land Tax. This is calculated as follows $5,497 for 2017, $4,937 for 2016, $4,788 for 2015 and $146.77 (13 days of December 2014 when the lease commenced). 3. Our client is prepared to pay $8,633.06 for outstanding rent (53 days @ $148.08 plus GST from 18th July to 8th September 2017) 4. Our client is prepared to pay $1,011.14 for Council Rates. 5. Our client is prepared to pay $1,925.00 for your legal fees with regards to assignment of lease. 6. On settlement of the sale our client will receive approximately $11,743 which will be put In our trust account, together with the deposit ($3,988) already in our trust account. 7. In addition there is amount of $12,993 as a rental bond. 8. In total there will be approximately $28,725 held pending resolution of the outstanding item - I note that I have already indicated in my emails to you and the real estate agent that the quotation from JWC covers work of a capital nature and is not payable by the Lessee. 9. The abovementioned is a significant concession by the Lessee to resolve this matter so that the assignment of the Lease can proceed and we can settle the sale without further delay 10. We look forward to your urgent response to this offer. 1. Mr Yeung to Mr Fitzpatrick on 14 September 2017 Dear John, Our client accepts the offer below on the basis: 1. Settlement takes place as soon as practicable and we receive a bank cheque for $26,937.97 (items 2.-5.) payable to Frank Low Yeung; 2. We will hold the bank guarantee pending resolution of the fire order issue. 3. You will hold the balance of sale proceeds less your costs in your trust account pending resolution of the fire order issue. Regards, Alan Yeung
The day after this exchange of emails, the lease was terminated.
JWC issued its third invoice to the agent on 28 February 2018 for $12,210 inclusive of GST for the fire protection work at the premises.
On 13 March 2018 the respondents presented the applicant's bank guarantee for payment and received $12,993. It did so without the consent or approval of the applicant. A fourth and final invoice for the fire protection work was issued to the agent by JWC on 27 November 2017 for $2640 inclusive of GST.

The claims

Application COM 20/27505, the applicant's claim, was lodged with the Tribunal on 19 June 2020. Application COM/49112, the respondents' cross-claim, was lodged on 23 November 2020.
In short, the central dispute between the parties is who, under the lease, was responsible for the fire protection work. This turns on whether the work was of a structural nature and was it required as a consequence of the applicant's use of the premises. The applicant says the work was structural and the responsibility of the respondents. The applicant also says that the failure on the part of the applicant to undertake the fire protection work caused disruption to its business. It also says that certain conduct on the part of the respondents was unconscionable and misleading or deceptive.
The applicant's claims are made under sections 34(1)(d), 62B and 62D of the Act for which it says that it is entitled to compensation or damages amounting in all to $113,115.22.
In addition, the applicant seeks compensation in the amount of $12,933 for the bank guarantee. It says it is entitled to that amount on the basis that the respondent's breached the agreement reached on 14 September 2017 to hold the bank guarantee "pending resolution of the fire order issue" or, as part of the unconscionable conduct, or misleading or deceptive conduct claims brought against the respondents.
The section 34(1)(d) disruption claim is in respect of two separate periods during which the applicant says it was unable to trade from the ground floor of the premises due to the premises not being BCA compliant and requiring the fire protection work. It seeks compensation in the amount of $83,003.22 made up as follows: 1. For the period 30 March 2015 to 1 January 2016 (first rental period): Details Amount Rent (263 days at $142.38 per day x 60%) $22,467.56 Lease Rent (13 days at $ 148.08 per day x 60%) $1,925.04 Outgoings (land tax and council rates) $7,267.86 Costs of works $24,192.06 Subtotal $55,852.52 1. For the period 21 February to 15 September 2017 (second rental period): Details Amount Rent (206 days at $162.88 per day x 60%) $20,132.31 Lease Outgoings (land tax and council rates) $5,348.39 Costs of works $1,670.00 Subtotal $27,150.70 Total $83,003.22
The applicant claims 60% of the rent in each of the periods this being its calculation of the ground floor area as a percentage of the entire premises. The calculation is not in dispute
I have noticed that the amount of $1,952.04 claimed in the first rental period is incorrect. It is for the full 13 days and does not allow for the 60% apportionment. The correct amount is $1,155.02, The total amount claimed in respect of the first and second rental periods therefore comes to $82,233.20.
In relation to the section 62B unconscionable conduct claim, the damages claimed by the applicant include the amount claimed in respect of the first and second rental periods, $12,933 for the bank guarantee, and an amount of $30,112 being the difference between the proposed sale price of the business to Studentpal and what it was eventually sold for to Young's Chinese Kitchen.
The applicant also claims interest pursuant to section 72A of the Act.
Counsel for the respondents, Mr Smorchevsky, has submitted that the applicant has widened the scope of its unconscionable claim as articulated in the points of claim to rely upon anything that the respondents and the agent acting for them did, or did not do. He says the applicant should not be permitted to do so. He says the respondents may well have called additional witnesses and adduced further evidence and even conducted their cross examination differently. In relation to the applicant's misleading or deceptive conduct claim, Mr Smorchevsky says that the reliance upon the representations made between Mr Hodges and Mr Ho were not identified in the applicant's points of claim and should not now be permitted for the reason that the respondents would have conducted their case differently if the applicant has identified that it would be relied upon dealings between a former employee of the agent and the applicant. He also says that there was simply no need and no expectation for the respondents to have attempted to adduce any evidence from either Mr Ho or Mr Park as to what conversations they may have had with Mr Hodges, and in any event Mr Ho no longer works for the agent having left sometime in 2016.
These submissions are rejected. The applicant's causes of action were clearly pleaded and the facts upon which the applicant now relies were available to it on the evidence. Further, Mr Hodges affidavits were filed in November 2020 and January 2021, well before the first two hearing days in June of this year. The respondents had ample opportunity to present evidence from Mr Ho or Mr Park, or both. Mr Ho no longer being in the employ of the agent is an unacceptable excuse for not adducing evidence from him.
The respondents cross-claim is for $45,654.35. Of that amount, they claim $40,700 inclusive of GST for the cost of the fire protection work they say the applicant was required by the terms of the lease to undertake and pay for. The balance of the claim is for unpaid rent. The respondents also seek interest under the lease or, alternatively under the Act, on any money found to be payable by the applicant.
Each party pleads that if they are found to be indebted to the other party, that amount is to be set-off against any amounts found to be owing by the other party.
Both the applicant and the respondents seek an order pursuant to section 71B of the act allowing their respective claims to be lodged with the Tribunal more than three years and no later than six years after the liability or obligation that is the subject of the claim arose.

Jurisdiction

It is not in dispute that the lease is a retail shop lease as defined under section 3 of the Act, each of the parties claims is a "retail tenancy claim" as defined under section 70, the applicant's unconscionable conduct claim is a claim for relief under section 62B of the Act, and the Tribunal has jurisdiction to determine each claim and make orders under section 72 of the Act. To be clear, notwithstanding that the premises include a residential area above the ground floor retail area, it is not in dispute that the ground floor retail area represents 60% of the premises. I am therefore comfortably satisfied that the predominant use of the premises was that of a juice bar and café, a use which comes within the business description "restaurants… and other eating places" found in Schedule 1 of the Act.

The relevant lease provisions

The following provisions of the lease are relevant to the determination of the dispute between the parties: 1. Clause 3.11: The lessee shall and will at the lessee's own cost comply with all notices, orders, by-law regulations and requirements of the Environment Protection Authority, the Council, Sydney Water, and any governmental or public authority imposing any liability on the lessor or lessee except of a structural nature not rendered necessary owing to the nature of the lessee's business carried on upon the said premises and If the lessee shall fail, neglect or refuse to comply with such notice, regulations or requirements it shall be lawful and not obligatory upon the lessor to comply with same and all monies paid by the lessor in connection shall be payable by the lessee to the lessor on demand as Iiquidated debt. 2. Clause 5.7(i): The lessee shall at the lessee's expense, to the extent not prohibited by legislation; comply with all statutes ordinances proclamations orders and regulations affecting the premises or any fixtures or fittings installed by the lessee therein provided that the lessee shall not be responsible for any structural alterations and repairs unless required by reason of the lessee's particular use of the premises.

The relevant provisions of the Retail Leases Act

The following sections of the Act are relevant to the determination of the dispute between the parties: 1. Section 7: This Act operates despite the provisions of a lease. A provision of a lease is void to the extent that the provision is inconsistent with a provision of this Act. A provision of any agreement or arrangement between the parties to a lease is void to the extent that the provision would be void if it were in the lease. 1. Section 23: A provision in a retail shop lease is void to the extent that it requires the lessee to pay any amount in respect of the capital costs of the building in which the retail shop is located or (in the case of a retail shop in a retail shopping centre) of any building in the retail shopping centre or any areas used in association with any such building. 1. Section 34(1)d): (1) A retail shop lease is taken to provide that if the lessor - (d) fails to take all reasonable steps to prevent or put a stop to anything that causes significant disruption of, or which has a significant adverse effect on, trading of the lessee in the shop and that is attributable to causes within the lessor's control, and the lessor does not rectify the matter as soon as reasonably practicable after being requested in writing by the lessee to do so, the lessor is liable to pay the lessee reasonable compensation for any loss or damage (other than nominal damage) suffered by the lessee as a consequence. 1. Section 41(a), (b), (g) and (h) The following procedure applies to the assignment of a retail shop lease that requires the consent of the lessor-- (a) A request for the lessor's consent to an assignment of the lease must be made by the lessee in writing. (b) The lessee must provide the lessor with such information as the lessor may reasonably require to be satisfied that the financial resources and retailing skills of the proposed assignee are not inferior to those of the lessee. (g) The lessor has 28 days (the "decision period" ) to decide whether to consent or to refuse consent to assignment. The decision period starts from when the request for consent was made by the lessee or from when the lessee has complied with the requirements of this section (whichever is later). (h) The lessor is taken to have consented to assignment if the lessee has complied with this section and the lessor has not, within the decision period, given notice in writing to the lessee either consenting or withholding consent to assignment. 1. Section 62B: (1) A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable. 1. Section 62D: A party to a retail shop lease must not, in connection with the lease, engage in conduct that is misleading or deceptive to another party to the lease or that it is likely to mislead or deceive another party to the lease. 1. Section 71: (1) A party or former party to a retail shop lease or former retail shop lease may lodge a retail tenancy claim in respect of the lease with the Tribunal for determination of the claim. (2) A claim may not be lodged more than 3 years after the liability or obligation that is the subject of the claim arose. 1. Section 71A(1) and (2): (1) A lessor or lessee, or former lessor or lessee, under a retail shop lease or former retail shop lease may lodge an unconscionable conduct claim with the Tribunal for determination of the claim. (2) A claim may not be lodged more than 3 years after the alleged unconscionable conduct occurred. 1. Section 71B: (1) A retail tenancy claim may be lodged more than 3 years but no later than 6 years after the liability or obligation that is the subject of the claim arose, if the Tribunal orders that the claim may be lodged with the Tribunal. (2) An unconscionable conduct claim may be lodged more than 3 years but no later than 6 years after the alleged unconscionable conduct occurred, if the Tribunal orders that the claim may be lodged with the Tribunal. (3) The Tribunal may make an order under this section-- (a) on application by the party or former party concerned, and (b) after hearing such of the persons likely to be affected by the application as it sees fit, and (c) if the applicant satisfies the Tribunal that it is just and reasonable to make the order. 1. Section 72(1)(a): (1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate - (a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person; 1. Section 72AA (1)(a): (1) In proceedings for an unconscionable conduct claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate - (a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person 1. Section 72A(1) and (3): (1) When the Tribunal orders on a retail tenancy claim or an unconscionable conduct claim that a person pay money to another person, the Tribunal may order that there is to be included, in the amount ordered to be paid, interest at a specified rate on the whole or any part of that amount for the whole or any part of the period between when the cause of action arose and when the order takes effect. (3) The rate of interest specified by the Tribunal under this section must not exceed the rate at which interest is payable on a judgment debt of the District Court.

Evidence

Two affidavits, both affirmed by Mr Hodges, and dated 28 October 2020 (the first Hodges affidavit) and 21 January 2021 (the second Hodges affidavit) were filed on behalf of the applicant. The applicant also relies on a report dated 8 October 2020 by Stuart Boyce of BCA Logic Pty Ltd (Mr Boyce), who provided an expert report (the Boyce report). It became the applicant's Exhibit 1.
The Antcliffe email and the Doughty and McGrath reports were annexed to the first Hodges affidavit.
The respondents relied upon the affidavit of Ms Tu and Ms Kho. No expert evidence was adduced by the respondents.
On 5 November 2020, the Tribunal ordered that evidence in one application is evidence in the other.
Most of the evidence presented by the parties is documentary. Their witnesses, Mr Hodges. Mr Boyce, Ms Tu and a director of the agent, Ms Patricia Kho (Ms Kho), were cross examined at the hearing. Because Ms Tu and Ms Kho did not have any direct dealings with Mr Hodges, and the respondent's did not adduce any expert evidence, it is not necessary for me to make any findings of credit or prefer the evidence of any particular witness over any other witness or witnesses.

Jones v Dunkel inference

Mr Vincent Ho, a former employee of the agent, and Mr Chong Park, an employee at the time of the hearing, did not give evidence on behalf of the respondent. Mr Bateman submits that it is appropriate for the Tribunal to draw a Jones v Dunkel (Jones V Dunkel (1959) 101 CLR 298) inference that their evidence would not have assisted the respondents' case. This is because, unlike Ms Tu or Ms Kho, both had direct dealings with the applicant and Mr Hodges and the respondents' failure to call them has not been explained. The inference is said to be important in relation to whether the respondent's conduct was reasonable and timely, unconscionable or misleading or deceptive.
Mr Smorchevsky says the Tribunal can but is not required to draw a Jones v Dunkel inference if there is an unexplained failure to call a witness that a party is expected to have called. He says it is necessary to show that it would have been naturally expected that the person would be called by a particular party. Only if those conditions are satisfied, Mr Smorchevsky submits, may the inference be drawn that the person's evidence would not have assisted the party who is expected to call them. He also submits that the applicant cannot use the respondent's failure to call someone in order to overcome a lack of evidence in the applicant's case.
Both Mr Ho and Mr Park were employees of the agent and who, at different times throughout the history of this matter, had direct contact with Mr Hodges. Mr Hodges says in his second affidavit that the conversations deposed to in his first affidavit with representatives of the agent were, he believes, with Mr Ho or Mr Park unless otherwise specified. This assertion by Mr Hodges could not have come as a last minute surprise to the respondents and their legal advisers. Mr Hodges affidavits were filed well before the hearing. In my view it would have been both natural and expected for Mr Ho or Mr Park, or both, to give evidence and there was ample opportunity to do so prior to the first two hearing days in June of this year. No reason has been given for Mr Ho or Mr Park not giving evidence. This is particularly significant in the case of Mr Park who was still in the agent's employ at the time of the hearing, and also because neither Ms Tu nor Ms Kho had any direct dealings with Mr Hodges.
While the contemporaneous documents are particularly relevant in establishing the background facts, and generally the best evidence of what occurred, to the extent that the conversations Mr Hodges deposes to having with Mr Ho and Mr Park are relevant to the determination of these proceedings, I consider it appropriate, in the circumstances, to draw a Jones v Dunkel inference that Mr Ho and Mr Park's evidence could not have assisted the respondents' case.

The Boyce report

Mr Boyce was asked by the applicant's solicitors to provide an expert opinion on the types of works set out in a table in his report. It is said to be a compilation of the various works to be carried out at the premises that had been identified in the Doherty report, the McGrath report and the proposed fire order.
In the Boyce report, Mr Boyce classified the ground floor level of the premises as class 6 under the BCA, describing it as a "retail tenancy" and the first floor level as class 4 under the BCA, which he described as "caretaker's residence". The report also categorised the works required to the premises as "decorative", "cosmetic", "minor", "major", or "structural". In relation to the descriptor "major defect" the report says this: Essentially considering an item as a Major Defect is equivalent to a Serious defect as per the Serious Defect Definition contained within the Residential Apartment Buildings (Compliance and Enforcement Powers) Act (RAB(CEP) Act) which states: Serious Defect, in relation to a building, means: (a) a defect in a building element that is attributable to a failure to comply with the performance requirements of the Building Code of Australia, the relevant Australian Standards or the relevant approved plans, or (b) a defect In a building product or building element that - (i) is attributable to defective design, defective or faulty workmanship or defective materials, and (ii) causes or is likely to cause- (A) the inability to inhabit or use the building (or part of the building) for its intended purpose, or (B) the destruction of the building or any part of the building, or (C) a threat of collapse of the building or any part of the building, or (c) a defect of a kind that is prescribed by the regulations as a serious defect, or (d) the use of a building product (within the meaning of the Building Products (Safety) Act 2017) in contravention of that Act. In reviewing the defects identified within the table below it is my opinion that these items would be considered to be a Serious Defect under the RAB (CEP) Act as all items are a current breach of the performance requirements of the Building Code of Australia, or Australian Standards called up under the Building Code of Australia. It is noted that the RAB(CEP) Act is not necessarily applicable to this commercial building portion with the caretaker's residence above, however it gives some context as to the nature of the category "major defect" in the … table. A structural element in my opinion is a member and/or joint that fulfills a structural function and is a physically distinguishable part of a structure, for example, wall, column, beam or floor. Thus a structural defect would be a defect related to a structural element that supports or holds up the subject building. In the items included in the table below and the schedule of works - all items are not considered structural however most of the items fall under the category major defect as they are a BCA or Australian Standard non-compliant issue.
It is not necessary to set out every item of work listed in the schedule to the Boyce report. It is sufficient to note that Mr Boyce expressed this opinion in relation to the following works: 1. The premises were insufficient with regard to fire resistance levels (FRL). The building has not been constructed with building elements/measures which will avoid the spread of fire between buildings on adjoining allotments and it is unclear whether the ground floor is constructed of fire-resistant materials that would maintain structural stability. The works required to achieve FRL were classified as major and were required irrespective of the use of the retail tenancy on the ground floor. The work was a base building compliance matter, and the failure to perform the work would compromise the premises ability to be occupied as a residence at the first floor level and compromise the premises ability to be occupied as a restaurant/café/juice bar at the ground floor level. 2. The complete ground floor ceiling is to be separated from the residence by a construction complying floor/ceiling system with appropriate FRL. These works were also classified as major, and a base building compliance matter and if not performed would compromise the premises ability to be occupied as set out in (1) above. 3. The kitchen exhaust system (design and installation) has not been certified to ensure it complies with AS/NZS 1668.1 and Part F4.12 which may suggest the system is not provided with adequate equipment to minimise the spread of fire that may occur. The work is classified as major, and, if the use of the ground floor retail portion is for food preparation or food handling, compliance with these works would be required to meet the Food Standards. The works would be considered to be a tenancy use issue if cooking of food was proposed. The failure to perform these works would not compromise the ability to occupy the first floor of the premises as a residence as the work related to the commercial portion of the premises only but would compromise the ability to occupy the ground floor.
It is to be noted that none of the works in respect of which Mr Boyce expressed an opinion were classified by him as "structural". Further, in relation to the kitchen exhaust, the certificate of compliance issued by Kras Engineering Pty Ltd was not one of the documents he lists as having been reviewed in preparing his report. This is likely to explain his comment that the exhaust system had not been certified. I am satisfied that the exhaust system installed by the applicant in the premises has been certified as compliant by Kras Engineering Pty Ltd.

The condition of the premises

Having regard to the Doherty report, the McGrath report, the Boyce report, the Antcliffe email, and council's notice of proposed fire order and fire safety order, there is no doubt, and I accordingly find, that the premises were not compliant with BCA fire safety standards or the level of safety expected by council, and work was required in order to make them compliant and safe. No finding is made that the fire protection work undertaken by JWC rendered the premises BCA compliant or that they meet the fire safety requirements of council.

Hearing

The hearing took place over three days. Mr Bateman of counsel appeared for the applicant and Mr Smorchevsky of counsel appeared for the respondents.
At the conclusion of day two of the hearing I made directions for the parties to file written submissions. The submissions were duly filed.

Issues

A preliminary issue to be determined is the parties' applications under section 71B of the Act for an extension of time in which to bring their respective claims.
The substantive issues in these proceedings are: 1. was the fire protection work 1. work "of a structural nature not rendered necessary owing to the nature of the applicant's business carried on upon the said premises" within the meaning of clause 3.11; or 2. "structural alterations and repairs (that were) required by reason of the applicant's particular use of the premises" within the meaning of clause 5.7(i); and 1. subject to the determination of issues (1)(a) and (b): 1. did the respondents engage in conduct proscribed by sections 34 (1)(d), 62B and 62D of the Act and if so, what, if any, compensation or damages might be payable by the respondents; 2. are the respondents' entitled to the relief they seek in their cross claim; and 3. who is entitled to the proceeds of the bank guarantee?

Applicant's submissions

In relation to the applicant's extension of claim application, Mr Bateman submits that the test for assessing whether it is just and reasonable for the Tribunal to make an order under section 71B is whether there can be a fair trial of the issues between the parties or there is prejudice to be suffered by the defendant or respondent. In support he relies on this statement by a Judicial Member Bluth in Polylux Pty Ltd v Corpers (No.5) Pty Ltd [2009] NSWADT 284: The primary test for determination as to whether or not an extension of time should be granted is "whether there can be a fair trial of the issues between the parties": see Brisbane South Regional Health Service v Taylor [1961] 186 CLR 541 and - South Western Sydney Area Health Service v Gabriel [2001] NSWCA 477 (17 December 2001). In other words, whether there is prejudice to be suffered by the defendant if the extension is granted; Sydney City Council v Sezegarac [1998] 43 - NSWLR195.
Mr Bateman says that it is just and reasonable for the Tribunal to make the extension order because: 1. both parties are seeking an order under section 71B; 2. most if not all of the liability, obligation or conduct that has given rise to the applicant's claim falls within the three-year period prior to 19 June 2020, when the applicant commenced proceedings. In support of this submission he points to a number of matters including the lease still being on foot, the fire protection work was yet to be completed, the parties agreement whereby the applicant was permitted to assign its lease, and their acknowledgement that liability for the fire protection work remained unresolved and was still to be determined; 3. the applicant suffered significant financial hardship and being unable to trade from the premises for significant periods of time, and was unable to commence proceedings while the lease remained on foot because it was reliant on the respondents cooperation and consent to exit of the lease and reduce its losses; 4. there is no prejudice suffered by the respondents. In this regard Mr Bateman refers to the fact that the respondents are also seeking an extension order, the evidence given by Ms Tu was limited in nature only in that she had no direct dealings with Mr Hodges and, during cross examination, she did not indicate any difficulty in recalling events. While Ms Kho under cross examination said that it was "impossible to recall conversations so many years ago" and that the agent had "very limited records of emails that date back so many years", also under cross examination Ms Kho said that it was the agent's practice to record important information in writing and by email and to not delete emails if they contained important information. Mr Bateman also observed that that no allegation of direct dealings with Ms Kho were made by Mr Hodges; and 5. any difficulties that the respondents may have had with evidence was due, amongst other things, to Ms Kho choosing not to speak with Mr Park, which she acknowledged during her cross examination.
On the question of who was responsible for the fire protection work, Mr Bateman makes the following submissions: 1. To the extent the lease requires the applicant to pay an amount that is in respect of a capital cost of the Premises, it is void by reason of the operation of section 7 and a section 23 of the Act. 2. As properly construed, the lease does not impose an obligation on the applicant to carry out the fire protection work as they were structural in nature, arose irrespective of the use or occupation of the premises by the applicant and once completed, had the effect of rendering the entire premises, that is, both the ground floor retail area and upstairs residential area safe and suitable for occupation. 3. The obligations that clauses 3.11 and 5.7(i) imposed on the applicant requiring it to comply with any notice, order or regulations were qualified in that they did not apply if the works required were of a structural nature and have not been rendered necessary owing to the nature of the applicant's business. 4. The fire protection work predominantly, and possibly wholly, concerned fire safety issues. This is confirmed by the reports in evidence and Council's proposed fire order notice. 5. The fire protection work was structural in nature despite those works not having altered or interfered with the framework or load-bearing components of the building. In support of this submission, Mr Bateman relies on three decisions: Holus Bolus Pty Ltd v The Wicko Pty Ltd [2012] NSWSC 497 (Holus Bolus), Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd & Anor [2006] NSWCA 224 (Alamdo) and Advance Fitness v Bondi Diggers [1999] NSWSC 264 (Advance Fitness) 6. The fire protection work was not rendered necessary due to the nature of the applicant's business nor were they required by reason of the applicant's particular use of the premises as a café and juice bar. 7. The submission is said by Mr Bateman to be supported by: 1. the Boyce report, Doherty report, the McGrath report, and what was noted in the Antcliffe email; 2. the fact that the premises had always been leased by the respondents for eat in and takeaway food businesses, and in that regard the applicant's business was no different; 3. Ms Tu's evidence that for 35 years the respondents had owned the premises had always consisted of a residence upstairs and retail area downstairs and the respondent's received rent from the applicant knowing or, at the very least, not objecting to the upstairs area of the premises being used as a residence; 4. the respondent's signed without objection the building certificate application lodged with Council; 5. the Doherty report which says the works performed by the applicant did not result in a change of use; 6. the BCA Review report finding that it was likely an earlier development consent issued by Council approved the use of the ground floor as a takeaway food shop and the first floor as an associated residential flat.
Having been put on notice since 21 April 2015 by Mr Hodges email to Mr Ho, Mr Bateman submits that the respondents, in breach of section 34(1)(d) did not take all reasonable steps to either prevent or put a stop to the significant disruption to or the adverse effect on the applicant's trading from the premises due to the need for the fire protection work. Further as owners of the premises for approximately 35 years, and with the right under the lease to carry out any structural works they think should be carried out (clause 8.2 (g)), it was within the respondents' control to prevent the disruption to the applicant's business for which it claims reasonable compensation under section 34(1)(d).
The appropriate measure of compensation for the applicant, submits Mr Bateman, is a proportion of the rent that it paid for the retail element of the lease, estimated by the applicant to be 60%, for the periods it was unable to trade, outgoings paid by the applicant during those periods and costs paid by the applicant towards the fire protection work. Those amounts are set out in paragraphs 74 to 76 above.
Mr Bateman also submits that the applicant should also be compensated in the amount of $12,933, for the bank guarantee which the respondents either as part of its unconscionable conduct or misleading or deceptive conduct claim or, by reason of the respondents breach of section 16BA of the Act which provides that the maximum return period is two months after completion of the performance obligations under the lease. Alternatively, the compensation should be awarded if it is found that the applicant is not liable for the fire protection work.
In relation to the unconscionable conduct claim, Mr Bateman relies on the following decisions: 1. Attorney General (New South Wales) v World Best Holdings Ltd [2005] NSWCA 261 and Spiegelman CJ's statement that unconscionability was a concept that required a "high level of moral obloquy"; 2. Ipstar Australia Pty Ltd v APS Satellite Pty Ltd [2018] NSWCA 15, where the Court of Appeal indicated that the use of "high level of moral obloquy" might be an unhelpful or imprecise phrase. Instead, the question of unconscionability involved a consideration of all is the circumstances to determine whether the conduct in question falls below acceptable norms, standards or values to the point where it is determined to be unconscionable; 3. the Court of Appeal decision in Tonto Homes Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 and to the passage at [291] where Allsop P (as his Honour then was) said this: It is neither possible nor desirable to provide a comprehensive definition (of unconscionable conduct). The range of conduct is wide and can include bullying and thuggish behaviour, undue pressure and unfair tactics, taking advantage of vulnerability or lack of understanding, trickery or misleading conduct. A finding requires an examination of all the circumstances. 1. Armstrong Management Pty Ltd v Sais-Bond & Associates Pty Ltd (RLD) [2007] NSWADT 47 at 141 where the Appeal Panel noted that section 62B of the Act "requires, ultimately, an holistic examination of all the circumstances of the lease relationship" and "one would normally expect to see an unconscionable conduct finding supported by a range of considerations " rather than one instance of egregious conduct.
Mr Bateman submitted that when viewed holistically, the following conduct by the respondents is relevant to a finding of unconscionable conduct: 1. not responding to 5 rent abatement requests between April 2015 and May 2017 when the applicant was unable to trade; 2. failing to assist or respond meaningfully, or in a timely manner, in relation to issues raised regarding the premises' compliance with the BCA; 3. taking no action in relation to the notice of proposed fire order; 4. threatening Mr Hodges that the applicant would be in breach of the lease if it did not provide the fire compliance certificate; 5. informing Mr Hodges that if the applicant failed to pay $12,210 for fire protection work, it may jeopardise its ability to assign the lease; 6. failing to approve in a timely manner the assignment of the lease to Studentpal; 7. despite repeated requests from Mr Hodges, failing to provide the specific advices or indicating the provisions of the lease on which the respondents relied to support their assertions that the applicant was responsible for the fire protection work; 8. the circumstances surrounding the issuing of the invoice in the amount of $40,700 which was issued after the assignment to Young's Chinese kitchen had been approved, the solicitor for Young's Chinese kitchen was copied into the email attaching the invoice, and it was issued before the landlords had been invoice for the amount of $40,700; and 9. demanding and receiving payment of the bank guarantee in contravention of the September 2017 agreement.
Mr Bateman next submits that the respondents by themselves or by the agent engaged in misleading or deceptive conduct by representing prior to the applicant entering into the lease that there would be no problem with it using the premises to operate the applicant's business, that the applicant could carry out a professional like for like fit out of the premises without the approval of the respondents, and that the amount for outgoings was limited to items as provided by the former tenants of the premises and as described in the disclosure statement provided by the respondents to the applicant.
Finally, with regard to the respondents cross-claim, in summary Mr Bateman makes these submissions. So far as the claim for $40,700 for fire protection work is concerned, the respondents have not established, on the balance of probabilities, that the applicant is liable for those works. With regard to rent claim of $4954.35, firstly, the rental ledger relied upon by the respondents does not identify the amount as being outstanding and, secondly, the agreement reached between the parties (recorded in the exchange of emails between the parties' solicitors) on 14 September 2017, settled the circumstances of this particular claim.

Respondents' submissions

Mr Smorchevsky, for the respondents, submitted that the applicant should not be given leave to bring its claim out of time. He says that there was no satisfactory explanation for why the proceedings were not brought in time and, the respondents have been prejudiced by the delay especially where the applicant's submissions rely heavily on the respondent's recollection or lack of recollection.
Mr Smorchevsky also relies on the decision in Polylux and the passage set out at paragraph 105 above. He submits that there is actual prejudice to his client's and he relies on what McHugh J said in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 556: "Besides the proved prejudice, the Iong delay gave rise to a general presumption of prejudice''.
Mr Smorchevsky says that the evidence shows the applicant had the ability including, the financial ability, to retain lawyers when needed and could have commenced proceedings earlier than it did both during when the fire protection work had to be done and later. In this regard he points to Mr Hodges evidence he did have the ability to retain a lawyer in relation to the building issues, that he owned a property worth some $300,000 which had been leased rent-free, he received almost $40,000 from the eventual sale assignment of the applicant's business in September 2017 and he had been employed as a project manager both before entering into the lease and again around late 2018.
Ms Tu and Ms Kho's evidence was largely documentary and was responsive to the applicant's claim as set out in its points of claim which was limited largely to written representations. It was therefore unsurprising, Mr Smorchevsky submitted, that under cross examination they could no longer recall events that occurred many years ago, something that the applicant was taking advantage of and causing prejudice to the respondents.
Mr Smorchevsky submits that whether or not the applicant is granted leave to bring its claim out of time, the respondents should be given leave to bring their cross-claim because it was reactive to the applicant's much larger claim, depends almost entirely on the construction of the lease, does not require the Tribunal to delve into people's memories of events many years ago, and the applicant would suffer no prejudice if it were brought out of time.
In relation to the construction of the lease, Mr Smorchevsky submits that the effect of clauses 3.11 and 5.7 (i) is that the applicant is obliged to undertake the fire protection work at its expense. The structural exceptions found in both clauses do not apply because the work was not structural on a common sense view of that expression.
Mr Smorchevsky submits that the decision in Holus Bolus was not a conclusive statement of what will or will not constitute "structural" work, nor does it purport to change the law in that regard. Instead the decision construes a particular expression in a particular contractual context and arrives at a particular result on the facts of that case. Further, the obligation imposed upon the lessor in that case was framed so as to require it to undertake repairs "of a structural nature" that were required to be done "including in compliance with any fire notice order". The subject lease in the present proceedings, does not expressly include work required under a fire safety order or order within the concept of structural work.
Mr Smorchevsky submits that Advance Fitness can also be distinguished on its facts from the present proceedings. This is because he says, unlike the present case, the fire safety works required by Council in that case also involved the construction of walls, which influenced, he submits, Austin J's finding that the particular works included a structural element.
Mr Smorchevsky also submits, referring to the decision in Alamdo, that the authorities make clear that, in general, a common-sense approach must be taken to what constitutes structural work or matters of a structural nature, but that, unsurprisingly, there must be some connection to the structure of the building.
The purpose of clause 3.11, Mr Smorchevsky submits, is that the respondents have an interest in ensuring that the applicant complies with regulatory requirements but the applicant has an interest in ensuring that is not made liable for major works affecting the premises structure of a kind that Council may require. The clause describes structural work in the common sense way as understood by the applicant's own expert and by the authorities. The fire protection work the subject of these proceedings is not structural in that sense.
Clause 5.7(i) lists various matters that the lessee must do at its expense including making good damage to the building, replacing broken glass and damaged lights, repairing or replacing air-conditioning, lighting and electrical and plumbing fittings which are broken or damaged by the applicant. The reference to "structural alterations and repairs" in that clause, submits Mr Smorchevsky, needs to be read as something beyond matters involving repair and maintenance of fittings and systems, and instead to be referring to structural work as relating to the structure of the building, but not including the fire protection work.
Mr Smorchevsky adds that even if any of the fire protection work was in fact of a structural nature, the applicant's residential use of the premises contributed significantly to the regulatory compliance issue that they faced which, he says, was confirmed by Mr Boyce, the applicant's own expert.
In relation to the quantum of both claims, Mr Smorchevsky makes these submissions: 1. broadly speaking there does not appear to be any issue between the parties regarding the quantification of their respective claims; 2. even if the applicant succeeds in showing that the fire protection work was structural, 1. the onus is on the applicant to show that each aspect of the work in question was structural, and to the extent that it was not, then the respondent are not liable; and 2. the respondent's maintain that the work was rendered necessary by the applicant's use of the premises and therefore the respondents are not liable for that work. 1. The September 2020 exchange of emails between the parties' solicitors does not affect the respondents cross-claim and any liability that the applicant has to the respondent which is the subject of a claim. 2. While the respondents have not taken issue with the way in which the applicant has apportioned the rental component of its claim between commercial and residential uses, that claim cannot succeed because the applicant obtained precisely what it bargained for which was, the exclusive right to occupy the premises. No loss or damage was suffered in the form of rent paid because the applicant had the benefit of the premises.
Mr Smorchevsky submits that the applicant's decision not to trade was a personal decision and one where there was no legal or physical restriction on his ability to do so, something that was reinforced by his decision to start trading in January 2017. There was, submits Mr Smorchevsky, no inability to trade either legally, physically or even practically, since the applicant traded notwithstanding outstanding safety issues and the Tribunal should not accept Mr Hodges assertions to the effect that he could not trade when he did. Further, there is no sufficient causal connection between the losses claimed in the actions of the respondents.
In relation to the applicants unconscionable conduct claim, Mr Smorchevsky submits that: 1. there was nothing unconscionable about not doing the fire protection work as premises could be used as a café and juice bar, nor was it unconscionable in not giving a rent abatement to a tenant who ceased trading voluntarily and whose use of the premises contributed to the need for work to be done; and 2. it has not been proven or explained how it is that the respondents acted in some morally otiose way.
So far as the applicants misleading or deceptive conduct claim is concerned, Mr Smorchevsky submits that: 1. the representation that the premises could be used as a juice bar and café did not carry with it a representation about compliance measures that had to be taken into account by the applicant. The mere permission to use a property for a certain purpose does not mean that the use referred to will be lawful in all circumstances and for the purpose of all regulations; 2. there was an express disclaimer in the disclosure statement that the applicant "should investigate if the proposed use of the premises is permitted under planning laws"; 3. there is no implied warranty that the premises were fit for purpose; and 4. Mr Hodges acknowledged in cross examination that he could have asked his solicitors to check regulatory or similar requirements but did not do so nor did he check them himself.
Mr Smorchevsky also submits that the applicant's claim for loss of opportunity to sell its business should be rejected because the respondents were under no obligation to consent to the assignment where the applicant failed to provide the financial and other information required under of the lease, and failed to comply with the statutory procedure for obtaining consent under section 41 of the Act. He also says that there was nothing unconscionable about consent to the assignment or sale having been given on 30 March 2017 after being sought on 28 February 2017. Further, he says the tenancy application was inadequate in a number of respects including an inconsistency between the stated business experience of the applicant and its occupancy at the current trading address. It is also submitted that the proposed use of the premises was not included in the application, the particular employee who submitted the application was not mentioned in ASIC search and although the company was set up shortly before the application was submitted, it claimed to have some 500 members using its services.
So far as the bank guarantee is concerned, the outcome of that matter, submits Mr Smorchevsky, should abide by the outcome of the balance of the claims by the parties.
So far as the respondents cross-claim is concerned, Mr Smorchevsky submits that on the proper construction of the lease the applicant was obliged to pay for the work done by the respondent's. With regard to the unpaid rent claim, the respondent's rely upon the rental ledger that is annexed to Ms Kho's affidavit.

Consideration - Limitation Issue

Under section 71 of the Act, a retail tenancy claim by a party or former party to a retail shop lease may not be lodged with the Tribunal more than three years after the liability or obligation that is the subject of the claim arose.
The Tribunal, however, has a discretion under section 71B(1) of the Act to make an order that a claim may be lodged more than three years but no later than six years after the liability or obligation that is the subject of the claim arose. Under subsection (3), that order may be made on the application of the party concerned, after hearing the persons likely to be affected by the application as the Tribunal sees fit, and if the applicant satisfies the Tribunal that is just and reasonable to make the order.
According to applicant's points of claim: 1. the liability or obligation which is the subject of the applicant's claim for misleading or deceptive conduct arose on 12 November 2014 when the respondents provided the applicant with a draft copy of the lease which describes the permitted use as "restaurant/café"; 2. the liability or obligation which is the subject of the applicant's claim for unconscionable conduct arose on or around March 2015; and 3. the liability obligation which is the subject of the applicant's claim for breach of section 34(1)(d) arose on or around April 2015.
The applicant's claim was lodged with the Tribunal on 24 June 2020 and clearly outside the three-year limitation period prescribed by section 71B.
Mr Hodges gave two reasons for the applicant's delay in commencing proceedings. First he says that between December 2014 and January 2016 and December 2016 and September 2017, when the applicant was unable to trade, it suffered significant financial hardship and was not in a position to commence these proceedings for a period of time. Secondly, the applicant was not able to commence proceedings while relying on the respondents' consent to the assignment of the lease to a potential buyer and reduce its losses. Presumably what Mr Hodges was saying is that he did not want to upset the respondents by complaining when he was dependant of getting their consent to the assignment of the lease.
Both Ms Tu and Ms Kho gave evidence going to the limitation issue.
In her affidavit Ms Tu said that: "Unfortunately, due to the significant lapse of time, my memory and recollection of each specific occurrence is limited."
In her affidavit Ms Kho said this: These events have occurred many years ago. It is impossible to recall conversations so many years ago. Further, we have very limited records of emails that date back so many years ago. If these proceedings had been commenced earlier, it is likely that my recollection of conversations and other events would have significantly improved, and that additional documents may have been available.
The generally accepted test to be applied by the Tribunal in determining if an extension of time should be granted is "whether there can be a fair trial of the issues between the parties", which is the often quoted line from Judicial Member Bluth's decision in Polylux.
While the reasons advanced by Mr Hodges for not commencing proceedings sooner are unconvincing, the applicant's claim is essentially a documents case and the construction of two clauses in the lease, and recollection of events is not critical to the claim or the respondents' defence. Relevant communications between the parties and their representatives was by email and those contemporaneous records constitute the best evidence. There is also, in my view, no prejudice to the respondents. Any conversations between the parties involved Mr Hodges and the agent's Mr Ho or Mr Park, a former employee and current employee, respectively, of the agent. Mr Hodges recollection of those conversations has not been disputed since Mr Ho or Mr Park who did not give evidence.
Ms Tu did profess to have difficulty remembering some matters but I was not persuaded by her evidence that any lack of memory was relevant to the outcome of these proceedings. Ms Tu had no direct dealings with Mr Hodges with all correspondence and communications being conducted with him through Mr Ho and Mr Park.
Ms Kho's affidavit evidence was to the effect that the agent had very limited records, however, under cross examination she agreed that it was the agent's practice to record important information in writing and by email and require their filing if they contained important information. Also, like Ms Tu, Ms Kho did not have any direct dealings with Mr Hodges.
Two further factors are relevant in the overall consideration of whether to make an order under section 71B and which favour making the order. First, as recorded in email correspondence of 8 and 14 September 2017 between the parties' solicitors, an agreement was reached less than three years prior to the commencement of proceedings that the issue over who was responsible for the fire protection work was still to be determined. Secondly, the respondents also seek an order under section 71B in respect of their claim.
Weighing up the submissions and the evidence, and taking into account the two additional factors just mentioned, I am satisfied that no prejudice will be suffered by the respondents in extending the time for the applicant to lodge its claim and there can be a fair trial of the issues between the parties despite the applicant's long delay in commencing proceedings. Accordingly, I find that it is just and reasonable for an order to be made under section 71B(1) that the applicant's retail tenancy claim and unconscionable conduct claim may be lodged more than 3 years but no later than 6 years after the liability or obligation that is the subject of the claim arose.
The applicant accepts that if its claim is extended then an order should be made in respect of the respondents' claim. That is a relevant factor in the determination of the respondents' application under section 71B. It is also pertinent to the determination of the application that there is no apparent prejudice to the applicant in doing so and there can be a fair trial of the issues in relation to that claim. It is therefore just and reasonable that the respondents' claim also be extended, and so, in respect of that claim, an order will also be made under section 71B(1).

Was the fire protection work "of a structural nature" or "structural alterations and repairs"?

The first question to be considered is whether the fire protection work was work "of a structural nature" or "structural alterations and repairs" within the meaning of clauses 3.11 and 5.7(i) of the lease. If the work was structural, then it will be necessary to consider whether that was due to the applicant's use of the premises.
The cases relied upon by the applicant are informative as to the approach courts have taken in deciding the often vexed issue as to whether work on the leased premises is structural work, for which the lessor is normally responsible, or maintenance, which generally falls on the lessee.
In Alamdo one of the issues was whether the lessee was responsible for repair of the bitumen areas at the end of the lease. The condition of the areas went beyond reasonable wear and tear and the lessee had an obligation under the lease to repair them unless this amounted to "structural maintenance, replacement or repair". A referee and also Barrett J, the primary judge, concluded that it was structural maintenance, replacement or repair. The Court of Appeal agreed. Relevantly, Hodgson JA at 39-40 (with who Basten JA and McClellan CJ at CL agreeing, said this: Mr. McHugh submitted that bitumen paving, as distinct from reinforced concrete paving, could not be a structure because it was flexible and did not distribute its load to the ground; and because it lacked the inter-connectedness of parts which could make it analogous to a building. In my opinion, the concept of structure is not limited to this extent. In my opinion it was well open to the referee and the primary judge to find that the areas of bitumen paving were structures and that, as the experts agreed, the repairs needed to areas 1 to 3 were structural repairs.
Mr Bateman relies on this statement for the proposition that the structure of a building was not limited to the load bearing parts of a building.
In Advance Fitness, one of the issues that Austin J was required to determine was whether fire safety work to the subject premises that had been recommended by an expert, a Mr Howse, was "was structural maintenance, replacement or repair" work. Referring to the report prepared by Mr Howse, , Austin J said this: [37] It expressed the opinion that if certain 'base building works' and other works in the tenant-occupied areas were carried out, the resulting upgrading would afford a level of fire and occupant safety commensurate with regulatory objectives, which would allow the remaining tenants to trade in safe conditions. The base building works involved sealing up service shafts with fire resisting construction, installing some fire resistant door sets and replacing lift landing doors, removing combustible material, upgrading the automatic detection and alarm system by additional smoke detectors and alarm bells, upgrading the emergency lighting and installing further exit signs.
His Honour then went on to say this: The distinction between structural and non-structural repairs requires the Court to make a practical judgment as to whether the work, having regard to its nature and extent, interferes with or alters the framework or structure of the building. Older case law, referred to by Jenkins LJ in ….. (Grenada Theatres Ltd v Freehold Investments (Leytonstone) Ltd [1959] 2 All ER 176) at page 181, tended to describe all non-structural work as 'decorative', but the modern connotation of that word may be too limited to allow it any continuing utility. Having particular regard to their extent, my opinion is that works in the Howse Report include a structural element, particularly as they involve construction of walls and similar sealing structures, and fire doors.
Mr Bateman observed that Austin J formed the view that the works in question were of a structural nature despite an expert in those proceedings expressing an opinion that "the works do not involve structural maintenance, replacement or repair, but are merely for safety upgrading works."
In Holus Bolus, Nicholas J was required to consider the meaning of the phrase "of a structural nature" in the context of work required by Council to at the Terminus Hotel, Quirindi in order for those premises to comply with the BCA. The question to be decided was whether clause 12.2 of the lease imposed on the lessor obligation to carry out the work required by the order. The clause required the lessor: To make all amendments alterations reparations and additions of a structural nature which by virtue of any statute or by-law now or hereafter in force may be required to be done or executed in or upon the demised premises including compliance with any fire notice or order by the Council or relevant authority at any time during the term of the Lease or any holding over thereof.
Other clauses in the lease expressly excluded the lessee's obligation to carry out works which are "structural" or "of a structural nature".
The lessee contended that under the lease the lessor was required to comply with any fire notice order as the work was of a structural nature. The lessor contended that the work was not a structural nature and should be undertaken by the lessee pursuant to the terms of the lease. The actual work required by Council was as follows: 1. a smoke detection and alarm system be installed throughout the building; 2. a sprinkler system be installed throughout the building; 3. a hydrant system be installed externally in the beer garden, 10 metres away from the building; 4. emergency lighting be provided throughout all of the common areas; 5. exit signs be provided throughout all of the common areas and stairs; 6. all unit doors be fitted with solid core doors; 7. PFE's be installed; 8. all shafts be fire rated or sealed at each level; 9. all wall/floor penetrations be fire sealed; 10. the balustrading be undertaken as per the BCA requirements; 11. the gas cylinders be enclosed in masonry construction; 12. panic bars be installed to the doors in the POPE area; exit doors swing outwards; 13. all electrical boards be enclosed in fire rated construction; and 14. provision of annual fire safety certificate be undertaken each year as per the legislation requirements."
Nicolas J came to the conclusion that the work described in the preceding paragraph was of a structural nature. In coming to that decision his Honour relevantly said this: [27] The question is whether or not the works, or part of them, are within the meaning of "amendments alterations reparations and additions of a structural nature". Under the lease, the lessee's obligation to carry out works which are "structural" (cl 7.2) or "of a structural nature" (cl 9.12) is expressly excluded. The term "amendments" is ordinarily understood to include improvements, or rectifications, or corrections of a fault. [28] The term "alterations" is ordinarily understood to include changes or modifications. Meanings of "reparations" given in the Macquarie Dictionary include "3. restoration to good condition; 4. repairs". The natural and ordinary meaning of "structural" given in the Macquarie Dictionary is "1. of or relating to structure; relating or essential to a structure". [29] In context in cl 12.2, the term "of a structural nature" is intended to be descriptive of works carried on in and upon the hotel building. As a structure is something consisting of component parts, it follows that the description is not limited to works which affect only those parts which are load bearing such as the main walls. [30] There are many cases which discuss the meaning of "structure", "structural alteration", and "structural repairs", but all are with regard to the legislation, lease, or agreement in the particular case. Sometimes they afford helpful, but not determinative, guidance for the approach to be taken. In the end, the question is one of interpretation to ascertain the obligation of the party with regard to the words used in the clause in context, and to the surrounding circumstances. [31] The phrase "of a structural nature" is of wide generality. It concentrates the mind upon the condition, state, or quality of the building. It suggests something which is associated with, relates to, or affects the structure considered as a whole. I would respectfully agree with the following statement of Paine J in Di Francesco & Ors v Blantrix Pty Ltd & Ors [2004] NSWLEC 669: "53 Adopting a practical approach to the provisions of cl 4 of Sch 3 of SEPP 60 ... and mindful of observations in cases such as Bondi Diggers and Almado, I consider that the phrase 'structural alterations' refers to work which is substantial, meaning not de minimis or minor and which changes or adds to the form of the fabric of the building in a manner which cannot be regarded as merely decorative. Works that fall within this description cannot be 'non-structural alterations' ..." [32] The cases establish that the determination of the question whether or not, for example, amendments or alterations are of a structural nature, is largely a matter of fact and degree. The court should apply a practical, "common-sense man-of-the-world view". (Wates v Rowland [1952] 2 QB 12, p 23; Brew Bros. Ltd v Snax (Ross) Ltd [1970] 1 QB 612, pp 640, 641.) 33 [33] In my opinion, the question in this case must be determined with regard to the whole of the works to be done rather than to the component parts of the works individually (Brew Bros p 641, 646). This is because necessary compliance with the fire safety standards under the code depends upon the combined effect of completion of the various items required. The defendant's denial of liability turned on a narrow interpretation of the scope of the term "of a structural nature" which, in the circumstances, I find to be wrong. On this issue I reject the defendant's submissions, and accept generally those for the plaintiff. [34] The inescapable conclusion on the evidence is that the works affect, and are directly related to, the fire safe and fire resistant condition of the hotel building. The evidence shows, and I find, that because the building falls short of the required fire safety standards its utility as a place for public access and accommodation as a hotel is compromised. In my assessment, the works, taken as a whole, involve the installation of a system for the compartmentation and containment of fire in the hotel building. By carrying out the works the condition of the building will be amended or changed to a standard which is regarded as essential for the ordinary use and enjoyment of the amenities of a hotel (cf: R v Lowe (1954) 19 LGR (NSW) 345, p 351). Put another way, without completion of these works the structure could not be lawfully used for the purpose for which it was designed, built, and let to the plaintiff. It is relevant, of course, that under the lease the plaintiff is required to use the premises as a hotel, and to keep it open for the provision of liquor and accommodation to members of the public at all reasonable times (cll 9.1, 9.2, 9.7). [35] In short, performance of the works will change the condition of the building from unsafe to safe. Accordingly, in my opinion, the works the subject of the council's letter of 16 June 2011 require the making of amendments and alterations of a structural nature within the meaning of cl 12.2 of the lease.
I agree with Mr Smorchevsky's submission that Holus Bolus is not a conclusive statement of what will or will not constitute "structural" work. However, I am persuaded to reach the same conclusion as in Holus Bolus having regard to the striking similarity between the fire protection work to the hotel required by council in that case, and the fire protection work in present proceedings. In doing so, I respectfully agree with what Nicholas J referred to in Holus Bolus as the practical common sense view, and the "practical approach" of Paine J in Di Francesco & Ors in determining whether the fire protection work amounted to "work of a structural nature" or " structural…repairs" in the context of the lease in the present proceedings.
Like in Holus Bolus, the fire protection work required here was not out of concern that the building was at risk of collapse. There is no evidence that that was a possibility. Like Holus Bolus, the work required by Council (and which was work that was universally endorsed by the authors of the reports in evidence) was directly related to making the premises fire safe and fire resistant and so rendering safe premises that were unsafe. In that regard the fire protection work had a direct connection with the structure of the premises. That in itself, in my view, is sufficient to make the work of a structural nature. Without the fire protection work being completed, the premises could not lawfully be used for the purposes for which they were being leased to the applicant because in that state they were unsafe. It is equally clear to me that when completed the works would, to adopt the words of Paine J in Di Francesco & Ors, add to the fabric of the premises not in a decorative way, but to render them safe for occupation and use.
I should add that Mr Smorchevsky also relies upon the fact that Mr Boyce did not describe in his report any of the fire protection work required as "structural" and he expressed the opinion, without elaboration, that a structural defect would be a defect related to a structural element that supports or holds up the subject building. In other words, none of the work required was structural and therefore not work for which the respondents should be responsible for. Mr Boyce holds tertiary qualifications in health and building surveying and also fire safety engineering. My view remains unchanged notwithstanding the opinion expressed by Mr Boyce and his qualifications. Ultimately it is a matter for the Tribunal to determine whether the work was of a structural nature and, in this regard, I respectfully agree with Austin J who in Advance Fitness said: [108] While an expert's opinion on the facts relevant to the Court's construction of a repair clause may be of assistance, I cannot allow an expert's opinion to replace the Court's own conclusion as to the proper classification of the building work as structural or non-structural repairs, especially when the factual basis for the opinion and the expert's understanding of the meaning of the terms are not articulated.
Notwithstanding Mr Boyce's opinion on what was structural work, for the reasons given I find that the fire protection work was work of a structural nature within the meaning of clause 3.11 of the lease and structural repairs within the meaning of clause 5.7 (i) of the lease.

Was the structural work made necessary as a consequence of the applicant's use of the premises?

Having concluded that the fire protection work was structural in nature and structural repairs, the next question is whether the work was made necessary as a consequence of the applicant's use of the premises? In my view, the answer to that question must be "no" on the basis of the following evidence: 1. the premises are over 50 years old, having been constructed under superseded building codes, and currently non-compliant with the BCA; 2. for the 35 years the premises have been owned by the respondent's, the ground floor has been used for retail purposes while the upstairs has been used for residential purposes or a rest area but not for retail; 3. the premises at the time of the subject lease had a current use that was approved by Council; 4. the McGrath report states that the existing plasterboard ceiling installed within the ground floor level of the premises would have been installed as a result of the conditions of an earlier development consent issued by Council which gave consent to the use of the ground floor level as a takeaway food shop and the first floor level as an associated residential flat; 5. the Doherty report states that the applicant's use was not considered a change of use; 6. the Antcliffe email, the Boyce report, the McGrath report and the Doherty report do not attribute the applicant's use of the premises as being responsible for council issuing the fire protection order or for the need to undertake the fire protection work; and 7. no expert evidence was adduced by the respondents to support the contention that the applicant's use of the premises resulted in a change of use or to challenge any aspect of the Antcliffe email or the reports the applicant relied upon.
It was left to Ms Tu to assert that the applicant's use of the premises resulted in a change of use. In her affidavit, she said the "replacement of the ventilation system and kitchen benches conducted on the premises...fundamentally changed the use and operation of the premises because it changed what the kitchen was able to produce". I do not, however, accept that evidence. Under cross examination Ms Tu, agreed that she had not been in the applicant's kitchen after it commenced occupying the premises. She also agreed that the use of the premises had not changed in the 35 years she and her sister had owned the premises with the ground floor area having been used as a takeaway food retail area while the first floor was used as a residence or rest area.
I am comfortably satisfied that the applicant's use of the premises was not responsible for council's decision to give notice of its intention to issue a fire protection order, or the decision to issue the actual fire protection order, or the need for the fire protection work to be carried out.
As the fire protection work was of a structural nature but not as a consequence of the applicant's use of the premises, the applicant's obligation to carry out work "of a structural nature" under clause 3.11, or "structural ….repairs" under clause 5.7 (I) is expressly excluded. It follows that the applicant is not responsible for the fire protection work and the costs incurred in relation to that work.
I would also add this. Section 23 of the Act renders void a provision in a retail shop lease to the extent that it requires the lessee to pay any amount in respect of the capital costs of the building in which the retail shop is located. The term "capital costs" is not defined under the Act. In Sean Lytton v North Bondi RSL Club Limited [2011] NSWADT 86, the Tribunal found that the cost of constructing a garbage compound was a capital cost which by virtue of section 23 was not recoverable from the lessee of a retail shop. On the basis of the evidence before me, I am of the view that the fire protection work was also capital cost. As such, even if the fire protection work was not structural work, section 23 renders void any obligation imposed on the applicant by clauses 3.11 or 5.7(i) of the lease to pay for the cost of that fire protection work because it was a capital cost.

The applicant's claims under the Retail Leases Act

I now turn to consider the applicant's claims for breach of sections 34(1)(d), 62B and 62D of the Act.

Section 34(1)(d) - Disruption claim

The applicant asserts that in breach of section 34(1)(d) of the Act, the respondents failed to take all reasonable steps to: 1. perform what it referred to in its points of claim as BCA remedial works (which I take to mean the fire protection work) and which prevented the applicant trading from 30 March 2015 and 1 January 2016 (first rental period) and suffering loss; and 2. perform the work required by the fire safety order within a timely manner which prevented the applicant from trading during the period 21 February and 15 September 2017 (second rental period) and suffering loss.
In relation to the claim for the first rental period, the respondents do not admit whether the lessee requested the lessor to rectify the matters in writing and deny that the basis for the claim were attributable to causes within their control. With regard to the second rental period, they deny that the applicant was unable to trade and conduct its business while the fire safety order had not been complied with, deny that the fire safety order had not been complied with during that period and deny that, as between the parties, the respondents were obliged to comply with the fire safety order.
Mr Smorchevsky, in his written submissions, said the respondents defence to this disruption claim is that clauses 3.11 and 5.7(i) explain why there could not have been any breach as alleged of section 34 of the Act because the responsibility to conduct work fell on the applicant and not the respondents. In view of the finding reached that the fire protection work was structural work, this defence must necessarily fail if the respondents are found to be in breach of section 34(1)(d).
Section 34 expressly provides that a retail shop lease contains the provisions found in subsection (1). That includes subsection (1)(d). It means that the subject lease contains a provision in terms of that subsection. It provides that if the respondents fail to take all reasonable steps to prevent or stop anything that causes significant disruption or has a significant adverse effect on the applicant's trading in the premises that is attributable to causes within the respondents' control, that which is not rectified by the respondents as soon as reasonably practicable after being requested in writing by the applicant to do so, then the respondents are liable to pay the applicant reasonable compensation for any loss or damage suffered as a consequence.
Before being entitled to "reasonable compensation" the applicant's must at least show that it gave notice in writing requesting the respondents to rectify the alleged breach or breaches of the lease. Neither Mr Bateman nor Mr Smorchevsky made any specific submissions whether written notice for the purposes section 34(1)(d) had been given by the applicant to the respondents.
Sometime between 31 March and 8 April 2015, Mr Hodges had his first visit from a Council officer. He lodged a Building Certificate Application with Council on 8 April 2015. He received an email from the Council officer on 20 April 2015 advising that he needed a BCA report to determine whether the premises were BCA compliant. Mr Hodges then spoke to someone at the agent, most likely Mr Ho, about the inspection and the need for a BCA report in order to obtain a building compliance certificate.
Between 21 April and 26 June 2015, the following email correspondence took place between Mr Hodges and the agent's staff which, in the relevant part, read as follows: 1. 21 April 2015 - Mr Hodges to Mr Ho: Hi Vincent Can you please forward through the latest account for [address provided]. …. Also, can you please provide the BCA certification for the building that Council is now requesting from me. Thanks for your assistance and I look forward to hearing from you soon. Kind regards Sandy (from the agent's office) to Mr Hodges "I'll chase the owner and solicitor again." 1. 18 June 2015 - Mr Hodges to Mr Ho: Hi Vincent I have forwarded you the email below from my BCA consultant. I really don't believe this should be my issue to resolve. I have lease the premises based on it being fit to trade from the information I have received so far, everything is pretty much saying it isn't. Can you please advise. Regards 1. The email Mr Hodges forwarded to Mr Ho was from Mr Antcliffe dated 18 June 2015. It reads: Mick, I just spoke with Mark, he requires a whole building fire safety report to be submitted for consideration. Under the BEC process, Council does need to consider the whole building as appropriate for life safety matters. We can prepare a report yet you will be looking at $2500+ GST for the report just disclosing non-compliances. We can propose recommendations to attend to non-compliances, these recommendations will involve physical work to the building to bring it up to a level of compliance acceptable to its current mixed use. We will list non-compliance and how to fix or attend to items of significance.
25 June 2015 - Mr Hodges to Mr Ho: Hi Vincent Further to our telephone conversation regarding the potential building code of Australia (BCA) compliance issue, I believe that the way forward is for the landlord to get a BCA report prepared. Once the report is being prepared it will detail what aspects of the building does or does not comply to the BCA standard. The report should also detail what mitigation measures are required to get the building to comply. It should be noted that I believe any BCA issues for the building would arise no matter what the premises was used for. I also believe that I am entitled to rent abatement until this issue is resolved. Please give me a call to discuss further if required. Regards
26 June 2015 - Mr Ho to Mr Hodges: After multiple deliberations with the owner and her solicitor they've indicated that legally they're obligated to assist in the building compliance of the property.
I am comfortably satisfied that Mr Hodges' 21 April 2015 email or that email together with his 18 and 25 June 2015 emails constitute sufficient written notification for the purposes of section 34(1)(d) of the Act.
The next question to be determined is whether the failure to undertake the fire protection work and the work required by the fire safety orders constituted significant disruption of, or which has a significant adverse effect on, trading of the (applicant) in the (premises) and that is attributable to causes within the (respondents) control…" to quote the relevant words of the section. In my view, the answer the question is "yes".
It is clear from the evidence that from at least 21 April 2015, with the sending of Mr Hodges' email to Mr Ho, that the respondents were on notice that there was a serious issue in terms of the premises being compliant with the BCA and that by June 2015 the applicant had not commenced to trade from the premises due to the BCA concerns. What is also clear is that from 25 June 2015, when Mr Ho emailed Mr Hodges, that the respondents had in effect wiped their hands of any responsibility to make the premises BCA compliant.
According to Mr Hodges, the applicant could not trade until the BCA documentation required by Council had been provided but due to financial pressure from about 18 January to 16 December 2016, the applicant did trade from the premises. I accept Mr Hodges evidence that he ceased to trade because he had been informed by Council that a proposed fire order would be issued in relation to the premises, and he was worried that the applicant's insurance would not be sufficient in the event of a fire there being known fire safety on building defects which he had a duty to disclose under his insurance policy.
Mr Smorchevsky has submitted that the applicant made a decision not to trade when it was under no obligation to do so, and it was always in its power to continue trading.
I do not accept the submission. That the applicant did trade for the best part of 12 months was no doubt foolish and, potentially, extremely dangerous in the circumstances. However, the evidence from the various experts together with Council's decision to issue the notice of a proposed fire order makes plain, in my view, that there was a serious safety issue with the premises and that it was in those circumstances appropriate for the applicant to cease trading both prior to 18 January 2016 and after 16 December 2020.
Accordingly, I am satisfied that the respondents have breached section 34(1)(d) of the Act for which the applicant is entitled to reasonable compensation.
For breach of section 34(1)(d) the applicant claims the amounts set out in paragraph 74 to 76 above. They consist of a proportion of the rent and outgoings paid during the periods the applicant was unable to trade. There is also a separate amount claimed for what is described as "cost of works".
I do not understand there to be any dispute over the number of days rent claimed by the applicant for the first rental period and second rental period, or that a fair apportionment of the rent between the retail area on the ground floor and the residential area on the first floor of the premises is 60% and 40%, respectively. Nor is there any dispute over the outgoings for those periods for which the applicant seeks to be reimbursed. Allowing for the error in calculating one of the rental periods referred to earlier, the total amount claimed for rent for both periods is $43,754.33. The amount for outgoings claimed in respect of those periods is $12,616.25. The applicant is entitled to be compensated for these amounts, which all up comes to $56,370.58, by reason of the respondent's breach of section 34(1)(d)
The "cost of works" claimed by the applicant are said by Mr Bateman to be the costs incurred by the applicant towards fire protection work. The amount claimed in respect of the first and second rental periods is $24,192.06 and $1,670, respectively.
The following specific items are said by Mr Bateman to make up the amount of $24,192.06 based on documents annexed to Mr Hodges first affidavit: 1. range hood and ventilation removal and installation - $8580 2. design quotation - $1485 3. custom-made bench - $1400 4. irregular bench including sink and handbasin - $4700 5. jet spray arm - $850 6. plumbers contract - $1880 7. delivery and install of stainless steel - $1600 8. cleaning supplies - $169.18 9. installation of new mixer tap and removal of existing tapware - $275 10. preparation of the McGrath review report - $1960
It is to be noted that the sum total of these items comes to $22,899.18 and not $24,192.06.
In his first affidavit, Mr Hodges says that the amount of $1670 claimed for the second rental period is for costs associated with the fire orders remedial works. However, the only particulars of this claim referred to by Mr Bateman in his written submissions is an invoice from a locksmith for a service call for which the amount charged was $495.
Except for the amount claimed in respect of the McGrath Review report, the amounts claimed as "costs of works" do not have any obvious connection with the fire protection works. They appear instead to be expenses incurred by the applicant in connection with the fit out of the premises and operation of its business. I will allow the $1960 claimed for the report as part of the compensation payable by the respondents for breach of section 34(1)(d) of the Act but I reject the balance of the claim for the additional costs.
The total amount of compensation to which the applicant is entitled to be paid is $58,330.58 made up as follows: 1. Repayment of rent - $43,754.33 2. Repayment of outgoings - $12,616.25 3. Cost of the McGrath report - $1,960

Section 62B - unconscionable conduct claim

The conclusion I have come to is that the respondent's conduct of which the applicant complains (as described in paragraph 112 above) was not unconscionable as understood in the context of section 62B, including those examples given in subsection (3). I am persuaded to this conclusion for the following reasons: 1. Even when looking collectively or holistically at all of the matters which the applicant contends amounts to unconscionable conduct on the part of the respondents, I am not comfortably satisfied that it was conduct of a standard that can be considered as unconscionable. 2. There is no evidence to warrant a finding that prior to or at the time the parties entered into the lease, or subsequently, there was an inequality of bargaining positions as between the applicant and the respondents or any evidence to justify a conclusion that the applicant, and Mr Hodges, its corporate mind, were not able to look after themselves in the context of the escalating dispute over responsibility for the fire prevention work or in relation to the assignment of the applicants business to Studentpal. 3. The evidence revealed that Mr Hodges was able to engage experts to investigate and assist in dealing with the BCA issues. He also had solicitors acting for the applicant when it first entered into the lease and also when he signed the lease to Young's Chinese kitchen. There is no evidence to suggest that he could not have retained solicitors during the intervening period when the dispute over the fire prevention work responsibility was gaining momentum or when he was trying to obtain the respondent's consent to the assignment of the lease to Studentpal. 4. There is no suggestion of any vulnerability or lack of understanding on the part of Mr Hodges at any time throughout this matter. 5. The respondents' conduct in relation to the fire prevention work can be explained by the fact that it was based on what they believed or had been advised was the correct interpretation who was responsible under the lease for the fire protection work. The fact that the advice was incorrect and the respondents' agents acted accordingly does not, in my view, amount to unconscionable conduct. 6. The respondents certainly failed to deal with the request to assign the lease to Studentpal within the 28 days required under the Act. Their attempt after the event to lay blame for the delay in dealing with the assignment request on the applicant's failure to provide information required by the Act is not supported by the evidence. While the respondents failed to respond to the assignment request within the time prescribed by section 41, that failure falls well short of what I consider to be unconscionable and equally well short of any of the indicia of unconscionability that have been recognised by the courts in the decisions cited by Mr Bateman. 7. Mr Park sending to the solicitors for Young's Chinese restaurant a copy of the invoice issued to the applicant for fire protection work and the respondents presenting the bank guarantee for payment when on the face of it agreement had been reached that they would not do so until responsibility for the fire protection work was established, was ill-conceived, and inappropriate but it was not, in my view, unconscionable.
The applicant's unconscionable conduct claim is rejected.

Section 62D - misleading or deceptive conduct

Mr Bateman submitted that the conduct described in paragraph 113 above was misleading or deceptive in breach of section 62D of the Act.
The principal complaint is that the respondents, prior to the parties entering into the lease, through their agent misrepresented that there would be no problem in using the premises to operate the applicant's business. The applicant's points of claim particularised the misrepresentation as providing the applicant with a draft copy of the lease which described the permitted use as "juice bar and café". Mr Smorchevsky submitted that there is simply nothing misleading or deceptive in the fact that the lease or a prior draft of it stated that the premises were permitted to be used as a juice bar and café.
I agree with Mr Smorchevsky. The reports in evidence confirm that the BCA classification of the premises is for a café on the ground floor and residence on the first floor, and they are uses approved by the City of Sydney Council. There was therefore nothing misleading or deceptive about the lease describing the permitted use of the premises as "juice bar and café".
It is also relevant in the context of the applicant's allegation to note that the disclosure statement, which has been signed by Mr Hodges in his capacity as a director of the applicant, contains a provision in Part 2 for a lessee to set out the statements or representations made by the lessor the lessors agent that the lessee has relied upon. There are no statements or representations in that section. It is blank. I am therefore comfortably satisfied that even if the representation of which the applicant complains had been made by or on behalf of the respondents, it was not relied upon by the applicant in entering into the lease.
It is difficult not to conclude that in some respects Mr Hodges has himself to blame for the predicament that he found himself in. It contains some very clear and unambiguous warnings for prospective lessee's including, under the heading "Additional information & advice for lessees" the following: Before entering into a lease, lessee should consider these key questions: Does the planning authority allow your proposed use for the premises under planning law? Does the premise comply with building and safety regulations?
Mr Hodges conceded in cross examination that he could have asked his solicitors at the time the applicant prior to entering into the lease to check for regulatory or similar requirements but did not do so. Some due diligence may well have avoided the parties becoming involved in protracted and what is no doubt expensive litigation.
The other matters that are said by the applicant to be misleading or deceptive are also not specified in the disclosure statement signed by Mr Hodges. Even if made, I am not comfortably satisfied on the evidence that the applicant relied upon the representations.
I would add that I am also not persuaded by the applicant's assertion that there was a representation by the respondent's that the applicant could carry out "a professional like for like fit out of the premises without approval" was misleading. There is no suggestion in the applicant's evidence that it was unable to fit out the premises in any respect or that the respondents did anything to inhibit the applicant's ability to fit out the premises.
For the foregoing reasons, the applicant's claim for misleading or deceptive conduct is also dismissed.

The bank guarantee

The applicant claims $12,993 being the amount of the bank guarantee it provided as security under the lease.
I am comfortably satisfied that the exchange of emails that took place between the parties' solicitors on 8 and 14 September 2017 records a binding agreement between the parties that the respondents would hold the bank guarantee pending the outcome of the proceedings in relation to which party was responsible for the fire protection work. The presentation by the respondents of the bank guarantee on 13 August 2020 for payment was in breach of that agreement. Having found that respondents were responsible for the fire protection work and the associated JWC costs, the applicant is entitled to the return of bank guarantee. Since the respondents are now in receipt of the proceeds of the bank guarantee, an order will be made that they pay to the applicant the equivalent amount of $12,993.

The applicant's claim for interest

The Applicant claims interest pursuant to section 72A of the Act. The Tribunal has a discretion under subsection (1) of the section to award interest when an order is made on a retail tenancy claim that a person is to pay money to another person. The Tribunal may order that interest be included in the amount ordered to be paid interest at a specified rate and applied on the whole or any part of the amount and for the whole or any part of the period between when the cause of action arose and when the order is to take effect. By subsection (3), the rate of interest awarded must not exceed the rate which is payable on a judgement debt of the District Court.
The applicant has been deprived of the use of the sum of $58,330.58 paid for rent and outgoings It is in my view entitled to an award of interest. However, taking into account the applicant's delay in commencing proceedings, in the exercise of my discretion I consider it appropriate to award interest on the sum of $58,330.58 from 15 September 2017, when the lease was terminated by agreement, to 22 November 2021. Calculated at the rate prescribed for District Court of New South Wales judgements, the amount of interest to be awarded is $16,939.20 calculated as follows: Start Date End Date Days Rate Amount Per Day Total 15/Sep/2017 31/Dec/2017 108 7.5% $11.9857 $1294.46 01/Jan/2018 30/Jun/2018 181 7.5% $11.9857 $2169.42 01/Jul/2018 31/Dec/2018 184 7.5% $11.9857 $2205.38 01/Jan/2019 30/Jun/2019 181 7.5% $11.9857 $2169.42 01/Jul/2019 31/Dec/2019 184 7.25% $11.5862 $2131.86 01/Jan/2020 30/Jun/2020 182 6.75% $10.7577 $1957.90 01/Jul/2020 31/Dec/2020 184 6.25% $9.9608 $1832.79 01/Jan/2021 30/Jun/2021 181 6.1% $9.7484 $1764.46 01/Jul/2021 22/Nov/2021 145 6.1% $9.7484 $1413.52 Total 1530 $16,939.20
In the exercise of my discretion I do not propose to award any interest on the proceeds of the bank guarantee. This is because it was always the intention of the parties that the bank guarantee would be held pending determination of these proceedings. Despite the fact that the respondents prematurely presented the guarantee for payment, the question of who was entitled to the guarantee, or the proceeds of it, was never intended to be decided until now.

Respondents' cross-claim

The respondent's cross-claim consists of a claim for the $40,700 which is the sum total of the four invoices issued by JWC to the respondents for the fire protection work, and outstanding rent in the amount of $4,954.35.
Having found that the applicant was not responsible for the fire prevention work, the respondents' claim for $40,700 must be dismissed.
The claim for $4,954.35 rent will also be dismissed. This is because the agreement reached between the parties, and which is recorded in the email exchange between their respective solicitors on 8 and 14 September 2017, in my view settled all claims, including any claim for rent the respondents had against the applicant, except for who was responsible for the fire prevention work, which has now been decided.
For completeness I would add this in relation to the respondent's rental claim. The evidence in support of the claim is the rental ledger maintained by the respondent's agent. A copy is annexed to Ms Kho's affidavit. Not only have I not been directed to any specific aspect of that ledger which identifies the amount claimed as being owing, on its face the ledger is in my view incomprehensible without proper explanation, and none has been provided.

Conclusion

In application COM 20 27505, the applicant is entitled to an order pursuant to section 72(1)(a) of the Act that the respondents pay to it the sum of $88,262.78. This is made up of $58,330.58 for rent and outgoings in respect of the first and second rental periods and the cost of the McGrath report, interest of $16,939.20 on that amount, and $12,993 for the proceeds of the bank guarantee..
The respondents' application COM 20/49112 will be dismissed.

Costs

In respect of both applications the parties have signalled their intention to claim costs. For their benefit in deciding whether they wish to make a costs submission, I will indicate now, and subject to anything they wish to say, it is my provisional view only that because the amount claimed in each application is more than $30,000, Rule 38 of the Civil and Administrative Tribunal Rules applies in both and, having regard to the outcome of the claims, in each application the respondents should pay the applicant's costs of and incidental to the proceedings, as agreed or assessed. In other words, costs should follow the event.
To give the parties time to consider their respective positions, I will make an order for the filing of file written submissions on the question of costs if they wish to do so. If no written submissions are filed, then in each application the order for costs will be as I have indicated.

Orders

The following orders will be made by the Tribunal 1. In COM 20/27505 1. Pursuant section 71B(1) of the Retail Leases Act order that M.W.H. Contracting Pty Ltd's retail tenancy claim and unconscionable conduct claim may be lodged more than 3 years but no later than 6 years after the liability or obligation that is the subject of the claim arose. 2. Pursuant to section 72(1)(a) of the Retail Leases Act order that Cam Quynh Tu and Karen Loi Tu pay to M.W.H Contracting Pty Limited the sum of $88,262.78 within 28 days. 3. In the event a party wishes to make a costs application it must file and serve written submissions within 14 days, any party opposing the application is to file and serve its written submission within a further 14 days, and the Tribunal will make a decision on the papers as permitted by section 50(2) of the Civil and Administrative Tribunal Act 2013 unless persuaded that there should be oral submissions. 4. If after 14 days no written submissions are filed, the following costs order is made: 1. Cam Quynh Tu and Karen Loi Tu to pay M.W.H Contracting Pty Limited costs of and incidental to these proceedings as agreed or assessed. 1. In COM 20/49112 1. Pursuant section 71B(1) of the Retail Leases Act order that Cam Quynh Tu and Karen Loi Tu's retail tenancy claim may be lodged more than 3 years but no later than 6 years after the liability or obligation that is the subject of the claim arose. 2. The application is dismissed. 3. In the event a party wishes to make a costs application it must file and serve written submissions within 14 days, any party opposing the application is to file and serve its written submission within a further 14 days, and the Tribunal will make a decision on the papers as permitted by section 50(2) of the Civil and Administrative Tribunal Act 2013 unless persuaded that there should be oral submissions. 4. If after 14 days no written submissions are filed, the following costs orders is made: 1. Cam Quynh Tu and Karen Loi Tu to pay M.W.H Contracting Pty Limited costs of and incidental to these proceedings as agreed or assessed.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 December 2021

Retail Leases Act 2013(NSW)

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