Punjabi Fusion Group Pty Ltd v Joseph John Romanos

Respondent's submissions

1. Mr Jones refers to the orders made by the Tribunal in the earlier proceedings in particular to the following orders: (1) The applicant Punjabi Fusion group Pty Ltd to pay the respondent Joseph John Romanos $72, 750.00 by one April 2023. (2) The applicant 's claim and the respondents cross claim otherwise be dismissed.
2. The only orders made by the Tribunal appear at [1] and [2]. The balance of the paragraphs are notations. To avoid any uncertainty the only orders made in those proceedings required, [I], that the Applicant was to pay the Respondent a monetary amount of $72,750.00 by 1 April 2023 and, [2], that the respective claims were otherwise dismissed. The Tribunal then made notations that the parties had come to an agreement but made no order to the effect of the agreement other than orders [I] and [2].
3. The Applicant, failed to execute the proposed deed as anticipated in notation [5] of the Orders. All that is binding on the parties, in addition to Orders [1] and [2], is the Heads of Agreement ("HOA") signed on 27 October 2022. The relief sought by the Applicant in the present application wholly relies on an alleged repudiation of the HOA. For a multitude of reasons the substance of that claim is futile. However, the application reveals the misconception of the Tribunal's jurisdiction and the terminal issues with such an application.
4. Ultimately, the application is one that ought to have been brought in contract, not in the retail leases division of the Tribunal. This is not a retail leases dispute. That dispute has been resolved. The issues in dispute presently are contractual in nature.
5. The Applicant fails to identify an empowering statutory provision to hear the dispute and, aside from the jurisdictional and factual futility, is otherwise estopped from attempting to re-litigate the issues previously resolved in this Tribunal. The Tribunal has insufficient statutory authority or equitable jurisdiction to hear the matter or grant the relief sought.
6. In any event the terms of the HOA included that: a. The First Defendant pay $72,750.00 to the Plaintiff by 4pm on I April 2023 ("Settlement Amount"). b. The First Defendant agreed to vacate the Premises by 4pm on I April 2023. c. The Plaintiff agreed to issue a lease to the First Defendant commencing I November 2022 and expiring on I April 2023 ("New Lease"). d. It was intended that the First Defendant would sell its business to a purchaser. e. The Plaintiff would enter into a lease with the purchaser, subject to the Plaintiffs final approval. f. The lease to a purchaser will be at market rent. g. The HOA will be reduced to a settlement deed ("Deed").

Outline of Chronology since the 27 October 2022

1. 2A deed was sent to the Applicant on 7 December 2022. On 24 January 2023, the Applicant's [then] solicitor stated that the execution of the deed was being arranged. On 17 February 2023 the Respondent delivered a signed deed to the Applicant which annexed the new lease (for the purpose of interim tenancy until I April 2023) and prospective lease (which was an invitation to treat for the prospective purchaser).
2. The Applicant failed to sign the deed or the New Lease (which permitted occupation until I April 2023 pursuant to the HOA). On I March 2023, the Applicant requested more time to comply with the deed. On 6 March 2023, the Respondent refused to extend the time and provided his independent appraisal of market rent for the prospective lease.
3. On 31 March 2023, the Applicant entered into a business sale agreement with Infinite Quality Foods Pty Ltd ("Purchaser") . The agreement contained a 28-day settlement period. The sale agreement included a prospective lease as an invitation to treat for the purchaser but omitted the proposed market rent provided by the respondent.
4. On 1 April 2023, the Applicant defaulted on Order I in failing to pay the settlement amount. The settlement amount was not paid until 17 April 2023
5. On 3 April 2023, the Respondent made requests for information from the Purchaser so as to properly consider entering a lease with the Purchaser
6. On 24 April 2023, the Respondent informed the Purchaser that he would not be prepared to enter the lease. Those reasons included: 1. The prospective Purchaser had not provided any reasonable evidence that would satisfy security over the lease; 2. There was no reasonable evidence that the prospective Purchaser could service the rental obligations; 3. There was no reasonable evidence of a history of operating such a business; 4. The market rent had not been agreed upon between the parties.
7. On 28 April 2023, the Respondent requested the following further information from the Purchaser so that he could further consider the Purchaser and facilitate the business sale agreement: 1. A complete understanding of the financial securities of the Purchaser and its guarantor (including evidence of how the business sale agreement will be financed and a copy of a bank guarantee). 2. Confirmation whether the Purchaser intends to present a different prospective lease in the nature of an invitation to treat. 3. An undertaking that the Applicant will undertake the make good rectifications for outstanding items not covered by the HOA.
8. There was no response to the request for further information.
9. On 12 May 2023, the Respondent again renewed his request for the further information. No further information was provided by the Purchaser or the Applicant.
10. On 1 June 2023, the Respondent then indicated to the Purchaser and the Applicant that, for a multitude of reasons, he did not agree to enter the prospective lease with the purchaser and requested that the Applicant vacate the premises by 16 June 2023
11. On 2 June 2023, the Applicant confirmed that the Purchaser had rescinded the business sale agreement and asserted that it has continued occupancy rights to the premises
12. On 14 June 2023, the Applicant appointed a Restructuring Practitioner pursuant to s 453B of the Corporations Act 2001 (Cth)
13. On 20 June 2023, the Respondent informed the Applicant that proceedings for possession of the premises would be commenced in the Supreme Court of New South Wales should the Applicant fail to vacate the premises by 25 June 2023.
14. On 23 June 2023, despite having appointed a Restructuring Practitioner, the present application was lodged by the Applicant.
15. On 29 June 2023, pursuant to the Corporations Act s 453S, the Restructuring
16. Practitioner provided written consent to the Respondent to commence proceedings against the Applicant in the Supreme Court.
17. A Statement of Claim seeking Possession of the premises was filed in the Supreme Court of New South Wales on 30 June 2023.
18. On 10 July 2023, the Restructuring Practitioner issued a report titled "Proposal for a restructuring Plan". The proposal indicated, inter alia, that the business of Punjabi Fusion owed $352,099.00 to creditors and offered creditors 19 cents in the dollar as part of the restructuring plan. Further, on the available documentation, it appears that the business is presently trading insolvently.

Summary Dismissal

1. The Respondent seeks summary dismissal of the present proceedings pursuant to s55(1)(b)of the NCAT Act, the other subsections not being relevant, which states: "(1) the Tribunal may dismiss at any stage any proceedings before it in any of the following circumstances- (b) if the Tribunal considers that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance,
2. The Applicant's present application is wholly dependant upon success in relation to the relief sought, namely that either: 1. the orders made on 27 October 2022 are set aside or, 2. in the alternative, renew the proceedings that were before the Tribunal.
3. Mr Jones submits on behalf of the Respondent that such relief must be refused for want of jurisdiction as the application is ultra vires of the jurisdiction of the Tribunal and otherwise brought in futility. In the likely event that the Applicant is unsuccessful in either having the orders of 27 October 2022 being set aside or the case being renewed, the application is reduced to a contractual dispute which is not within the jurisdiction of the Tribunal.
4. According to Mr Jones, the application must be summarily dismissed for the following reasons.
5. The Applicant seeks to have the orders made on 27 October 2022 set aside. The applicant has failed to bring an internal review, external review or point to any error of law or jurisdictional error warranting that the order made on 27 October 2022 ought to be set aside. The Applicant has not identified any statutory basis for setting aside the orders and, instead, relies on a tenuous allegation of conduct amounting to repudiation of a contractual agreement to have an order set aside or quashed.
6. The Tribunal does not have inherent jurisdiction to set aside orders merely upon application. The Applicant must demonstrate some defect with the orders and pursue the available review avenues or seek judicial intervention. The Tribunal is required to exercise its function and statutory powers lawfully and in accordance with the empowering legislative provisions. No such power is identified or enlivened in the present application.
7. No order is available for the relief sought to set aside order (1) of the Tribunal's orders of 27 October 2022 and it should be refused and summarily dismissed.

Renewal application

1. Insofar as the Applicant wishes to renew proceedings and have previous orders set aside, the Applicant relies upon Schedule 4, Cl 8 of the NCAT Act. That Clause relevantly provides: 8 Renewal of proceedings in respect of certain Division decisions If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified hy the Tribunal. If an order has not been complied with within the period specified by the Tribunal. the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal. within 12 months after the end of the period: stating that the order has not been complied with. The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act. When proceedings have been renewed in accordance with this clause, the Tribunal - may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or may refuse to make such an order.
2. Firstly, no order was made in favour of the Applicant. Secondly, even if there was an order in favour of the Applicant, each of the orders have been complied with' albeit late.. Accordingly, the jurisdiction of the Tribunal is not enlivened and the proceedings cannot be renewed. The relief sought in order no 10 of the Application ((f) in these Reasons in paragraph 5) must be refused and summarily dismissed.
3. The only other foreseeable course for the Applicant would be an application for reinstatement Pursuant to s 55 of the Act. However, such an Application would also be futile as reinstatement is only statutorily available on the basis that the proceedings were dismissed pursuant to s 55(I)(c) of the NCAT Act. That provision requires that an order was made in the Applicant's absence. In the proceedings sought to be re-opened the Applicant was present and legally represented. In fact the orders are expressed as "By Consent". No such avenue is available. The application should be summarily dismissed as the proceedings are brought in futility
4. Even if there was no statutory or jurisdictional bar to the applicant' claim, the claim should be refused in accordance with the dictates of the overriding purpose of the Act.
5. For the reasons that follow, an application for renewal or reinstating the previous proceedings would be futile, significantly prejudicial to the Respondent and be subject to estoppel.

Futility - The present application fails on factual merits.

1. Even if the Applicant was successful at reinstating the proceedings, the Applicant is inviting re-litigation of the same factual bases as previously settled between the parties. Notwithstanding any issue estoppel or promissory estoppel, that litigation will inevitably include the Respondent's cross claim seeking: 1. Outstanding rental amounts; 2. Outstanding outgoings; 3. Amounts sought for rectification of outstanding defects; 4. Costs of the previous proceedings brought in futility for, inter alia, covid rental relief; and 5. Costs of these proceedings.
2. Mr Jones then sets out why the prospects of success of the Applicant, on the view of the Respondent are very low. For reasons later discussed the Tribunal will not further explore this aspect as it is not necessary.
3. The Respondent is prejudiced by the reopening of the earlier litigation. Again while these issues have been expanded in the submissions the Tribunal will not further explore this aspect as it is not necessary.
4. The Applicant has brought a new application seeking to re-litigate matters that have already been resolved in Tribunal proceedings. This raises the issues of res judicata and issue estoppel.
5. In Aldous v State of New South Wales [2021] NSWSC 668 Her Honour Harrison As J stated at [15] " Res Judicata and issue estoppel 15. The State submitted that these current proceedings are the subject of res judicata and/or issue estoppel. 16. So far as res judicata and issue estoppel are concerned, in Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; (2015) 323 ALR l ; [2015] HCA 28 ("Tomlinson") (per French CJ, Bell, Gageler and Keane JJ) at [20]-[26] the High Court explained res judicata, issue estoppel and Anshun estoppel as follows: 1. The High Court at [20], stated that a final judgment "quells" the controversy between the persons involved, with the rights and obligations in controversy ceasing to have an independent existence and merging in the final judgment, equating to a "res judicata" in the strict sense; 2. The High Court at [22], explained that three forms of estoppel have been recognised as having the potential to result from the rendering of a final judgment in adversarial proceedings, including: 1. "cause of action estoppel", which operates to preclude "assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceedings and which was determined by the judgment"; 2. "issue estoppel", which operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The High Court said that the classic expression of the primary consequence of its operation was that a "judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies"; and 3. "Anshun estoppel", which operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. 17. In Tomlinson at [25]-[26], the plurality explained the concept of abuse of process as follows. 18. Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. 19. Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel."55If the applicants are not barred from raising them through res judicata, then the applicant is certainly barred by way of issue estoppel or conduct amounting to an abuse of process.
6. Mr Jones submits that the earlier proceedings determined on 27 October 2022 expressly relied on a contention that the 2019 lease applied to the parties. Whether the 2019 lease applied to the parties was a key battle ground, expressly pleaded in the Applicant's points of claim at [3] - [7] and the subject of many paragraphs of affidavits. The Respondent, in the alternative contended that the only lease between the parties was that implied by the Retail Leases Act s8. It is beyond doubt that the application of the 2019 lease was a critical issue in those proceedings.
7. The Orders made on 27 October 2022 dismissed the parties claims and ordered the Applicant to pay the respondent $72.750.00. Those Orders, by consent, resolved the issues litigated by the parties.

Submissions from the Applicant

1. Mr Auld, on behalf of the Applicant seeking the Orders submits that the Applicant as a tenant of the Respondent for the purpose of the Retail Leases Act, 1994 (RLA) seeks relief including as arising out of retail shop lease, or former lease, and the breach by the Respondent of the HOA. The competing claims between the two parties are retail tenancy claims for the purpose of the RLA. On the view submitted by the Respondent, any retail shop lease dispute could be characterised as merely "contractual", and in so doing completely avoid the intent, purpose and operation of the RLA and the protection it offers to tenants.
2. Mr Auld then submits that here the retail shop lease must be: 1. the retail shop lease which the parties attempted to create by operation of clause 2 of the HOA (the 6 month lease expiring on 1 April 2023); 2. the 2019 lease, which itself is referred to in clause 2b of the HOA; 3. a mix of oral and written retail shop lease agreement; 4. some mix of these
3. A retail tenancy claim, which grounds the jurisdiction of this Tribunal under the RLA is defined in s70 of the RLA as: " retail tenancy claim means any of the following: (a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned, being: (i) a claim for payment of money (vi) a claim for relief against forfeiture
4. Section 70 of the RLA also includes reference to "unconscionable conduct claim" to mean a claim for relief under s62B.
5. Mr Auld submits that that an unconscionable claim by the Applicant against the Respondent is a live issue where the Applicant alleges that the Respondent delayed and frustrated the sale of the business to a purchaser, while continuing to insist on strict compliance with the vacation date in the HOA.
6. The Respondent bears the onus in seeking the Tribunal to exercise its discretion in proceeding under s 55(1)(b) of the NCAT to summarily dismiss the Applicant's application. The power to order summary judgment should be exercised with great case, and not unless it is clear there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99.
7. The test, according to Mr Auld is that "the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion". The test has been variously expressed, including "so manifestly groundless", etc: General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 at 128-129 per Barwick CJ.

Determination of the Application of the Respondent for Application for Orders by the Applicant be summarily dismissed.

1. The present application seeks: 1. Orders made on 27 October 2022 be set aside; The Applicant discloses no statutory avenue or power of the Tribunal to make such an order. The applicant's only contention is an allegation of repudiation of HOA. That does not vitiate or warrant the orders being set aside. The order was not contingent on the performance of the HOA. The Orders were made "By consent". 1. The lease of 2019 be registered over the premises; The applicant is estopped from relitigating this issue. The matter was a critical battleground in the previous litigation and the reopening is barred by the principles of res judicata and issue estoppel. Following the reasoning in the decision in Aldous v State of New South Wales [2021] NSWSC 668, the Orders by consent made by the Tribunal close off any re opening of the issues raised concerning the 2019 lease. The lease was the subject of litigation between the parties settled by the consent orders and the proceedings were dismissed. To reopen would be an abuse of process. 1. The sum of $72,750.00 be returned; The Applicant was ordered to pay this amount. The Applicant discloses no lawful avenue of review, renewal of proceedings or reinstatement. The order cannot be made. 1. The Applicant be able to occupy the premises in accordance with the terms of the lease dated I July 2019; This claim also fails for res judicata, issue estoppel and substantive estoppel reasons identified at (b) above. 1. An order that the Respondent behave reasonably in determining an application by a prospective purchaser of the Applicant 's business as to a lease assignment; As identified by Mr Auld for the Tribunal to have jurisdiction there must be a retail lease between the parties. Once such a lease is found then the issues raised here may be triable. There are serious allegations of unconscionable conduct. They are put as breaches of the HOA by the Respondent and delay and frustration of the sale process by the Applicant to a purchaser of the business. The attempt by Mr Auld to identify the "lease" for the purpose of the Applicant's application, in particular this order, in the view of the Tribunal fails. It cannot be the 2019 lease as that no longer exists and cannot be revived for the reasons expressed earlier. It cannot be the short term lease created by the HOA expiring on 1 April 2023 as there is no controversary surrounding that lease, certainly that is not the Lease to be assigned to a prospective purchaser. There is no other lease between the parties. No mix of oral or written lease is identified in the Applicant's application for these orders or in the submissions made. The Applicant occupies the premises pursuant to the terms of the short term lease expiring on 1 April 2023, and appears to be in default. That can be the only lease between the parties for the Tribunal to rely upon for jurisdiction. As noted, "a retail tenancy claim" in s70 (1) (a) of the RLA is a "claim in connection with a liability or obligation with which a retail tenancy dispute is concerned. " In the case of Lovecek v JV Idola Pty Ltd [2011] NSWADT 18 the New South Wales Administrative Tribunal held that the Tribunal did not have jurisdiction to hear a claim for personal injuries arising out of a lease. The lessee contended that the claim for personal injuries she sustained was "a claim in connection with a liability or obligation" with which the subject dispute was concerned and was therefore a "retail tenancy dispute". The Tribunal determined that the correct approach as the interpretation of "in connection with "is set out by Barwick CJ in Brown v Rezitis [1970] HCA 56 at [16] where he stated that: "in connection with"…does emphasise the need for a close connection between then order made and the contract or arrangement varied or avoided. In my opinion, the power to make an order for payment of money is at best no more than a power to make such an order as can reasonably be thought to have a real connection with the making, variation or avoidance of the contract or arrangement which has been varied or avoided." Accordingly, the Tribunal held that [49] "a claim for personal injuries does not have the close, real or logical connection with the subject lease or agreement between the parties in these proceedings as required ..". Similarly, the application regarding the proposed order relating to obligations by the Respondent to deal with a proposed sale and purchaser does not have the close, real or logical connection with the short term lease, being the only lease between the parties. It is not the lease to be assigned. The alleged obligations of the Respondent do not arise under that lease. The dispute here is a matter of contract under the HOA. 1. In the alternative, the Applicant seeks to have the matter dealt with by way of renewal of proceedings application in accordance with Schedule 4 Clause 8 of the Civil and Administrative Tribunal Act 2013. There is no availability to the Applicant to seek renewal of the proceedings as discussed. No order was made in favour of the Applicant and the only 2 Orders made have been complied with.
2. The Tribunal is mindful of the issues raised that the jurisdiction to summarily dismiss an action is to be sparingly employed. The Tribunal is satisfied that the Respondent has discharge the onus he bears as the moving party.
3. As found by Dr J Lucy, in Hasabrabo v Liquor and Gaming NSW [2020] NSWATAD254 at [30] "The tribunal may dismiss proceedings "if the Tribunal considers that the proceedings are frivolous or otherwise misconceived or lacking in substance (s 55(1)(b) NCAT). When proceedings are manifestly groundless or untenable their maintenance may be frivolous or vexatious (Asuzu v Council of the New South Wales Bar Association [2021] NSWCA 406 at [119]). I consider that these e proceedings are manifestly untenable due to the Tribunal's lack of jurisdiction. They are misconceived for the same reason."
4. The Tribunal considers the Applicant's Retail tenancy applications as manifestly untenable due to the Tribunal's lack of jurisdiction as discussed earlier. They are misconceived for the same reason.
5. Accordingly I dismiss the Applicant's application
6. Consequently, the Tribunal does not have to consider the Respondent's other orders it seeks in these interlocutory proceedings, as the application is dismissed, other than the last request which is for costs.
7. there were no submissions, as far as I could find on costs, other than the application for security of costs if the Applicant's application was to proceed. Accordingly, I will make no order as to costs but allow the Respondent to make submissions if he wants to pursue costs.

ORDERS 1. A hearing of the Respondent's summary dismissal application is dispensed with. 2. The proceedings are dismissed pursuant to s55 (1) (b) of the Civil and Administrative Tribunal Act 2013.( NCAT) 3. Each party to pay their own costs proceedings. 4. In the event either party contends a different costs order should be made, the following order and directions are made: 1.The cost applicant is to file application for costs (limited to 3 pages) within 14 days from the date of publication of these orders, including submissions about whether an order can be made dispensing with a hearing pursuant to s50 (2) of the NCAT. 2. The respondent to the costs application is to file and serve any submissions in reply (limited to 3 pages) within 28 days from the date of these orders, including submissions about whether an order can be made dispensing with a hearing pursuant to s50 (2) of NCAT. 3. Order 3 ceases to have effect if a cost application is filed in the time permitted by these orders.

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: 22 September 2023