The Hilltop Store Pty Limited v BVL Partnership Pty Ltd

Background

1. The applicant's directors are Ms Carla Jones (Ms Jones) and Mr Matthew Evans (Mr Evans). Sand & Roses Pty Limited holds seventy percent of the applicant's shares while the remaining thirty percent is held by Mr Evans. The directors and equal shareholders of Sand & Roses Pty Limited are Ms Jones and her husband, Mr Richard Dolan (Mr Dolan).
2. The sole director and secretary of the respondent is Ms Monique Parmenter (Ms Parmenter). Anthony Parmenter (Mr Parmenter), her husband, is the respondent's Chief Operating Officer. Where appropriate, I will refer to them as "the Parmenters".
3. The Lodge was acquired by BVL Management Pty Ltd (BVL Management) in 2017. Ms Parmenter is also the sole director of that company. The respondent does not have a lease of the Lodge from BVL Management.
4. The Lodge consists of a hotel with a swimming pool, poolside bar and poolside pizza bar. There is also a restaurant. According to the respondent, the restaurant consists of an indoor seating area for 80 people and an outdoor terrace sitting area for 60 people plus a kitchen area (restaurant). Again according to the respondent, the indoor and outdoor seating areas each measure 350 m².
5. Since BVL Management acquired the Lodge, the respondent has operated it as a hotel and restaurant, except for the period the restaurant was operated by the applicant.
6. The initial connection between the parties was made at The Hilltop Store café at Sawtell (café) operated by the applicant. The Parmenters dined there and got to learn about Ms Jones and Mr Dolan who were the chefs.
7. On 27 September 2019, Mr Parmenter sent an email to Mr Evans seeking to discuss a business opportunity in relation to the restaurant. Over the following months the parties' representatives met and corresponded to negotiate the terms of what might be broadly described as a business arrangement. The applicant contends that what was being negotiated was a lease of the restaurant. The respondent says the applicant did not want a lease and what was being negotiated was a management agreement to provide food and beverage services to the hotel and restaurant at the Lodge.
8. Those negotiations resulted in the parties signing the term sheet on 29 January 2020. It was prepared by Mr Parmenter and reads as follows: Term Sheet - Bellingen Valley Lodge to Hilltop Store Restaurant, adjoining outdoor terrace and grassed area to north of terrace situated within Bellingen Valley Lodge at 1381 Waterfall Way Bellingen NSW. Lessor BVL Partnership Pty Ltd ACN 622 730 509 Tenant Hilltop at the Lodge ABN 49 622 113 179 Term Sheet Commencement date 26 February 2020 Terminating Date 26 February 2023 Option to renew for a period of 5 years with a written notice period of 3 months prior If option to renew taken at 2023, further option to renew for 5 years at 2028. Rent Rent free period to Commence on 26 February 2020 and cease on 30 June 2020. Turnover rent calculated on gross turnover for all food and beverage sales from 1 July 2020 Turnover rent percentage 5% first 12 months, 6% thereafter after GST Tenant to provide monthly sales figures no later than 5 business days following the end of the month, with apportioned rent paid no later than the 15th day of the following month. Bond - $20,000 payable by 30th January 2020. Permitted use - Hospitality business relating to operating a licensed restaurant. Operational - Minimum Restaurant hours Wednes Thurs to Saturday Evenings 5pm to 9pm, Saturday and Sunday mornings 7.30am -10.00am - Liquor Licensee to remain as Monique Parmenter - All bar/waitstaff to provide RSA certification to BVL management prior to beginning employment. - Tenant to specify a food safety officer and comply with council regulations. - Certificate of currency to be provided for workers compensation and public liability insurances. - Tenant to provide their own point of sale and merchant facilities. - Tenant to be provided exclusive rights to all conferences, tours and functions held at Bellingen Valley Lodge. - BVL Partnership retains any hire fees for conference area, pool surrounds and wedding venues. - All venue marketing and pricing to be approved by BVL management prior to listing. Outgoings & Maintenance - Tenant to cover outgoing utility costs from commencement of lease on a usage basis for LPG gas and on a pro rata basis for water and electricity (approximately $1,200 per month as at 26th February 2020). - Tenant to ensure all restaurant, kitchen and bar equipment is maintained, serviced and in good working order and cover costs of any maintenance - Tenant to maintain the kitchen, restaurant and terrace to a high standard of cleanliness at all times. - Tenant to ensure grease trap is maintained and provide council with evidence when required. - Noise control and limitations are set and managed by BVL management. Annexure - All Weddings prior to the turnover rent commencing on 1 July 2020 will attract a 15% commission paid to BVL Partnership. Signed / Date C Jones (Signed 29/01/20) R Dolan (Signed 29/01/20) M Evans (Signed 29/01/20) Bellingen Valley Lodge A Parmenter (Signed 29/01/20) Hilltop Store
9. The words "after GST" in the third line under the "Rent" subheading were added by hand. Under the "Operational" subheading, "Wednes" has been crossed out and "Thurs" written above. ABN 49 622 113 179 is the applicant's Australian Business Number.
10. Mr Parmenter says the term sheet was prepared by him without the benefit of legal advice and to record some of the essential terms the parties were seeking to achieve, He did not, he says, prepare it to be a lease but rather as a management agreement because the applicant did not wish to provide personal guarantees or provide financial statements or make financial disclosure.
11. The $20,000 bond referred to in the term sheet was transferred by the applicant to the respondent's bank account by two payments, each of $10,000, on 30 and 31 January 2020.
12. About 26 February 2020, the applicant commenced the fitout of the restaurant. The respondent paid approximately $150,000 for the cool room, exhaust housing and flooring. The applicant says it spent approximately $160,000 on the balance of the fitout cost. This is not in dispute.
13. On 12 March 2020, Ms Jones sent a text message to Ms Parmenter, who held the liquor licence for the Lodge, requesting a letter from Ms Parmenter stating that "the Hilltop" will be running the restaurant/bar at the Lodge, Ms Jones explained that the letter was required for a credit application that was being made to a wine supplier, and Ms Parmenter was the licence holder. On 13 March 2020, Ms Parmenter sent Ms Jones a letter which reads as follows: To Whom it May Concern I Monique Parmenter, director of BVL Partnership PTY LTD. Trading as, Bellingen Valley Lodge, Liquor Licence No. LIQ0600469965 certify that 'The Hilltop' trading as 'Hilltop At The Lodge' have a management agreement in place to operate our bar and restaurant under my licence. For further clarity, you can contact me on [number provided]. Regards, (Sgd) Monique Parmenter Director Bellingen Valley Lodge
14. The applicant commenced trading at the restaurant, which was known as "The Hilltop at the Lodge", on 5 June 2020. Mr Dolan, Ms Jones and Mr Evans managed the restaurant. The restaurant was licensed to sell alcohol and did so under the liquor licence held by Ms Parmenter.
15. According to Mr Dolan, it was the applicant's initial plan to register the business name "Hilltop at the Lodge" under the applicant's ABN. However, following discussions with a financial advisor, Hilltop at the Lodge Pty Ltd ACN 642 822 946 (HATL) was incorporated on 21 July 2020 to operate the restaurant. The applicant and HATL have the same directors and shareholders.
16. Mr Dolan says the respondent was aware of the applicant operating the restaurant under HATL. He says all communications and invoices were issued by the respondent to either "Hilltop", "Hilltop at the Lodge" or "Hilltop at the Lodge Pty Ltd".
17. Mr Parmenter says he first learned about HATL after he received an email in about August 2020 that a new entity was created. He was told that a new entity had been set up to operate from the premises but says the respondent was not asked if it agreed and says it never did agree.
18. Each month from September 2020 through to June 2021 the respondent issued invoices addressed to "Hilltop at the Lodge", "Hilltop" or "Hilltop at the Lodge Pty Ltd" . The invoices contained a section headed "Description" that described what the particular invoice was for. The descriptions in the monthly invoices were not identical. For example, in the invoices for the August and September 2020 the description was "Restaurant rent". Subsequent invoices simply referred to "rent" while the January rent description was "Hilltop January rent" and February rent was described as "Restaurant Feb rent". The June 2021 invoice for May rent contains the description "May hire fees" but the invoice issued the following month gave the description "June turnover rent". The August invoice description was "July - rent".
19. The amounts invoiced each month were said to be 5% of the gross turnover at the restaurant for all food and beverage sales calculated from information provided to the respondent. With one exception, the amounts invoiced were expressed as inclusive of GST.
20. The respondent also issued separate invoices that were expressed to be for outgoings for each of the months of December 2020 through to May 2021.. The invoices have been issued to either "Hilltop" or Hilltop at the Lodge" while the 9 March 2021 invoice for February outgoings has been issued to Hilltop at the Lodge Pty Ltd. There is one invoice for the period 5 June to 30 November 2020. The description in that invoice reads "outgoings - 5th June to 30 November 2020" and contains a single amount inclusive of GST. Each of those invoices contains a list of items such as cleaning, handy bin, electricity, water restaurant, and supergas restaurant, with a specific amount allocated for each item.
21. Between December 2020 to February 2021, Mr Dolan repeatedly requested Mr Parmenter for formal lease documentation. The following is summary of the relevant requests and Mr Parmenter's responses as recorded in the documents that are in evidence: 1. Email from Mr Parmenter to Mr Dolan 8:48 AM 3 December 2020 Carty & Cox Lawyers will email you a disclosure statement for the lease today (I have given her your email address). 1. Email from Mr Dolan to Mr Parmenter 5:20 PM 3 December 2020 As far as the lease goes, I have had no correspondence from Carty & Cox as of yet. 1. Email from Mr Dolan to Mr Parmenter 5 December 2020 and Mr Parmenter's reply the next day. These are the relevant parts of the exchanges in the emails. Dolan: At the close of business yesterday I still haven't received any correspondence from Cart & Cox Solicitors for our current leased area at Bellingen Valley Lodge. Parmenter: I received correspondence from Carty & Cox Friday night at 6.36pm, as discussed a lessor disclosure letter is being prepared to send out to you from the term sheet we agreed upon which I am currently completing, to reiterate you have a copy of the agreed term sheet which has been signed which you should be able to use with silver chef for your equipment, to formalise the document into a lease there is a lot of additional detail, work and cost involved ) I will endeavor (sic) to finalise today and send back to Carty & Cox and then onto you. Dolan: As mentioned prior to our last two meetings, we need to have this lease finalised before the Hilltop team move forward with any operational and financial outlay for the new phase of the business. We have equipment lined up ready to go for the kitchen that really needs to be in for summer to facilitate the high-volume expected. Parmenter: You have a signed copy of the term sheet we all agreed upon and have been operating under this since 5th June 2020, the lease is a process and I will push as hard as possible to get this done quickly. We too have invested heavily in your current business fit - out and have fully funded the pool pizza/bar. 1. Email from Mr Dolan to Mr Parmenter 10 December 2020 Could you please send through the copy of Terms of Agreement signed by both parties or copy the original so I can send it to Silver Chef, we only have the documents we signed at the Hilltop store last year. ….. In regards to the lease, our lawyers away from Friday until fourth January. (Hence why the push was on for him to see it). However he'll look at it on his return in January. 1. Email from Mr Parmenter and to Mr Dolan 15 January 2021 Thanks for sending thru the inventory and leased areas, I have forwarded to our solicitors to complete the lease. ….. I will forward invoices for the rent & outgoings shortly. 1. Email from Mr Dolan to Mr Parmenter 7 February 2021 Also we need to get the lease finalised, have Carty and Cox been in contact in relation to it? 1. Email from Mr Parmenter to Mr Dolan 7 February 2021 I have sent an email to Carty & Cox for an update on lease and will advise the progress once I've heard from them.
22. In his 5 October 2021, affidavit, Mr Dolan says he met with Mr Parmenter around 18 December 2020 mainly to discuss the operation of the newly renovated pool bar and providing breakfast to hotel guests during weekdays over the peak holiday season. He says that during this conversation he raised with Mr Parmenter that he had still not received any registrable lease documentation. According to Mr Dolan, Mr Parmenter, while patting a bundle of documents he had before him said words to the effect: I have the lease here, I just received it from Carty and Cox and there are a few things that I need to change then I will get it to you, but the important thing is that it is here.
23. In his affidavit of 12 October 2021, Mr Parmenter refers to a conversation that he had with Mr Dolan in about December 2020. He says the conversation was about the opening of the pool bar and the operating days and hours of the restaurant. He makes no mention of any discussion about lease documentation.
24. The parties' solicitors were also involved in correspondence over the provision of lease documentation. The following is a summary of that correspondence: 1. Email from James Blaxland (applicant's solicitor) to Tony Cox (respondent's solicitor) dated 23 March 2021 which states as follows: We refer to our previous emails and the telephone call with you on 15 January 2021. I note that we have not received any response from you nor draft lease documents. Please advise whether you hold instructions to act on this matter. 1. Email Mieke Elzer (Carty & Cox) to Mr Blaxland 23 March 2021 We are still awaiting instructions from our client.
25. Between October and December 2020 the respondent fitted out an area adjacent to the hotel's pool for use as a pizza bar. The fit out included the installation of a pizza oven. Mr Dolan provided some input as to the layout of the area and the equipment to be installed.
26. Mr Parmenter says that he first mentioned the respondent's plan to create what he referred to as "a pool bar with a pizza restaurant", amongst other planned renovations, at a meeting with the applicants directors on 12 October 2019. This is denied by Mr Dolan. He says the topic of what he refers to as a "pool bar/kiosk" was first raised with the applicant in September 2020. An item on the written agenda of a meeting between the parties representatives held on 2 September 2020 was "pool bar and wood fired pizza oven".
27. Contemporaneous documents in evidence refer to this eating facility variously as a "pool bar", "pizza bar", "poolside bar", "outdoor pizza bar" pool kiosk/pizza bar or "pizza bar/kiosk". For convenience I will from now on refer to it as the "pizza bar".
28. At the respondent's request the applicant operated the pizza bar from late December 2020. This arrangement is not mentioned in the term sheet nor was it recorded in a formal agreement. Income generated from the pizza bar appears to have been accounted for in the monthly financial reports sent to the respondent.
29. On 23 April 2021 Mr Dolan sent the following email to Mr Parmenter: Hi Anthony, The following email is to inform that Hilltop at the Lodge will unfortunately no longer be operating the pool bar or poolside kiosk. We would like to thank you for the opportunity to expand our operations on the site however these have not been financially viable for us and the resources and energy will be directed back into the business to improve on our offering within the restaurant. It will still be an option to have a drinks and snack service for poolside guests from 1500 to 1800 during the restaurant operating days. I would also like to formalise our lease with the Lodge and it would great to have a copy to read over at our next meeting. If you would like to discuss any of the above please give me a call. Thanks Matt
30. Mr Parmenter replied on 29 April 2021. In relevant part his email said this: It was extremely disappointing to receive your email last Friday, giving us notice that you would no longer operate the pool bar and kiosk, effectively immediately. This didn't allow for us to make any alternate arrangements let alone inform our guests, which caused us some real issues. The Lodge needs to operate as one business with both parties agreeing on key issues such as operating hours and the offering available.
31. Later that day, Mr Evans sent an email to Mr Parmenter which, in relevant part, reads as follows: I apologise for the lack of notice and disruption that my decision may have caused. I made and actioned the decision on the verbal agreement with the Lodge of operating the pool bar and kiosk for the Easter school holiday period only, as agreed upon in our last face to face and confirmed in email on the 3rd of March 2021, which was fulfilled. There was no further discussion as to whether Hilltop at the Lodge would provide any ongoing services after the 18th of April 2021. ….. At present we are working within the terms and conditions set out in writing which commenced on the 26th February 2020 and have asked for these terms and conditions set into a registered lease, this will elevate any 'grey areas' around Hilltop at the Lodge's operating hours within the restaurant. We look forward to working with any vendors that come onsite in the pool bar and will wholeheartedly help them succeed and achieve the aligned vision of the site.
32. The issue over the pool bar aside, up until about July 2021 the restaurant operation and the relationship between the parties was generally uneventful. It was about then that the relationship started to deteriorate. This appears to have been due to a number of factors.
33. On 13 July 2021, Mr Parmenter sent Mr Damien Attwood, the applicant's bookkeeper, a document containing outgoings for June 2021. In his email, Mr Parmenter asked that Mr Atwood forward "signed off management accounts by 15 July 2021". Mr Attwood replied the next day. In his email he said "BVL lease payment will be paid in tomorrow's pay run". He also queried the June outgoings invoice and, referring to an attached excel document, adding this: "The lease estimated for outgoing per month water, super gas, bins, and electricity is approximately $1200 a month. Why is it tracking around $2200?" He then said that once June 2021 outgoings were "verified and clear to both parties" payment for those outgoings would be arranged.
34. On 15 July 2021, Mr Parmenter sent Mr Atwood an email answering his queries adding that he awaited receipt of the management accounts.
35. On 16 July 2021, Mr Atwood sent Mr Parmenter an email which in relevant part reads: Upon review of the lease agreement on file its (sic) doesn't require us to provide a copy of our management accounts for the financial year. If you believe differently please highlight the section applicable, and attach it to your reply.
36. The same day Mr Parmenter sent this email to Mr Attwood Firstly let me clarify in reference to our agreement, the agreement we have with The Hilltop is a management agreement and the agreement states that our rent relies on top line sales. Top line sales need to be verified by your accountant, accompanied with last financial year quarterly BAS statements
37. The next day, that is 17 July 2021, Mr Atwood sent Mr Parmenter an email that reads: It is a requirement that the Hilltop at the Lodge Pty Ltd top-line turnover is provided as part of the agreement, not the full company management accounts. You currently hold this information as it is provided on a monthly basis.
38. Mr Parmenter replied by email the same day. He said that historically the Hilltop had shared management accounts and in later months reduced that information to what he described as "a simple excel spreadsheet of top line sales". Mr Parmenter said he wanted BAS statements because the only way sales figures could be verified was by what had been submitted to the ATO.
39. On 20 July 2021 a meeting took place between Mr Parmenter, a Mr Martin Simich, Mr Dolan, Ms Jones and Mr Evans. Mr Simich is said to be an investor in and advisor to the respondent.
40. Mr Parmenter said the meeting was to discuss various issues including the applicant's failure to pay outgoings and provide certain financial information. Mr Parmenter's claims to have said that the termination of food and beverage services at the pizza bar by the applicant was viewed as a breach of the agreement to provide the services. He says that the applicant was not offering dinner at the restaurant and pizza bar every day between 4 PM and 9 PM contrary to an oral agreement, and failed to offer a continental breakfast pack and hamper for guests to pre-order on the days the restaurant was closed. He also claims to have said that the applicant was in breach of "our agreement" in respect of restaurant trading days and times.
41. According to Mr Parmenter, Mr Simich said at the meeting that the respondents vision for the Lodge was for it to become a destination venue and he questioned whether the applicant was prepared to step up and make the vision a reality. Again, according to Mr Parmenter, Mr Simich said the following to the applicant's directors: If you aren't willing to do this then our visions are not aligned and we will never reach our potential as a business, which would be disappointing. We understand that you have very young families and that the demand of running two operations and then scaling them further is very stressful and taxing on your personal lives, so you can be forgiven for not wanting to do more. If you decide you don't want to commit to the real effort that is required then we'll work with you to exit without embarrassment and perhaps the way forward is to communicate to the public that you have decided to close as a result of COVID as many other businesses have over the past. It is a genuine reason.
42. Mr Dolan denies that at the meeting there were comments by Mr Parmenter or Mr Simich regarding a failure to comply with any oral agreement or to do breakfast hampers or any mention of the pizza bar. He agrees that there was a discussion about outgoings and why they had increased and says that Mr Simich gave what he described as an ultimatum in these terms: The vision for the Lodge has changed and it is very different from when we had burgers at the back here. You either operate the restaurant seven days a week or we'll find someone else who will, and will call you a COVID casualty.
43. On 10 September 2021 the applicant's solicitors sent a letter to the respondent. In the letter they asserted that the applicant entered into a lease with the respondent for three years with a further option for five years, the permitted use was the operation of a licence premises, a security bond for $20,000 was paid, and the rent was 5% of turnover for the first 12 months and 6% thereafter. The letter also asserts that the respondent had committed numerous breaches of the Act including failure to register the lease as required by section 16, failure to provide a lessor's disclosure statement as required by section 11 and a failure on the part of the respondent to pay the security bond to the relevant authority as required by section 16C of the Act. It was also asserted that the collection of outgoings by the respondent was in breach of the Act because the respondent failed to provide a disclosure statement. Demand was made for the outgoings, amounting to $35,129.70 to be reimbursed to the applicant, a lease in registrable form be provided, and the security bond be deposited with the NSW Government's Retail Bond scheme.
44. On 21 September 2021 the applicant was locked out of the premises. The sign on the door of the premises, affixed by the respondent, reads: DO NOT ENTER! AREA CLOSED DUE TO A GAS LEAK PLEASE SEE RECEPTION STAFF
45. No evidence was adduced by the respondent of any actual gas leak in the premises requiring it to be closed to the applicant. In cross examination, Mr Parmenter said there was a gas leak in the hot water system.
46. On 22 September 2021, the respondent's solicitors sent a letter to the applicant's solicitors. Responding to the applicant's solicitors letter of 10 September 202 they said their client denied any lease existed in respect of the premises. They went on to assert that the applicant did not provide all the services promised to the quality and standard required and over the course of the provision of those services the respondent was required to perform some of them itself. The letter then says this: Given your client's lack of performance to date, our client has instructed us to advise you that it no longer requires your client's services and has changed the locks in the premises. Please arrange for your client to attend the premises to remove its belongings and our client will make access available upon 72 hours notice. We a further instructed that your client has failed, despite several requests, to account to our client in respect of amounts owed to it and accordingly our client demands your client provide our client with appropriate documents including Financial Accounts, income tax returns, BAS statements, invoices, receipts, and bank statements for the period from the commencement of the provision of services to the date of this email certified by an auditor within 28 days. In this regard we are instructed that your client used the kitchen in the premises to cook food which was sold at your client's cafe in Sawtell without accounting to our client. Should your client fail to provide the required documents we expect instructions to commence proceedings to require their production and seek damages.
47. No mention was made in the respondent's solicitor's letter of any gas leak.

Application for interim relief

1. On 23 September 2021 the applicant commenced proceedings COM 21/40885 seeking interim or urgent orders for relief against forfeiture. Following a contested hearing, Senior Member Thode made the October orders. In written reasons published on 8 November 2021, the Senior Member found that the term sheet bore all the hallmarks of a retail lease and then went on to say this: [5] …..It refers to a restaurant with adjoining outdoor terrace and grassed area to north of terrace situated within Bellingen and Valley Lodge at xxx Bellingen. It refers to a tenant (the respondent). The term sheet refers to a commencement date of a lease and a date on which the lease will terminate. It envisages a rent free period to commence on 26 February 2020 and to cease on 30 June 2020. It stipulates rent by way of turnover rent calculated on gross turnover for all food and beverage sales from 1 July 2020. It nominates a bond in the sum of $20,000 that was paid by the applicant on or about 30 January 2020. The permitted use is a 'hospitality business relating to operating a licenced restaurant' being a business which is nominated within Schedule 1 of the Act. The term sheet further dictates the minimum restaurant hours, the outgoings and maintenance and further operational parameters usual for a retail lease.
2. The Senior Member expressly stated in the reasons that she had regard to the various emails passing between the parties to which I have referred, to the 23 March 2021 email from the then respondent's solicitor to the applicant's solicitor, to which I have also referred, and to section 3 of the Act, in coming to the conclusion that the correspondence supports the contention that the respondent intended to enter into a retail lease. The Senior Member then said this: [13] For these reasons I am comfortably satisfied that the parties entered into a retail lease. In respect of the orders sought. I am satisfied that the balance of convenience favours relief against forfeiture. I am satisfied that damages in this instance are not an adequate remedy and that the respondent should be held to its agreement. [14] The applicant would suffer a (sic) significant by way of reputational damage in accordance with the uncontested evidence of Mr Dolan of 17 October 2021. It is also the evidence of the applicant that it is ready willing and able to commence trading and that it will require only about seven days to stock the premises and get the appropriate staff on site. [15] I also note that the applicant's directors are willing to give an undertaking as to damages which is reflected in the orders. [16] Relief against forfeiture under subsection 72 (1)(d) is a discretionary power that must be exercised having regard to each particular set of circumstances. In this instance I am satisfied that the applicant has complied with all terms of the lease and that the exclusion from the premises was a breach of the lease. It is therefore appropriate that the respondent permit the applicant to re-enter the premises and to continue occupation in accordance with the terms of the lease. The balance of convenience favours the granting of the orders made to enable the applicant to continue generating income from the operation of its business to recover the cost of the fit out and other expenses to honour existing bookings and engagements were possible and to preserve its reputation.
3. The respondent did not comply with the October Orders.
4. On 9 November 2021 the respondent's solicitors sent a letter to the applicant's solicitors. In relevant part it reads as follows: We refer to the orders of the tribunal (sic) of 8 November 2021. Pursuant to those orders, made on an interim basis, the tribunal has found the "term sheet" attached to your client's application between our respective clients to be a lease between our clients pursuant to the Retail Leases Act 1994 that sets out the terms agreed between our clients. Accordingly, there are several matters to be dealt with prior to your client commencing trading at the premises tomorrow in accordance with the term sheet. Prior to your client collecting keys for the premises at reception, please ensure the following are provided: 1. Details of your client's food safety officer; 2. Copy of your client's development approval in respect of use of the premises following the completion of the renovation referred to in the affidavit of Richard Dolan dated 5 October 2021; 3. Current certificate of currency for workers compensation and public liability insurances; 4. Details of all proposed marketing in respect of the premises for approval by our client; 5. Details of all pricing in respect of the premises for approval by our client; 6. Details of delivery schedule in order that our client can ensure noise is appropriately controlled Please note, that in order to provide your client with exclusive use of the area the subject of the term sheet, our client is in the process of removing all its belongings. As a consequence of the orders, our client can no longer allow your client to sell or supply alcohol on the premises due to the impact of s92 of the Liquor Act 2007. Further, we are instructed to advise that our client does not consent to allowing the consumption of alcohol in the restaurant, adjoining terrace and grassed area to the north of the terrace as the premises form part of premises for which a liquor licence is in place and for which the licensee is prohibited from interfering with your client pursuant to the orders sought by you and granted on 8 November 2021.
5. The reference in the letter to the orders of 8 November 2021 is in fact a reference to the October orders published on 8 November 2021.
6. On 9 November 2021, the applicant's solicitors sent the following letter to the respondent's solicitors: We refer to the orders of Senior Member Thode dated 8 November 2021, a copy of which is enclosed with this letter. We are instructed that our client wishes to access the premises this coming Friday. Please confirm that your client agrees to leave a copy of the keys for the premises at the reception of The Lodge, Bellingen, for our client to collect at 11am on Friday 12 November 2021.
7. On 11 November 2021, the respondent's solicitors again wrote to the applicant's solicitors. The letter reads as follows: We refer to our letter of 9 November 2021 which crossed with your letter of the same date. We note we are yet to receive the following: 1. Details of your client's food safety officer; 2. Copy of your client's development approval in respect of use of the premises following the completion of the renovation referred to in the affidavit of Richard Dolan dated 5 October 2021; 3. Current certificate of currency for workers compensation and public liability insurances; 4. Details of all proposed marketing in respect of the premises for approval by our client; 5. Details of all pricing in respect of the premises for approval by our client; 6. Details of delivery schedule in order that our client can ensure noise is appropriately controlled Further, we are instructed to advise that our client requires your client to provide an undertaking that upon receiving the keys to the premises it will remove any alcohol stored on the premises and that it will not allow the sale, supply or consumption of liquor on the premises. No doubt you agree that the above requirements being met prior to the provision of keys are reasonable, particularly in light of your client's representation to the tribunal that it was ready, willing and able to commence trade in accordance with the terms of the term sheet. We are instructed by our client that were they to remove their belongings, in particular their furniture, your client would have difficulty trading from the premises. In order to alleviate this immediate issue from your client and have your client trading and on site, we are instructed to advise that our client will not remove those items until the start of the week commencing 6 December 2021. This should allow your client sufficient time to replace those items with their own items. We can provide a list of these items should your client request. Finally we note that your client is currently in breach of its obligations in respect of minimum trading hours under the term sheet.
8. On 16 November 2021, the applicant's solicitors provided the respondent's solicitors with certificates of insurance, issued in the name of HATL, and Mr Dolan's Food Safety Supervision Certificate. They also informed the respondent's solicitors that development approval for the premises was not required as there had been no change of use, marketing and pricing will remain as it was prior to the lockout, delivery schedules could not be provided until access was given to the premises and, under the lease, their client had the right to serve alcohol under Ms Parmenter's licence. The applicant's solicitors said that their client was prepared to provide an undertaking not to sell or serve alcohol until the matter was resolved, and therefore there was no need to remove all alcohol from the premises. They asked for confirmation that the respondent would provide access to the premises by close of business that day.
9. The next day, that is 17 November 2021 the respondent's solicitors wrote to the applicant's solicitors. While stating that their client respects the orders of the Tribunal and was seeking to comply with them, they then proceeded to list six conditions that the applicant was required to comply with before the respondent was prepared to give it access to the premises. They included removal of all alcohol from the premises, an undertaking from Mr Dolan, Ms Jones and Mr Evans not to allow the sale or consumption of alcohol the premises, the provision of public liability insurance by the applicant, confirmation that the applicant had notified the local council that trading had commenced in accordance with the obligations under the Food Act 2003, details of their client's proposed menu and details of their client's proposed marketing activities, including all matters concerning the reopening.
10. The respondent's application to set aside the October Orders was heard by Senior Member Charles on 17 December 2021. It was also a contested hearing. The respondent sought the following orders: 1. An order pursuant to section 36 and 38(1) of the Civil and Administrative Tribunal Act 2013 (NSW) that orders 1, 2 and 3 made by the Tribunal on 16 October 2021 ('Orders') be vacated. 2. An order pursuant to section 72(1)I(ii) of the Retail Leases Act 1994 (NSW) that the applicant surrender possession of the premises to the respondent forthwith. 3. A declaration pursuant to section 72(f)(iii) of the Act that if (which the respondent denies) a retail lease exists, the Applicant has repudiated it and the Respondent is entitled to terminate any such lease forthwith by giving written notice of the termination to the Applicant 4. An order that this Application for Miscellaneous Matters be heard at the same time as the directions hearing listed for 17 December 2021. 5. An order that the applicant pay the respondent's costs of this Application for Miscellaneous Matters.
11. A number of grounds were given for the respondent's application including: 1. various breaches of the retail lease alleged by the applicant; 2. the applicant was not ready, willing and able to comply with multiple terms of the alleged lease; 3. the applicants directors appeared to have no substantial assets so that their undertaking as to damages was worthless; and 4. if there was a retail lease, it was repudiated in its terms by the applicant and the respondent is entitled to terminate any such lease forthwith.
12. In an affidavit dated 3 December 2021, apparently prepared for the purposes of the hearing before Senior Member Charles, and to provide some explanation as to why the October orders had not been complied with, Mr Parmenter, said he was "very concerned to ensure that the respondent complies with the Tribunal's orders unless it has a "lawful excuse" within the meaning of section 72 of the CAT Act 2013". Referring to what he described as "events post 15 October 2021", he said that the applicant: 1. had not traded from the premises since the October orders; 2. failed to provide the respondent with certificates of insurance for workers compensation and public liability insurance, instead providing certificates of insurance for HATL; 3. had not offered to indemnify the respondent for uninsured loss arising from accidents that would ordinarily be covered by such insurance; 4. had not provided any evidence that it has the means to indemnify the respondent for any liability arising from an accident on the premises where no insurance is in place; 5. refused to remove alcohol from the premises; and 6. had only given an ambiguous undertaking to use its best endeavours to ensure alcohol was not consumed on the premises until such time as the dispute is resolved.
13. As previously mentioned, the respondent's application was unsuccessful, the Senior Member deciding that nothing had occurred since the October orders were made to constitute a legal basis for those orders to be amended or to require the applicant to take any specific action or provide any particular documents to the respondent in order for the applicant to resume operations of the restaurant at the premises.
14. Apparently in an attempt to address the respondent's concern that it would be a breach of the October orders for Ms Parmenter, as the holder of the liquor license, to have access to the premises, HATL on 9 December 2021 applied for an on-premises liquor licence with Mr Evans being the contact person. The application was opposed by Ms Parmenter.
15. At the hearing Mr Parmenter gave evidence that he was in discussions with other parties to use the restaurant. There is no evidence that anyone other than the respondent is in occupation of the premises.

Jurisdiction

1. The Tribunal has jurisdiction under the Act to determine retail lease disputes. There is, however, a threshold jurisdictional issue.
2. The respondent contends that the agreement recorded in the term sheet is not a retail shop lease under the Act but a management agreement, and therefore the Tribunal does not have jurisdiction to determine the applicant's application. The applicant contends that the agreement is a retail shop lease and therefore the Tribunal does have jurisdiction under the Act.
3. The ability for the Tribunal to determine if a claim is within its jurisdiction was confirmed in Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213. At [12]-[13] Leeming JA relevantly said this: [12] In the case of a court, the position was described in State of New South Wales v Kable (2013) 252 CLR 118; [2013] HCA 26 at [31]: "[A]l courts, whether superior or inferior, have the authority to decide whether a claim that is made in the court is within its jurisdiction. That power can be described as a court having jurisdiction to decide its own jurisdiction." [13] So too NCAT is authorised, by necessary implication, to determine whether claims made to it are within its limited jurisdiction. That authorisation extends to determining whether an applicant has purported to invoke NCAT's jurisdiction in proceedings which are constitutionally impermissible because they amount to a matter arising under a federal law. The implied limitation upon legislative power which prevents the New South Wales Legislature from authorising NCAT to determine such matters cannot prevent NCAT from determining whether an applicant purported to do something which is constitutionally impermissible. That is not contrary to the Constitution; rather, it vindicates the constitutional limitation.
4. If the Tribunal does have jurisdiction to determine the dispute between the parties, because the term sheet is found to be a retail shop lease, the respondent says that it is up to the applicant to satisfy the Tribunal that it has power to order the relief sought under the Act. I do not understand that contention to be in dispute.

The issues to be determined

1. In my opinion, these are the issues to be determined in these proceedings" 1. Is the term sheet a retail shop lease under the Act? 2. If the answer to (1) is "yes", has the applicant repudiated the lease? 3. Is the respondent entitled to the relief it seeks? 4. Is the applicant entitled to the relief it seeks? 5. Has the respondent disobeyed the October orders of the Tribunal and if it has, what are the consequences?

Hearing and evidence

1. The hearing of this matter was conducted by audio visual link as a consequence of the COVID 19 pandemic and the Tribunal's safety protocols.
2. At the hearing, Mr T Davie of counsel appeared for the applicant and Mr S Gray of counsel appeared for the respondent.
3. The applicant's documentary evidence consisted of four affidavits sworn by Mr Dolan while the respondent's documentary evidence consisted of four affidavits sworn by Mr Parmenter.
4. The documentary material relied upon by the parties was substantial but had been conveniently reproduced in a hearing book by the parties' legal representatives.
5. Both Mr Dolan and Mr Parmenter were cross-examined.
6. Both counsel also provided the Tribunal with written submissions.
7. At the outset of the hearing Mr Davie objected to the Tribunal hearing from the respondent. He contended that the respondent had disobeyed the Tribunal's October orders and it should therefore exercise its discretion and not to hear the respondent. This was opposed by Mr Gray. It was not in dispute that the respondent had not complied with the October orders. Mr Gray said it has lawful reasons for not complying with the orders. The issue took some time to ventilate but in the end I decided to proceed with the hearing for two reasons.
8. Firstly, the proceedings had been listed before me for the hearing of the substantive issues and not whether the respondent may or may not have lawful reasons for disobeying October orders and it should therefore be precluded from participating in the hearing. Section 36(1) of the CAT Act contains the "guiding principle" for proceedings in the Tribunal which requires both the Tribunal and the parties "… to facilitate the just, quick and cheap resolution of the real issues in the proceedings". It would have been contrary to the guiding principle, in my view, to embark on a hearing to determine whether the respondent was in contempt of the October orders and precluded from participating in the hearing when both parties had come prepared to determine the substantive issues which I have set out above.
9. Second, the determination of whether the respondent had disobeyed the Tribunal's orders was so serious in its nature that it would be unfair, in my view, to have embarked on it without the respondent being given an opportunity to fully prepare in order to meet the assertion.
10. In determining questions of fact, I have found the contemporaneous documents the parties have put into evidence to be more reliable than the oral testimony of Mr Dolan and Mr Parmenter. Where the evidence each gave in relation to conversations at the meetings on about 18 December 2020 and 20 July 2021 conflicted, I have preferred the evidence of Mr Dolan over the evidence of Mr Parmenter. In observing Mr Parmenter while under cross examination, I found him more often than not to lapse into being an advocate for the respondent's case when answering questions put to him, and he tended to avoid directly answering questions. His evidence generally was also inconsistent with the contemporaneous documents. Mr Dolan, on the other hand was, in my opinion, a truthful witness whose evidence was corroborated by the contemporaneous documents.

Retail Leases act

1. The following are the relevant provisions of the Act for the purposes of the issues to be determined in these proceedings:
2. Section 3 (1): "retail shop" means premises that: 1. are used, or proposed to be used, wholly or predominantly for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph (whether or not in a retail shopping centre),
3. Section 3 (1): "retail shop lease" or "lease" means any agreement under which a person grants to another person for value a right of occupation of premises for the purposes of the use of the premises as a retail shop: 1. whether or not the right is a right of exclusive occupation, and 2. whether the agreement is express or implied, and 3. whether the agreement is oral or in writing, or partly oral and partly in writing.
4. Schedule 1 lists the "Retail Shop Businesses" that are businesses prescribed for the purposes of the definition of "retail shop". One of those prescribed businesses is: "Restaurants, cafeterias, coffee lounges, food courts and other eating places".
5. Section 5(a): the Act does not apply to shops that have a lettable area of 1000 square metres or more.,
6. Section 7 renders void the provision of the lease to the extent that the provision is inconsistent with a provision of the Act. In effect, it prohibits parties from contracting out of the Act.
7. Section 11 requires a lessor disclosure statement to be served at least seven days before a retail shop lease is entered into and requires the disclosure statement to be in or to the effect of parts A and B of the form in Schedule 2 of the Act.
8. Section 12A(1) provides that the lessee under a retail shop lease is not liable to pay any amount to the lessor in respect of outgoings unless the liability to pay the amount was disclosed in the lessor's disclosure statement for the lease. Subsection (4) permits a lessee to recover from the lessor any amount paid to the lessor that the lessee was not liable to pay because of the section.
9. Section 16(1) requires a retail shop lease that is for a term of more than 3 years to be registered in accordance with the Real Property Act 1900 within three months after the lease signed by the lessee is returned to the lessor, the lessor's lawyer or agent. Subsection (3) provides that the term of a retail shop lease includes any term for which the lease may be extended or renewed at the option of the lessee.
10. The Tribunal is empowered to make the orders found in section 72 of the Act in respect of a retail shop lease. Relevantly they include the power to: 1. order a party to pay money to a person (subsection (1)(a)); 2. do or perform, or refrain from doing or performing, any specified act, matter or thing (subsection(1)(c)(iv)); 3. grant relief against forfeiture (subsection (1)(d)); 4. require rectification of the lessor's disclosure statement (subsection (1) (e)); 5. deem a disclosure statement given by the lessor after the lease is entered into to have been given in compliance with section 11 before the lease was entered into (subsection (1) (e1)); 6. declare the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not (subsection (1)(f) (iii)); and 7. make such ancillary orders as the Tribunal considers necessary for the purposes of enabling an order under the section to have full effect (subsection (2)).
11. Section 72 AB prohibits the Tribunal from making an order under section 72(1)(e) and (e1) unless it is made by consent or the Tribunal is satisfied it is necessary to correct an error or omission, to give effect to the intention of the parties when the lease was entered into, or to give effect to the actual disclosure of information between the parties.

Submissions

1. In summary, Mr Davie made the following submissions: 1. In determining whether an agreement is a retail shop lease, the correct approach is set out in the decision of Barrett J (as his Honour then was) in Moweno v Stratis [2002] NSWSC 1151. 2. The respondent having granted the applicant for value a right of occupation of the premises for the purpose of using the premises as a retail shop and, and the use of the premises as set out in the term sheet - "hospitality business related to operating a licence restaurant" - being one of the prescribed businesses - restaurants, cafeterias, coffee lounges, food courts and other eating places - specified in Schedule 1 of the Act, the term sheet was a "retail shop lease" as defined under section 3 of the Act. 3. The term sheet has the characteristics or features of a retail shop lease including: 1. the applicant was referred to as the "tenant" and the respondent as the "lessor"; 2. the applicant's right of occupation was exclusive; 3. the obligation to operate a licenced restaurant, ensuring that the restaurant and kitchen and bar was maintained and serviced; and 4. there were express references to the payment of rent and the calculation of the rent. 1. The premises are not owned by the respondent, and while the Tribunal has the power to order the joinder of the owner, BVL Management, to the proceedings (section 44, CAT Act), who would clearly be affected if an order was made to execute the lease, because of common directors and shareholders such an order would not be necessary because the respondent held itself out as capable and willing to procure a lease from BVL Management and that company must have been aware and on notice of that. 2. No disclosure statement having been given by the respondent to the applicant as required by Section 12A of the Act, the applicant is entitled to the return of $37,129.70 in outgoings. 3. The total amount actually paid to the respondent by the applicant for outgoings was $27,664.40. This amount was offset by vouchers given to guests of the hotel by the respondent for the restaurant to the value of $7,465.30. These offsets having been taken into account, the total value of outgoings paid by the applicant is $37,129.70. 4. The respondent should be required to deposit the $20,000 security bond with the NSW Government's Retail Bond Scheme pursuant to section 16C of the Act. 5. The applicant should be compensated by the respondent for its losses as a result of the lockout but it does not seek compensation in these proceedings but will seek leave to pursue compensation if the proceedings are renewed.
2. Mr Davie submitted that the reasons given by the respondents provide no justification for not complying with the October orders. Amongst other things, he submitted that: 1. The liquor licence issue is not a lawful excuse for failing to comply with the orders of the Tribunal. Prior to the lockout the applicant did operate a licenced restaurant under Ms Parmenter's licence and there is no evidence to indicate that some supervening event had occurred that would prevent that arrangement from continuing. 2. It was known to the respondent that HATL would be operating the restaurant and the relevant insurance certificates had been provided.
3. The following is a summary of Mr Gray's submissions in reply on behalf of the respondent that the term sheet is not a retail lease: 1. Before the Tribunal can find that it is a lease, the applicant needs to establish the area leased is less than 1000 m², it was used wholly or predominantly for carrying on one or more of the businesses prescribed by the Act, it is a lease as defined by the Act, and there is an agreement in the relevant sense in respect of each of the above matters. 2. The term sheet is an agreement to agree. 3. The term sheet refers to a commencement date, a termination date, options to renew, turnover rent, permitted use, and outgoings and maintenance costs. The respondent accepts that such language, if drafted by a lawyer, would be indicative of a lease, but that language needs to be seen in the context of a lay person drafting the document. 4. All of these expressions are equally capable of being used both in the context of a management agreement and in the context of a lease. 5. The term sheet shows a consensus on some important terms such as money that is to be paid and the term length but the following are indicators that the parties did not intend to make a binding lease: 1. In the term sheet the parties have not identified with precision the area the subject of the arrangement; 2. the parties have not identified who was to be a party to the contract. In this regard the applicant put forward a business name that did not exist and then put forward a different entity to occupy the premises and meet the obligations under the term sheet; 3. the respondent did not put forward BVL Management, the owner of the land, as the counterparty to the arrangement and there is no evidence that the respondent had the right to grant occupation of a retail shop under a retail shop lease. Had the owner wished to grant such a right of occupation it could and presumably would have included itself in the term sheet. 4. the applicant did not act in accordance with the term sheet in that it put forward an entirely new entity to operate at the restaurant and the applicant never sought to obtain its own liquor licence despite requiring one under the Liquor Act, given that Mrs Parmenter was not permitted to lease out the area that her licence covered; 5. the parties did not act in accordance with the term sheet; 6. the history of events is against a concluded bargain or binding agreement as to a lease; 7. even if no information was given about outgoings, that no disclosure statement was given as required by the Act has been held to indicate that it was unlikely to be a lease was entered into at that time; 8. the parties agreed in December 2020 that entry into the lease would be necessary to work out the "grey areas", according to Mr Evans, or involve "a lot of additional detail, work and cost", according to Mr Parmenter; 9. many of the essential terms of vague and uncertain or not identified, such as the minimum number of hours that the restaurant was to operate; and 10. what the applicant contends were the indicators of the term sheet being a lease, could easily relate to an arrangement of a management agreement in respect of a catering business. 1. The relief sought by the applicant is in the nature of specific performance which is generally inappropriate if it requires continuing mutuality of dealings. Specific performance will also not be ordered on a contract of personal service other than in exceptional circumstances. Mrs Parmenter, as the holder of the liquor licence and various bar staff identified in the term sheet will require specific performance if the term sheet is to bind the parties. Further, the term sheet is an indivisible contract and specific performance cannot be ordered in respect of part of the contract where it cannot compel specific performance of the whole. Tribunal is unable to make an order requiring leasing of unidentified areas and operate a licensed restaurant and force a term that Mrs Parmenter is to be the licensee for the entire Lodge. 2. No direct power has been identified by which the Tribunal can order the registration of the lease and grant access to the premises to an entity that was not a party to the proceedings. 3. The applicant has had the benefit of the use and trade from the Lodge for profit, and so should not take the benefit of being repaid amounts paid in relation to disclosed and agreed outgoings, which is akin to unjust enrichment. 4. Should the Tribunal be inclined to make any order in favour of the applicant in relation to outgoings, it should make an ancillary order under section 72(e) or (e1) of the Act to enable a lessor disclosure to be given (or deemed to be given) in compliance with section 11 of the Act; 5. The respondent accepts that should the Tribunal find that the arrangement between the parties was a lease then it will be necessary to pay the $20,000 into a security bond in accordance with the Act. 6. There should be no finding that the applicant has suffered any loss or damage giving rise to compensation and the Tribunal should not reserve that position to a later date. The matter was listed for hearing on 28 February 2022, of which the applicant was aware, and there must be a finality to the litigation.
4. In relation to compliance by the respondent with the October orders, in summary Mr Gray made these submissions: 1. The respondent has not breached the October orders. 2. HATL and not the applicant sought access to the restaurant and there was no obligation on the respondent in the orders to grant access. 3. the December decision does not assist the applicant's contempt submission because it did not seek to amend the orders to include HATL; 4. The Applicant refused to come forward in its own right and provide its own insurance and liquor licence to show that it was able to carry out the business in accordance with the term sheet, and the respondent did not permit access to an uninsured and unlicensed entity. 5. The respondent would have been engaging in conduct contrary to law because of restrictions that arise from the Liquor Act which are at odds with the order; 6. The respondent had a lawful excuse (within the meaning of section 72 CAT Act in that the respondent was not engaged in conduct contrary to law in order to comply with the orders. 7. The respondent unreservedly apologises for its conduct if it is found to have breached the October orders of the Tribunal.
5. The following is a summary of Mr Davie's submissions in reply: 1. The onus is not on the applicant to prove that the area it claims to be the subject of a retail lease did not exceed 1000 m². Even if Mr Parmenter is correct and the restaurant and outdoor terrace area combined is 700 m², there is no basis for assuming the kitchen and grassed area exceeded 300 m². 2. The express provisions of the term sheet identify that the use falls within the definition of a business, namely, "Restaurants….and other eating places" found in Schedule 1 of the Act; 3. The term sheet is not an agreement to agree. It was never disputed by Mr Parmenter that there was an agreement rather he asserted there was a management agreement and not a retail shop lease. 4. The agreement is not void for uncertainty. The provisions of the term sheet are neither vague nor uncertain. 5. As for what the respondent says were the indicators that the term sheet was not a retail shop lease under the Act: 1. precisely defining the area of the lease is not necessary and the applicant was not prevented from operating the premises and the respondent demanding and receiving rent and outgoings; 2. the parties are identified in the term sheet and the fact that a different but closely related entity occupied the premises is not material; 3. "lessor" is defined in the Act to mean a person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease and includes a sublessor. It was the respondent who granted the right to occupy the premises and there is nothing to indicate that it had no authority to do so, it had prepared a lease for execution and no impediment to the granting of a lease is evident; 4. the parties acted in accordance with the term sheet but any breach by the applicant was not material and specifically, there was no term of the contract that the applicant was required to hold a licence under the Liquor Act; 5. the applicant entered into possession of the premises and the respondent demanded rent and outgoings and there was nothing to indicate that an agreement had not been entered into by the parties; 6. the consequences of not providing a disclosure statement is provided for under the Act. It does not mean that there was no retail shop lease; and 7. while there may still be grey areas to be agreed by the parties, that does not mean that the parties did not enter into a retail shop lease; and 1. The Tribunal has power to order the provision of the lease by section 72 (1)(e) and 72 (2).

Is the term sheet a retail shop lease under the Act?

1. The first issue to be determined is whether the term sheet is a retail shop lease under the Act. If it is not a retail shop lease then the Tribunal does not have jurisdiction to determine this dispute.
2. Both parties agree that the correct approach in determining whether the Tribunal has jurisdiction to determine this particular issue is that expressed by Barrett J in Moweno. Referring to the definition of 'retail shop lease' or 'lease' in section 3 of the Act, his Honour said this: [4] Several features of this definition may be noted. First, any "agreement" of the relevant description is within the "retail shop lease" concept, whether or not it is (or contemplates) a lease in the strict sense: see CAC Pty Ltd v Diamond Hill International Pty Ltd (1996) 7 BPR 14,754. Second, a "right of occupation of premises" granted (or agreed to be granted) by one party to another must be produced by the "agreement". Third, the grant of that right must be "for value". Fourth, the "right of occupation of premises" must have a "purpose" definable by reference to "the use of the premises". Fifth, that "use of the premises" must be "as a retail shop". Sixth, the factors in paragraphs (a) to (c) are to be left out of account in deciding whether a particular agreement is a "retail shop lease".
3. Referring to the definition of "retail shop" in section 3, his Honour went on to say this at [7] - [9]: [7]…..In the present case, para (b) of this definition (as well as the part of para (a) referring to a "retail shopping centre") may be ignored. When the relevant part of the definition of "retail shop" is inserted into the relevant part of the definition of "retail shop lease", the words become: "any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises as premises that are used wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1". A paraphrase is: "any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises wholly or predominantly for the carrying on of one or more of the businesses specified in Schedule 1." [8] The focus is thus upon two things: the content of the right of occupation granted or agreed to be granted "under" the parties' agreement; and the question whether the occupation the subject of the right is "for the purpose of" the use of the premises in the way described. Determining the purpose [9] This raises the question of how one is to determine the purpose (as regards use) for which one person grants to another a right of occupation. The matter must, of necessity, be approached by reference to the terms of the parties' agreement. The relevant grant of a right of occupation is a grant sourced in the parties' agreement. This is the force of the words "under which". The purpose for which the right of occupation is granted must therefore be sought in the terms of the grant as embodied in the agreement. One's immediate reaction to the definition of "retail shop lease" is that expressed by Young J in passing in Kanittha Ninubon v GAG Pty Ltd [1998] NSWSC 298: "In any event, it was a lease made after 1 August 1994. It referred to premises being used as a restaurant and, accordingly, was a lease to which the Retail Leases Act 1994 applied."
4. The decision of Senior Member Bluth in Honings Bakery Pty Ltd v Cerialis Pty Ltd [2014] NSWCATCD 87 (Honings) is often referred to in this Tribunal for the following summary of the applicable principles for determining the use of the premises: [37] Firstly one looks at the lease to see what is the permitted or agreed use of the premises; If the agreement clearly defines what the use of the premises is to be, then the question as to whether or not the premises are a "retail shop" under s 3 of the RL Act will be determined as to whether or not that use appears in Schedule 1; If the permitted or agreed use is not clear or is uncertain, or the use covers a number of different types of businesses, some of which are, or may be, within Schedule 1 described businesses, then an analysis is required of the actual use of the premises to determine whether the predominant use(s) fall within one or more of the businesses prescribed in Schedule 1.
5. The conclusion I have come to is that the term sheet is a retail shop lease as defined under section 3 the Act, the parties to which are the applicant as the lessee and the respondent as the lessor. These are my reasons: 1. Although as a document it does not present as a retail lease in the sense that one would expect to see such a lease with the usual trappings of formality and lengthy legal provisions, the term sheet is expressed in terms that clearly contemplate that what the parties were entering into was a lease of the premises. In other words, it has, as submitted by Mr Davie, all the characteristics of a retail lease. It describes the use of the premises, it identifies the premises, it refers to the parties as lessor and tenant, it provides for a start and end date, an option period, a method for calculating rent, the payment of a security bond, a method for calculation of outgoings and imposes maintenance obligation for which the tenant is expressly made responsible. 2. While having the characteristics of a retail lease by reason of the terminology used, to come within the Act the term sheet must, consistent with the approach of Barrett J in Moweno, satisfy the definition of "retail shop lease" found in section 3. There are two relevant limbs to this definition. It must be an agreement by which the respondent grants the applicant, for value, a right of occupation of the premises, and the use of the premises must be wholly or predominantly for the carrying on of one or more of the businesses set out in Schedule 1 of the Act. 3. By the term sheet the applicant was expressly granted a right of occupation of the premises that being a "restaurant, adjoining outdoor terrace and grassed areas to north of terrace…" at the Lodge. There is no evidence to suggest that the respondent was not authorised to grant that right. In addition, that right of occupation was "for value" (also a requirement of the definition) in that the term sheet expressly obligated the applicant to pay rent and outgoings, which it did. The term sheet therefore satisfies the first limb for the purposes of the definition of a retail shop lease found in section 3 of the Act. 4. The term sheet expressly described the use as: "Hospitality business relating to operating a licence restaurant". As noted by the Senior Member Bluth in Honings, one looks to Schedule 1 of the Act to determine whether or not that use is one of those listed in the Schedule. Should there be any uncertainty, then an analysis is required to determine whether the predominant use falls within any of the businesses prescribed in Schedule 1. 5. Mr Gray submitted that if there was an agreement it was not a retail lease because the applicant cannot establish that the area "leased" was wholly or predominantly used as a restaurant. I disagree. 6. There are multiple factors pointing to the use being that of a restaurant. The term sheet term sheet describes the use as, "…operating a licenced restaurant". It also specifies "minimum restaurant hours", and it required the "tenant" to ensure that all "restaurant equipment" was maintained and that it maintained "the restaurant" to a high standard of cleanliness at all times. It is also relevant to note the references to the "restaurant" in the rent and outgoings invoices issued by the respondent. 7. There is, in addition, the evidence given by both Mr Dolan and Mr Parmenter. 8. In his 5 October 2021 affidavit, Mr Dolan said this: On 5 June 2020, the Hilltop Restaurant commenced trading. The Hilltop restaurant ran successfully, and we developed an excellent reputation. There were very few functions at the Respondent's Hotel during this time. From the commencement of trading, the restaurant catered approximately 10 weddings only, all held within the restaurant. 1. Mr Dolan's evidence that the applicant had been operating a restaurant was not challenged on this or on the reference in his evidence to the premises as "the restaurant" . 2. Even Mr Parmenter referred to the area occupied by the applicant as a restaurant. In his 12 October 2021 affidavit, after describing the Lodge, he said this: (The) Lodge has a restaurant, comprising of: (a) 350m2 of indoor seating for 80 people; (b) 350m2 of outdoor terrace seating for 60 people; and (c) kitchen area (together the "Restaurant"). 1. Mr Parmenter' affidavits are replete with references to "the restaurant" that was occupied by the applicant. 2. On the basis of what is stated in the term sheet and the evidence of Mr Dolan and Mr Parmenter to which I have referred, I am comfortably satisfied that the premises was wholly used as a restaurant, a use that is one of the prescribed uses in Schedule 1 of the Act, and therefore satisfies the requirements of the second limb necessary for the term sheet to be a retail shop lease under the Act.
6. Mr Gray submitted that the size of the premises is uncertain such that the applicant must establish that the area of the premises was less than 1000 m² otherwise it is not a retail shop lease by reason of section 5(a) of the Act. I do not accept that submission. The respondent is perfectly placed to adduce evidence of the precise area of the premises, it being currently in occupation of the premises. If it wished to assert that the Act does not apply because the area the subject of the lease exceeded 1000 m², it was incumbent upon it, in my view, to adduce evidence to that effect and not attempt to shift the onus on to the applicant. I would add that there is no evidence by which I am able to conclude that the area of the premises exceeded 1000 m². Indeed, Mr Parmenter's very precise definition of the restaurant and its dimensions would suggest otherwise.
7. I do not accept that the term sheet was an agreement to agree, as submitted by Mr Gray. Although it does not contain all of the provisions that would normally be found in a formal retail lease document, it is nevertheless an agreement for occupation of the premises for value and for a prescribed use. It therefore satisfies the requirements of a retail shop lease under the Act. I would also add that I am comfortably satisfied that the term sheet is neither vague or uncertain particularly given that the parties seem to have been perfectly able to operate under it until they started to fall out in around July 2021. In any event, it is not a requirement of the Act that a retail shop lease contain all of the formal provisions one would expect to find in such a lease that has been prepared by lawyers. As Barrett J held in Moweno, it need only satisfy the definition of a retail shop lease in section 3 of the Act.
8. I also do not accept Mr Gray's submissions that there were a number of indicia that point to the conclusion that the parties did not intend to make a concluded bargain or a binding agreement as to lease.
9. Mr Gray submitted that there was confusion or uncertainty over the premises both as to size and location. I accept Mr Davie's submission that precisely defining the area of the premises was not necessary and did not prevent the applicant from operating the premises and the respondent demanding and receiving rent and outgoings.
10. In addition, the term sheet described the premises as "Restaurant, adjoining outdoor terrace and grassed area to the north of the terror situated within (the Lodge)". It is a document drafted by Mr Parmenter and signed off by him and the applicant's directors. There is no suggestion that thereafter the parties were under any misunderstanding or confused about the size and location of the premises. Moreover, and as already noted, Mr Parmenter had no difficulty in defining the component parts of the restaurant and the area of each part.
11. A further indicator, according to Mr Gray, that it was not the parties' intention to have a concluded bargain submitted was the way in which the tenant was described in the term sheet by reference to a business name and an ABN. The ABN 496 221 131 79, which is part of the descriptor given to the "tenant" in the term sheet, is the applicant's Australian Business Number. That in my view is sufficient to identify the applicant as the tenant.
12. According to Mr Gray, another indicator was BVL Management, as owner of the Lodge, not being made the counterparty to the term sheet. That does not strike me as unusual such that it should lead to a finding that no lease was intended. The respondent was managing the Lodge, including the premises, at the time and assuming the role of the lessor seems entirely consistent to me in the context of that arrangement with BVL Management. It is certainly not, in my view, inconsistent.
13. Mr Gray submitted that another indicator that a concluded bargain was not intended was the parties not acting in accordance with the term sheet. He pointed to HATL operating at the premises, something which he says was never intended at the time the term sheet was signed.
14. The term sheet does not prohibit the applicant from allowing a related company to operate the restaurant or require the applicant to seek the respondent's consent to do so. Moreover, Mr Parmenter gave evidence that by August 2020 he was aware HATL was operating the restaurant and did not object. Knowing that HATL was operating the restaurant, issuing invoices to HATL, and not raising any objection until almost 12 months later either the respondent implicitly consented to HATL operating the restaurant or, if there was a breach by the applicant, the respondent waived the breach.
15. Another indicator, submitted Mr Gray, was the applicant never seeking to obtain its own liquor licence. The term sheet specified the restaurant to be operated under Ms Parmenter's licence. The applicant was not required to apply for its own liquor licence.
16. Mr Gray said that the absence of a lessor's disclosure statement as required by the act had been held to indicate that it was unlikely a lease was entered into at the time. Mr Gray does not provide any authority for that submission. In my view, the provisions of the term sheet and the parties conduct up until the applicant was locked out on 21 September 2021, was consistent with the parties having entered into a retail shop lease notwithstanding the absence of a formal disclosure statement.
17. I also do not accept Mr Gray's submission that further indicators of there being no concluded bargain or binding agreement was an agreement between the parties made in December 2020 that entry into the lease would be necessary to work out the "grey areas", according to Mr Evans, or Mr Parmenter saying that a lease would involve "a lot of additional detail, work and cost".
18. In his 29 December 2020 email to Mr Parmenter, Mr Evans actually used the expression "elevate any grey areas" to describe what might happen when the provisions of the term sheet are incorporated into a more formal and registered lease. He was, in my view, flagging the possibility of that process turning up any new matters. He did not say there were in fact any "grey areas" in relation to the agreement that was then in place. Further, Mr Evan's email made clear that the parties were still working within what he referred to as "the terms and conditions set out in writing which commenced on 26 February 2020…" which was a reference to the term sheet. I take Mr Parmenter's reference to "the additional detail, work and cost of the lease", to be no more than a complaint about what was involved in the preparation of a more formal lease and not an indication that a lease was not already in existence.
19. An issue that was the subject of much debate was whether the term sheet was a management agreement rather than a retail shop lease.
20. Mr Gray submitted the term sheet was not a retail shop lease but rather a management agreement or licence by which the initial "hospitality business" would be conducted from and around the Lodge as it expanded, with a lease or other contracts coming into fruition upon their negotiation and agreement. In the interim, however, he said the parties agreed to be bound by the term sheet. To support the submission Mr Gray draws on Ms Parmenter's 13 March 2020 letter (referring to a management agreement), the parties sharing resources and jointly promoting the businesses, the establishment of the pizza bar and the applicant assisting in the design and operation of it, the applicant referring in December 2020 to relationship between the parties as a partnership and, some 11 months after the signing of the term sheet, the parties discussing a lessor disclosure statement.
21. I am unable to accept the submission. The terminology used in the term sheet is consistent with a lease. It makes no mention of a "management agreement" nor am I able to read into it anything that would suggest that the restaurant was being managed by the applicant rather than being operated as its own business. Furthermore, and as a matter of commercial logic, the idea that the applicant was providing services to the respondent under a management agreement seems completely at odds with the term sheet requiring the applicant to provide a share of its takings to the respondent as rent and paying outgoings rather than the respondent paying the applicant for those services. It is equally at odds with the applicant having spent in the order of $160,000 on fitout costs.
22. More importantly however, the submissions ignore the provisions of section 3 of the Act, and what constitutes a retail shop lease, and the fact that the parties cannot contract out of the operation of the Act (see section 7). Putting these insurmountable factors to one side, I do not accept the submission that Ms Parmenter's letter describing the term sheet as management agreement, or the parties cooperating to promote the Lodge and restaurant, or their working together to establish the pizza bar gives rise to a management agreement.
23. The reason for Ms Parmenter referring to a management agreement in her letter was not explained and she did not give evidence. Mr Parmenter said in cross examination that there was no reason why his wife was unable to give evidence. The only inference that can be drawn from that is that her evidence would not have assisted the respondent's case. Absent any explanation from Ms Parmenter for her reference to a management agreement, I am unable to accept that her characterisation of the term sheet in that way renders it something other than a retail shop lease.
24. The fact that the parties were jointly promoting the Lodge in the restaurant is understandable as is the applicant assisting with the design and operation of the pizza bar. While not a partnership, it was no doubt considered to be mutually beneficial for them to work cooperatively to attract customers to their respective businesses given their proximity. I fail to see how that gives rise to a management agreement.
25. I also fail to see how, and do not accept, that any delay on the part of the applicant in raising the issue of a disclosure statement reinforces a submission that there was a management agreement and not a retail shop lease. A lease can by definition under section 3 of the Act be a retail shop lease without a disclosure statement. While the Act prescribes other consequences for a disclosure statement not being provided, the characterisation of an agreement that is, by definition, a retail shop lease, is unaffected by the absence of a disclosure statement or even the late request for a disclosure statement.
26. While under cross examination, Mr Parmenter on a number of occasions referred to the term sheet a "management agreement". The evidence he gave, was in my view an attempt by him to create a false narrative about the nature of the term sheet. This narrative and his evidence is wholly inconsistent with the express provisions of the term sheet and equally at odds with the contemporaneous documents, including many of his own emails, which contain numerous references to a lease.
27. Mr Gray conceded that the terminology used in the term sheet could, if it had been drafted by a lawyer, be indicative of a lease but as it was drafted by a lay person it could, he said, equally be used in the context of a management agreement. There is nothing about the document which in my view supports that submission and I reject it. As I have already said, the term sheet makes no mention of a "management agreement" nor is there anything, in my view, to allow the inference to be drawn, that the applicant was managing rather than leasing the premises. On a plain reading the words used in the term sheet can only be understood in the context of the applicant and the respondent entering into a lease of the premises on the terms set out in the document.
28. The fact that the term sheet was prepared by someone who was not a lawyer does not, in my view, justify a conclusion that it was something other than a retail lease. Mr Parmenter appeared to be a person of some sophistication and education. He was after all the chief operating officer of the respondent. Neither in his affidavits or at any stage in his cross examination did he exhibit or profess any misunderstanding or confusion between a lease and a management agreement. The correspondence in evidence, and in particular the exchange of emails between Mr Dolan and Mr Parmenter from 3 December 2020 and 4 April 2021, which I have set out in paragraph 34 above makes plain, in my view, that he knew that in drafting the term sheet he was creating a document to record the terms of a lease between the parties.
29. Accordingly, I find that the term sheet is a retail shop lease under the Act between the applicant as lessee and the respondent as the lessor. It also follows that the Tribunal has jurisdiction to determine this dispute.

Has the applicant repudiated the lease.

1. Having found that the term sheet is a retail shop lease, the next issue to be determined is whether the applicant repudiated the lease entitling the respondent to the relief sought in the respondent's application.
2. Mr Gray submitted that the orders the respondent seeks (by its application), for the surrender of possession of the premises by the applicant, and declarations that the applicant has repudiated the lease and the respondent is entitled to terminate that lease, are appropriate. The grounds for the orders sought are expressed in these terms: On 15 October 2021 the Tribunal made orders following evidence and submissions by the applicant that it was ready, willing and able to comply with the terms of the retail lease alleged by it. It has subsequently come to light that the applicant was and remains not ready, willing or able to comply with the terms of the lease alleged by it in that it has: 1. failed to provide a certificate of currency for workers compensation and public liability insurance; 2. failed to provide monthly sales figures no later than 5 business days from the end of each month; 3. failed to operate the leased premises as a "licensed restaurant" (in that the applicant does not have a liquor licence and the respondent is unable to permit the applicant to serve alcohol without putting itself in breach of its own liquor licence); 4. failed to operate the restaurant for the stipulated minimum hours; 5. failed to provide all the new marketing and pricing for approval by the respondent; and 6. failed to maintain the kitchen, restaurant and Terrace to a high standard of cleanliness. Accordingly, the applicant obtained the (October orders) in bad faith and they should be vacated. Further it has come to light that the applicant directors appear to have no substantial assets so that their undertaking as to damages is worthless so the orders should be vacated. Further, if (which the respondent denies) a retail lease exists, the applicant has repudiated its terms and the respondent is entitled to terminate any such lease forthwith.
3. As can be seen, the application appears to be primarily directed toward the December application to set aside the October orders.
4. Mr Gray's submissions in relation to the repudiation issue are brief. He says that if it is found that there is a retail shop lease, the applicant has repudiated the lease, and the orders it seeks for the surrender of possession of the premises by the applicant, the declarations that the applicant has repudiated the lease and the respondent is entitled to terminate the lease, are appropriate. In support of this submission Mr Gray relies on the four affidavits sworn by Mr Dolan and the four affidavits sworn by Mr Parmenter. Just what parts of those affidavits are said to be relevant to the repudiation issue was not specified.
5. Prior to 21 September 2021 when the respondent locked out the applicant from the premises because of what was said to be a gas leak, no allegation had been made by the respondent that the applicant had repudiated the lease. Nor, for that matter, had any notice of breach been served from which the precise nature of the applicant's alleged repudiatory conduct can be discerned.
6. There is also scant evidence of any allegations by the respondent prior to the lockout that the applicant was in breach of the lease. Mr Parmenter's claims to have said at the meeting on 20 July 2021 that the termination of food and beverage services at the pizza bar by the applicant was viewed as a breach of the agreement to provide the services. He also claims to have said that the applicant was in breach of "our agreement" in respect of restaurant trading days and times by failing to open the pizza bar and restaurant every day during holidays from 12 PM to 7:30 PM and outside of holiday periods from Sunday to Wednesday between 2 PM to 7:30 PM. Mr Parmenter subsequently claimed that HATL operated the restaurant without the respondent's consent, and the applicant had failed to provide the respondent with what he described as top line sales figures verified by its accountant and accompanied with last financial year quarterly BAS statements.
7. On 22 September 2021, that is, the day after the lockout, the respondent's solicitors wrote to the applicant's solicitors. In the letter they said there had been a failure of the applicant to provide services to the quality and standard required and because of what was said to be a "lack of performance to date" they have been instructed to inform the applicant's solicitors that the respondent "no longer (required the applicant's) services and has change the locks in the premises". There was no mention in the letter of any breach of a provision of the term sheet, or any allegation of repudiatory conduct on the part of the applicant.
8. There was correspondence from the respondent's solicitors sent to the applicant's solicitor in November 2021 that is, after the October orders were made. The letters, which are set out in paragraphs 66 to 69 above, required the applicant to provide certain information. I am comfortably satisfied that the letters were written in the context of the October orders having been made and for the purpose of apprising the applicant of the respondent's preconditions for allowing the applicant back into the premises. No allegation is made in that correspondence to the effect that the applicant engaged in repudiatory conduct either of a management agreement or lease.
9. In an affidavit sworn 3 December 2021, Mr Parmenter made a number of allegations about the applicant's failure or inability to do certain things after 15 October 2021. These include not providing insurance certificates for HATL, not indemnifying the respondent for uninsured loss, not removing alcohol from the premises, and the applicant never trading from the premises. He also complained about the applicant selling alcohol from the without its own liquor licence, not removing its alcohol supplies from the premises until it obtains a liquor licence, operating an unlicensed restaurant contrary to the terms sheet, failing to provide any marketing or pricing information since the October orders were made, and failing to clean the premises since the October orders were made.
10. The allegations made by Mr Parmenter appear to be more relevant to the December application to set aside the October orders, however, for the purposes of determining this issue, I will assume they are also relied upon by the respondent when it says that the applicant has repudiated the retail shop lease constituted by the term sheet.
11. What constitutes repudiation of a contract is described by Professor Brendan Edgeworth in Butt's Land Law (7th Ed) at [7.1610] in these terms: Repudiation of contractual obligations is not easily established. The landlord (or tenant) must prove either breach of a fundamental term of the lease, in the sense of a breach so serious that it makes commercial performance of the contract impossible, or deprives the other party substantially of the benefit of the contract; or an intention displayed objectively (even if not held subjectively) by the other party no longer to be bound by the lease, or to perform it only according to that party's wishes irrespective of the terms of the lease. Additionally, a contract may be terminated where there has been a breach of a term expressed to be an essential term by the parties to the lease. A single breach of a (non-essential) lease covenant is unlikely to amount to under an invalid notice to remedy a breach by the tenant; or persistent failure to register the lease but multiple breaches may. Examples of repudiation by tenants include abandoning the premises and persistent and deliberate failure to pay rent. However, each case depends on its own circumstances; specifically, mere failure to pay rent does not constitute a repudiation. But failure to pay rent will entitle the landlord to terminate where the covenant to pay rent is expressed to be an essential term of the lease. Where a landlord purports to terminate the lease for the tenant's repudiation, but the tenant's conduct is not in fact repudiatory, the landlord may well be found to have repudiated, entitling the tenant to terminate the lease and sue for damages. But conduct falling short of attempted termination, such as arguing wrongly that the other party has breached a term of the lease, is not repudiation, although if the alleging party threatens to terminate unilaterally after the mistake has been pointed out, repudiation will be made out. Other examples of landlords repudiating the lease include: serious breach of the covenant for quiet enjoyment; breach of the covenant not to derogate from grant; terminating under an invalid notice to remedy a breach by the tenant; or persistent failure to register the lease.
12. The authors of Commercial Leases in Australia (8th Ed) also said this about repudiatory conduct at [130.1010]: Repudiatory conduct might take a variety of forms. It may constitute a course of conduct or may be evidence by one significant act or omission. Actions may be evidence by action showing a complete disdain for the terms of the lease itself or may be constituted by a complete renunciation, for example, through a written expression by the lessee of a desire not to be bound by the terms of the lease. However it may be constituted, it must, of itself, amount to an intention in the lessee not to be bound by the lease in the future. ….. However, at the very least, the lessee's misbehaviour - regardless of whether it is manifested by the non-payment of rent, either alone or in combination with other breaches - must evince an intention to no longer be bound by the lease. Repudiation can sometimes be difficult to prove in this context. The presence of the express provision for re-entry in the lease upon default by a lessee will not exclude any other common law rights available to the lessor so as to preclude the recovery of damages for loss of any of the benefit of the lease. However, it must be said that even if the conduct of the lessee could be characterised in any way as a breach of covenant or condition in the lease, notwithstanding its severity and the fact that it may amount to a repudiation of the lease, the better view would be to serve a Notice to Remedy Breach prior to initiating other action to terminate the lease. About the only occasion where this path might not need to be followed is where the lessee has abandoned the premises, although that may constitute a breach of a covenant or condition, for example, the covenant to trade.
13. What I conclude from these learned authors is that in order for the respondent to establish that the applicant has repudiated the retail shop lease recorded in the term sheet, it must prove to the requisite standard that the applicant has breached a fundamental term, or it has acted in a way, when viewed objectively, that it no longer intends to be bound by the term sheet.
14. Having carefully considered the respondent's evidence, I am not comfortably satisfied that the applicant was in breach of the term sheet either prior to the lockout or since then. However, even if the applicant did breach the provisions of the term sheet as alleged, the respondent has not established (nor has it been submitted on its behalf) that the applicant was in breach of a fundamental provision entitling the respondent to exercise a common law right to re-enter the premises when it did and terminate the lease. For that reason, the respondent was not entitled to re-enter the premises on 21 September 2021.
15. Furthermore, Mr Parmenter's allegations of breach by the applicant do not, in my view, even come close to establishing that the applicant exhibited conduct which could be said to constitute "disdain for the terms of the lease" or evidence from which it can be concluded that the applicant has expressed "a desire not to be bound by the terms of the lease". On the contrary, I am comfortably satisfied on the basis of the evidence presented that the applicant has at all times expressed in clear and unambiguous terms its wish to remain in the premises and comply with the provisions of the term sheet.
16. Accordingly, I find that the applicant did not repudiate the retail shop lease recorded in the term sheet.
17. In case it may become relevant, I will briefly say something about the actual lockout of the applicant on 21 September 2021.
18. The term sheet does not contain an express right that permits the applicant to re-enter the premises in the event of a breach by the applicant. When it locked out the applicant, the only reason given by the respondent at the time for doing so was that there was a gas leak. Clearly that is not a basis for terminating a lease for breach of a fundamental term or repudiatory conduct. Furthermore, I am not comfortably satisfied that there was a gas leak. It is apparent from the conversation that took place on 20 July 2021 involving Mr Simich, and from the respondent's solicitors 22 September 2021 letter, that the respondent had a plan to retake possession of the premises and run the restaurant or find another operator. The gas leak was the pretext for implementing the plan. The allegation that the applicant repudiated the lease was an afterthought designed to try and justify what was an unlawful attempt to terminate the lease recorded in the term sheet.

Is the respondent entitled to the relief it seeks

1. Having found that the term sheet is a retail shop lease and the applicant did not repudiate that lease, the respondent's application will be dismissed.

Is the applicant entitled to the relief sought in its application?

1. The next issue to be determined is whether the applicant is entitled to the relief that it seeks.

Order for immediate access to the premises

1. The applicant seeks relief against forfeiture and an order that it be given immediate access to the premises to continue operating its business, unmolested by the respondent or agents, officers, and employees of the respondent. The Tribunal has power under section 72(1)(c) of the Act to order a party to proceedings to surrender possession of specified premises to another person and to also grant a party relief against forfeiture under section 72(1)(d). The exercise of those powers is discretionary.
2. There being no finding that the applicant was in breach of the term sheet, the lease was never forfeited. It is therefore not appropriate for an order to be made granting the applicant relief against forfeiture.
3. A factor that is relevant to the exercise of the Tribunal's discretion when it comes to the making of an order requiring the respondent to give the applicant possession of the premises would be any evidence to suggest that BVL Management, the owner of the Lodge, is unwilling to permit the applicant to resume operating its business from the premises. There is no evidence to that effect.
4. Another factor relevant to the exercise of the same discretion is whether the premises are now occupied by a new tenant. However, as already mentioned, there is no evidence that anyone other than the respondent is in occupation of the premises.
5. Mr Gray likened the making of an order for possession in favour of the applicant to an order for specific performance which he said was generally inappropriate if it requires continuing mutuality of dealings. Notwithstanding the respondent's actions in locking out the applicant from the premises and preventing it from being allowed back in, I am not persuaded by the evidence that making an order that the applicant be allowed back into the premises would give rise to an unworkable situation. Expressed another way, there is no evidence to suggest that if the order is made, the parties would not be able to continue to conduct themselves in accordance with the provisions of the term sheet.
6. Having found that the term sheet is a retail shop lease, and the applicant has not repudiated the lease, an order will be made that the respondent give the applicant access to the premises to continue operating its business in accordance with the provisions of the term sheet, without interference by the respondent, its employees, servants or agents. To be clear, the intent of the order is to permit the applicant or HATL to operate the licenced restaurant from the premises.
7. Mr Gray said that Ms Parmenter was not permitted to lease out the area that was covered by her liquor licence. The submission is unsupported by any evidence. If there is any legal impediment to Ms Parmenter's licence being used to sell alcohol from the premises by a lessee, it is incumbent on the respondent and Ms Parmenter to ensure that impediment is removed forthwith.
8. No reason has been given by the respondent why that order should not be complied with immediately but I propose to give the respondent 72 hours from the making of the order to comply with it.

Provision of a lease in registrable form

1. The applicant seeks an order that respondent provide a lease, in registrable form on the terms previously agreed between the parties (in the term sheet), for the applicant's execution and that upon return of the executed lease to respondent, the lease is to be registered.
2. Section 16 of the Act requires a retail shop lease to be registered if it is for a term of more than three years or if the parties to the lease have agreed that it be registered. For the purposes of the section, the term of the retail shop lease includes an option. When the lease signed by the lessee is returned to the lessor the lease recorded in the term sheet, the lessor is then required to lodge the lease for registration in accordance with the Real Property Act 1900 within three months.
3. The term of the lease recorded in the term sheet is three years but there is an option to renew for a period of five years. Section 16 therefore applies to the retail shop lease recorded in the term sheet.
4. Neither counsel has referred me to any decision of where section 16 has been considered in the context of a party to a lease demanding that it be registered under the Real Property Act. Mr Davie simply submits that an order to the effect sought would be an order to the effect that the respondent comply with its obligations at law under the Act.
5. Mr Gray submits that that the Tribunal must be satisfied that there is utility in making the order in circumstances where the parties to the term sheet do not include the registered proprietor, the size of the premises is uncertain, the term sheet would need to be redrawn to enable the applicant to operate licence premises, which could affect the respondent from maintaining its licence. He also refers to other factors militating against the Tribunal being satisfied as to the utility in making the order. These include the applicant saying there may be grey areas that need to be addressed and an issue involving minimum operating hours. Mr Gray also submits that the Tribunal does not have the power and should not be required to supervise further negotiations or the making of additional or different contractual obligations.
6. As I have previously found, the provisions of the retail shop lease recorded in the term sheet have been sufficiently certain as to enable the parties to conduct their business relationship in accordance with them for some time. I have also found that there is no uncertainty as to the size of the premises, and no evidence has been adduced by the respondent that persuades me to come to the conclusion that the applicant is unable to operate a licensed restaurant. I therefore do not consider any of those matters to be an impediment to the registration of the retail shop lease recorded in the term sheet.
7. The difficulty I have in reaching a decision about the relief sought by the applicant is the lack of evidence as to what, if anything, is required of the registered proprietor in facilitating the registration of the lease, and what is required to produce a lease in registrable form.
8. Mr Gray has drawn attention to BVL Management not being a party to the term sheet. What that means so far as the term sheet being registered as a lease has not been explained. No submissions have been forthcoming from Mr Davie as to whether BVL Management's participation or consent is required to register the term sheet as a lease. Added to that, no submissions have been made or any evidence provided as to precisely what will be required to produce a lease in registrable form. Does that simply involve attaching a prescribed form or cover sheet to the term sheet or is something else that needs to be done before it will be accepted for registration?
9. Due to the uncertain nature of the matters to which I have referred, I am not comfortably satisfied that even if I were to make the order sought by the applicant that it is capable of being complied with. Accordingly, in the exercise of my discretion, I decline to make the order.

Claim for payment of outgoings

1. The applicant has claimed $35,129.70 for outgoings said to have been paid to the respondent in breach of section 12A(1)of the Act. The section provides that a lessee under a retail shop lease is not liable to pay any amount for outgoings unless the liability was disclosed in the lessor's disclosure statement. Section 12A(4) permits the lessee to recover from a lessor any amount paid that that the lessee was not liable to pay because of the section.
2. This amount claimed by the applicant is made up of $27,664.40 in outgoings and $7,465.30 in vouchers said to have been given to guests of the hotel by the respondent for use in the restaurant. The applicant says that because the respondent did not provide a disclosure statement setting out the outgoings payable it is entitled to recover the outgoings paid by virtue of section 12A(4) of the Act.
3. Annexed to Mr Dolan's 14 October 2021 affidavit is a spreadsheet said to show, amongst other things, the outgoings paid by the applicant to the respondent for the period June 2020 to May 2021. The total amount stated is $27,664.40.
4. Also annexed to the same affidavit is a letter from a firm, apparently chartered accountants, called "beyondnow solutions". The letter is dated 14 October 2021 and addressed to the applicant's solicitors. The letter states that the firm was asked to verify payments of rent and outgoings to the respondent. The schedule attached to the letter contains a list of the outgoings paid by reference to the respondent's invoices for the period 5 June 202 to 31 May 2021. The total amount comes to $21,175.32. It is inclusive of GST.
5. Mr Gray conceded that a disclosure statement has not been provided but says the parties clearly evinced an intention to be legally bound in relation to the payment of the outgoings disclosed and agreed in the term sheet. He submitted that they also recognised and agreed that a lessor disclosure statement and lease were still in the process of being prepared and finalised. Mr Gray further submitted that the applicant has had the benefit of using and trading from the premises for profit and therefore it should not have the benefit of being repaid amounts paid in relation to disclosed and agreed outgoings. He described it as akin to unjust enrichment. Mr Gray submitted that in those circumstances an ancillary order should be made under section 72(1)(e) or (e1) of the Act.
6. Mr Gray says that if I am against him on these submissions, the Applicant's claim for $37,129.70 is incorrect and I should accept the outgoings figure of $21,175.32 verified by beyondnow solutions. Mr Gray also submitted it can be safely inferred that GST was also charged by the respondent on the outgoings, and I should take into account that the applicant has received a credit for GST.
7. Section 11 of the Act expressly requires a lessor to provide to a lessee a lessor's disclosure statement at least 7 days before a retail shop lease is entered into. That did not happen here. While the parties agreed that outgoings would be payable by the applicant and also agreed as to the amount of those outgoings, that agreement does not override the obligations contained in section 11. This is because section 7 of the Act prohibits the parties from contracting out of the provisions of the Act.
8. For the same reason, it makes no difference, in my view, that the parties may have eventually realised the need for a disclosure statement. Contrary to section 11, a lessor's disclosure statement was not provided.
9. I have not been referred to any authority on this point but in my view the clear intent of the legislators in amending the Act to include section 12A, and in particular subsections (1) and (4), was to permit a lessee to recover outgoings paid in circumstances where the liability for those outgoings was not disclosed in the disclosure statement. While I can well understand why Mr Gray would submit that the applicant having had the benefit of trading from the premises should not have the added benefit of being repaid the outgoings, I am unable to read subsections (1) and (4), or the section as a whole, so as provide for an exception in the circumstances described by Mr Gray. By subsection (1), the applicant was not liable to pay the outgoings because the outgoings were not disclosed in a lessor's disclosure statement. It follows, in my view, that section 12A(4) is enlivened and the applicant, as lessee, is entitled to recover from the respondent any amounts paid to the respondent as a consequence of the disclosure statement not having been served.
10. Turning to the quantum of the applicant's outgoings claim, having considered the evidence presented by the applicant in taking into account the submissions made on behalf of the respondent, I decided that the amount the respondent is to repay the applicant for outgoings due to the liability not being disclosed in a lessor's disclosure statement is $21,175.32. This is because it is an amount that has been verified by a firm of chartered accountants, beyondnow solutions, engaged on behalf of the applicant. I have no reason to doubt the accuracy of their calculation which I consider more reliable than the spreadsheet calculation prepared by the applicant.
11. The respondent's invoices that were issued for outgoings include GST. GST is not payable on an award of damages. The amount to be repaid by the respondent to the applicant will be $19,250.29 which is $21,175.32 less the GST component.
12. As mentioned, the applicant has also claimed to be repaid $7,465.30 in vouchers said to have been given to guests of the hotel by the respondent for use in the restaurant. This claim is also brought under section 12A(4). This amount is recorded in the outgoings spreadsheet annexed to Mr Dolan's 15 October 2021 affidavit as "Receipts for restaurant" and "Glampers overnight stay".
13. It has not been explained by the applicant how it came about that those vouchers were issued, on what terms they were issued and why they should be treated as outgoings. Furthermore, in verifying the outgoings paid by the applicant to the respondent, beyondnow solutions does not identify vouchers, "Receipts for restaurant" or "Glampers overnight stay" as outgoings. I am therefore not comfortably satisfied that they are outgoings and, accordingly, the claim for $7,465.30 is rejected.
14. It was submitted by Mr Gray that if I was against him in relation to the applicant's outgoings claim, I should make ancillary orders under section 72(1)(e) or (e1) of the Act.
15. Section 72(I)(e) relevantly gives the Tribunal the power to order the rectification of the lessor's disclosure statement while subsection (e1) gives the Tribunal the power to make an order deeming a disclosure statement given by the lessor after the lease is entered into to have been given in compliance with section 11 before the lease was entered into.
16. By section 72AB, an order cannot be made under section 72(1)(e) or (e1) unless it is made by consent or the Tribunal is satisfied it is necessary to correct an error or omission, to give effect to the intention of the parties when the lease was entered into, or to give effect to the actual disclosure of information between the parties.
17. In my view, both subsections contemplate the existence of an actual lessor's disclosure statement that would permit proper consideration to be given, as required by section 72AB, to an application for rectification of a lessor's disclosure statement or to deem the giving of a lessor's disclosure statement. However, there is no lessor's disclosure statement in evidence. Furthermore, section 11 requires a lessor's disclosure statement to be in writing, and in or to the effect of Parts A and B of the form in Schedule 2 of the Act. It is a prescribed form. In my view, the term sheet is not a document that satisfies the requirements of a lessor's disclosure statement under section 11 of the Act as it is not in the prescribed form set out in Schedule 2. Without a disclosure statement in proper form, the Tribunal cannot be expected to rectify something that does not exist or deem something to be a disclosure statement that has not yet been brought into existence. The respondent's application for orders under section 72(1)(e) or (e1) is refused.
18. I would add that it does seems to me that section 72(1)(e1) would not necessarily preclude a further application by respondent if a disclosure statement in the prescribed form is now provided. It would then be up to the respondent to satisfy the Tribunal as to the matters set out in Section 72AB of the Act.

Security bond

1. The applicant seeks an order that the $20,000 security bond, which is held by the respondent, be deposited with the NSW Government's Retail Bond Scheme and provide the applicant with a receipt evidencing the same.
2. The respondent accepts that should it be found that the arrangement between the parties is a retail shop lease then it will be necessary for it to pay the $20,000 into a security bond in accordance with the Act. An order to that effect will be made.

Compensation claim

1. By its amended application, the applicant seeks an order that the respondent pay compensation to it for losses it claims to have suffered as a result of the lock out. The evidence adduced by the applicant in support of this claim was the subject of some debate at the hearing.
2. The only evidence adduced by the applicant in support of its compensation claim was in Mr Dolan's 23 February 2022, which was served a few days before the hearing. Four paragraphs (11 - 14) of the affidavit were devoted to explaining how he and the applicant's bookkeeper and accountant had estimated that from 28 September 2021 to 24 February 2022 the applicant had suffered a net profit loss of $169,231.00. A profit and loss statement said to show the losses for that period was annexed to the affidavit.
3. These paragraphs in Mr Dolan's affidavit were objected to by Mr Gray on the basis that that the affidavit was filed contrary to the orders that have been made by the Tribunal, it was only served a few days before the hearing commenced and the respondent was now not in a position to be able to meet or interrogate that evidence. Mr Davie accepted that there was prejudice to the respondent in the late service of this evidence and that it was not strictly in reply to any evidence adduced by the respondent. He sought leave to withdraw the four paragraphs on the basis that the applicant will have leave to raise the issue of loss should it arise as a consequence of the Tribunal's final decision in the proceedings.
4. By its amended application, the applicant was seeking an order that the respondent pay compensation to it for losses it suffered as a result of the lockout. The applicant's evidence in support of the compensation claim was filed late and without leave. I satisfied that as a consequence of the late filing there was prejudice to the respondent in trying to meet that evidence at the hearing. Furthermore, when the proceedings were listed for hearing no order was made for there to be separate hearings on liability and quantum, and no order to that effect had been sought by the applicant. The four paragraphs in Mr Dolan's affidavit were therefore rejected.
5. There being no evidence in support of the applicant's claim for compensation or damages, the claim is rejected.

Has the respondent disobeyed the October orders of the Tribunal and if it has, what are the consequences.

1. It is not in dispute that the respondent did not comply with the October orders. Section 72 (1) provides that a person must not, without lawful excuse, contravene a designated order of the Tribunal. The respondent says that it had a lawful excuse within the meaning of section 72 of the CAT Act for not complying with the orders.
2. I have given considerable thought as to whether it is relevant or even appropriate to the determination of the dispute between the parties for me to make any finding as to whether or not the respondent has disobeyed the October orders. In the end I have decided, for the following reasons, not to determine that issue: 1. Firstly, whether or not the respondent complied with the orders is not directly relevant to the substantive issues between the parties which I have already determined. 2. Second, the October orders will be superseded by the orders I propose to make as a consequence of my findings in these reasons. It will be the respondent's attitude and compliance with those orders that may be relevant at some point in the future. 3. Third, given the serious nature of the allegations of non-compliance that have been made it would be wrong, in my view, to simply determine the issue of compliance without a proper hearing.
3. I will though add this. While not making any finding regarding the respondent's decision not to comply with the October orders, the reasons given by the respondent for not complying seem to have an air of artificiality about them. I also found it troubling when having unsuccessfully applied to set aside the October orders, the respondent continued to deny the applicant access to the premises. Parties to proceedings in this Tribunal need to understand that it is not for them to unilaterally decide whether or not to comply with the Tribunal's orders. That is entirely a matter for the Tribunal.

The applicant's section 8 application

1. In his written submissions, Mr Davie said the applicant seeks an order pursuant to section 8 of schedule 4 of the CAT Act. This prayer for relief is not sought in the applicant's amended application.
2. The section provides that if an order is made in the exercise of a Consumer and Commercial Division function in proceedings, the Tribunal may make an order giving 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 by the Tribunal. That person then has 12 months after the end of the period to apply to renew the proceedings if an order has not been complied with.
3. The applicant seeks an order now giving leave to renew the proceedings within 28 days or such other period as may be specified by the Tribunal. Mr Davie said the applicant is concerned that without an order for a time by which the orders of the Tribunal should be complied, the power to renew will not be enlivened.
4. Mr Gray did not address the making of an order under section 8 in his submissions.
5. I do not consider it necessary to make a section 8 order now. The orders will specify a time for compliance and, if they are not complied with by the respondent, the applicant will have 12 months after the end of that period in which to make the application.

Costs

1. Both parties seek costs. Orders will be made to give both parties the opportunity to make costs submissions.

Orders

1. The orders that will be made as a consequence of the reasons I have given supersede the October orders.
2. These are the orders of the Tribunal: 1. Declarations pursuant to section 72(1)(f)(iii) of the Retail Leases Act 1994 that: 1. The term sheet dated 29 January 2020 signed on behalf of the applicant and the respondent (term sheet) is a retail shop lease of the restaurant, adjoining outdoor terrace and grassed area to the north of the terrace (premises) within the Bellingen Valley Lodge at Bellingen, New South Wales. 2. The applicant has not repudiated the retail shop lease recorded in the term sheet. 1. Pursuant to section 72(1)(c)(ii) and (iv) of the Retail Leases Act 1994, the respondent within 72 hours of the date of this order give the applicant, its employees, servants and agents, access to the premises to continue operating its business in accordance with the provisions of the term sheet without any interference by the respondent, its employees, servants or agents. 2. Pursuant to section 72(1)(a) of the Retail Leases Act 1994, the respondent within 14 days pay to the applicant the sum of $19,250.29. 3. Pursuant to section 72(1)(c)(iv) of the Retail Leases Act 1994, the respondent within 14 days transfer the $20,000 security bond paid by applicant to the NSW Government's Retail Bond Scheme and within 7 days thereafter provide the applicant with a receipt verifying the transfer. 4. The respondent's Application for Miscellaneous Matters is dismissed. 5. In the event a party wishes to make a costs application it must file and serve written submissions within 14 days, any party opposing the application is to file and serve its written submission within a further 14 days, and the Tribunal will make a decision on the papers as permitted by section 50(2) of the Civil and Administrative Tribunal Act 2013 unless persuaded that there should be oral submissions. 6. If after 14 days no written submissions are filed, then there will be no order as to costs

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: 30 August 2022