Pampering Patisseries Pty Ltd v Fanos

Notice of Appeal and submissions

1. The appellant filed a Notice of Appeal dated 12 December 2017. The appeal was filed on 13 December 2017, the appellant having received notice of the decision on 30 November 2017. Consequently, the appeal was filed in time.
2. The appellant has only filed an appeal in connection with the decision in proceedings see COM 17/23839. However, it is clear from the orders sought that it is seeking to appeal both the order dismissing its application and the order that it pay to the respondent the sum of $6954.32 plus interest.
3. The Notice of Appeal raised issues concerning various dates recorded in the reasons. However, the substantive matters raised were as follows: 1. the Tribunal did not correctly address the claims made by the appellant that the respondent had breached particular clauses of the lease; 2. The appellant referred to s 62B of the Retail Leases Act, 1994 (NSW) (RL Act) which relates to unconscionable conduct and various other sections of the RL Act and said the "decision was made against the Retail Lease Act 1994". 3. The appellant said the decision was not fair and equitable because it was contrary to the provisions of the lease, there was a "defective Certificate of Compliance" provided in relation to the installation of the grease trap and the Tribunal failed to consider all evidence provided by the applicant demonstrating "breaches and misconduct". In part, this conduct related to the grease trap which was said not to be properly installed or operate correctly, emitting odours; 4. The appellant also said the decision was against the weight of the evidence and the lease and the "lessor's disclosure statement" were not reviewed properly. In this regard the appellant referred to expert evidence which the respondent had provided in connection with the installation of the grease trap. The appellant also said it was forced "to pay undisclosed outgoings", conduct which "affirms lessors illegal and deceptive practices".
4. While the appellant did not seek leave to rely on new evidence in the Notice of Appeal, a claim was subsequently raised and various material was provided for which leave was ultimately sought. We will return to this matter below.
5. The respondent filed a Reply to Appeal on 29 December 2017. First, the respondent contended: 1. The Lessor's Works had been completed 3 days after the expiry of the rent free period; 2. When completed, the grease trap and pump out pit were found to be "compliant"; 3. Insofar as there were problems with the grease trap, these arose from the failure of the appellant to regularly pump out the grease trap and/or to properly close the lid; 4. There was expert evidence about these matters, no cross examination of the experts by the appellant despite an opportunity to do so and, in any event and no evidence that the operation of the grease trap had interfered with the operation of the appellant's business and/or caused it any loss and damage.
6. In its reply, the respondent also said: 1. There was no basis to make any order under s 17 of the RL Act to abate the rent and, in any event, this section had no application because it did not operate in circumstances where there was a rent free period at the commencement of the lease; 2. The appellant's Notice of Appeal did not identify any specific errors of the Tribunal; 3. A number of the clauses of the lease referred to by the appellant have little or no relevance and the assertion by the appellant that the Tribunal failed to have regard to particular provisions of the RL Act and the claims were, in a number of respects, misconceived.
7. Otherwise, the respondent said it was difficult to reply to the Notice of Appeal due to its lack of specificity.
8. The Appeal was listed for call over on 9 January 2018. At that time, directions were made for the filing and service of evidence and submissions and a copy of the sound recording if it was being relied upon. The directions required each party to identify for the Appeal Panel and the other party the parts of the sound recording relied upon in their written submissions.
9. The parties provided written submissions and made oral submissions at the hearing of the appeal.
10. The appellant's representative, Ms Ke (the Public Officer) appeared for the appellant at the hearing. Ms Ke apparently prepared the written submissions. Ms Ke had requested an interpreter to assist her at the hearing. Upon questioning by the Appeal Panel, Ms Ke indicated she was happy to present her case directly, rather than through the interpreter, who remained for part of the hearing however was not required to assist.
11. The respondent was represented by Mr Pearson of Counsel at the hearing. Mr Pearson had prepared written submissions on behalf of the respondent.
12. The parties also supplied three folders of documents which contain evidence from the original hearing as well as new evidence upon which the appellant sought leave to rely.
13. The appellant did not comply with the directions made in a number of respects. Consequently, Ms Ke made a number of assertions concerning what happened at the original hearing in the absence of properly identifying transcript references. This lack of clarity, while perhaps understandable because the appellant was not legally represented, was a continuation of the problems which the Tribunal had experienced at the original hearing as recorded at [7] of the reasons. Be that as it may, following completion of the hearing of the appeal, directions were made to allow particular transcript references to be provided by the parties.
14. The appellant's written submissions again lacked precision. They also sought to assert the Tribunal Member misconducted herself and/or the original hearing. The written submissions made assertions similar to the Notice of Appeal including in respect of unconscionable conduct and misleading and deceptive conduct.
15. The assertions concerning the conduct of the Tribunal Member were not pressed at the final hearing. Nor was the allegation in the written submissions that the Tribunal had wrongly removed Mr Andrew Fanos as a party to the proceedings. In relation to this last matter, it is clear that Mr Fanos was not the lessor and no reason was offered by the Appellant as to why he was otherwise a necessary party to the proceedings. Accordingly, it is unnecessary to deal with these issues any further.
16. The appellant's written submissions provided little or no detail as to why the matters identified were indicative of error.
17. Despite this lack of specificity, the Appeal Panel allowed the appellant's representative to make oral submissions in order to explain to the Appeal Panel the errors which the appellant asserted that the Tribunal had made. While some concern was expressed by the respondent about the lack of notice, Mr Pearson of Counsel was given an opportunity to reply to all submissions which had been made and no adjournment was sought by the respondent.
18. The submissions can be summarised as follows.
19. The appellant contended the respondent had engaged in unconscionable conduct. When asked to identify what this conduct was, the appellant said that it was required to pay all outgoings and expenses, some of which had not been included in the Lessor's Disclosure Statement dated 3 June 2015 (disclosure statement), signed before the lease was executed. This document is found at pp 56-70 of the appellant's bundle (AB). The lease is found at AB 28-55.
20. The appellant also complained that there had been delay in completing the Lessor's Works set out in cl 23 of the lease (AB 53). This work required the supply and installation of a grease trap, exhaust ducting, the upgrade of the electricity supply, the removal and replacement of an existing aluminium shopfront and various plumbing work. The appellant also complained that the grease trap was not properly constructed and/or installed and that a certificate that had been issued in connection with the grease trap was false. In part, the appellant sought to rely on fresh evidence said to be a telephone conversation Ms Ke had with an officer from the Fair Trading Office concerning whether or not an alleged inspection of the grease trap installation had in fact taken place.
21. The appellant said there had been a delay in the issue of an Occupation Certificate because of the late completion of the Lessor's Works. In relation to this delay the appellant contended that the disclosure statement required the respondent to carry out this work before the date the lease commenced.
22. When asked by the Appeal Panel to identify what losses the appellant was claiming, the only amount Ms Ke could identify was $45,253, apparently being fit out costs of the appellant.
23. Next, the appellant asserted it was not required to pay all rates and charges in respect of the property of which the premises was a part. The appellant relied on s 30 of the RL Act and said it could never be obliged to pay for all rates and taxes as outgoings. In making this submission, the appellant had initially sought to make reference to the strata schemes legislation, however this matter was not pursued any further at the hearing of the appeal and did not appear otherwise to have any relevance to the lease, the premises not being part of a strata scheme.
24. In relation to particular outgoings, the appellant said it should not be required to pay for waste water charges from Sydney Water. The appellant's submission was that cl 2.2 only refers to "water usage", a separate item on the Sydney Water accounts. When asked to identify what amount the appellant was claiming, Ms Ke said the appellant was referring to the charges in the Sydney Water accounts found in the respondent's bundle (RB) pp 386, 391 and 398. The amount for charges other than for those described as "water usage" are $256.71, $258.11 and $262.38 a total of $777.20.
25. The appellant also submitted it should not be responsible for the cost of the Annual Fire Safety Statement for which the respondent was awarded $275.00: reasons at [32]. In respect of this item, the appellant referred to the Environmental Planning and Assessment Regulation, 2000 (NSW) (EPA Regulation) and said that the charges related to the building as a whole, and did not arise because of the conduct of the appellant's business. Consequently, the cost of the annual certificate was to be borne by the respondent as lessor pursuant to cl 6.10 because the requirement to obtain the certificate did not arise out of the appellant's "occupation and use of the demised premises" and was therefore not an amount payable in consequence of cl 7.2 of the lease.
26. Finally, in relation to the application to adduce fresh evidence in the appeal, the appellant sought to rely on an affidavit of Ms Ke sworn 9 February 2018. Among other things, this document dealt with matters concerning conversation she had with Mr Fanos, the agent, prior to entering into the lease and what had occurred in relation to applying for Council development approval, the carrying out of the fit out and the certification of the required works and the suggestion that the respondent had provided "false" documents.
27. The statement also made a number of assertions concerning Mr Damian Moloney, one of two experts who had provided evidence on behalf of the respondent concerning the grease trap issue. This evidence had been accepted by the Tribunal in preference to the evidence of a plumber, Mr Khan, who had provided evidence on behalf of the appellant. Included in this material was evidence of conversations Ms Ke said she had with various people from Sydney Water and the Department of Fair Trading, Plumbing Service, Technical & Compliance Assurance team. This material concerned communications after the appellant had vacated the premises about the height of a vent for the grease trap, the original certificate of compliance and previous inspections. In her affidavit, Ms Ke refers (at par 112) to sending an email to "Sydney Water requesting an investigation for possible corruption and Waste Water Discharge Permit issued by error for Grease Trap at … King Street, Newtown".
28. In reply, the respondent made the following submissions.
29. The respondent opposed any grant of leave to adduce fresh evidence. The respondent said that the evidence now identified was reasonably available at the time of the original hearing and should have been provided at that time, if relevant.
30. In relation to delay and the claim of unconscionable conduct, the Lessor's Works were in fact completed 3 days after the rent free period provided in the lease had expired, namely 4 months and 3 days after the commencement of the period of the lease which was 15 September 2015.
31. The respondent submitted that the cl 8.2 of the disclosure statement (which said that the Lessor's Works) would be completed before commencement of the lease) did not assist the appellant in establishing any liability of the respondent for delay, whether for breach of agreement or unconscionable conduct. This was because the terms of the lease had been subsequently negotiated between the parties, including on the aspect of how long the fit (including the Lessor's Works) would take to complete and the rent free period had been extended from an initial offer of 3 months to a final period of 4 months to accommodate these matters. The appellant had been legally represented during these negotiations, as had the respondent, and in these circumstances there was no unconscionable conduct, nor for that matter any misrepresentation.
32. The Appeal Panel was referred to correspondence recording negotiations between the parties prior to the lease being signed and Ms Ke confirmed the appellant did have legal representation at this time.
33. The respondent also referred to s 17 of the RL Act and said that section, which deals with the payment of rent when a lessor's fit out is not completed, also had no application in the present case because there was no liability of the appellant to pay rent under the lease on entering into possession of the retail shop. In any event, even if this section did apply, by the end of the rent free period the respondent had substantially complied with its obligations in respect of the Lessor's Works and therefore there was no reason for the rent to abate: see s 17(2)(a) of the RL Act
34. Further, the respondent said that the delay in completing the Lessor's Works was caused by the unavailability of the appellant's certifier to inspect the final works after they had been completed on 15 January 2016. Consequently, an occupation certificate was not issued until 3 days later on 18 January 2016.
35. When asked by the Appeal Panel about how long the respondent was permitted to carry out the Lessor's Works under the lease, the respondent said it was not required to be undertaken prior to the commencement of the lease. In the absence of a specified time period, the respondent appeared to accept that the works needed to be completed within a reasonable time. In this regard the respondent referred to the decision of the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1981-1982) 149 CLR 337 and said the Tribunal was entitled to have regard to surrounding circumstances in interpreting the contract.
36. Finally on this aspect, the respondent said there was an agreement to extend the rent free period in consequence of what had occurred. In this regard the respondent pointed to correspondence between the parties' lawyers found at RB 294 and following.
37. As to the grease trap, the respondent said it had generally been properly installed and operated correctly. The respondent said that any odour being omitted from the grease trap arose from the failure of the appellant to pump it out and/or from the failure of the appellant to properly close the grease trap. The respondent said the conclusions the Tribunal reached on this aspect were supported by the evidence of two witnesses for the respondent (Mr Moloney and Mr Caracoglia) which was preferred over the evidence of the appellant's witness Mr Khan and that no error was shown to have been made by the Tribunal. Further, the respondent said that despite being afforded an opportunity to do so by the Tribunal, the appellant did not cross examine the respondent's witnesses about these matters.
38. In making these submissions, the respondent accepted that there were some minor non-conformances of the grease trap with the Australian Standards. In this regard, there was an issue concerning the height of the vent outlet and the fact that a "Dergo vent" had been used. However, the respondent said that the evidence of her witnesses confirmed any odour being omitted from the grease trap was not caused by this discrepancy.
39. In relation to s 30 of the RL Act, which limits the outgoings which a landlord might recover under a retail lease to which that section applies, the respondent says the section does not apply to the present lease. That is because it only applies to a retail shop lease in a shopping centre.
40. In respect of water usage charges, the respondent said that the expression "water usage" found in cl 2.2(a) of the lease should be given a meaning that includes both water usage charges and wastewater charges levied by Sydney Water. In this regard, the respondent asserted there was an ambiguity and having regard to the principles in Codelfa the Appeal Panel should have regard to the surrounding circumstances.
41. In relation to the Annual Fire Safety Statement, the respondent said the provisions of cl 7.2 applied because the need for the statement arose as a requirement of the Development Approval and the use of the premises. The respondent did not accept that the EPA Regulation required such a statement in respect of the multiuse premises in any event.

Consideration

1. This appeal was fixed for a half day hearing. However, due to the issues we outlined above concerning the preparation by the appellant of its appeal and the filing and service of evidence, the hearing took a whole day to conclude. It was also necessary to make directions to allow transcript references and limited submissions to be provided after the hearing had concluded.
2. The appellant raised questions of law, for which there is a right of appeal, and other questions for which leave to appeal is required. Clause 12 of Sch 4 of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act) applies to this appeal as it is a decision of the Consumer and Commercial Division of the Tribunal. The principles set out by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 are relevant to the grant of leave.
3. At the outset, we note that the appellant, somewhat unhelpfully, made liberal use of the expressions "unconscionable conduct", "misleading statements", "false statements" and the like. This language had the effect of obscuring the real issues in dispute rather than identifying the legal and factual errors which the appellant wished to raise on appeal.
4. Despite these difficulties, the issue as finally advanced in the appeal can be dealt with under the following headings: 1. Application to adduce fresh evidence; 2. Claim for unconscionable conduct/breach of lease concerning: 1. the appellant's obligation to pay all outgoings; and 2. the carrying out of and completion of the Lessor's Works; 1. The defective grease trap claim; 2. Section 30 claim- not required to pay all outgoings; 3. No liability for Sydney Water charges other than water usage; 4. No liability to pay cost of Annual Fire Safety Statement.
5. We will deal with each of these matters in turn.

Application to adduce fresh evidence

1. The Appeal Panel may grant leave to appeal where a party may have suffered a substantial miscarriage of justice because "new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)": see cl 12(1)(c) of the NCAT Act.
2. The meaning of this expression was dealt with by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111.
3. It is unnecessary to set out in detail what the Appeal Panel said in that case. It is self-evident that the matters now raised by the appellant in the affidavit of Ms Ke, is evidence which could have been provided as part of the appellant's evidence in the proceedings at first instance. True it may be that the appellant's representative, Ms Ke, only had conversations with the people identified after the appellant had vacated the premises. However, the facts sought to be proved, including in relation to the grease trap, are matters about which evidence could have been adduced at the original hearing.
4. It follows that the application to adduce fresh evidence should be refused.
5. We should note at this point that we indicated to the appellant's representative at the hearing of the appeal that we would otherwise treat Ms Ke's affidavit as further submissions because she had indicated to us that she wished to rely on what was said in her affidavit as explaining why the appeal should be allowed.

Claim for unconscionable conduct/breach of lease concerning

1. There are two claims to be dealt with under this heading. First is the claim that the appellant should not be liable for all outgoings. The second is in relation to the delay in carrying out the Lessor's Works.

Appellant's obligation to pay all outgoings

1. The disclosure statement records at cl 13.1 that the appellant is "required to pay or contribute to the (respondents) outgoings". There are estimates in the disclosure statement for insurance (cl 14.3) and for local government rates being "charges and water sewerage and drainage rates and charges" (cl 14.9): see AB 60-61.
2. The appellant did not contend it had been charged an amount in excess of these sums. Rather, its contention was that it should not have to pay for all outgoings.
3. Clause 2.2 of the lease expressly dealt with the obligation to pay for outgoings. As stated above, this term was agreed between the parties following negotiations in which each party was legally represented. Clause 2.2 provides as follows: In addition to the rent hearing reserved the Lessee shall pay the Lessor within 14 days of written demand the outgoings or the proportion of outgoings as set out in item 7 of the reference schedule. Outgoings for the purpose of this clause shall include: (a) All water usage levied by Sydney Water or by any other Government Authority, on the Property of which the demised premises forms part; (b) Council Rates levied by Marrickville Council on the property of which the demised premises form part; (c) All insurance premiums paid by the Lessor on the property of which the demised premises forms part including but not limited to fire, storm and tempest and public liability.
4. Item 7 of the reference schedule to the lease provides as follows: Outgoings or proportion of outgoing 100% percent of Water Rates and trade waste. 100% percent of Council Rates, 50% percent of Building Insurance
5. These charges are consistent with the disclosure statement. By reference to cl 14.14 and 14.16, it is clear that the respondent was proposing in the disclosure statement that the appellant pay 50% of the insurance charges, estimated at cl 14.3, and the whole of the government rates and charges estimated at cl 14.9, a total of $7118.00.
6. This is what was recorded in the lease, a document about which the appellant was able to obtain any necessary legal advice prior to signing it.
7. There was nothing which prevented the respondent from agreeing to lease the premises on terms that the appellant pay the whole of the outgoings or, in this case 50% of the building insurance and 100% of all other outgoings being government charges.
8. While the appellant referred to s 30 of the RL Act as supporting its contention that 100% of the outgoings could not be charged by the respondent, for the reasons submitted by the respondent, this submission is plainly incorrect. Section 30 does not apply to this lease because the premises are not part of a shopping centre.
9. In our view there is nothing in the submissions or the evidence to which we have been referred that demonstrates any relevant unconscionable or misleading and deceptive conduct, nor has any breach of the lease been established. Accordingly this ground of appeal fails.

Carrying out of and completion of the Lessor's Works

1. Both parties accepted that the time for completion of the Lessor's Works was not specified in the lease.
2. The appellant sought to rely on cl 8.2 of the disclosure statement to assert that the work was to be completed before the lease commences. On the other hand, the respondent said that this proposition was unsustainable because if the lease had not commenced there would be no binding agreement between the parties.
3. We do not accept the respondent's submission that a binding lease could not have been entered into on terms that a landlord carry out its fit out obligations prior to the commencement of the period of the lease. Clearly the parties can agree what they wish, including which party is to undertake what fit out work and when. The fact that a three-year initial term of a lease might commence after a lessor's fit out is completed does not make such a lease unenforceable.
4. However, the problem with the appellant's submission is that cl 8.2 was not a term reflected in the lease which the parties signed. Rather, the lease specified a commencement date of 15 September 2015, provided for a rent free period and provided for the carrying out of various fit out work described as the Lessor's Works in cl 23 and the Lessees Works in cl 24.
5. Clause 27 then provided: Notwithstanding anything herein contained, the Lessor agrees to provide the Lessee a gross rent free period of four (4) months from the commencement of the lease or the later of DA approval being received.
6. In our view, the work required by each of the parties required development approval (DA approval). The lease contemplated that the initial period of the lease would commence, whether or not the DA approval had been received, however the rent free period would be extended if the DA approval was not obtained prior to commencement of the lease. Logically, that would mean that each of the Lessor's Works and the Lessees Works may be done after the lease had commenced.
7. It follows that, upon its proper construction, the lease did not require that the Lessor's Works be carried out before the lease commenced.
8. While the lease was on terms different to that contained in cl 8.2 of the disclosure statement, there is no basis to conclude there was any unconscionable conduct or misleading and deceptive conduct in relation to this matter. Again, the parties negotiated the terms of the lease with the benefit of lawyers acting on their behalf. In doing so, the rent free period was extended from the 3 month period initially offered. It is evident from the correspondence which the respondent identified during the course of the hearing that this extension to 4 months was to deal with the uncertainty concerning how long it would take for the fit out work to be completed.
9. It follows there is no relevant contravening conduct arising from any differences between the disclosure statement and the lease in this regard.
10. The second element of unconscionable conduct concerning the Lessor's Works is said to arise from the delay in completing that work.
11. There was some dispute as to exactly what allegation was raised at the original hearing concerning completion of the Lessor's Works, particularly in relation to the grease trap, and whether the issue of delay had in fact been raised as opposed to an issue concerning the grease trap being defective.
12. At [8] and [11] of the reasons, the Tribunal describes the claims made by the appellant in the following terms: 8. The (appellant) alleges that the (respondent) failed to complete Works as prescribed in the lease and in the Lessor's Disclosure Statement. The (appellant) alleges that the (respondent's) breaches of the lease have course substantial loss to the lessee. … 11. The (appellant) alleges that the (respondent) deliberately delayed completion of the lessor's works and course substantial delay to the lessee in completion of the lessee's works which resulted in delays in obtaining the required Occupation Certificate to commence trading. They allege that as a result they lost business opportunities in the busy Christmas and New Year periods.
13. Having set out particular complaints, the Tribunal said at [13]: The Tribunal has considered the evidence on this point and find that all works required to be carried out by the less or pursuant to the lease were completed as at 15 January 2016, prior to the expiry of the rent free period under the lease. The (appellant) has waited nearly 18 months in bringing the application. The (appellant) has not demonstrated that even if there has been a delay in completing the works that this is what caused the delay the (appellant) opening the premise (sic). The Tribunal is not satisfied that the lessee is entitled to any abatement of rent or outgoings or is in any way relieved or excused from liability to pay rent and outgoings to the (respondent) for any period or duration.
14. In making these findings, the Tribunal did not identify the time by which the respondent was required to complete the Lessor's Works pursuant to the lease.
15. Clause 23 was in the following terms: Lessor's Works 23. The Lessor at his own costs shall carry out the following works:- i) Supply and Install grease-trap. ii) Supply and install exhaust ducting. iii) Upgrade the electricity supply to three phase 100 amp. iv) Remove and replace existing aluminium shopfront with new shopfront with sliding doors. v) In plumbing the work required to connect the grease-trap to the shop plumbing including any other internal plumbing required to complete the lessees work.
16. No time was specified for completion of this work in the clause or otherwise in the lease.
17. However, in our view, there should be implied into the lease a term that the Lessor's Works be carried out within a reasonable time but not later than the end of the rent free period. This is because it is clear from the surrounding circumstances that the negotiations concerning the rent free period extended the time so as to ensure all fit out works could be completed before rent was payable. Such a term is necessary to give business efficacy to the lease, is capable of clear expression and is not inconsistent with any terms of the lease: see B.P. Refinery (Westernport) Pty. Ltd. v. Hastings Shire Council [1977] UKPCHCA 1; 180 CLR 266; 52 ALJR 20 at p 26.
18. It might be thought that the implied term should be that the works would be completed within 8 weeks from the date the lease commenced. This is because of the facts disclosed by the surrounding circumstances being the anticipated time to complete the Lessor's Works as stated in the correspondence negotiating the terms of the lease: see RB 163. In this way, the balance of the rent free period would be available to the appellant to complete the Lessees Works. However, it is clear from the description of the Lessor's Works that some of that work is dependent upon the appellant completing the Lessees Works so as to enable relevant plumbing connections to be made. In these circumstances, an implied term to the effect the Lessor's Works were required to be completed within 8 weeks from the commencement of the lease or the grant of the Development Approval would be inconsistent with the express requirements for the carrying out of such works.
19. As stated above, the Tribunal found that all works were carried out prior to the expiry of the rent free period. Having regard to the concession made by the respondent, namely that the Occupation Certificate was not issued until 3 days later on 18 January 2016, this conclusion on its face appears wrong for two reasons. First, the rent free period expired on 15 January 2016, 4 months after the lease commenced on 15 September 2015. Secondly, the Lessor's Works were incomplete as it had not obtained an Occupation Certificate for its work by 15 January 2016.
20. However, as made clear from the submissions by the respondent and having regard to the documents to which the respondent referred, the rent free period was in fact subsequently extended for 1 week, until 22 January 2016. This agreement was reached because of delay in completing the fit out work and obtaining the Occupation Certificate. In this appeal, the appellant did not challenge the fact that agreement was reached.
21. This agreement had the consequence of extending the rent free period and meant that the respondent was not in breach of the implied term to complete the Lessor's Works within a reasonable time and not later than the end of the rent free period.
22. While the appellant made general assertions that the respondent did not proceed expeditiously with the Lessor's Works, and in effect delayed carrying out those works, there was no evidence to which we have been referred to make good this claim. Further, it was explained that the Lessees Works was itself only completed on 13 January 2016 when the final statement of compliance for fire safety was received (see RB 267), a matter inconsistent with the assertion by the appellant that the completion of all fit out work and the commencement of business operations by the appellant was delayed solely by reason of the conduct of the respondent. Certainly this fact is inconsistent with the assertion that the appellant lost the opportunity to trade during the Christmas/New Year period 2015/16 by reason of any conduct of the respondent.
23. In any event, no relevant loss and damage has been proven to have been suffered by reasons of the matters about which complaint is made.
24. In these circumstances, this ground of appeal fails.

The defective grease trap claim

1. The Tribunal made findings based on the evidence of the two witnesses called on behalf of the respondent, some of which conflicted with the evidence of the appellant witness, Mr Khan.
2. The Tribunal: 1. accepted the grease trap and pump out pit had been installed in accordance with the manufacturers specifications by a licensed plumber: at [14]; 2. found the odours omitted from the grease trap were what might be regarded in the range of "normal operation" and did not "adversely affect the (appellant's) use of or ability to trade from the premises": at [15]; 3. did not accept the respondent had breached any obligation in connection with the grease trap: at [17].
3. The appellant needs leave to appeal these findings.
4. During the course of the hearing, the appellant referred to evidence from the witnesses for the respondent and said that there were defects in the system, particularly in relation to the venting to which we have referred above. Consequently, the appellant contends that the Tribunal's conclusions were in error.
5. The problem with this submission is that the respondent's witnesses did identify and deal with the issues concerning the venting features of the grease trap installation. Both of the witnesses said that there was no odour or other problems arising from any non-conformance. This evidence was contrary to the evidence of Mr Khan, the plumber who gave evidence on behalf of the appellant. The respondent's witnesses also gave evidence that the system had not been properly maintained by the appellant and/or the appellant had failed to properly close the system which permitted odours to escape. In making these statements, the witnesses also gave evidence that the odours they observed were in the range of normal operation of such systems.
6. In our view, the findings of the Tribunal on this aspect of the appeal could not be said to be against the weight of evidence or not fair and equitable. Certainly, we are not satisfied that the appellant may have suffered a substantial miscarriage of justice.
7. For these reasons, leave to appeal is refused and this ground of appeal is dismissed.

Section 30 claim- not required to pay all outgoings

1. We have dealt with this issue above. This ground of appeal is not made out.

No liability for Sydney Water charges other than water usage

1. During the hearing of the appeal, there was a discussion concerning the proper interpretation of cl 2.2 and the meaning of the expression "water usage" and whether this expression included Sydney Water charges for wastewater.
2. The appellant referred to the Sydney Water accounts and noted there was a distinction between water usage charges and wastewater charges. Ms Ke submitted the appellant was only liable for water usage charges because, on the proper construction of the lease, only those charges were payable by the appellant.
3. In reply, the respondent again relied on Codelfa and said the Appeal Panel should have regard to the surrounding circumstances, including the statements made in the disclosure statement that the appellant would be liable for all water rates.
4. We do not accept the respondent's submission in this regard. As the High Court has made clear on many occasions, recourse to surrounding circumstances is only permissible where there is some relevant ambiguity which cannot be resolved by a consideration of what the parties have expressly agreed. Recourse to the disclosure document is both unnecessary and provides little or no assistance where the parties had been legally represented and have conducted negotiations concerning the terms of the lease which has finally been reduced to writing.
5. However, cl 2.2 (a) must be read in the context of the lease as a whole. In this regard, while cl 2.2 (a) uses the expression "all water usage levied by Sydney Water" rather than the expression "rates" used in cl 2.2(b) as to the amounts payable for Council Rates, clause 2.2 in its introduction states that the appellant is to pay "the outgoings all proportion of outgoings as set out in item 7 of the reference schedule". Consequently, the expression "water usage" needs to be given a meaning consistent with the obligation imposed by item 7.
6. The reference schedule makes clear that the appellant is to pay "100% percent of Water Rates and trade waste (emphasis added)".
7. In our view there can be no doubt that the obligation of the appellant was to pay all the charges in the Sydney Water accounts in respect of water usage and trade waste charges.
8. It follows this ground of appeal fails.

No liability to pay cost of Annual Fire Safety Statement

1. The last matter to deal with is whether the appellant is responsible for the Annual Fire Safety Statement.
2. Clause 6.10 of the lease requires the respondent to "comply with the reasonable requests of any authority relating to the health, safety and security of the demised premises provided that such request does not arise by reason or as a result of the conduct of the (appellant's) business".
3. Clause 7.2 requires the appellant to "comply with all statutes, ordinances, proclamations, orders and regulations … relating to the demised premises or the use thereof, and with all requirements which may be made or notice or orders which may be made or notice of orders which may be given by any governmental, semi-governmental, city, municipal, health, licensing or any other authority having jurisdiction or authority in respect of the demised premises or the use thereof PROVIDED THAT the (appellant) shall be under no liability in respect of any structural alterations, required in terms of this clause 7.2 unless the liability arises out of the (appellant's) occupation and use of the demised premises".
4. It is clear from the development approval and the fire safety statement that part of what needs to be certified are fire seals providing protection of penetrations which were works necessary because of the appellant's fit out work and use of the premises: see Development Approval condition 47-RB 185, Statement of Compliance-RB 267 and Annual Fire Safety Statement-RB 378. Consequently, the respondent says that the appellant was obliged to pay the costs of the annual fire safety statement. Further, because the respondent, as owner, was required to ensure such a statement was obtained, the failure of the appellant to do so enabled the respondent to step in, complete the work and back charge any costs to the appellant. On this latter point, the respondent referred to cl 11.4 of the lease.
5. On the other hand, the appellant relied on the EPA Regulation.
6. The obligation to provide an annual fire safety statement arises from Div 5 of the EPA Regulation. That division is part of Part 9 Fire safety and matters concerning the Building Code of Australia. Regulation 167 defines the building to which the Part replies. It says: 167 Application of Part (cf clause 80B of EP&A Regulation 1994) (1) This Part applies to all buildings except as follows: (a) only Division 7A applies to class 1a and class 10 buildings, …
7. That is, Div 5 does not apply to class 1a and 10 buildings.
8. Class 1a buildings are defined as a single dwelling being a detached house; or one of a group of attached dwellings being a town house, row house or the like. Class 10 buildings are non-habitable buildings or structures.
9. The present building is mixed use and so is not a class 1a or 10 building. Therefore Div 5 applies. Clauses 175 and 176 provide: 175 What is an annual fire safety statement? (cf clause 80GA of EP&A Regulation 1994) An annual fire safety statement is a statement issued by or on behalf of the owner of a building to the effect that: (a) each essential fire safety measure specified in the statement has been assessed by a competent fire safety practitioner and was found, when it was assessed, to be capable of performing: (i) in the case of an essential fire safety measure applicable by virtue of a fire safety schedule, to a standard no less than that specified in the schedule, or (ii) in the case of an essential fire safety measure applicable otherwise than by virtue of a fire safety schedule, to a standard no less than that to which the measure was originally designed and implemented, and (b) the building has been inspected by a competent fire safety practitioner and was found, when it was inspected, to be in a condition that did not disclose any grounds for a prosecution under Division 7. 176 Issue of annual fire safety statements (1) The assessment and inspection of an essential fire safety measure or building must have been carried out within the period of 3 months prior to the date on which the annual fire safety statement is issued. (2) The choice of person to carry out an assessment or inspection is up to the owner of the building. (3) The person who carries out an assessment must inspect and verify the performance of each fire safety measure being assessed.
10. This division places on the owner the obligation to obtain the annual fire safety statement and from whom it is obtained. The statement is in respect of the whole building, in this case the premises and that part of the building used a residence.
11. In our view, it could not be said that the obligations imposed by the EPA Regulation arise from the particular use of the premises by the appellant. Rather, it arises because the building is not a single dwelling. Further, the annual fire safety statement (AB 378) has "essential fire safety measures" which include portable fire extinguishers and fire alarms. There is no evidence to suggest (and its seems improbable) that these particular measures are not throughout the whole building, as opposed to the premises to which the lease relates.
12. Consequently, it could not be said the requirement for the annual fire safety statement arises "by reason or as a result of the conduct of the (appellant's) business" and are not therefore excluded from the matters for which the respondent is required to pay.
13. In these circumstances, we are satisfied that, upon the proper construction of cls 6.10 and 7.2, the obligation to pay for the annual fire safety statement was on the respondent. This view is also supported by the fact that the expense is an annual outgoing for which the owner would otherwise be liable and that this outgoing is not included in in the lease as part of Item 7 Outgoings or proportion of outgoings. Consequently, there was an error of law arising from the Tribunal's construction of this clause and the Tribunal was in error in awarding the respondent the costs in respect to the annual fire safety statement.
14. It follows that the original award of the Tribunal should be varied to deduct $275.00. An award should be made for $6,879.32 being the original award of $6,954.32 less the sum of $275.00.

Other matters

1. We should briefly mention one other matter that was the subject of written submissions from the appellant. That was water ingress to the premises. This item was raised in the appellant's submissions in reply. It was not pursued in oral submissions.
2. Again there was evidence from the respondent's witnesses on this topic. The Tribunal dealt with the issue at [19]. The Tribunal was not satisfied any issue arose from water ingress. The Tribunal concluded that any rising damp was in the premises at the commencement of the lease and the premises were leased subject to its "present state and condition".
3. No reasons are advanced about why this conclusion was in error. No term of the lease was identified that rendered the respondent liable for any problem.
4. Accordingly, no error is established.

Orders

1. The appellant has been unsuccessful on all but one issue. In relation to matters requiring leave to appeal, this should be refused. In relation to the annual fire safety statement, this matter raised a question of law so leave is not required. The original order 2 of the Tribunal should be varied to award the amount of $6,679.32 plus interest, a reduction of $275.00.
2. Our preliminary view is that no order for costs should be made. Any application seeking an order for costs must be filed and served in 7 days from the date of this decision together with any evidence and submissions.
3. The Appeal Panel makes the following orders: 1. Leave to appeal is refused. 2. The appeal is allowed in part and Order 2 made 28 November 2017 in application COM 27/27924 is varied to read as follows: The lessee is to pay the lessor, immediately, $6,679.32 plus interest calculated at 10% per annum from the date from which he outgoings became due.

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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: 23 April 2018