PL Town Hall Pty Ltd v The Trust Company Ltd

Priceline and Trust in Contest over their Lease

1. Priceline leased the premises from Trust since October 2014. The "Terminating Date" is defined by the lease as 30 June 2021. Neither party suggested that options for renewal of the lease were available.
2. The parties' contest centred around two clauses of the lease relating to the ending of the tenancy, clause 32 and clause 53. Clause 32 provides as follows: "32. When this Lease ends 32.1 When this Lease ends: (a) the Tenant must: (i) vacate the Premises and give them back to the Landlord in the same condition as they were in at the date the Tenant first occupied the Premises date, except for fair wear and tear; (ii) make sure all the Tenant's property is removed by the Terminating Date; (iii) remove; (A) all fitout and loose items; (B) all Tenant infrastructure in the ceiling cavity and elsewhere outside the boundaries of the Premises; (C) any ceiling installed by the Tenant and any services installed in the ceiling: (a) reinstate the Premises to base building standard and layout, including the mechanical and electrical services and repair of the ceiling and floor coverings (including replacement as needed); and (b) repaint the Premises damage caused to the Premises by the installation or removal of fixtures, fittings or furniture or upon vacating the Premises. 32.2 Anything left at the Premises will become the Landlord's property and the Landlord may keep it or dispose of it. Unless the Landlord gives the Tenant notice to the contrary, the Tenant must leave the shopfront which will become the Landlord's property for no cost."
3. The lease defines "Tenant's Property" in the following terms: "Tenant's Property means all property owned or leased by the Tenant which is inside the Premises including all fixtures, fittings, signs, equipment and goods including the items listed in Schedule 2"
4. Clause 53 provides as follows: "53 What the Landlord may do if the Tenant breaches this Lease 53.1 If the Tenant breaches this Lease and does not remedy it as required, the Landlord may do any one or more of the following: (a) re-enter and take possession of the Premises; (b) end this Lease (see clause 32); (c) recover from the Tenant any Loss the Landlord suffers due to the Tenant's breach; (d) use the Bank Guarantee (see clause 16) to recover any Loss the Landlord suffers due to the Tenant's breach; or (e) exercise any of the Landlord's other legal rights. 53.2 The essential terms of this Lease are clauses 11, 16, 24. 25, 26, 27, 28, 29 and 50 to the extent they are applicable. If the Tenant breaches an essential term of this Lease and the Landlord re-enters and takes possession of the Premises or ends this Lease, the Landlord may recover all money payable by the Tenant under this Lease up to the Expiry Date. 53.3 If the Tenant vacates the Premises before the Expiry Date, whether or not it ceases to pay Rent, the Landlord may: (a) accept the keys for the Premises; or (b) enter the Premises to inspect or repair them or to show them to prospective tenants; or (c) advertise the Premises for re-letting, without this being re-entry or waiver of the Landlord's rights to recover the Rent or other money under this Lease. This Lease continues until a new tenant takes possession of the Premises, unless the Landlord accepts a surrender of or ends this Lease."
5. Other terms of the lease are relevant to the present contest between the parties: clauses 40, 46, 47, 48 and 49. Clause 40 allows the landlord, Trust, to carry out any of the tenant's obligations under the lease. Clause 46 provides that the tenant's use and occupation of the premises is at the tenant's risk. Clause 48 releases the landlord from liability for loss suffered by the tenant relating to the tenant's use or occupation of the premises. And under clause 49 the tenant indemnifies the landlord against loss incurred by reason of the tenant's conduct.
6. A spreadsheet of Priceline's performance of its rental obligations and other obligations under the lease since October 2014 provides some evidence that it has had an indifferent performance in paying rent. The evidence suggests that it has been late in rent payments from time to time since September 2015 and has been continuously in arrears by at least one month's rent since May 2016. Trust contends Priceline ceased making rental payments in full by August 2016 but thereafter its habit was to make part-payments of rent at random intervals. Trust contends and it does not seem to be disputed that Priceline has not made any rental payments since 29 October 2020, other than the first of the series of occupation fees ordered by the Court on 3 March 2021 which are discussed in more detail below.
7. According to Trust's calculations, Priceline owed Trust $464,600.60 in unpaid rent and other unpaid obligations under the lease as at 1 February 2021. Priceline disputes this calculation but has not provided an alternative calculation.
8. As earlier indicated, when Trust served its Notice of Termination of Lease on Priceline on 17 February 2021 Priceline responded by filing its Summons on 26 February 2021. This Summons sought declarations that the Notice of Termination of Lease was a "prescribed action" within the meaning of regulation 3 of the Retail and Other Commercial Leases (COVID-19) Regulation (No. 3) 2020, which action was taken during the "prescribed period" within that Regulation. The Summons consequently sought a declaration that Trust had no right to terminate the lease. Priceline also sought declarations that it was not in arrears of rent, that the lessor had "affirmed the lease" and, in the alternative, it sought relief against forfeiture.
9. The relief sought in the Summons was not resolved in a contested basis. The parties reached a compromise when these earlier proceedings came before Lindsay J, sitting as the Equity Duty Judge on 3 March 2021. The parties presented the following negotiated settlement to the Court and his Honour made the following orders and notations of agreement by consent: "VERDICT, ORDER OR DIRECTION: By and with the consent of the parties, Lindsay J makes the following notations and orders: 1. ORDER that the plaintiff deliver possession of the premises known as Shop G54 Citigroup Centre, 2 Park Street Sydney NSW 2000 (Premises) to the defendant forthwith.

ORDER that the proceedings be dismissed with no order as to costs without prejudice to such, if any, rights and obligations the parties may have against one another in relation to due performance of the plaintiff's lease.

NOTE that the defendant gives to the Court an undertaking not to take possession of the Premises by re-entry before 30 June 2021 if the plaintiff: a. Provides the defendant with a bank guarantee in the sum of $88,150.58 on substantially the same terms as the bank guarantee under the lease within 7 Days (with an expiry date of no earlier than 30 September 2021).

NOTE that the intention of notation 3 is that in the event that the plaintiff defaults in respect of any of (3)(a)-(f), the defendant will be entitled to take possession of the premises forthwith.

NOTE that it is agreed between the parties that their intention is that the plaintiff will deliver possession of the Premises to the defendant no later than 30 June 2021.

NOTE that it is also agreed between the parties that, whether or not the plaintiff remains in possession of the Premises until 30 June 2021, it is contractually obliged to provide the bank guarantee referred to in (3)(a) and to make the payments referred to 3(b)-(e) inclusive.

NOTE that the defendant's rights in respect of rental arrears and otherwise generally are reserved, as are the plaintiff's defences, if any.

RESERVE to the parties liberty to apply for such, if any, orders as may be necessary in the working out of the orders and the agreement referred to in these notations and orders.

ORDER that these orders be entered forthwith."

1. The figure of $88,150.58 provided for in various parts of Order 3 of these orders was equivalent to the current monthly rental of the premises, which was chosen as the periodic amount to be paid as a condition of Priceline's continued occupation. The structure of the agreement the parties reached represents a conventional solution for claims of relief against forfeiture. The scheme of the agreed orders was to test Priceline's bona fides by requiring a bank guarantee and a payment of rent within seven days, that is by 10 March. The agreement then made rent payments due on the first of April, May and June. Both parties accepted in their current contest that the 3 March orders represented a binding agreement to the parties' disputes up to that point, including their dispute about the relief against forfeiture.
2. The transcript of proceedings for 3 March records that Order 6 was introduced into the parties' agreement at the initiative of Lindsay J in order to resolve what was an ambiguity in the terms which the parties had agreed. The parties' draft did not make clear that if Priceline vacated prior to 30 June that it was still required to make the outstanding payments. His Honour re-crafted Order 6 to make that clear.
3. No doubt mindful from judicial experience that performance of the agreement may encounter unforeseen obstacles, his Honour crafted and added clause 8 to the agreement, reserving to the parties liberty to apply for any necessary orders "working out of the orders and the agreement referred to in these notations and orders".
4. It is common ground that on 10 March 2021 Priceline made the first payment of $88,150.58 provided for in Order 3(b). But Priceline did not arrange the bank guarantee provided for in clause 3(a) by the due date of 10 March 2021. It claims that it was unable to do so. This may well be correct. It would not be surprising that company which it had difficulty in meeting rental payments for some months would find challenges in arranging a bank guarantee. But Trust also contended that Priceline was tardy in applying for the bank guarantee.
5. The 3 March orders gave the parties liberty to apply and on 11 March 2021 Priceline approached the Equity Duty Judge, Rein J, for an extension of time to provide the bank guarantee under Order 3(a). Trust opposed the application, particularly on the basis that the orders were based on an agreement between the parties which gave the defendant legal possession of the premises subject only to an undertaking not to exercise that right by going into physical possession of the premises, if the plaintiff met the requirements of clause 3.
6. In rejecting the application, Rein J referred to the making of the consent orders on 3 March. His Honour's in reasons (at [11] - [17]) drew heavily upon the circumstance that in substance Priceline was seeking to vary consent orders, which authority indicated could only be done in exceptional circumstances which did not apply here: "11. The Plaintiff, it is agreed, has not met the first requirement and the Defendant, therefore, Mr Weinberger submits, is entitled to take possession and that is what it has done this morning. Mr Weinberger submitted that there is no judicial basis for the application since there is no order in respect of which the Court can extend time. Effectively, the argument is that there was an opportunity granted to the Plaintiff to avoid a consequence and it has simply not met the requirements for avoiding those consequences. 12. I think there is much force in that submission but, even if it is not correct, in order for the Plaintiff to obtain some change in the orders, it must establish "exceptional circumstances" given that the orders were made by consent and reflected a contractual arrangement between the parties: see Paino v Hofbauer (1988) 13 NSWLR 193 per McHugh JA with whom Samuels JA and Clarke JA concurred. This case has more recently been the subject of consideration by the Court of Appeal in Lachlan v HP Mercantile Pty Ltd (2015) 89 NSWLR 198. In Paino, McHugh JA said the following, after rejecting the notion that the Court did not have a discretion to extend time: "Nevertheless, when a party asks that a consent order based on a contract should be set aside or varied and the underlying contract could not be set aside or varied, the case would need to be exceptional before the Court would exercise its discretion in favour of an applicant. Moreover, by itself the failure of the applicant to comply with the terms of a consent order based on a contract could rarely, if ever, be a sufficient ground to vary the order. This is particularly so when the parties have stipulated that time for the performance of the parties' obligations was to be of the essence of the agreement." 13. This case is even stronger than Paino in that this is not a case where there was an order that something should occur by a certain date, rather there was an undertaking by the Defendant not to do something if the circumstances as specified were met and they have not been met. I do not think the circumstances are exceptional. The Plaintiff was aware that it had seven days to obtain the bank guarantee and it has failed to do so. As Mr Weinberger pointed out, the Plaintiff was on its own evidence slow in seeking the bank guarantee from Macquarie Bank, waiting two days after 3 March 2021 (see paragraph 5 of Mr Khanji's Affidavit of 11 March 2021) to begin the process of application for the bank guarantee, but in any event the reasons for the Plaintiff's failure are not germane since those reasons have nothing to do with the Defendant and are not relevant as the time within which the Plaintiff had to provide the guarantee had been agreed upon by the Plaintiff without qualification. 14. I do not accept that Order 8 of the orders made on 3 March 2021 provides an opportunity for the Court to alter the terms of the undertaking which the Defendant gave. That was the Defendant's undertaking and it has not breached that undertaking in doing what it has done. That is probably very much linked to the point that I referred to earlier about the juridical basis for the application. 15. This is not a case where forfeiture is to be considered because the agreement that was reached brought an end to the lease (by agreement) only subject to the undertaking to which I have referred. The Plaintiff obtained, in effect, an opportunity to avoid the loss of possession of the premises and failed to meet the requirements for that loss not to occur. 16. I note the Plaintiff seems to claim that it needs three months to vacate the premises. The Plaintiff agreed that if it did not meet all of the requirements of the notation in 3 of the 3 March 2021 orders that it would give up possession forthwith. There was no requirement that the Plaintiff would be given further time to vacate. A period in which to vacate the premises might have been desirable but, beyond the period between 3 and 10 March 2021, it was not a term negotiated by the Plaintiff with the Defendant. 17. I, therefore, am not persuaded that there can be or should be any extension of time in relation to the undertaking given by the Defendant and the orders made on 3 March 2021. The Plaintiff's Notice of Motion should, therefore, be dismissed with an order that the Plaintiff pay the Defendant's costs."
7. This Court respectfully agrees with Rein J's conclusion that clause 8 of the 3 March orders could not be used to vary the undertaking that Trust gave in relation to not taking possession. The situation may be different with respect to the issue of it retrieving the stock that it claimed. It is at least arguable that this issue could equally have been dealt with by taking advantage of the liberty to apply conferred in the earlier proceedings by clause 8. But Priceline took the safer course of commencing fresh proceedings.
8. The premises have remained unoccupied since Rein J's 11 March decision. On 29 March Priceline commenced the present proceedings, for the more limited purpose of seeking access to the premises to remove its goods. The parties exchanged correspondence seeking to reach a negotiated solution to the present contest but have failed to do so.
9. The remaining contest concerns the terms of which Priceline will be allowed to remove stock from the premises. Priceline estimates that it will need five to seven working days to pack and clear the premises of all stock, drugs and consumer goods. Priceline estimates that based on its cost price, its stock is worth $585,000. Priceline says that it would be worth considerably less in a liquidation sale. Priceline's case is that much of its stock cannot be resold by third parties.
10. Priceline says the stock is of little or no value to anyone but Priceline, which can sell the stock through other pharmacies. Priceline's principal pharmacist, Mr Assad Karem says that apart from the drugs the general consumer stock has greater value to Priceline than to anyone else: "24. The stock is of no or little value to anyone but PLTH [Priceline]. PLTH can sell the stock through other pharmacies. The drugs cannot be sold by anyone other than PLTH. There is no secondary market for the stock, which are not drugs, such as cosmetics and toiletries. I have been involved in running pharmacies etc,… In operating a pharmacy, the source of all stock must be known and for that reason stock is only purchased from well-known and reputable wholesalers. Pharmacies do not sell liquidated stock. Part of operating a pharmacy is knowing the source of goods sold in order to protect customers by ensuring that the products sold are safe."
11. This accords with what might reasonably be expected of pharmacy practice and the Court is prepared to act upon this evidence in this interlocutory hearing.
12. Some matters concerning the proposed stock removal are not contentious. It is accepted on all sides that because the premises are in a reasonably busy part of the CBD that removal of the stock must occur after hours. Priceline has insurance coverage for its proposed access to the premises sufficient to satisfy Trust. Trust has indicated that its reasonable costs of supervision and facilitation of access are approximately $3,000 per day. Priceline is prepared to pay that amount into Court to facilitate the removal of the stock generally. The parties agree therefore that if Priceline has access to the premises for seven days that it will pay Trust $21,000 to cover its costs of providing personnel and other on-costs associated with it supervising Priceline's access.
13. It is also agreed that the pharmaceutical products at the premises are a special case. Pursuant to Priceline's obligations under applicable State and Commonwealth legislation the pharmaceutical stock at the premises is kept under lock and key. Restricted substances and drugs of addiction need to be removed, transported, handled by pharmacists to comply with applicable laws for the control of such substances. It is important for pharmacists familiar with the stock at the premises to be able to take control of such items and to document their movement and to ascertain whether any inventory is missing. The premises have been locked since 11 March and the pharmacists employed by Priceline have been out of possession. If the drugs are taken from the premises and delivered to another pharmacy, they are required to be signed in and signed out by the same pharmacist so that a clear chain of custody is recorded.
14. Relevant law enforcement bodies must also be notified when such goods are being removed. The detail of this can be worked out between the parties and does not need to be specified by the Court. But it goes without saying that the removal of this material from unoccupied but locked premises is a priority. These reasons will not be published until the parties have notified the Court that the material has been removed from the premises.

The Parties' Respective Positions

1. The parties have been open about the course of their negotiations since the filing of the Summons in these proceedings. The filing of the Summons resulted in Trust's lawyers offering to provide Priceline with five days access under a deed of access for the defined permitted purpose of removing from the property, "its stock, being items limited to pharmaceutical, therapeutic and consumer goods, business records and the personal property of any of its directors, officers agents or employees". But the access license so offered would not permit the removal of "any counters, shelving, dispensing stations, display units or other fixtures or chattels" not expressly identified as part of the permitted purpose.
2. In subsequent correspondence Priceline proposed licence to remove "drugs, stock, plant and equipment" but not to remove "fit out and fixtures" from the premises. The parties then debated in correspondence what was involved in "plant and equipment". Priceline asserted that the "plant and equipment" it wanted to remove included "computers [and] storage compartments". That in turn raised queries to what was meant by "storage compartments". A list supplied by Priceline shows a list of plant and equipment at the premises including joinery, steel fixtures, Team systems, fatigue mats and trolleys, signage, a security system - CCTV and alarm system, EAS gates, lighting, money and drug safes, retail data strips and hooks, dispensary, accoutrements, retail area items, data equipment, and PA and phone equipment. Just what of this is fixed and what is readily removable is hard to determine on the material provided.
3. Subsequently, Priceline classified the above categories of "plant and equipment" as "freestanding" meaning it can be disassembled and carried away, or "removable", meaning it is fixed to a ceiling, wall or shelf and can be removed by removing the fixings. Priceline asserts this can be done "without altering or damaging the fit out of the premises". Trust disputes that these so-called "removable" items can be removed without causing damage.
4. The position of each of Priceline and Trust hardened somewhat in the lead up to the oral hearing. Each now proposes the following orders to resolve the present interlocutory dispute.
5. Trust proposes that upon Priceline giving the usual undertaking as to damages and paying Trust $42,000 to cover its expenses for 14 days' occupation and providing a certificate of currency of public liability insurance, that it will give Priceline access to the premises for 14 days commencing on Monday, 19 April 2021, during which Priceline is permitted to move from the premises (a) all pharmaceutical, therapeutic or consumer goods, (b) any personal property belonging to a director, officer or employee of the plaintiff, and (c) any fixed assets, plant or equipment. And Priceline is to make good the premises by 2 May 2021. The making good involves reinstating the premises to "base building standard" as defined under the lease, repainting the premises and making good any damage caused to the premises by installation or removal of fixtures, fittings, lightings, signage, storage facilities or furniture. Trust's terms allow Trust to carry out any of the obligations on its behalf. And its terms require Priceline to acknowledge that it is otherwise bound by the obligations of clauses 32.2, 40, 46, 47, 48 and 49 of the lease for the duration of the access period. Upon acceptance of these terms the Summons would otherwise be dismissed.
6. Priceline's proposal in contrast, is that it be allowed into the premises upon the payment of $21,000 and be given 14 days to remove all its stock, fittings, plant and equipment. Its proposal would not require it to provide the bank guarantee or make any further monthly payments under the 3 March consent orders.

Applicable Legal Principles

1. Interlocutory Injunctions. As Trust submits, Priceline is in substance seeking the grant of a mandatory interlocutory injunction allowing it to enter the premises and to change them in various ways. Priceline's claim for relief calls for the application of principles relating to the grant of interlocutory injunctions and mandatory injunctions.
2. In deciding whether to grant an interlocutory injunction the Court must consider whether there is a serious question to be tried and then whether the balance of convenience and questions of hardship and related factors warrant the grant of an interlocutory injunction. First, the plaintiff must prove a serious, not a speculative, case which has a real possibility of ultimate success and that property or other interests might be jeopardised if no interlocutory relief is granted: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) at [21-350] ("Equity Doctrines and Remedies"), discussing the requirements of the Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618; [1968] ALR 469; (1968) 42 ALJR 80; [1968] RPC 301 prima facie case test. Put another way, the plaintiff must show a sufficient likelihood of success to justify the preservation of the status quo pending the trial: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; (2006) 229 ALR 457; (2006) 80 ALJR 1672; [2006] HCA 46 at [70] - [71].
3. Then, it becomes a matter of analysing if in all the circumstances of the case, considering the balance of convenience and issues of hardship, the Court should nonetheless exercise its discretion by declining to issue an interlocutory injunction: Equity Doctrines and Remedies at [21-350]; and see also Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; (2001) 185 ALR 1; (2001) 76 ALJR 1; [2001] HCA 63 and Beese (Managers of Kimpton Church of England Primary School) v Woodhouse [1970] 1 All ER 769; [1970] 1 WLR 586. Other factors to which the Court will have regard include the adequacy of damages, the possibilities of alternative remedies, whether there has been any laches or delay, the strength of the grounds of defence suggested by the defendant, what, if any, undertakings the defendant is prepared to give, but hardship and the balance of convenience are very important: Equity Doctrines and Remedies [21 - 375]. If any infringement of a plaintiff's right between writ and hearing would be properly compensated in damages, that fact alone can, but not must, be a ground for declining an injunction: McCarty v Council of the Municipality of North Sydney (1918) 18 SR (NSW) 210; (1918) 35 WN (NSW) 85.
4. A special feature of this case is that there is now only a limited opportunity for Priceline to retrieve its goods and if that opportunity is not granted and taken now then that opportunity will no longer be available as final relief. Priceline's and Trust's remaining rights will be reduced to a damages contest at a final hearing. The matter is urgent because Trust needs to know when it can release the premises.
5. In Kolback Securities Ltd v Epoch Mining (1987) 8 NSWLR 533; (1987) 11 ACLR 630 McLelland J (as His Honour then was) when considering what must be established for the grant of an interlocutory injunction when the restraint in question may have implications for the disposition of the proceedings at final hearing, said: "As I see it, the position is as follows. Where a plaintiff's entitlement to ultimate relief is uncertain, the Court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately be held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled: see, eg, Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 216; A v Hayden (No 1) (1984) 59 ALJR 1 at 4-5; 56 ALR 73 at 79. Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the Court to decide that question on the interlocutory application. Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the Court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question: see, eg, A v Hayden (No 1) (at 4; 78); Cohen v Peko-Wallsend (1986) 61 ALJR 57 at 59;68 ALR 394 at 397. If the Court does decide the question of law the uncertainty is to that extent removed. Unless the plaintiff shows that there is at least a serious question to be tried which if resolved in its favour would entitle it to final relief, then the requirements of justice as between the parties will dictate that an interlocutory injunction should be refused: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 57 ALJR 425; 46 ALR 398; Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 58 ALJR 283; 52 ALR 651; A v Hayden (No 1); Castlemaine-Tooheys Ltd v South Australia (1986) 60 ALJR 679; 67 ALR 553 and Cohen v Peko-Wallsend Ltd. Apart from this, although normally the Court "does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case" (Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622), there are some kinds of case in which for the purpose of seeing where lies the balance of convenience (or more specifically "the balance of the risk of doing an injustice" - see per May LJ in Cayne v Global Natural Resources plc [1984] 1 All ER 225 at 237, cf per Brennan J in Brayson Motors Pty Ltd v Federal Commissioner of Taxation (1983) 57 ALJR 288 at 292; 46 ALR 279 at 285), it is desirable for the Court to evaluate the strength of the plaintiff's case for final relief: see, eg, Brayson Motors Pty Ltd v Federal Commissioner of Taxation (at 292; 285); Castlemaine-Tooheys Ltd v South Australia at 682; 559. One class of case to which this applies is where the decision to grant or refuse an interlocutory injunction will in a practical sense determine the substance of the matter in issue: see, eg, NWL Ltd v Woods [1979] 1 WLR 1294 at 1306-1307; [1979] 3 All ER 614 at 625-626 per Lord Diplock; Cayne v Global Natural Resources plc. The present is such a case. The substantial matter in issue is whether Epoch should be permitted to proceed with the issue of non-renounceable rights in accordance with the announcement of 13 March 1987. That will be irrevocably determined in a practical sense by the grant or refusal of an interlocutory injunction."
6. The orders sought here are in the nature of a mandatory enforcing (as distinct from a restorative) injunction. Priceline seeks to enforce what it claims are subsisting common law rights to have Trust grant it a temporary licence over the premises to retrieve its goods and for Trust to take positive steps to accommodate Priceline's exercise of rights under that licence avoid the goods becoming the property of Trust under clause 32.
7. This can be classified as a mandatory enforcing injunction because here, Priceline seeks to have Trust perform what Priceline claims is its right at general law to allow it to retrieve its goods at the end of the lease. But Trust contests that Priceline has the benefit of that right.
8. The grant of mandatory injunctions is discretionary, with the discretionary factors that can be deployed against the grant of such an injunction being similar to those for the grant or withholding of a prohibitory injunction; but the force of operation of those factors can be different, for example hardship may be a more prominent factor: Heydon, Leeming and Turner, Meagher Gummow and Lehane, Equity Doctrines and Remedies, 5th Edition, LexisNexis Butterworths, [21-450].
9. A Party seeking Equity must do Equity. It is trite law that in order to seek Equity a party such as Priceline must do Equity: Meagher, Gummow & Lehane describe it as, "one of the most important of the maxims of equity" and that it "prescribes that justice must be reciprocal between the parties to an equity suit": Meagher Gummow and Lehane at 3-050; CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; (2007) 235 CLR 1. But it is important that the Court of Equity only impose terms that flow from the defendant's existing contractual or legal or equitable rights: Meagher Gummow and Lehane at 3-050; Bofinger v Kingsway Group Limited [2009] HCA 44; (2009) 239 CLR 269.
10. Tenant's right to retrieve tenant's fixtures. Priceline argued that notwithstanding the terms of the lease, clause 32 stipulated that it still had the benefit of a tenant's right at common law to re-enter for a reasonable period after the conclusion of the lease to remove tenant's chattels and fixtures.
11. The common law provides for such a right. Under the general law a tenant normally has a right of re-entry for a reasonable time for the purposes of moving goods in circumstances where the tenancy was terminated without sufficient warning to enable the tenant to remove the goods and the landlord does not have a possessory lien over the goods: Haniotis v Dimitriou [1983] 1 VR 498 and Martin v King (1996) 7 BPR 14,681. This right also extends to the removal of fixtures: McMahon's Transport Pty Limited v Ebbage [1999] 1Qd R 185 and Kyriacou v Manakis [2006] NSWSC 804. But such rights are subject to modification by agreement between the parties either under the lease or even after termination.

Consideration of the Parties' Contentions

1. The parties advanced vigorously competing arguments about their respective rights under the lease and the 3 March consent orders. They foreshadowed the legal arguments that they anticipated raising at a final hearing. The Court offered them the possibility of construing the lease and the 3 March consent orders on a final basis. But both parties declined to accept that course. So, the Court here briefly considers the outlines of arguments on each side and then traces out the profile of an appropriate grant of interlocutory relief for the parties to bring in short minutes of order.
2. Priceline claimed it had a surviving common law right to retrieve its goods from the premises for a reasonable period after termination of the lease, which it accepted occurred as a result of the 3 March consent orders. It submitted it should now be permitted to exercise that right.
3. Trust replied, contending that whatever common law rights Priceline may have had they were modified by clause 32 which applied and clause 32.2 now allows Trust to keep and dispose of any of Priceline's goods that are left behind after the exercise of its clause 32.1 rights. Consistent with these contentions Trust says that if Priceline is to be allowed into the premises under clause 32.1 it must reinstate the premises and repaint them as that clause requires, as part of its re-entry to retrieve the goods.
4. Priceline replied in turn saying that clause 32.2 has no application because the clause was only engaged where goods were "left at the premises" at the end of the lease, which had not yet occurred and would not occur until 30 June. Alternatively, it argues that "left at the premises" implies that Priceline have some freedom to remove its goods which the circumstances had not allowed it here.
5. Trust's rejoinder was that on the proper construction of clauses 53 and 32 together, the words of clause 32.1 "when this lease ends" were engaged when the lease came to an end by the effluxion of time, or when re-entry for breach has occurred as it has here. And Trust argues that Priceline had ample freedom to remove the goods pursuant to the 3 March consent orders so that it is not inappropriate to say that Priceline's goods have been "left at the premises" within the words of clause 32.2.
6. The parties' contentions are complicated by the 3 March consent orders. At final hearing Priceline can argue that the 3 March consent orders entirely replace the clause 32 mechanism for ending the lease and that Priceline's rights at common law are revived. At such a hearing Trust would no doubt reply that the 3 March consent orders are only designed to displace the terms of the lease to the extent that they must to allow the 3 March consent orders to be performed but the terms of the lease are otherwise operative.
7. It is not necessary to evaluate these various arguments other than to say that they are reasonably maintainable on all sides and will be resolved at a final hearing.
8. But the 3 March consent orders represent the most recent specific agreement that the parties made about vacating the premises and ending the lease. There is little contention that those consent orders are binding in their terms and that the lease came to an end on 3 March and legal possession then returned to Trust. Thereafter Priceline's occupation of the premises is explained, at least in part, by its adherence to the terms of the 3 March consent orders.
9. Rein J's judgment gives effect to those orders and Trust submits that the present proceedings are an impermissible attempt to appeal from Rein J's judgment. But that somewhat overstates the position. The present application deals with a matter not dealt with by Rein J's judgment: retrieval of Priceline's goods.
10. Neither party advanced argument to contend that the Retail Leases Act 1994 had any application to the present circumstances.
11. Priceline has demonstrated a serious question to be tried. The balance of convenience requires the present impasse to be resolved. Equity requires Priceline to do Equity as the price of interlocutory relief. In the Court's view, doing Equity requires Priceline to substantially honour the terms of the 3 March consent orders.
12. Priceline's contentions say little about the terms of the 3 March consent orders. Trust's contentions also diverge from the 3 March consent orders considerably. Trust's contentions instead heavily emphasised the terms of clause 32 of the lease, the application of which is contentious and will be decided at a final hearing.
13. The balance of convenience here requires close regard to the 3 March consent orders. But it must also be sensitive to dealing differentially with the various categories of goods that are in question. The parties' contentions raise issues about three types of items that Priceline claims it has left on the premises and wishes to retrieve. These types of goods are the following, and the third is the most contentious: 1. pharmaceutical products and Priceline's confidential papers; 2. other consumer stock; and 3. plant equipment and fittings.
14. (1) Pharmaceutical products and confidential papers. The Court indicated to the parties that it would authorise a separate regime for the removal of the pharmaceutical products presently locked away in the premises and any personal or confidential papers belonging to Priceline. Because of Priceline's obligations to account to regulatory bodies in respect of pharmaceutical products in its possession, it is desirable that Priceline be able to deal with such products quickly, without any ambiguity as to their management and without the imposition of onerous conditions. This will promote compliance with external regulators so that such products are accounted for by the Priceline pharmacist most familiar with them, Mr Assad Karem.
15. Priceline's confidential papers are likely to include inventories and logs relating to these same pharmaceutical products and thus there is a good case for them being categorised the same way. Whatever else happens the Court will permit entry to the premises for seven days upon the making of the payment of $21,000 to permit Priceline to remove pharmaceutical products and all its confidential papers in whatever form they are kept.
16. (2) Other consumer stock. The case for other consumer stock being removed on the same basis as the pharmacological products and confidential papers is strong. The Court accepts that this stock has value for Priceline but would have little or no value to a new pharmacist coming into the premises to take a lease after Priceline. It is pointless for the Court to impose onerous terms upon the removal of this other consumer stock. Such terms would effectively destroy its value to Priceline for no commensurate benefit to Trust. The Court will also include the removal of consumer stock within the liberty to remove Priceline's pharmacological products and confidential papers.
17. (3) Fixtures and Fittings. Perhaps the most controversial area involves the removal of fixtures and fittings. The items may have substantial market value and they would be of value both to a new pharmacy tenant at the premises and to Priceline. Moreover, their removal includes the unfixing of fixtures to the freehold and handling and transportation of bulky items that has the potential to cause incidental damage to the premises. But the value of these fixtures and fittings, as distinct from the consumer stock and pharmacological items, is uncertain.
18. The conditions that Trust seeks to place on the removal of these items are unsatisfactory for an interlocutory regime. It is controversial whether Priceline is required to do Equity by performing clause 32.1. And Trust's proposal would invite immediate and unnecessary disputes about whether or not Priceline has satisfactorily made good or repainted the premises. Such disputes may of course still exist at final hearing if clause 32 is held to apply.
19. The 3 March consent orders provide an appropriate framework for interlocutory relief for fixtures and fittings. Priceline will be given a Court authorised licence for 14 days from Tuesday 20 April to Tuesday 4 May to recover these items.
20. This licence will be on the following conditions. First, Priceline will need to pay the periodic payment of $88,150.58 due under the 3 March consent orders on 1 April. Priceline will not have to pay the periodic payment of $88,150.58 due on 1 May: it will only be in occupation until 4 May.
21. Priceline will have to provide reasonably satisfactory security in the amount of $88,150.58 in lieu of the bank guarantee provided for under the 3 March consent orders. The Court will determine what is reasonable, if the parties cannot agree. If in cash the security could be paid into Court or paid into a controlled moneys account. The Court is not specifying any particular form of security. Depending upon the value of the fixtures and fittings some of that security may perhaps be able to be provided by independently valuing and leaving some portion or class of the fixtures and fittings at the premises. Equally, some of the stock that Priceline removes may be able to be sequestered and sold with the proceeds being set aside.
22. For the avoidance of doubt, the Court would regard computer systems that hold any of Priceline's commercial information as falling within the type of goods in category (1), not category (3).
23. Clauses 40, 46, 47, 48 and 49 of the lease will apply to Priceline's occupation under this interlocutory order. Priceline will have to give an undertaking as to damages, but this may end up being little wider than these clauses. Clause 32 of the lease will not apply in this interlocutory regime, but without prejudice to Trust's right to argue at final hearing that Priceline has breached that clause.
24. The Court must also look to making a final hearing much more efficient and reducing disputes at that time. This can be done now with some simple steps accompanying the removal of goods from the premises. To avoid unnecessary disputes about the identification of fixtures and fittings and other similar property at any final hearing the parties should construct a regime in which they mutually check off and agree the inventory of fixtures and fittings, if necessary recording the same with photographs or video evidence immediately before removal commences. Existing inventories in management accounts of consumer stock and pharmaceutical goods can conveniently be made available inter partes.
25. Once removal of plant and equipment has taken place, to the extent that Trust alleges that has caused damage to the premises or failed property to reinstate them, Trust should itemise and photograph the defects and effect service of a substantiated list on Priceline within an agreed period.
26. To try to avoid a final hearing, the Court is prepared to order a mediation. If the parties wish to take that course each of them should submit to directions to formulate and substantiate their claims in the near term.
27. This is an interlocutory application. The relative merits of the parties' respective positions will only be determined at a final hearing. Costs will therefore be reserved.

Conclusions and Orders

1. The Court has now given the parties sufficient guidance for them to bring in short minutes of order to give effect to these reasons. It is desirable that this be done by the end of today so the access regime can commence tomorrow morning. The Court therefore makes the following orders and directions: 1. Direct the parties to bring in short minutes order to give effect to these reasons; 2. List the proceedings for the entry of orders at the parties' convenience any time after 2PM on 19 April 2021, by arrangement with my Associate; and 3. Order that these reasons not be published other than to the parties and relevant regulatory authorities until the parties notify the Court that the pharmaceutical products have been removed from the premises. 4. Grant liberty to apply.

Further Argument Between 19 and 21 April 2021

1. After the Court made these orders on 19 April, further argument took place and on 21 April the Court made further orders and published further reasons which are set out below.
2. The Court's above decision on Monday, 19 April 2021 proposed that the parties bring in agreed short minutes of order to give effect to the Court's reasons. The parties have been unable to agree upon short minutes of order. The Court prepared draft short minutes of order and circulated them but that in turn led to further contention between the parties. So, the Court relisted the matter, heard argument, made further directions and received supplementary evidence and submissions.
3. This further argument raised two main issues: (i) whether Priceline should be required to provide a bank guarantee or an equivalent as part of the price of access to the premises; and, (ii) whether entry to the premises should be permitted in a two-step process (in two periods of seven days, in the first the pharmaceutical and consumer stock could be removed and in the second the fixtures and fittings could be removed) as the Court's earlier reasons envisaged, or in a single period of 14 days. The Court has now decided for the following additional reasons to make the interlocutory orders set out below.
4. The Bank Guarantee. Trust draws specific attention to an important aspect of the history of this matter. In November 2020 Trust called upon the existing bank guarantee to pay claimed arrears of rent. Under the lease, clause 16.3 once the bank guarantee under the lease is called upon, Priceline had an obligation to replace it. Trust submits that one purpose of the 3 March 2021 consent orders, 3(a) was to reinstate that bank guarantee in part. Trust submits that for Priceline to do equity in conformity with Order 3(a) of the 3 March consent orders, it must now reinstate the bank guarantee or its equivalent as order 3(a). The Court's draft orders provided for the payment of money into Court rather than the reinstatement of the bank guarantee. The question is whether the Court should make its draft orders or make orders that in substance reinstate the bank guarantee.
5. The Court has reasoned that in order to do equity the Court should have close regard to the 3 March consent orders. But that does not mean those orders must be followed in all respects despite the lapse of time and the change of circumstances since 3 March. The Court must also have regard to what is likely to reduce short-term conflict between the parties so they each have as much certainty as possible.
6. Since the first week of March Priceline has defaulted on this part of the 3 March orders and is liable under those orders to make monthly payments until 1 June to cover its potential occupation of the premises until 30 June. Priceline has since made an unsuccessful application before Rein J to be allowed back into the premises. Priceline has now commenced fresh proceedings, conceding it will not be allowed back into the premises and seeking access to its stock. That matter was argued on 15 April and the Court gave judgment on 19 April. That provoked a further round of submissions on 20 April.
7. These parties have a propensity to continue this dispute. It is in their best interests for the Court to craft orders that will reduce further short-term disputes. The Court will not reinstate any part of the bank guarantee because that is likely to lead to another Court application as to whether the bank guarantee can be called upon to pay outstanding rent. The parties' competing submissions show that there is an active contest between them as to whether or not Priceline is able to take advantage of the Retail and Other Commercial Leases (COVID-19) Regulation (No. 3) in such a way that it can justify a continuing moratorium on its outstanding rent of $464,000 up to 1 February. Priceline says this sum is not now due. Trust says that it is. The Court is not in a position to adjudicate the relative merits of prospective arguments on this issue yet at an interlocutory hearing. All that can safely be said is that it is contentious.
8. If the Court reinstates the bank guarantee all that is likely to happen is Trust will call upon it and Priceline will make another application to the Court to attempt to restrain the call. A better course is the Court's original proposal which is for the equivalent of the bank guarantee to be paid into Court. In Trust's recent submissions it contended that it was "eager to relet the premises and is presently unable to take appropriate steps in that regard as a result of [Priceline's] continued Court applications". The Court will modify the 3 March consent orders by payment of an amount equivalent to the bank guarantee into Court.
9. The Period of Access to the Premises. In accordance with its earlier reasons the Court proposed draft orders which envisaged Priceline having access to the premises in two steps, the first for recovery of the pharmaceutical and general consumer goods and the second step for the recovery of fixtures and fittings. Additional evidence has changed the picture on this issue a little.
10. Despite a request from the Court, Priceline is unable to break down the value of the pharmaceutical goods from the general consumer goods in the stock estimate of $585,000 that was given in its primary evidence. Priceline has filed evidence indicating that it "does not press the removal of its fixtures and fittings for the time being" (emphasis added). It says these may now be worth about $250,000. But this is Priceline's last practical opportunity to retrieve these items. Thereafter, they will fall into Trust's possession. So the Court will still allow Priceline the option of retrieving these items.
11. Priceline has also indicated that third parties hold registered purchase money security interests ("PPSIs") in the stock under the Personal Property Securities Act 2009 worth up to 80% of their value. Trust submits that there is little incentive for Priceline to take up the opportunity to have a second week of access to the premises and that it is likely that it will just retrieve the pharmaceutical goods and consumer goods and leave fixtures and fittings there. The additional evidence suggests that is likely. But the additional evidence also suggests that because of the quantum of the existing registered security interests there is little potential benefit for Trust in being able to take possession of the stock, if it is left behind.
12. What is needed is a simple clear mechanism so Trust knows as soon as possible when it can relet the premises but allows Priceline access to remove its goods whilst paying for proportionate supervision of that access. Priceline needs to know what it has to pay upfront. The Court is mindful that Priceline is already in default under the 3 March consent orders, which require it to make payments up to 30 June. These matters have been taken into account in fixing the amounts for payment in advance under these orders.
13. Priceline argues that there should not be a strong disincentive for it removing its pharmaceutical goods from the premises so that it can comply with applicable legislation. But because the value of the pharmaceutical goods cannot be differentiated from the value of the general consumer goods, the Court does not have a sound basis to construct a regime in which the pharmaceutical goods can be removed on their own with a lesser appropriate payment being made for that task. If Priceline elects not to pay the sums of money provided for in these orders, then no doubt Priceline will have to account to the relevant regulatory authorities for the situation in which it finds itself.
14. Trust will of course need to be mindful that if Priceline is unable to retrieve its computers and confidential business papers and suffers financial loss as a result of needing to reconstruct them, then its costs of doing so will be added to any claim for damages that Priceline may have at the end of these proceedings. Otherwise, the parties will be left to their respective rights in damages against one another at final hearing and the proceedings will be listed before the Registrar for directions to be made for that purpose.
15. The Court wishes to know when the pharmaceutical products have been removed from the premises. Directions are made for the Court to be informed of that so that the judgment can be published from that point onwards.
16. The proceedings will be listed on Friday, 23 April at 4pm for the plaintiff to give any undertaking as to damages it chooses to give.
17. The Court therefore makes the orders set out below: 1. For the purposes of these orders, the expressions "the premises" and "the lease" have the same meaning as they do in the Court's reasons for decision of 19 April 2021. 2. The plaintiff may have access to the premises for the purposes described in Order 3, if the plaintiff before 4pm on Friday, 23 April 2021: 1. Gives to the Court the usual undertaking as to damages; 2. pays the sum of $88,150.58 into Court as security for the plaintiff's performance of such obligations under the lease or the 3 March 2021 orders as may be found at final hearing to apply to the plaintiff; 3. pays to the defendant (on account of the defendants' supervision during access to the premises) the sum of $21,000 for access until 30 April 2021 ("the shorter period"), or $42,000 at the plaintiff's option for access until 7 May 2021 ("the longer period"); and 4. pays to the defendant a further sum of $88,150.58 if the plaintiff pays only for the shorter period of access, and a further sum of $110,188.22 if the plaintiff opts to pay for the longer period of access. 1. The access conferred by these orders only permits the plaintiff to remove the following of its property from the premises under the reasonable supervision of the defendant's staff: 1. if the plaintiff pays for the lesser period, the plaintiff may remove its pharmaceutical products, confidential papers, computers, consumer stock and other consumer products; and 2. if the plaintiff opts to pay for the longer period of access, then in addition to the items in (a), the plaintiff may remove fixtures and fittings from the premises. 1. Clauses 40, 46, 47, 48 and 49 of the lease will apply during the plaintiff's entry and access to the premises pursuant to these orders, but without prejudice to the defendant contending at final hearing that other provisions of the lease apply. 2. The parties otherwise remain bound by the Court's orders of 3 March 2021. 3. Direct the parties to inform the chambers of Slattery J when all the plaintiff's pharmaceutical goods have been removed from the premises. 4. List the proceedings for mention at 4pm on Friday, 23 April 2021 before the Duty List Judge. 5. Liberty to apply on 2 hours' notice. 6. Costs reserved. 7. The proceedings are adjourned for further directions to 11 May 2021 before the Registrar in Equity.

Amendments 30 April 2021 - Publication restriction removed following completion of interlocutory regime. Judgment addendum delivered on 21 April 2021. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 April 2021