Respondent AMP Investments Pty Ltd & Knox City Shopping Centre

2. The applicants must pay the respondent's costs of this day to be taxed in default of agreement in accordance with County Court Scale "D".

For the Applicants Kani Mustafa accountant for the applicants

For the Respondents Mr Bick QC and Mr Walsh instructed by Purves Clarke Richards

[1] This is an application for an interim injunction made on behalf of tenants at Shop 2045A, the Knox City Shopping Centre. These tenants are represented not by Counsel or by a solicitor but by their accountant, Mr Kani Mustafa.

[2] An important question arises in those circumstances, given that there are neither legal practitioners nor the tenants themselves present to offer an undertaking as to damages which is the typical incident of an interim injunction. Mr Mustafa says that he has authority in the circumstances to offer an undertaking as to damages. He has referred me to a faxed document in the name of Mr Malik Nazligul, which states that he authorises Ken Mustafa, who is his accountant and manager "To represent me with my application against Knox City Shopping Centre in the Retail Tenancies Tribunal". Mr Mustafa acknowledged that whilst he believes that he has general power to represent the interests of the applicants and therefore to offer an undertaking as to damages, it was not a matter which was specifically the subject of discussions between them. I will however pass on from that issue, and reach no conclusion on it, except to say that I regard Mr Mustafa's entitlement to offer the undertaking as dubious to say the least.

[3] I now turn to the facts. Mr and Mrs Nazligul were tenants of the shop for a period of five years under the terms of a lease dated the 16th of June 1993. According to the account given by Mr Mustafa to me this evening, towards the end of that lease, they were having difficulty paying the rent. Receiving no satisfaction, they went on rent strike and eventually had some discussions with the landlord. It was necessary in their view, either they receive a reduction in the rent that they were paying or that their tenancy be moved to a shop with greater passing trade to enable them to generate more income and thereby be able to meet their obligations. The lease expired with no matter as to its renewal or to the creation of a further tenancy resolved. The final day of the lease was the 28th of February 1998.

[4] Before proceeding further with the facts, it is necessary to say something as to the Tribunal's jurisdiction. Section 34 of the Retail Tenancies Reform Act grants that jurisdiction and grants the Tribunal power to deal with

"Any dispute between a landlord and a tenant arising under or in relation to a retail premises lease other than a claim by the landlord solely for the payment of rent or a dispute that is capable of being determined by a valuer under Section 12, 13 or 15."

It is not suggested that any of those exclusions as to jurisdiction applies. It also needs to be considered that sub-section (2) provides that in the case of a lease within the meaning of the Retail Tenancies Act 1986 the jurisdiction of the Tribunal extends only to matters arising under a retail premises lease, not in relation to it or arising under a provision of the statute in relation to a lease to which the Act applied.

[5] This lease, at least the original one, was entered into in 1993. As we will see later, Mr Mustafa submits that there is a further lease entered into sometime in 1999. The earlier lease is governed by the 1986 Act, the later lease, if it exists, is governed by the 1998 Act. Ultimately this is of little moment because the definition of lease to be found in both Acts is in the same terms. I quote from the 1986 Act:

" "lease" means a lease or sub-lease having a term of not less than one year and includes an agreement for such a lease or sub-lease"

Accordingly, not just any tenancy of retail premises is sufficient to attract the Tribunal's jurisdiction. It must be a tenancy, including an agreement for a lease or a sub-lease of not less than one year's duration.

[6] For this purpose the 1993 lease can be no source of jurisdiction because as I have already noted, it expired on the 28th of February 1998. Accordingly, jurisdiction if it exists, is to be found in the further lease, which Mr Mustafa alleges. In that regard I refer to a statement which he made for the purposes of earlier proceedings in the Magistrates' Court in which he verified by viva voce evidence before me as being true and correct. He states inter alia:

"On or about the 14th of March 1998 we were summoned to a meeting with the centre manager and the leasing manager. At the meeting was also present Mr Malik Nazligul the proprietor.

During the course of our negotiations that day we were offered our existing site at a slightly reduced rent or the site of another tenant at double our existing rent.

We informed the shopping centre that the new site would not really be suitable because it was much too big for a jewellery store. However we would be willing to wait until a suitable site became available.

At this time the shopping centre manager and leasing manager gave us a clear and concise undertaking that as long as the rent was paid on time we would be allowed to pay the slightly reduced rent at our current site until a new agreement between ourselves and the shopping centre could be reached and that there would not be any move to evict us as long as the rent was paid on time."

(The statement goes on to say that since then the rent has been paid on time.)

[7] This account of events does not necessarily accord with the view taken by the landlord and I have been referred to lengthy affidavits filed on behalf of the landlord in the proceedings in the Magistrates' Court. Given the nature of this interlocutory application, it is not necessary or appropriate for me to seek to resolve any issue of credibility between the landlords' witnesses and the tenants' witnesses and so I do not go to any points of contradiction.

[8] It will be seen from the passage that I have quoted from Mr Mustafa's statement, that what he appears to be relying upon in that statement, which was made on the 20th of May, is the clear and concise undertaking "that as long as the rent was paid on time, we would be allowed to pay the slightly reduced rent at our current site until a new agreement between ourselves and the shopping centre could be reached". That seems to me to come down to an assertion that there would be an indefinite right of overholding under the expired lease and that that overholding would not be terminated pending the conclusion of negotiations for a new tenancy.

[9] It is appropriate at this stage to note Clause 3.2 of the expired lease. It is a lengthy clause and I will not quote it at length. I will note however that it provides for a monthly tenancy to operate at the conclusion or termination of the principal lease. The final paragraph of the clause states

"The monthly tenancy so created shall be determinable at any time by either party by one (1) month's notice in writing given to expire on any day but otherwise the tenancy shall continue on the same terms and conditions (so far as are applicable to a monthly tenancy) as are contained in this Lease ..."

[10] Presumably in reliance upon that provision, the document styled "Notice to Quit" was served on the tenants on the 21st of April 1999. It required them to yield up possession on the 22nd of May of 1999, that is, one month from the date of service. In those circumstances Mr Bick QC, who appears with Mr Walsh on behalf of the tenants, submits that the entitlements of the tenants, whatever they were, were terminated and there is accordingly no basis for the grant of any injunction in their favour to restrain the execution of the Notice to Quit.

[11] Mr Mustafa however put his case ultimately in a slightly different fashion. He says that at the meeting on the 14th of March 1998, the tenancy at Shop 2045A was offered to the tenants at rental of some $45,000. Some months after that, he says, that offer was accepted and the acceptance of that offer created a new five year tenancy which this Tribunal ought to protect by the grant of an interim injunction to enable the full rights and wrongs of the matter to be investigated.

Further, though he did not put it in quite this fashion, it would seem to follow that the jurisdictional difficulty which I hinted at earlier, would be removed if there was in existence a further five year lease. I note the definition of lease which I have quoted already extends not only to leases but agreements to lease. It seems to follow however, from the manner in which Mr Mustafa describes events, that this new five year lease is not evidenced in any way in writing.

[12] The effect of Section 53 of the Property Law Act 1958 is that no interest in land may be disposed of except by writing and Section 53 clearly extends to an agreement for lease. If this is an agreement for lease, it is unenforceable by reason of Section 53. Further, by force of Section 54 of the Property Law Act 1958 the alleged lease not being in writing is not enforceable at law.

[13] These provisions are of course subject to the equitable doctrine of part performance and I am not sure whether any event has been alleged that might constitute part performance. Given that the applicants' case has not been presented by a qualified lawyer, it would be unfair in my view to find against them on so technical a point, particularly where the facts have not been the subject of any exhaustive examination, having regard to the nature of the proceeding before me this evening.

[14] There is however in my view a far more substantial objection to my concluding that there is even a serious case to be argued as to the existence of this further five year lease. It is this. Upon the account given by Mr Mustafa, there was a lapse of some several months between the offer of the $45,000 tenancy for five years at Shop 2045A at the Knox City Shopping Centre and the purported acceptance of that offer. It is trite law that a contractual offer remains open only for a reasonable time or if it is to remain open for something more than a reasonable time, there must be some special arrangement for it or perhaps even some additional consideration to keep the offer open indefinitely. Accordingly, it seems to me there is not even a serious question to be argued as to whether a lease arrises in those terms. I am fortified in that view by the following further considerations.

[15] The manner in which the case was put to me by Mr Mustafa was that he opened the case from the bar table, explaining what his client's storey was. Eventually he went into the witness box, swore that what he had told me from the bar table was true and correct and he also verified on oath the statement from which I have quoted. It was only at the very end of that process when, as it seemed to me, I was expressing some doubt as to whether the clear and concise undertaking referred to in his statement could give rise to any injunctive relief that he asserted the existence of the five year lease based upon a $45,000 annual rent. In the circumstances, this rendered the entire account of events relative to that dubious to my mind but given that this is not the time for making judgments as to credibility, I did not think it appropriate to reject his account on that score. However, the fact that it is intrinsically dubious leaves me with the greater confidence in rejecting it. One other matter which arises is, a consideration as to whether there are any persisting rights of overholding under the expired lease. Within the next few weeks a test case will be argued by Mr Golvan QC, dealing with the question as to whether an overholding clause under a lease for more than one year can ground the Tribunal's jurisdiction as distinct from a mere periodic tenancy existing outside the terms of any lengthier lease. For the purposes of this proceeding, I believe I should regard there to be an arguable case that the Tribunal has jurisdiction, if it appears that these tenants are still tenants pursuant to the overholding clause of the expired lease.

[16] The Notice to Quit, it was conceded by Mr Bick QC, did not expire on the recurrent date for the purposes of the periodic tenancy created by the overholding clause. He submitted however, that so long as the period of one month was in fact comprised within the Notice to Quit, it was nevertheless a valid Notice to Quit. He referred to and relied upon a decision of Dean J. in Cohen v Millner [1960] VicRp 79; [1960] VR 499, 502, where His Honour noted that in Victoria the rule as to the expiry of notices to quit for periodic tenancies had been abolished since 1948 by force of what is now Section 32(2) of the Landlord and Tenant Act 1958. Despite all the changes that have taken place in the law or landlord and tenant, it appears that this time honoured provision remains in force. However, the section deals with proceedings for the recovery of premises in the Magistrates' Court and the sub-section is prefaced by the words "for the purposes of this section in the case of a periodic tenancy". In other words the section does not operate to abrogate the rule as to the expiry of the notice to quit so far as it operates at common law as distinct from in proceedings for recovery of possession in the Magistrates' Court. Nor does it operate for the purposes of this Tribunal. Accordingly, the Notice to Quit, viewed purely in terms of the rule of Common Law does not appear to have the effect that it purports to have. Nevertheless, in my view the passage which I have quoted from Clause 3.2 by force of the law of contract, relieves the landlord of the operation of the rule and so the notice appears to operate to terminate the overholding period in the manner in which I have described.

[17] By way of reply and after his sworn evidence had concluded, Mr Mustafa said that rent for the period of June 1999 had been paid to the landlords in 1999. Mr Bick said that according to his instructions that was not correct. Mr Mustafa said that the rent was paid on Tuesday of this week. Does that affect the conclusion that I have reached as to the effective termination of the overholding provision of the old lease? In my opinion it does not and for two reasons.

[18] First, Mr Mustafa was not confident as to precisely how the rental was despatched. He thought it might have been sent by post but was more inclined to think it was sent by hand delivery. If the rent was sent by post, in my view, the experience that one has of the efficiency of the postal service would lead one to conclude that it might not yet have reached its destination. Even if it had, it would be premature in my view, to conclude that the landlord had accepted it. Even if contrary to the doubts that I have expressed, that rental was received, the effect of it in my view would be to create some new tenancy by estoppel and not one based upon the overholding provision in the lease. If a new tenancy is created by the very nature of the thing, unless one accepted the assertion that there was a new five year tenancy, something which I have not accepted, this new lease would be solely a period one from month to month and not a lease of at least one year's duration.

[19] The effect of the findings that I have made therefore, is that the Tribunal does not in the circumstances possess jurisdiction to grant the relief which Mr Mustafa has sought on behalf of his clients. In those circumstances I think the proper course is for me to refuse the injunction and dismiss the proceeding.

[20] I have just given my reasons for refusing this application for an interim injunction and also for dismissing the proceeding for want of jurisdiction. Consequent upon those orders, Mr Bick QC, who appears with Mr Walsh for the respondent has sought an order for costs. An initial question arises as to jurisdiction. If the Tribunal lacks jurisdiction to deal with the principal relief sought, does it have jurisdiction to make a costs order or is it deprived of the ability to make any order at all, other than an order which effectively sends the matter away? With some hesitation, I conclude that the Tribunal does nevertheless possess jurisdiction in the circumstances.

[21] In a recent decision Re Boulton ex parte The Construction Forestry Mining and Engineering Union (1998) 73 ALJR 129, 133 Kirby J of the High Court of Australia said that every court and tribunal has jurisdiction to consider whether it has jurisdiction, if a jurisdictional objection is taken it has jurisdiction to hear and consider that matter and a duty to hear and determine it. To that extent in my view I did have jurisdiction to deal with the matter that was pressed before me today and therefore having jurisdiction sufficient to consider the jurisdictional issues it must follow that I have power to award costs with respect to the matter that I did properly entertain if I am persuaded that it is proper to do so.

[22] Section 109 of the Victorian Civil and Administrative Tribunal Act which is the provision empowering me to order costs states a general proposition that costs lie where they fall. In the matter of Malthall and Illiopolous v Bevendale (No. 2) (1998) V Conv R 58- 527 I held that proceedings in this List are customarily proceedings between commercial parties and in the nature of commercial litigation. Having regard to the nature and complexity of those proceedings, a matter specifically referred to in Section 109(3)(d) I considered that generally it is appropriate that costs should follow the event in this jurisdiction. That would point in favour of a costs order being made in favour of the respondent. I think the following additional matters point in that direction too. The fact that I have determined that I did not have jurisdiction to make the orders sought, demonstrates that the bringing of the claim was vexatious, at least in the legal sense of the term. Further, the fact that not even an arguable case has been found at this stage indicates a lack of strength in the claim brought by the applicant.

[23] In the circumstances I think it appropriate that the respondent should have its costs having been brought here at so short a notice. I should also add that whilst it was not appropriate for me to make any findings as to credibility, I had some difficulty with some of the evidence which was put before me, a matter which I hinted at in my principal ruling. What was at stake here was a lease in which the rental was at the rate of $50,000 per year.

[24] Again in the Malthall case, I indicated why the County Court scales are generally the correct ones in this jurisdiction. Accordingly, the proper scale is County Court Scale "D" and I will order that the applicants pay the respondents costs of this proceeding to be taxed in default of agreement in accordance with County Court Scale "D".