12 and 13 March 2013, 20 and 21 May 2013; and 9, 10 and 11 October 2013

Last date for filing written submissions: 25 February 2014.

Versus (Aus) Pty Ltd v A.N.H. Nominees Pty Ltd (No2) (REVISED) (Retail Tenancies) [2014] VCAT 454

1. The Respondent must pay the Applicant $33,926.76.
2. Liberty to apply until 16 May 2014 on the question of costs and interest.

1. This proceeding arises after prolonged litigation between the parties, which culminated, at least in part, in a determination by the Tribunal on 1 December 2011 ('the Earlier Proceeding').[2] That determination required the Respondent to pay the Applicant damages of $218,599.63 plus interest.
2. The nature of the dispute comprising the Earlier Proceeding is not far removed to what is before the Tribunal in this proceeding. In essence, the Applicant ('the Tenant') leased retail premises located in Brighton ('the Premises') from the Respondent ('the Landlord') pursuant to a lease agreement dated 10 November 2006 ('the Lease'). The Premises have long suffered from problems associated with moisture ingress and mould, leading to the Premises being unfit for occupation. As a result, the Tenant was awarded damages in the Earlier Proceeding commensurate with its loss occasioned by the inability to occupy and trade from the Premises.
3. The orders made by the Tribunal on 1 December 2011 awarded damages up until the 31 December 2011[3] and it would appear from the published Reasons that this date was selected on the assumption that the Premises would be repaired and fit for occupation sometime in January 2012. According to the Tenant, this has not occurred. It contends that the Premises were never made fit for occupation and as a result, the Landlord has repudiated its obligations under the Lease, with the consequence that the Tenant terminated the Lease by letter dated 27 March 2013. The Landlord denies that the Premises were not made fit for occupation; although it accepts that the Lease has come to an end.[4]
4. It is obvious that the central question that underpins this proceeding is whether the Premises were ever made fit occupation and if so, when? It is on that premise that the Tenant couches its claim against the Landlord. In particular, in its Third Further Amended Points of Claim, the Tenant makes various claims against the Landlord. As I understand the Tenant's pleading, it alleges breach of lease, unconscionable conduct and misrepresentation on the part of the Landlord as the legal grounds upon which it relies. The Tenant alleges that certain promises were made by the Landlord that it was to commence remedial work in the early part of January 2012 in order to arrest any moisture ingress and eradicate all mould which had infested the Premises as a consequence of that moisture ingress. The Tenant contends that the Premises were never remediated to a point where the level of mould in the Premises was rendered safe to allow reoccupation of the Premises. As a result, the Tenant alleges that the lingerie business that it had previously operated from the Premises was effectively destroyed with the consequence that it has suffered considerable loss, which it quantifies and claims as follows:
   • (a) $358,924.45 for loss of profits from the period 1 January 2012 until the end of the term of the Lease, being 18 May 2016.
   • (b) $1,443,005 for the loss of the goodwill value associated with the business.
   • (c) $40,000 being the costs of initially purchasing the business, which it says are now thrown away.
   • (d) Unliquidated damages representing the loss of opportunity to expand its business.
   • (e) $791.01 being electricity charges which it incurred as a result of the Landlord temporarily occupying the Premises for the purpose of undertaking remedial work.
   • (f) Exemplary damages.
   • (g) Costs.
5. The Landlord does not dispute that the Premises had, historically, suffered from water ingress problems, with the result that elevated levels of mould were detected within the Premises. Indeed, this was the conclusion reached by the Tribunal in the Earlier Proceeding. However, the Landlord disputes that the Premises were not made fit for occupation. It further disputes that it was obligated to carry out remedial work to arrest water ingress or eradicate mould after the Lease was renewed an 18 May 2011, notwithstanding the fact that it undertook significant remedial works at its own cost after that date.

1. The background facts to this dispute are set out in some detail in the Reasons published in the Earlier Proceeding. Although not entirely relevant to the matters currently under consideration, it is appropriate to summarise those background facts in order to understand the issues which are central to this proceeding.
2. The Landlord has been the registered proprietor of the Premises since 1985. Prior to the Tenant occupying the Premises, the Premises were leased to Gadeaux Giftware under a lease entered into in June 2006 for a five year period with a further option of five years. In November 2006, the Lease was transferred to the Tenant. After it took possession, it commenced fitting out the Premises to operate its proposed lingerie business. During the course of the fit-out works, the Tenant identified three issues:
   • (a) water damage on the west wall;
   • (b) lack of water on the Premises; and
   • (c) a leaking toilet.
3. By email correspondence dated 15 June 2010 addressed to the Landlord, the Tenant stated:

We resolved the issues (i.e. the water damage on the wall) at our considerable expense, despite the fact that there was clearly an issue with the building, which is not the tenant's responsibility.

The water damage issue inside the store, as mentioned in A above, was rectified at our considerable expense, despite it not being the tenant's responsibility.

1. In order to 'resolve' the water damage on the wall, the Tenant clad the west wall with plasterboard.[5]
2. From January 2007 until February 2008, the Tenant operated its lingerie business without interruption. However, from the end of February 2008 until August 2008, construction work was being undertaken on an adjoining property. This culminated in noise issues and access problems to the rear of the Premises. Nevertheless, the Tenant continued to trade despite disruption caused to its business.
3. From September 2008 until March 2010, there were no disruptions to the Tenant's business.
4. In March 2010, the Premises were flooded following heavy rainfall. Repairs were undertaken by the Landlord during this period, with rent being abated between April and June 2010. Between November 2010 and February 2011, further flooding occurred.
5. As a consequence, substantial repair work was then undertaken by the Landlord. This included replacing the roof cladding, tanking the rear wall and constructing an elevated veranda at the rear of the Premises, so as to create additional freeboard at the rear door. The toilet was also replaced. That work was undertaken during the period May to August 2011 at the Landlord's expense.
6. However, following completion of the work, the Tenant refused to re-occupy the Premises. It claimed that there were excessive levels of mould within the Premises, making the Premises potentially hazardous to re-occupy. It was at this point that the dispute between the parties escalated. In that respect, the Tenant engaged the services of Mr Siket, building biologist, to investigate and report on the state of the Premises. In his report dated 20 May 2011, Mr Siket stated:

A general visual inspection was conducted and moisture readings as well as surface and airborne mould samples were taken. The entire floor slab area from the front to the rear of the store (including change room and storage areas was 100% saturated. Both sides of the centre of the floor area recorded maximum readings on the moisture meter. The complete saturation of the wall material was recorded half to 1 m above the floor level. This is a serious case of excessive moisture and water intrusion and has created an ideal environment for mould proliferation to occur.

Considering the reported health effects by the occupants, very high moisture levels, water ingress issues as well as visible mould growth and moisture damage it is highly recommended that stock be removed from the store and that it is not occupied until such time that the results are obtained and the risks to health properly evaluated. It is highly possible that the stock in the store has been contaminated by the airborne mould spores...[6]

1. As a result of the impasse between the parties, the Tenant issued the Earlier Proceeding. In its Reasons dated 1 December 2011, the Tribunal stated:
   1. It was not until the eve of the hearing that the respondent actually did something which showed it was properly concerned about the mould problem. On 30 October 2011, the respondent received an email from a company, Pure Protect, about eradicating the problem. The email said, inter alia:

Of concern is the high level of contamination and in particular that of the mould genus known as Strachybotys, which is better known as toxic black mould.

1. On 9 November 2011, Mr Lepp [for the Landlord] engaged Pure Protect to do the work as soon as possible. Even if that work is carried out immediately, because of the need to fully dry out the premises and then take steps to eradicate the mould, I find it highly probable the premises will, at best, not be fit for re-occupation until at least 1 January 2012.
2. As I have already indicated, the Tribunal determined that the Tenant was entitled to compensation for losses occasioned as a result of the water ingress, mould infestation and other issues that arose during the course of the tenancy. However, the present proceeding relates to losses which occurred after January 2012 and which, in many respects; differ from the heads of damage claimed in the Earlier Proceeding.[7]
3. According to the Landlord, there were delays in effecting remedial work following the orders made by the Tribunal in the Earlier Proceeding. Mrs Lepp, the director of the Landlord gave evidence that:
   1. Part of the Judgment given by Judge Lacava required the Respondent to repair and decontaminate the premises of mould including the wet wall [the west wall].
   2. From on or about January 2012 attempts were made to damp proof the wet wall from the outside of the premises. Next to the premises is 15 Church Street which is tenanted to a florist. The most expedient and effective way to rectify the wet wall was to repair the wall from 15 Church Street.
   3. The respondent's solicitors attempted to gain access from the other side of the wet wall but were thwarted by the unreasonable demands of the owners of 15 Church Street.
   4. Negotiations continued for some months but eventually it was deemed to be too difficult to deal with the owners of 15 Church Street.
4. For reasons which I discuss below, the remedial works did not commence until January 2013. According to the Tenant, those remedial works did not result in the Premises ever being rendered fit for occupation.
5. Consequently, by letter dated 27 March 2013, the Tenant sought to terminate the Lease on the ground that the Landlord had repudiated its obligations under the Lease.

1. It is common ground that the Lease has come to an end, although it is not clear how this was brought about. According to the written closing submissions filed by Mr Spaleta, the director of the Tenant who appeared on its behalf, the Tribunal declared or ordered that the Lease came to an end on 21 May 2013.[8] I do not accept that this statement reflects any finding of the Tribunal. In fact, having listened to the audio recording of the hearing conducted on 21 May 2013, it is clear to me that no finding was made by the Tribunal on that day to the effect that the Lease had come to an end. Having said that, I note that the audio recording of the hearing on 21 May 2013 records Mr Spaleta asking a number of questions at the conclusion of the hearing, which related the parties' respective obligations concerning the Premises. However, no findings were made or orders pronounced which had the effect of declaring that the Lease had ended on that day, even though I noted that the parties had, by that date, already communicated to each other that neither regarded the Lease as being on foot.
2. In particular, by letter dated 27 March 2013 to the Landlord, the Tenant stated:

In any event, the issue of whether the subject Lease remains on foot is a matter presently before VCAT and the part heard hearing adjourned by Senior Member Riegler which will resume on 20 May 2013. Versus contends that your client's conduct in failing to rectify the leased premises constitutes repudiation by it of the subject Lease which repudiation Versus has accepted bringing the Lease to an end and founding its present claim before VCAT in damages.

1. In response to that correspondence, solicitors for the Landlord sent the following letter, dated 9 April 2013, to the Tenant:

We accept that the lease between our client and Versus (Aus) Pty Ltd for the premises at 17 Church Street, Brighton, Victoria is at an end as confirmed by you in your email to us dated 27 March 2013 at paragraph 3. Accordingly, our client will be instructing an agent to re-let the premises at an appropriate time. You will be required to return all keys for the premises. Please contact our office at a mutually suitable time for the keys to be returned to us within the next 7 days.

1. As I understand the claim made by the Tenant, it was entitled to determine the Lease because the Landlord failed to make the Premises fit for re-occupation, by eliminating excessive moisture and eradicating mould. The grounds upon which the Tenant contends that the Landlord was obligated to make the Premises fit for occupation are set out in the Tenant's Third Further Amended Points of Claim which was filed on 7 October 2013. The relevant paragraphs in the Third Further Amended Points of Claim are as follows (omitting the particulars):
   1. By orders 2, 3, 7, 8, 9, 10 and 17, of this tribunal in action number R187/2010 made on 1 December 2011 the respondent was ordered to:

(a) restore the premises to a state fit for use as a retail premises by the applicant for the conduct of its business ("the fit state"); and

(b) pay compensation to the applicant for being unable to conduct its business to 31 December 2011.

1. The respondent has engaged in unconscionable conduct. The respondent knew not repairing would have serious negative effects upon the applicant's business and allowed it to happen.
2. Despite the representations, the respondent has failed to restore the premises to the fit state.
3. The respondent has failed and refused to perform both the necessary structural works to the premises and the required mould and bacteria eradication/remediation works in accordance with ANSI standards. The respondent has failed to deliver a premises fit for purpose per the lease and the Retail Leases Act 2003 ("the Act").
4. As a result of the matters pleaded in paragraphs 6 to 9, the applicant suffered loss and damage.
5. In essence, the grounds upon which the Tenant asserts that the Landlord was obligated to make the Premises fit for re-occupation can be summarised as follows:
   • (a) by previous order of the Tribunal;
   • (b) by the express terms of the Lease;
   • (c) by the provisions in the Retail Leases Act 2003 or other statutory requirements; and
   • (d) by reason of representations made by the Landlord, which it contends constitutes unconscionable conduct on the part of the Landlord.
6. I shall discuss each of these grounds separately as follows.

1. I do not consider that any contractual obligation to make the Premises fit for occupation arises by order of the Tribunal. Indeed, it is not for the Tribunal to prescribe the contractual obligations of the parties. Its function is to construe the terms of the Lease, rather than write them. Nevertheless, the Tenant seems to rely on the following order made by the Tribunal in the Earlier Proceeding in support of its contention:
   1. The rent and outgoings payable by the applicant to the respondent will continue to abate until all mould is eradicated from both the surfaces and in the air at the premises. Before the premises are re-occupied by the applicant, the respondent is to obtain a report, at its expense, from qualified mould remedial specialist certifying that all mould has been eradicated from the surfaces and in the air within the premises.
2. There are a number of comments which I make in respect of the above order. First, the expert evidence given in this proceeding makes it clear and uncontroversial that some airborne mould will always be present in the Premises, which is an entirely natural phenomenon. Indeed, comparisons were made with the airborne levels of mould found internally with those found externally in order to ascertain suitable levels of airborne mould. Consequently, I do not interpret the orders made by the Tribunal to mean that all mould needs to be eradicated but rather, the order needs to be read down to mean the removal of all excessive levels of mould in order to make the Premises fit for occupation.
3. Second, I do not construe the orders of the Tribunal to mean that the Landlord has a contractual obligation to make the Premises free of mould or fit for occupation. The order relates to the abatement of rent. It merely provides that no rent is payable until excessive levels of mould is eradicated. It does not necessarily follow that an order for the abatement of rent means that the Landlord is in breach of its obligations under the Lease. For example, it is not uncommon for there to be terms in a lease that provide for the abatement of rent where premises are destroyed or rendered unfit for occupation through no fault of either party. Consequently, I do not find that the orders made by the Tribunal in the Earlier Proceeding create any contractual or quasi-contractual obligation to make the Premises fit for occupation.

1. The Reasons published in the Earlier Proceeding do not point to any particular term of the Lease which expressly imposes an obligation on the Landlord to make the Premises fit for occupation. It appears, however, that the Tribunal considered that the Landlord's obligation to give quiet enjoyment of the demise carried with it an obligation to make the Premises fit for occupation. However, that obligation, if it existed, only arose as a result of the events which transpired after the Lease was entered into; namely, the flooding and remedial work undertaken by the Landlord to arrest that flooding.
2. Neither party pointed to any particular provision in the Lease which expressly required the Landlord to make the Premises fit for occupation. Indeed, such a clause would be unusual in a retail tenancy agreement, given that it is not uncommon for a new tenant to take possession of a bare building shell, with a view to fit-out the Premises in a manner that best suits its business needs. Indeed, that is largely what occurred when the Tenant first took possession of the Premises.
3. Looking then that the terms of the Lease, it appears that the obligations to make good or maintain the Premises rests with the Tenant and not the Landlord. In particular, Clause 1 of the Lease states:
   1. THE LESSEE CONVENANTS AND AGREES with the Lessor as follows-

(f) To keep the Premises, including the faces of the external and internal walls which comprise the boundary of the Premises, together with any additions in good and tenantable repair and to make good any damage caused to the Premises during the term, fair wear and tear and damage by fire or other cause not attributable to the negligence of the Lessee always excepted. The Lessee must also thoroughly clean the inside and outside of all windows at least once in every three months and clean and keep free of debris all drains, waste pipes, gutters, spouting, rain heads and down pipes which exclusively serve the Premises.

(g) Not without the approval in writing of the Lessor or the Agent, to employ any person in the repair or maintenance of the Premises or to effect any structural alterations, additions or repairs or to install or remove any fixtures and fittings on the Premises.

1. In my view, in the absence of any statutory requirement, the written terms of the Lease do not impose an obligation on the Landlord to maintain the Premises in a condition that is fit for occupation. Moreover, no submissions were made to suggest that such a term is to be implied into the Lease agreement. Even if the Tenant did make that contention, I doubt whether the implication of such a term could be justified having regard to the criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings:[9]

For a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.

1. Mr Spaleta further submitted that the Tribunal has previously determined that the Landlord had breached its contractual obligations. He pointed to the Tribunal's Reasons dated 26 September 2013, which concerned an application by the Landlord to strike out the Tenant's claim, primarily on the basis that the claim was res judicata. In particular, the Tenant refers to the following extract of the Tribunal's Reasons given in that preliminary hearing:

Mr Gronow further argued that the claims constitute a claim to damages for breach of the Tribunal's orders to make the Premises fit for occupation. He submitted that such a claim was not maintainable. I do not accept that the claim is couched in terms of damages for breach of the Tribunal's orders. In fact, there is no order specifically requiring that the Landlord make the Premises fit for occupation. That obligation is found in terms of the Lease itself. Therefore, it cannot be said that the damages claim are akin to a claim seeking enforcement of the previous judgment. [underlining added] [10]

1. In my view, the extract of the Reasons cited above does not determine the question whether the Lease requires the Respondent to repair or maintain the Premises such that they are suitable for occupation by the Tenant. In that sense, the Reasons must be read in context. In particular, the primary issue before the Tribunal at that time was whether the claim, the subject of the current proceeding was res judicata. That was the position taken by the Landlord when it argued that the cause of action raised by the Tenant in the present proceeding had merged into the judgment of the Earlier Proceeding. In particular, it was argued that the Tenant was merely seeking to sue for a breach of the Tribunal's previous orders. That argument was not accepted on the ground that the cause of action was not based on a breach of the Tribunal's earlier order but rather, based on a breach of the terms of the Lease.
2. Indeed, the extract of the Reasons set out above merely recognises the contractual basis upon which judgment was entered against the Landlord in the Earlier Proceeding. No doubt, such a finding, although not expressly articulated in the Reasons given in the Earlier Proceeding, was based on a finding that s 52 of the Retail Leases Act 2003 ('the Act') imported a contractual obligation into the Lease to maintain the Premises in a condition consistent with the condition when the Lease was first entered into. It is implicit in the Reasons given by the Tribunal in the Earlier Proceeding that the Tribunal considered that the problems which afflicted the Premises in early 2010 were problems that did not exist at the time when the Lease was first entered into. In that sense, it is common ground that the flooding and to a lesser extent, moisture problems, manifested in early 2010, some years after the Lease was first entered into.
3. However, the question now under consideration is whether the same applies after the Lease was renewed in May 2011. In other words, does the contractual obligation to maintain the Premises in a condition consistent with the condition at the commencement of the Lease, imported by s 52 of the Act, exist following renewal of the Lease. That question did not arise for consideration in the Earlier Proceeding or in the preliminary hearing.

The provisions of the Retail Leases Act

1. The provisions of the Act appear to be the primary basis upon which the Tenant contends that the Landlord is contractually liable to make the Premises suitable for occupation. Section 52 of the Act states:

(1) A retail premises lease is taken to provide as set out in this section.

(2) The landlord is responsible for maintaining in a condition consistent with the condition of the premises when the retail premises lease was entered into -

(a) the structure of, and fixtures in, the retail premises; and

(3) However, the landlord is not responsible for maintaining those things if -

(a) the need for the repair arises out of misuse by the tenant; or

(b) the tenant is entitled or required to remove the thing at the end of the lease...

1. It would appear that s 52 of the Act was the basis, in part, upon which the Tribunal found the Landlord liable in the Earlier Proceeding.[11] In particular, s 52 of the Act imported a contractual obligation into the Lease, which required the Landlord to maintain the Premises in a condition consistent with the condition of the Premises when the Lease was first entered into. As indicated above, in 2010 the Premises suffered from significant flooding, which ultimately resulted in considerable remedial work being undertaken by the Landlord. However, the circumstances are somewhat different in the present proceeding. In particular, it is common ground that the current Lease was renewed on 18 May 2011. This is confirmed in a declaration made by the Tribunal in the Earlier Proceeding.
2. In Ross-Hunt Pty Ltd v Cianjan Pty Ltd,[12] Deputy President Macnamara (as he then was) confirmed that the comparator for the purposes of s 52, is the most recent renewal of the Lease and not the date of commencement of the first term of the lease. In my view, that approach is correct. It is inconceivable that Parliament would have intended for the Landlord to remain responsible for maintaining retail premises in a condition consistent with the condition at the commencement of the original lease term in circumstances where the lease may provide for multiple terms extending over many years. Therefore, the comparator in relation to the present Lease is the condition that the Premises were in as at 18 May 2011. In that respect, the Tenant's case concedes that the Premises suffered from moisture problems and were infested with unhealthy levels of mould prior to that date.
3. It is common ground that the Premises were in need of repair prior to the Lease being renewed. Indeed, significant repair work was carried out between May and August 2011 in an attempt to repair water ingress issues that had plagued the Premises between November 2010 and February 2011.
4. Further, Mrs Spaleta, the former director of the Tenant, gave evidence that shortly after taking possession of the Premises, when the shop fitting works were undertaken by the Tenant, it was discovered that the west wall was water damaged. Photographs were tendered in support of that evidence. Indeed, the closing submissions of the Tenant make numerous references to its contention that the condition of the Premises prior to the original Lease being transferred to the Tenant in June 2006 was that the Premises had long suffered with moisture problems. Mrs Spaleta's evidence is consistent with the evidence of Mr Spaleta who said that when he began the shop fitting work, it became immediately apparent that there were water ingress problems affecting the Premises. He said the previous business had shelves over the west wall and once those shelves were removed he could see that there was a moisture problem on the west wall. He said that he observed that the wall and bricks were broken and mouldy.
5. That being the case, how can it be said that the Landlord had a statutory or quasi-contractual obligation to repair the moisture problems or eradicate the unhealthy levels of mould after renewal of the Lease? As I have already indicated, the parties have not pointed to any particular provision in the Act, the Lease or any other statutory enactment which imposes liability on the Landlord to carry out repairs or eradicate unhealthy levels of mould, other than s 52 of the Act.
6. It does not appear that this point was discussed or relied upon by the Landlord in the Earlier Proceeding. Therefore, it is not clear to me on what basis the Tribunal found that the Landlord was liable for the Tenant's losses after the Lease was renewed on 18 May 2011. That is one of the difficulties in having proceedings which canvass the same facts or circumstances being heard by a differently constituted Tribunal. Nevertheless, I raised this issue after receiving closing submissions from the parties, whereupon I made orders giving the parties leave to file supplementary submissions dealing with this specific issue. Both parties filed supplementary submissions in accordance with those orders.
7. Mr Spaleta submitted that the term of the Lease which requires the Landlord to give the Tenant quiet enjoyment of the Premises, carries with it an obligation to ensure that the Premises are fit for occupation. I do not accept that submission. In my view, the requirement to give quiet enjoyment does not, in itself, impose such an obligation. In other words, without there being some positive obligation on the Landlord to make the Premises fit for occupation, the failure to do so is not, in my view, a breach of the term to give quiet enjoyment of the Premises.
8. In Commercial Tenancy Law, the learned authors state:

The covenant [to give quiet enjoyment] imposes an obligation on the landlord to put the tenant into possession and allow the tenant to remain peacefully in possession during the term of the lease free from interruption: Jaeger v Mansions Consolidated Ltd (1903) 87 LT 690; Markham v Paget [1908] 1 Ch 697. The covenant is prospective in nature and amounts to an obligation on the landlord not to do anything after the date of the grant which substantially interferes with the tenant's occupation; the covenant does not provide a remedy where the state of affairs existed at the date of grant of the lease: Glasshouse Investments Pty Ltd v MPJ Holdings [2005] NSWSC 456; Southwark London Borough Council v Baxter [1999] 1 WLR 939; AF Textile Printers Pty Ltd v Thalnut Nominees Pty Ltd [2007] VSC 73.[13]

1. Therefore, if there is no contractual or statutory requirement to make the Premises fit for occupation and the Premises were unfit for occupation at the time the Lease was renewed, then the failure to make the Premises fit for occupation does not amount to a failure to give quiet enjoyment of the demise because that was the state of affairs at the date of grant of the lease.
2. In the Tenant's supplementary closing submissions dated 25 February 2014, allegations are raised that the presence of asbestos was discovered after a number of floor tiles were lifted in the store room. This occurred after the Lease had been renewed. It was argued that this was a further factor evidencing that the Premises were not fit for occupation. However, this submission does not answer the question posed. In particular, it is not suggested that the presence of asbestos constitutes a condition which manifested during the current term of the renewed Lease. Indeed, it is beyond doubt that the asbestos cement sheet, upon which the ceramic floor tiles were laid, was present well before the original Lease was entered into in 2006.
3. The issue of asbestos was not raised in the Tenant's Third Further Amended Points of Claim. Indeed, objection was raised by the Landlord when the Tenant sought to adduce evidence going to that issue. In my view, it would be unfair to now consider the impact of the asbestos, given that no expert was called to offer any opinion as to whether the asbestos represented a risk to health or what impact it may have had in terms of re-occupying the Premises. Further, the Tenant, in its supplementary closing submissions, has included extracts of the Occupational Health and Safety (Asbestos) Regulations 2003 in support of its submission that the presence of asbestos made the Premises unfit for re-occupation. However, the extract of the regulation referred to and annexed to the Tenant's supplementary closing submissions speaks about the obligations of the occupier. It does not import contractual terms into the Lease which would require the Landlord to undertake work concerning the removal or otherwise of the asbestos. In my view, the issue of asbestos does not take the matter any further.
4. Therefore, I find that s 52 of the Act does not import a term into the Lease that requires the Landlord to make good water ingress or mould issues that were manifest prior to the Lease being renewed. However, 52 of the Act is not the sole ground upon which the Tenant submits that the Landlord had an ongoing obligation to make good excessive moisture and mould conditions within the Premises. It contends that this obligation also arises as a result of representations made by the Landlord, giving rise to unconscionable conduct on the part of the Landlord.

Representations giving rise to unconscionable conduct

1. Part 9 of the Act deals with unconscionable conduct. The relevant provisions state:

(1) A landlord under a retail premises lease or a proposed retail premises lease must not, in connection with the lease or proposed lease, engage in conduct that is, in all the circumstances, unconscionable.

1. Sub-section (2) of s 77 sets out a number of matters to which the Tribunal may have regard to for the purpose of determining whether a landlord has engaged in unconscionable conduct. Many of those matters relate to conduct concerning the negotiation of the lease.
2. Subsection (3) then states:

(3) In considering whether a landlord has contravened sub-section (1), the Tribunal-

(a) must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

1. As I understand the submissions made by the Tenant, the unconscionable conduct is constituted by certain representations being made by the Landlord promising to undertake remedial work so as to make the Premises fit for occupation in January 2012. These undertakings or representations fall into two categories:
   • (a) representations said to have been made prior to the renewal on 18 May 2011; and
   • (b) representations said to have been made after the renewal on 18 May 2011.
2. Mr Schlicht of counsel, who appeared on behalf of the Landlord, submitted that the Tenant has misapprehended the doctrine of unconscionability. He argued that unconscionable conduct is a subset of categories in which equity will intervene in order to set aside a transaction. He referred to Commercial Bank of Australia Ltd v Amadio,[14] wherein the High Court considered the concept of unconscionable conduct as follows:

Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such disadvantages taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interest.[15]

1. As I have indicated, the Tenant points to certain misrepresentations made by the Landlord concerning the state of the Premises, as constituting the unconscionable conduct on the part of the Landlord. Mr Schlicht submitted that the representations, even if proved to be false, would only be relevant in the sense that they were made at a time prior to entering into the Lease, such that they induced the Tenant to enter into the Lease. He conceded that only in those circumstances, would it be unconscionable for the Landlord to enforce the Lease. However, Mr Schlicht argued that this is not claimed by the Tenant. The unconscionable conduct complained of is the failure to restore the Premises to a fit state pursuant to promises made by the Landlord after the Lease was entered into. Therefore, the unconscionable conduct relates to events that post-date the entering into of the Lease.
2. The evidence of Mr and Mrs Spaleta, set out in their individual witness statements dated 17 February 2013, each repeat the same allegations concerning this issue verbatim:
   1. The respondent entered into the lease with the applicant despite the respondent's knowledge of the serious problems with the premises before it entered into the lease with the applicant.
   2. The respondent provided a false disclosure statement to the applicant in 2006, stating that the premises were fit for purpose in occupation in order to lease the premises and for the sole purpose of obtaining financial gain.
   3. The respondent tricked the applicant into signing the lease knowing it is leasing a premises unfit for purpose and occupation and knowing that it would not maintain or repair the premises or comply with the lease or the Retail Leases Act 2003 ("the Act"), despite its representations to the contrary.
   4. Despite knowing that its premises were not in a fit state for occupation, the respondent made the misrepresentations to the applicant, provided a false disclosure statement and entered into the lease with the applicant for its own financial gain. The respondent committed an act of fraud.
   5. The respondent made further misrepresentations during the tenancy and at trial in the R187/2010 proceeding and further in relation to repairs and works performed or to be performed at the premises.

1. Given the prolonged interlocutory phase and lengthy trial in proceeding R187/2010, the respondent had special knowledge that the forced closure of the applicant's retail business and its failure and refusal to repair and perform works at the premises immediately following trial would cause further and irreparable damage to the applicant's retail business.
2. The respondent had special knowledge that by not starting works at the premises immediately following trial in November 2011, as per the evidence given and representations made by the respondent at trial, and by refusing to begin works or even provide the scope of works and timetable of the works to be performed at the premises, the respondent knew it was preventing the applicant from planning for or continuing with its retail business.
3. The respondent has engaged in unconscionable conduct.
4. I accept that representations made prior to entering into the Lease are no longer relevant, given that the Lease was renewed on 18 May 2011.[16] In that respect, the Tribunal made findings and declarations in the Earlier Proceeding that the Tenant exercised its option to renew the Lease by email correspondence forwarded to the Landlord on 16 February 2011.
5. However, Mrs Spaleta gave evidence during the course of the hearing that representations were made by Mrs Lepp prior to 18 May 2011, in which the Landlord promised to undertake certain building work. The scope of that work is set out in email correspondence forwarded to the Tenant by the Landlord on 23 April 2010. That email correspondence states, in part:

Dear Irene and Bob,

I am meeting with the plumber and Matt Brown on-site Tuesday 26 April at 10:30 AM to:

1. Agree detail of spouting and downpipe works which I will agree on-site for completion maximum urgency.
2. Discuss and agree with the plumber a programme of work to replace toilet, replace toilet door, renew walls and ceiling and repaint toilet.
3. Inspect all flashings and roof items for leaks and repair - including replace guards on top of vents.
4. Agree a program to repair rear wall external timbers, clean, seal and repaint.

This is not a complete list of works to be carried out this year but is a significant start...[17]

1. However, there is no direct evidence that the Tenant relied upon what it submits were representations to make the Premises fit for occupation or that it was induced to renew the Lease based on any such representation. Indeed, there is no evidence to suggest that the scope of work, set out in that email correspondence dated 23 April 2010, was not completed or at least substantially completed during the period May to August 2011, being the period that the Landlord undertook substantial remedial work.
2. Moreover, there is no evidence of any representation being made prior to 18 May 2011 to the effect that the respondent would ensure that the Premises would be fit for occupation. In my view, the representations only go so far as to promise that certain works, primarily concerned with arresting water ingress to prevent further flooding, would be undertaken by the Landlord. In fact, remedial work was undertaken by the Landlord between May and August 2011 in order to deal with water ingress issues. It was only after that time that concern over the infestation of mould started to play a prominent role in the dispute between the parties.
3. In passing, I note that in the Tenant's supplementary closing submissions, Mr Spaleta contends:
   1. If the Respondent had not made its representations in 2010 and 2011 and given its undertakings to the Tribunal and the Applicant, including at hearing on 12 May 2011, where it asked the Tribunal to close the premises in order for it to perform its works at the premises for 2 to 3 weeks, the Applicant would not have exercised its lease option in February 2011, or renew the lease on 18 May 2011. By virtue of its representations and undertakings from April 2010 to May 2011 to the Tribunal and the Applicant that it will repair the premises, the Respondent enticed the Applicant into renewal of the lease, despite its knowledge that it failed to comply with OHS Regulations 2007 and failed to remove asbestos from the premises.
4. It is not clear to me what representations were made in 2010 to 2011, which the Tenant contends it relied upon or induced the Tenant to renew the Lease. The alleged representations pleaded in the Applicant's Third Further Amended Points of Claim, which were filed during the course of the hearing of the current proceeding, relate to email correspondence commencing 21 November 2011 through to 19 March 2012. Those 'representations', referred to as email correspondence, post-date the date of renewal and therefore cannot constitute representations which induced the Tenant to renew the Lease. Moreover, there is nothing pleaded, nor set out in the witness statements filed on behalf of the Tenant, to shed any light on what representations it asserts were made at the hearing on 12 May 2011.
5. In my opinion, there is no basis to claim against the Landlord on the ground that it engaged in unconscionable conduct by reason of it having represented that it would make the Premises fit for occupation. The mere fact that representations may or may not have been made prior to the entering into of the original Lease is of no consequence, insofar as the present proceeding is concerned, given that the Lease was renewed on 18 May 2011. That being the case, there is insufficient evidence for me to find that representations were made by the Landlord prior to the Tenant exercising its option to renew, which induced the Tenant to renew the Lease.
6. Nevertheless, the evidence before me indicates that the parties certainly had some mutual understanding that further remedial work was to be undertaken by the Landlord after the Tribunal handed down its decision in December 2011. That work concerned arresting excessive levels of moisture and eradicating excessive mould found to exist in the Premises. It is self evident that the Tenant persisted in maintaining the tenancy based on a belief that the Premises (and the shop fittings and other chattels removed from the Premises) would be remediated in a timely manner. Although this 'understanding' may not have had a contractual basis, given that there is no fresh consideration, it is reasonable to infer that it nevertheless altered the Tenant's position. For example, had the Landlord indicated that it was going to rely upon its strict contractual rights and not undertake any work to remediate the Premises, then it is likely that one of two things would have occurred:
   • (a) the tenant would have sought to end the tenancy, given that it says it was unable to carry out its business without remedial work being done; or
   • (b) the Tenant would have carried out the remedial work itself.
7. Neither of these circumstances eventuated. This is because the Tenant assumed that the Landlord would undertake the remedial work. That assumption was not baseless. There were numerous e-mails emanating from the Landlord indicating that it was poised to undertake remedial work and indeed, it is common ground that that is exactly what occurred, albeit late.
8. In my view, it was reasonable for the Tenant to believe that the Landlord would undertake the remedial work, given that the Landlord had indicated that it was poised to carry out that work. Although the Tenant has couched its claim in terms of unconscionable conduct inducing it to renew the Lease, it seems to me that the circumstances really give rise to equitable estoppel. The following passage from the judgment of Brennan J in Walton's Stores (Interstate) Ltd v Maher [18] seems to better encapsulate the way in which the Tenant has couched its claim under this particular head of damage:

In my opinion, to establish equitable estoppel, it is necessary for the plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in that case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance upon the assumption or expectation; (4) the defendant knew or intended him to do so; (5) plaintiff action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.[19]

1. In my view, the assumption that remedial work was going to be done was reasonably induced by the assurances and conduct of the Landlord. The chain of email correspondence relied upon by the Tenant makes that point clear. For example, in email correspondence dated 4 January 2012 addressed to the Tenant, Mr Lepp states:

Dear Bob

Time did not permit us to seek other quotes for mould remediation prior to the Court Hearing in November 2011. We have since found another accredited company and have asked them to provide a quote for the same remediation works that Pure Protect have quoted for previously.

We are planning to meet them at the shop on Thursday 5th of January 2011 or Friday 6th but will confirm time and date when they indicate their availability...

1. Further email correspondence dated 10 January 2012 from Mr Lepp to the Tenant stated:

Dear Bob

...

There is to be a further inspection on Friday, 13 January 2012 by the mould remediator to enable detailed remediation works to be specified.

1. Further email correspondence dated 20 February 2012 from Mr Lepp to the Tenant stated:

Dear Bob

Sorry for the delay in starting works at the shop but we are still waiting for permission from the Freemasons to go ahead with works on their side of the wall.

1. Further correspondence dated 19 October 2012 from the Landlord's solicitors to the Tenant stated:

In accordance with the Orders of Judge Lacava made 1 December 2011, the damaged wall to the premises will be repaired and all mould from both the surfaces and in the air at the premises will be eradicated. A report will also be obtained from a qualified mould remedial specialist certifying all mould has been eradicated from the surfaces and in the air within the premises.

The works will take a minimum of eight (8) weeks. During this period, you will not be permitted to enter the premises due to occupational health and safety reasons. You will be liable for any consequences resulting from attempts to enter by yourself or your agents...

1. In my view, it is open for the Tenant to claim compensation on the ground that an equity has arisen in its favour based on the promises made by the Landlord and the fact that it has altered its position to its detriment, in reliance upon those promises. The comments of Mason CJ and Wilson J in Waltons reinforce this point:

None the less the proposition, by making the enforcement of the promise conditional on (a) a reasonable expectation on the part of the promisor that his promise will induce action or forbearance by the promisee and (b) the impossibility of avoiding injustice by other means, makes it clear that the promise is to be enforced in circumstances where departure from it is unconscionable.[20]

1. The Tenant claims compensation for loss of profits and other losses to the end of the Lease term. However, the right to claim compensation to the end of the Lease term will depend, in part, on how the Lease came to an end. According to the Tenant, the Lease was lawfully terminated by it as a result of the Landlord having repudiated it its obligations thereunder.
2. For the reasons which follow, I do not accept this contention, principally because:
   • (a) Notwithstanding that the Landlord may have been under an equitable obligation to carry out remedial work, that obligation was not contractual in nature. The fact that the Landlord was slow in affecting remedial work does not, in my view, constitute a breach of the terms of the Lease.
   • (b) Even if the obligation to undertake remedial work was in some way elevated to constitute a contractual promise,[21] I do not find that the Landlord's conduct goes so far as to constitute a repudiation of its obligations under the Lease, despite the fact that the remedial works were considerably delayed.
3. What follows are my observations and findings which have led me to reach this conclusion.

1. As I have indicated already, the damages claimed by the Tenant rest, in part, on the premise that the Lease was lawfully terminated by it. Even if I assume that the Landlord was contractually obligated, either under the terms of the Lease or otherwise, to maintain or repair the Premises so that they were fit for occupation, I do not consider that the failure to effect that outcome prior to 27 March 2012 entitled the Tenant to terminate the Lease. In determining whether the Lease has been repudiated by the Landlord, ordinary principles of contract apply: The Progressive Mailing House Pty Ltd v Tabali Pty Ltd:[22]

Repudiation or fundamental breach of a lease involves considerations which are not present in the case of an ordinary contract. First, the lease vests an estate or interest in land in the lessee and a complex relationship between the parties centres upon that interest in property. Secondly, this relationship has been shaped historically in very large measure by the law of property, though in recent times the relationship has been refined and developed by means of contractual arrangements. Thus, traditionally at common law breach of a covenant by a lessee, even a breach of the covenant to pay rent, conferred no right on the lessor to re-enter unless the lease reserved a right of re-entry...

These incidents of the law of landlord and tenant indicate that mere breaches of covenant on the part of the lessee do not amount to a repudiation or fundamental breach. Indeed, it is of some significance that the instances in which courts have held the lessee has repudiated his lease are cases in which the lessee has abandoned possession of the leased property. But too much should not be made of this as very few cases of repudiation by lessees have come before the courts. I would therefore specifically reject the appellant's submission that abandonment of possession is necessary to constitute a case of repudiation by the lessee. On the other hand, it should be acknowledged that it would be rare indeed that facts which fell short of abandonment would properly be seen as constituting repudiation by the lessee in the case of a long lease at a rental which was either nominal or but a fraction of the amount which could be obtained in the market place.[23]

What needs to be established in order to constitute a repudiation is that the party evinces an intention no longer to be bound by the contract or that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way.[24]

1. In Laurinda Pty Ltd v Capalaba Park Shopping Centre,[25] Mason CJ stated:

There is a difference between evincing an intention to carry out a contract only if and when it suits the party to do so and evincing an intention to carry out a contract as and when it suits the party to do so. In the first case the party intends not to carry out a contract at all in the event that it does not suit him. In the second case the party intends to carry out the contract, but only to carry it out as and when it suits him. It is much easier to say of the first than of the second case that the party has evinced an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with his obligations and not in any other way. But the outcome in the second case will depend upon its particular circumstances, including the terms of the contract. In some situations the intention to carry out the contract as and when it suits the party may be taken to such lengths that it amounts to an intention to fulfil the contract only in a manner substantially inconsistent with the party's obligations and not in any other way.[26]

1. The comments made by Mason CJ are relevant to the present circumstances. Assuming that the Landlord was contractually obligated to maintain the Premises in a condition so that they were fit for occupation, the question arises whether by its delay in effecting that outcome, it repudiated the Lease.
2. In my view, the evidence presented in this case does not go so far as to establish that the Landlord evinced an intention to maintain or make good the Premises only if and when it suited it to do so, being the first scenario referred to in the extract of the judgment of Mason CJ cited above. The present circumstances fall within the second scenario posited by Mason CJ; namely, that the Landlord evinced an intention to carry out repairs and remedial work as and when it suited it to do so. Therefore, it is necessary to look at the circumstances leading up to the purported termination of the Lease in order to determine whether the delay in effecting repairs and remedial work is reasonably explicable or whether the delay leads to the inexorable conclusion that the Landlord had no real intention of making the Premises fit for occupation.
3. As indicated in the extract of the statement of Barbara Lepp set out in paragraph 17 above, the Landlord contends that it experienced difficulties in effecting remedial work because it was unable to gain access to the exterior of the west wall. In relation to the facts and circumstances in the months prior to the purported termination in March 2013, Mrs Lepp further states:
   1. The Respondent organised rectification works to the premises to commence on 29 October 2012.
   2. 19 October 2012, Isokow Lawyers informed the Applicant that:

(a) Works to the premises will commence on 29 October 2012 at 10.00am;

(b) The Respondent will require all keys to the premises, including the front door, rear gate padlock and parking area chain to be returned failing which the locks will be changed;

(c) The applicant was invited to attend the premises at the commencement of the works to participate in the cataloguing and removal of the items present in the premises.

1. On 22 October 2012 at 5.44pm., the Applicant forwarded an email to Isakow Lawyers:

(ii) all information relating to the process/procedure/materials to be used to decontaminate the premises and the Applicant's items; and

(b) Indicated that there was is no requirement for the Applicant return any keys to the premises to the Respondent.

(c) Indicated that the Respondent does not have a right to change the locks at the premises.

(a) I received a telephone call from Mr Saddington of Premier Restorations at about 7:30am.

(b) Mr Saddington had been away and he had just been informed by his offices that the Applicant had forwarded to Premier Restorations a number of emails which Mr Saddington described as threatening towards Premier Restorations should they attempt to enter the premises that day.

(c) As a result, Mr Saddington refused to attend the premises to commence works until the matter had been sorted out.

1. The Respondent then organised rectification works to the premises to commence on 26 November 2012.
2. On 9 November 2012, the scope of works was forwarded to the Applicant even though there was no requirement to do so.
3. I attended the premises on 26 November 2012 at 8.00am together with my husband, Mr Lepp, Mr Saddington and my solicitor, Daniel Isakow.
4. Mr Spaleta informed Mr Saddington that he could commence works at the premises but was not allowed to remove any items from the premises.
5. Mr Saddington informed me that unless all the items were removed from the premises, he was unable to commence works as the premises would remain contaminated.

1. Works did not commence at the premises that day.
2. In order to commence rectification works to the premises, I commenced an application at VCAT on 5 December 2012. The application was heard before Senior Member Davis on 17 December 2012 and orders were made which allowed the Respondent to change the locks if the Applicant failed to provide the Respondent with the keys to the premises by 15 January 2013.

1. On 24 January 2014, Premier Restorations commenced works to the premises.
2. The following works have now [as at 4 March 2013] been completed:

(a) the wet wall has been repaired by the insertion of a silicon membrane and waterproofing rendering;

(c) all removable panels had been removed and taken to Premier Restorations for mould removal;

(d) some floor tiles in the storeroom at the premises lifting and the Respondent has been requested by Premier Restorations to remove the floor tiles in the store room to enable total treatment of all surfaces in the premises. This is expected to be completed by approximately 5 March 2013. All mould from the premises and in particular the wet wall is expected to be removed by 8 March 2013;

(e) the final testing of air and surfaces for contamination in accordance with the Order 2 of Judge Lacava and the report in respect of this is expected to be received by about 15 March 2013:

(f) all chattels and items previously removed from the premises have been decontaminated unless they have been deemed unable to be decontaminated by Premier Restorations. [27]

1. It is clear from the evidence given during the course of the hearing that the projected works were not completed, or at the very least, properly completed within the proposed time lines suggested in Mrs Lepp's witness statement dated 4 March 2013.
2. In his report dated 6 March 2013, Mr Siket, the building biologist engaged by the Tenant, indicated that there were still problems regarding elevated moisture levels found in the Premises, sufficient to support mould growth. Although Mr Siket was criticised during cross-examination as to the methodology used to conduct moisture assessment of the property, it is common ground that the Respondent undertook further remedial work to the concrete floor.
3. In that regard, Mr Considine, of IKW Consulting Group, was engaged by the Landlord to undertake the further remedial work to the concrete floor. He prepared a report dated 3 April 2013, which he adopted as his evidence in the Proceeding. He stated:

In order to resolve any future problems we were asked to remediate the substrate based on the concrete slab having a high moisture content even though this was never quantitatively proven by Ecolibria.

The scope for the remediation of the slab was as follows:

• Grind off all of the existing epoxy coating until nothing is left but a porous concrete surface with no contaminants
• Apply ProtectCrete Densi-proof moisture barrier which penetrates into the slab up to 20 cm
• Patch the concrete slab as required
• Apply the first of 3 coats of Hychem SF20 surface epoxy
• Give a light sand in between the first and second of Hychem SF20 surface epoxy

The Densi-proof is used to cure and seal the concrete slab and to stop potential water ingress and protect against possible acid chemical attack. The Densi-proof makes the slab virtually impermeable and restricts vapour transmission.

Densi-proof penetrates up to and beyond 200 mm [sic] into the slab where it forms an internal permanent, chemically complete, non-destructive gel like barrier which allows concrete to breathe and maintain its optimum humidity to allow hydration to continue. It also prevents water and other harmful agents from entering or moving through the concrete.

The Hychem SF20 is a surface epoxy coating and not a moisture barrier which is why the SF20 was not used alone. There are epoxy coatings which can be used as a moisture barriers however they are not recommended as surface coatings which is why the 2 products had to be used in conjunction with each other.

We have used Densi-proof successfully over the years on numerous projects including a flooded Centrelink office in Queensland and have never had any moisture related issues with the slabs where this product has been used.[28]

1. Mr Siket prepared another report, dated 16 May 2013, and gave further oral evidence on 21 May 2013. His evidence was that he still found elevated moisture readings in various parts of the Premises. He opined that there was still a risk that the Premises could be hazardous if re-occupied if those moisture levels did not dissipate. He formed that view because he believed that elevated moisture levels could create an environment for mould growth beyond the normal mould ecology range. However, he qualified his opinion by stating that he did not know what remedial work was undertaken to arrest the problems associated with excessive moisture and therefore, was unsure whether the moisture levels would dissipate in time after the Premises had an opportunity to dry out.
2. During cross-examination, Mr Siket was criticised on the methodology used by him to measure moisture levels in the concrete slab floor. He conceded that the methodology employed by him was not in accordance with the relevant Australian Standard. He further conceded that the testing undertaken by him was indicative only.
3. Mr Siket confirmed that his moisture readings were taken in May, at a time after the remedial work had been completed to the concrete floor. His evidence was that the moisture readings taken by him were similar to the readings taken prior to the remedial work being undertaken. When asked about the scope of work undertaken by Mr Considine, he confessed that he was unfamiliar with the waterproofing work and conceded that he was not an expert in the field. It was put to Mr Siket that in order to properly read moisture in a concrete floor, it was necessary to drill holes into the concrete and to insert probes into those holes. Mr Siket agreed. He said that he did not adopt that process but merely rested the probes against the concrete floor.
4. Further, Mr Lark, the mycologist engaged by the Landlord, gave evidence that airborne sampling of the Premises conducted on 20 April 2013 revealed that the levels of airborne mould detected in the samples collected from within the premises were rated as Normal Mould Ecology on microscopy.[29]
5. In my opinion, Mr Siket's methodology to measure moisture levels in the concrete floor is questionable and I do not consider that his evidence can be taken as an accurate reflection of the moisture level in the concrete floor. In that respect, it seems unlikely in light of the evidence of Mr Considine, that the concrete floor would record the same moisture levels prior to and after the remedial work was undertaken. In my view, that conclusion undermines the credibility of Mr Siket's testing. I do not, therefore, accept that the moisture readings of the concrete slab were necessarily elevated post the remedial work.
6. Nevertheless, it is common ground that Mr Siket discovered some surface mould from the samples taken in the false ceiling. During cross-examination, Mr Siket was asked whether that area appeared to be dusty. He conceded that it was and it appeared not to have been cleaned as part of the remedial work undertaken to eradicate surface mould from the Premises. That evidence is not controversial, given that the Landlord conceded that there were some discrete areas which Premier Restorations missed when cleaning the Premises of all surface mould. Indeed, evidence was given by Ms Taylor-Blake, environmental consultant employed by the Landlord, that she instructed Premier Restorations to return to the Premises and re-clean those specific areas.
7. Moreover, evidence given by Mr Lark on 20 May 2013, the mycologist, who oversaw the analysis of the mould samples taken from the Premises at various times, was that he could not say, one way or the other, whether the Premises were fit for occupation as at that date.
8. On 14 August 2013, the Landlord obtained a report from Ivan Cupic of LRM Global Pty Ltd, which was also tendered in evidence. That report concludes:

The two main goals of mould post remediation verification, is to determine that the remediation is complete and that mould spore levels in the space are acceptable. The assessment should primarily be visual and can also include analytical sampling (airborne or surface).

After reviewing the available information related to the present assessment, LRM Global believe the premises have been adequately remediated (returned to a condition of a "Normal Fungal Ecology" and the slightly elevated airborne mould levels, recorded within the internal remediated zones, are the result of the external air infiltrating from the external environment and not emanating from a source within the premises themselves.

LRM Global is of the opinion that the current status of the premises does not present a health risk to individuals and is safe for re-occupancy.[30]

1. There is no contradicting expert opinion rebutting the opinion expressed by Mr Cupic in the LRM Global Pty Ltd report dated 14 August 2013. Accordingly, I find that at some point prior to 14 August 2013, the Premises have been adequately remediated. In other words, given that there is no evidence to contradict the opinion expressed in the LRM Global report, the Tenant's claim that the Premises have never been made fit for re-occupation is not made out.
2. However, the fact that the Premises may have been fit for occupation as at 14 August 2013 does not, necessarily, assist me in determining whether the Tenant lawfully terminated the Lease on 27 March 2013, given that as of that date, the evidence indicates that some surface mould was still present, which according Mr Siket, indicates that additional remediation works need to be undertaken before the property is inhabited again.[31]
3. In that respect, I have set out the facts concerning the remedial work in order to determine whether the delay in achieving remediated Premises fit for re-occupation could be said to demonstrate that the Landlord has evinced an intention that it did not intend to be bound by the terms of the Lease. In my view, the evidence does not go that far. Although the parties have differing views as to the diligence or otherwise of the Landlord, I find that the Landlord was attempting to remediate the Premises, albeit at a pace that justifiably attracted criticism.
4. Consequently, I find that the evidence does not demonstrate that the failure to make the Premises fit for occupation by 27 March 2013 evinced an intention that the Landlord was not willing to perform its obligations under the Lease. That being the case, I find that the purported termination of the Lease by the Tenant was ineffective, insofar as it was based on the acts or omissions on the part of the Landlord.

1. The Landlord's correspondence dated 9 April 2013 responded to the Tenant's statement that the Lease was at an end by simply confirming that the Lease was at an end. It is not contended by the Landlord that it lawfully brought the Lease to an end upon the Tenant's breach. In my view, that statement could be understood as giving rise to two different outcomes. First, it may evidence an election by the Landlord to terminate the Lease on the ground that the Tenant's conduct in purporting to end the Lease constituted repudiation of itself.
2. Second, it may simply evidence the Landlord's willingness to end the Lease, given the unequivocal statement by the Tenant that it no longer considered the Lease on foot. The second outcome would mean that the parties have, effectively, mutually abandoned the Lease. In my view, this is the more likely scenario, given the unequivocal statements by each of them that neither regard the Lease as remaining on foot. In CGM Investments Pty Ltd & Ors v Chelliah & Ors,[32] Finkelstein J discussed the principle of mutual abandonment as follows:

[17] Whenever parties make a contract it is possible that they have conducted themselves in such a way that it can be said by implication that they have agreed to rescind their bargain: Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93, 114; Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520, 534. This was dealt with by Isaacs J in Summers v Commonwealth [1918] HCA 33; (1918) 25 CLR 144. In that case the parties had entered into a contract for the supply of a specified number of blocks of marble each of a certain dimension. For some time neither party took any step to perform the contract. It was held that the parties had abandoned or abrogated the contract. Isaacs J said (at 151-152):

"Whatever the terms of contract may be, it is possible for the parties so to conduct themselves as mutually to abandon or abrogate it. A position not too altogether dissimilar arose in the case of De Soysa v De Pless Pol [1912] AC 194. There, neither party had repudiated or refused to perform the contract, nothing in the nature of recision had occurred, but, said Lord Atkinson for the Privy Council: - 'One party to a contract is not bound to give the other unlimited time after a day named to do that which the other has contracted to do. There must be some point of time at which delay or neglect amounts to refusal ... In truth, the project seems to have been, to a great extent, if not altogether, abandoned by all the parties concerned.' In my opinion, that is the legal position here. Informally, but effectively, the parties have so acted in relation to each other as to abandon or abrogate the contract."

Summers v Commonwealth has been applied by the High Court in D T R Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423. This case concerned a contract for the sale of land. The purchaser purported to rescind the contract on the basis that the vendor had repudiated the contract by not complying with a condition. The vendor asserted that the purchaser's rescission constituted a wrongful repudiation and that the contract was thereby at an end. Stephen, Mason and Jacobs JJ (with whom Aickin J concurred) said (at 434):

"[T]here can be no doubt that ... when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as still being on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract."

[18] In my view, the authorities to which I have referred establish not only that an agreement can be abandoned by conduct, but also that the question whether an agreement has been abandoned does not require one to examine whether the parties actually had the intention of abandoning the agreement; only whether their conduct, when objectively viewed, manifests that intention. This conclusion accords with the objectivist theory of contract which is now irrevocably entrenched in our law: Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422. See also Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, where McHugh JA (as his Honour then was) said (at 336) that "[t]he weight of authority in favour of the objective theory is too great".

What are the consequences of the Lease being at an end?

1. Ultimately, it is of no consequence whether the Lease came to an end as a result of mutual termination or because the Tenant had repudiated its obligations by purporting to terminate the Lease when it did not have a right to do so. This is because no cross claim is made by the Landlord against the Tenant. Therefore, even if the Landlord's letter dated 9 April 2012 constitutes an election to accept the repudiation of the Lease by the Tenant, no claim is pursued as a consequence thereof.
2. Importantly, however, a finding of either lawful termination by the Landlord or mutual termination results in the Tenant's claim based on losses arising as a result of it not being able to occupy the Premises after the date of termination (27 March 2013 or 9 April 2013) being dismissed because it is no longer open for the Tenant to claim damages in respect of future performance under the Lease. That does not, however, mean that accrued rights are lost. The losses which the Tenant alleges it suffered prior to termination of the Lease are still recoverable. That proposition is made clear in the majority judgment in Westralian Farmers Limited v Commonwealth Agricultural Service Engineers Ltd.[33] In that case, Dixon and Evatt JJ stated:

In general the termination of an executory agreement out of the performance of which pecuniary demands may arise imports that, just as on the one side no further acts of performance can be required, so, on the other side, no liability can be brought into existence if it depends upon a further act of performance. If the title to rights consists of vestitive facts which would result from the further execution of a contract but which have not been brought about before the agreement terminates, the rights cannot arise. But if all the facts have occurred which entitle one party to such a right as a debt, a distinct chose in action which for many purposes is conceived as possessing proprietary characteristics, the fact that the right to payment is future or contingent upon some event, not involving further performance of the contract, does not prevent it maturing into an immediately enforceable obligation. [34]

1. Accordingly, I will assess the Tenant's claim for damages on the premise that the Lease ended on 9 April 2013 and on the basis that any proven loss up until that date is recoverable.

1. The Tenant contends that its loss and damage occurred during the currency of the Lease. In particular, it claims that its business was destroyed as a result of it being unable to continue to trade for an extended period of time. In that respect, Mrs Spaleta gave oral evidence consistent with the evidence that she gave in the Earlier Proceeding that the Tenant had exclusive distribution rights in relation to a number of luxury Italian lingerie brands, which included Valery. She said that if the business grew as envisaged, the business plan was to expand and eventually open ten retail outlets in Australia.
2. Mr Spaleta also gave oral evidence in relation to the exclusive distribution agreements that the Tenant had with various lingerie manufacturers. Regrettably, none of those distribution agreements were produced in evidence. In that respect, Mr Spaleta said that the Valery distribution agreement had been lost or destroyed. Nevertheless, a number of documents were produced to corroborate that such distribution agreements existed.[35] The first document produced was a printout of the Valery webpage as it existed on 1 September 2007. According to Mr Spaleta, the web page showed that the Australian distributor for Valery was the Tenant, located at 5/123 Cochrane Street Brighton. The second document is a chain of two emails from and to Valery. The first email is dated 15 June 2006 and is addressed to Mrs Spaleta. At states:

Herewith I am sending you a standard agreement we have. It needs to be reviewed of course. Let me know if you have another one to propose it is not a problem. Irene, what about the payment? Do you think it is possible for you to ask for a bank guarantee from your bank? Or do you prefer for example an advanced transfer? I stay at your disposal and I wait for your answer.

1. In response to that email, the Tenant responded on 21 June 2006 as follows:

... I will contact you again tomorrow evening (Melbourne time) via telephone regarding the distribution agreement above, and our future partnership.

Enclosed is a copy of the distribution agreement you sent via e-mail with notes, for your consideration...

1. Further email correspondence from Valery dated 24 July 2006 was produced. That email was an answer to a enquiry raised by another Australian lingerie retail outlet regarding the importation of Valery lingerie:

Thank you for the interest in our Company and in our products. We inform you that starting from October we will have a new distributor in Australia. I will forward this information to him so that he will contact you.

1. Similar correspondence was produced in relation to a proposed distribution agreement for Eva Madaschi. Mr Spaleta gave evidence that in 2008 he began to negotiate with another clothing manufacturer, namely Spanx, to be its sole distributor in Australia. He said by August 2008 he was unable to continue with negotiations concerning the distribution agreement because the dispute had adversely impacted the Tenant's financial position with the consequence that it was not able to provide credible financial statements sufficient to satisfy the requirements of Spanx.
2. During cross-examination, Mr Spaleta was asked why the Tenant did not re-establish its business in other premises, following the favourable judgment made on 1 December 2011, which awarded damages to the Tenant in the amount of $218,599.63. Mr Spaleta conceded that by that time, it was too late to re-establish the business in other premises because the supply contracts had been rescinded and the Tenant had lost its suppliers. He said that the Tenant would have been in a fantastic position in January 2012 to expand but for the fact that it had lost its suppliers.
3. There is no evidence as to when the distribution agreements were actually rescinded or lost. Nothing is pleaded in the Tenant's Third Further Points of Claim other than to say that, but for the actions of the Landlord, the Tenant would have entered into an alternative lease that would have allowed it to acquire further exclusive distribution contracts for products. However, it appears from the evidence of Mr Spaleta that the existing supply contracts were lost at some point prior to January 2012. Indeed, a claim for loss of business goodwill formed part of the claim made by the Tenant in the Earlier Proceeding, although for reasons that were not explained to me, that part of the claim was abandoned during the course of that hearing. In my view, if the loss of the supply contracts occurred prior to the hearing of the Earlier Proceeding, then any loss arising from that circumstance should have been prosecuted in the Earlier Proceeding and not resurrected as part of this proceeding. In that respect, I consider that it is critical for the Tenant to establish, on the balance of probabilities, that the rescission of the supply contracts:
   • (a) occurred at a point in time after the Earlier Proceeding was heard; and
   • (b) that this factor has led to (caused) the Tenant's business being destroyed.
4. Ultimately, I consider that there is insufficient evidence to find, on the balance of probabilities, that the rescission of the supply contracts occurred after the Earlier Proceeding was heard. Importantly, however, even if it were established that the supply contracts were rescinded after the Earlier Proceeding was heard, there is insufficient evidence tying that factor to the destruction of the Tenant's business in order to draw the necessary causal link. No doubt the loss of supply contracts may have adversely impacted on the profitability of the business, however, that is a far cry from concluding that the business has been completely destroyed. In my view, further evidence would need to have been adduced that any attempt to re-establish supply contracts was unsuccessful and that this led to a situation where the Tenant was unable to trade profitably. There is no direct evidence establishing that.
5. In my view, the evidence going to the issue that the Tenant's business has been completely destroyed, such that it is no longer viable to re-establish that business, is speculative. I am not persuaded, based on the general comments made by Mr and Mrs Spaleta, that the business conducted by the Tenant was unable to be re-established during the currency of the Lease, had it run its full term. No doubt, the Tenant may have suffered ongoing losses but that is a very different head of damage to a claim for damages based on the business having been completely destroyed.
6. Moreover, the quantum claimed in respect of the destruction of the business or business goodwill is premised on an assumption that the business would have expanded to ten retail outlets. Again, the evidence going to that issue is speculative and I am not persuaded that this goal could have been achieved. In particular, there are so many variables which may affect the growth of a retail business from year to year and its ability to expand its operations to more than one retail outlet. These variables include factors such as the state of the retail market from one year to another, the availability of other retail premises and the likely profit that might be derived by those other retail outlets, especially when located in other locations that might have a very different demographic to the retail market in Brighton. The only evidence given in relation to these factors are general comments, reflecting the ambition of the Tenant to expand its business. No expert opinion evidence was adduced in support of this aspect of the Tenant's claim. The evidence was largely given by Mr Spaleta, who is not qualified as an expert witness. Consequently, I find that the Tenant's claim, in so far as it relates to the head of damage categorised as the destruction of the Tenant's business or loss of goodwill is unproven.
7. My finding is reinforced by the comments of Street CJ in Gurnett v Macquarie Stevedoring Co Pty Ltd:[36]

A guess is a mere opinion or judgment formed at random and based on slight or uncertain grounds. In contradistinction to such a conjectural opinion, an inference is a reasonable conclusion drawn as a matter of strict logical deduction from known or assumed facts. It must be something which flows from the given premises and is certainly or probably true, and the mere possibility of truth is not sufficient to justify an inference to that effect.

1. In the present case, the conclusion which the Tenant says should be accepted by the Tribunal does not, in my opinion, follow from the evidence presented as certainly or probably true and the mere possibility of the Tenant's business being destroyed is not sufficient to justify an inference to that effect. Consequently, the heads of damage claimed under paragraphs 2, 3 and 4 of the Prayer for Relief in the Tenant's Third Further Amended Points of Claim are not made out. That then leaves for consideration, the Tenant's claim for loss of profits and its claim for electricity charges in the amount of $791.01.

1. The Tenant claims loss of profit over the period 1 January 2012 to 18 May 2016, being the end of the current term of the renewed Lease. However, I have already found that the Lease came to an end on or 9 April 2013, either by reason of the Tenant repudiating the Lease or by reason of mutual termination. Any claim for loss of profit after those dates is not maintainable, given that claims in relation to future performance of the Lease do not survive after termination of the Lease. Therefore, the loss of profit claim is limited to the period 1 January 2012 until 9 April 2013.
2. The Tenant submits that the Tribunal should merely adopt the Tribunal's reasoning made in the Earlier Proceeding, when assessing the quantum of the Tenant's loss of profit claim. In that regard, apart from filing a forensic accountant's report which it ultimately did not seek to rely upon, no expert evidence was adduced by the Tenant in support of its loss of profit claim. Rather, it merely extrapolated calculations made by the Tribunal in the Earlier Proceeding, subject to adjusting expenditure figures to take into account having paid out an overdraft facility, which meant that ongoing interest charges were no longer added to its expenditure, thereby increasing its net profit. It claims loss of profit for the remainder of the Lease term to 18 May 2016, calculated as follows:

1. If the Tenant's calculations were accepted over the period 1 January 2012 until 9 April 2013, the amount would be reduced to $90,974.94, which represents the whole of 2012 ($70,347.70) plus 98 days to 9 April 2013 ($20,627.24).
2. However, Mr Schlicht submitted that it is simply incorrect to say that the Tribunal is bound by the calculations it made in the Earlier Proceeding. He referred me to three authorities in support of that submission. First, in Bennett v Liddy,[37] Muirhead J considered a claim for damages by the dependants of a deceased person pursuant to the Compensation (Fatal Injuries) Ordinance 1974 (NT). His Honour stated:

In assessing general damages the pain or suffering, or damages for defamation there are indeed no exact criteria. In such cases precedent and experience, processes of comparison contrast, assist the judicial exercise but the damages must be proved and the facts which justified the assessment and the award must be proved.

1. Mr Schlicht next referred to me to R v Oliver,[38] a case which concerned an appeal by the Crown of a sentence imposed on the respondent after he pleaded guilty to drug related charges, on the ground that it was inadequate. In that case, Street CJ commented:

There is, moreover, always a danger as recognised on the civil side in the assessment of general damages, of seeking to use a factual assessment in one case as a legal precedent or authority to govern the decision in another.

1. The last authority referred to by Mr Schlicht is Mann v Capital Territory Health Commission.[39] That case concerned an appeal to the High Court over a claim made by Dr Mann for damages relating to continuing breaches of his contract of employment. The claim made by Dr Mann extended to damages not yet suffered but only apprehended. In the joint judgment of Stephen, Wilson and Brennan JJ, their Honours stated:

That this should be the position is a consequence of the somewhat unusual situation of the parties to this action: unusual because despite the alleged wrongful and damaging conduct of the Commission, Dr Mann still remains in its service some five years after that conduct began to affect him and still, day by day, is subject to that conduct. That conduct may at any time in the future cease, thereby averting further damage. If it does not, it would, all else being equal, continuously give rise to new causes of action which, if pursued, would entitle Dr Mann to compensatory damages for whatever losses he could prove that he had thereby incurred. Of course, all else is not in fact equal: as things at present stand there is a finding adverse to him that the term on which he sought to rely is not to be implied in the contract and he would no doubt be bound by that finding in any further action against the Commission. But that is irrelevant to the question of the extent of damages recoverable in the present action, upon which the present objection to competence of the appeal turns. It will only be in respect of the causes of action now sued upon that damages can be recovered and they relate only to the breaches complained of in the present action. [Underlining added]

1. In my view, the facts in Mann v Health Commission draw some similarity to the present circumstances. Like in Mann v Health Commission, the Tenant's complaints are said to be continuing breaches of the Lease. However, as I have previously determined, the cause of action in this proceeding nevertheless remains separate and distinct to the cause of action in the Earlier Proceeding, despite the fact that there are common factors between both proceedings. Be that as it may, I am of the opinion that although the calculation of damages in the Earlier Proceeding may provide some guidance in calculating damages in this proceeding, I am not bound by that calculation. My task is to assess damages in this proceeding based on the evidence given in this proceeding.
2. However, the evidence adduced on behalf of the Landlord goes further than simply calculating the projected sales and expenses after 2012. It critiques the calculations made in the Earlier Proceeding and substitutes alternative figures for Projected Sales, Cost of Sales and Actual Expenses for all of the calendar years up to 2011. This means that the projected net profit or loss for the years 2012 and following are not calculated from a platform of Projected Sales previously found to exist in 2011 but rather, are based on a lesser amount.
3. In response, Mr Spaleta submitted:

... if the Tribunal were to adopt a different formula and methodology in calculating loss of profits in this proceeding than from the previous proceeding, given;

1. the parties in this proceeding, the premises and the issues with the premises have not changed,

there is a possibility of an inconsistent finding made by the same Tribunal on matters which have already been heard and determined in His Honour's decision.[40]

1. In Sinnot v Higgins Trading Company Pty Ltd [41] Beach J set out the principles to be applied where issues of fact or law have previously been the subject of a determination in an earlier proceeding:

The starting point so far as the current analysis is concerned is the judgment of Dixon J in Blair v Curran.[42] His Honour said:

"A judicial determination directly involving an issue of fact or law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order...[43]

1. In Forster v Legal Services Board,[44] Kyrou AJA further discussed the relevant principles concerning issue estoppel:
   1. In Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2],[45] Lord Guest stated that issue estoppel does not arise in respect of a judicial decision unless the following three components are satisfied:

(1) that the same question has been decided; (2) that the judicial decision which is set to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

1. The above passage was quoted with approval by the High Court in Kuligowski v Metrobus.

(a) 'Same question' component of issue estoppel

1. Authorities such as Blair v Curran[46] and Ramsay v Pigram[47] make it clear that the expression 'same question' in the first component of the doctrine of issue estoppel does not refer to the ultimate question, as identity in the ultimate question would give rise to a res judicata. Rather, the first component refers to an issue which established the legal foundation or justification for the judicial decision. Accordingly, the doctrine of issue estoppel can apply notwithstanding that the ultimate question for decision in a subsequent proceeding is different.
2. In my view, the findings made by the Tribunal in the Earlier Proceeding concerning the Projected Sales and Cost of Sales for the calendar years up to and including 2011 are conclusions reached by the Tribunal based on the facts, assumptions and inferences drawn from the evidence presented in that proceeding. It is no longer open to revisit those findings, despite the accounting evidence adduced on behalf of the Landlord.
3. Therefore, what was found to be the Projected Sales in 2011 represents the springboard or platform upon which I am to calculate whether the Tenant suffered any further loss of profit in the years that followed. In forming that view, I accept that I am not bound to adopt the same methodology of calculation as was adopted by the Tribunal in the Earlier Proceeding. As I have already indicated, I am required to assess projected or future profits based on the evidence adduced in this proceeding, subject to my assessment being premised on a finding made in the Earlier Proceeding as to the amount of Projected Sales assumed for 2011.
4. In the present case, no expert accounting evidence was relied upon by the Tenant. The Tenant relied solely on the evidence of Mr Spaleta, who conceded that he had no formal accounting qualifications. By contrast, the Landlord relied upon the expert opinion evidence of Mr Fettes, a forensic accountant. Mr Fettes prepared a report dated 8 February 2013, which he adopted as his evidence in this proceeding.
5. The opinion of Mr Fettes differs from the assumptions or calculations advanced by the Tenant in three material aspects. First, Mr Fettes disagrees that the Tenant's Sales would have grown at 6% compounding annually. Therefore, Mr Fettes' assessment of the Projected Sales for 2012 and following is markedly different to the amount claimed by the Tenant. Second, Mr Fettes has calculated the Cost of Sales (ie, purchases of stock) by reference to the Gross Profit Margin applicable to the Tenant's sales, rather than using historical data provided by the Tenant and then uplifting that data by a percentage figure each year. Third, Mr Fettes opines that the Tenant's Actual Expenditure is higher that the amount adopted in the Tenant's calculations. I shall consider each of these issues in turn.

1. The Tenant submitted that the growth rate adopted by the Tribunal in the Earlier Proceeding represents the likely minimum growth rate which its business would have achieved but for the disruption caused by the Landlord's failure to remediate the Premises in a timely manner. Mr Spaleta referred me to what he submitted were findings made by the Tribunal in the Earlier Proceeding:

[300] Whilst I accept the applicant's figures show an actual average rate of growth of 15.67% in the first four months of 2008, in my view, it is unrealistic to expect the business to continue to grow in sales at that rate. Four months is only a small period of time from which to estimate what the sales would be over a period of four years. In my view, it is more appropriate to apply growth rate of 6% to the 2007 sales figures and in my calculations of loss of profits I have used this figure.

1. As I have already indicated, the Tribunal's assessment of damages based on a growth rate of 6% is not a finding that this growth rate will continue for the remainder of the Lease term. It is an assumption made by the Tribunal in order to determine what the Projected Sales were for the years 2008 to 2011. There is no indication in the Reasons published in the Earlier Proceeding that this growth rate was to continue beyond 2011.[48]
2. Therefore, I must adjudge the damages claimed based on the evidence before me in this proceeding. It would be an error to ignore that evidence and arbitrarily adopt assumptions made by the Tribunal in the Earlier Proceeding, which relate to a different accounting period. Moreover, the evidence before the Tribunal in this proceeding differs from what was before the Tribunal in the Earlier Proceeding. In particular, Mr Fettes expressed the opinion that it would be unsafe to continue to extrapolate a growth rate of 6% compounding annually because that growth rate was not supported by either Australian Bureau of Statistics ('ABS') data or by the Tenant's financial history. He stated:
   1. In my opinion the 6% annual growth rate is not appropriate for 2010 and 2011. According to the ABS, Australian Clothing Footwear and Accessories Retail figures, sales fell by 1.14% in 2010 and fell by 2.04% in 2011. Accordingly I believe these are the appropriate growth rates to apply to the 2009 figures.

1. For completeness, the recorded ABS growth rate of 2007 was 7.81% and in 2009 it was 4.56%. It appears that despite having no disruptions in 2009 Versus significantly underperformed against the market in that year, i.e. sales dropped from $122,139 (2008 projected figure) or $104,552 (2008 actual figure) to $95,461 (2009).
2. It is also clear from a review of the ABS figures that conditions in the Australian clothing, footwear and accessories retailing market were much more favourable in 2007 than they were in any of the following four years.
3. In my view, the evidence of Mr Fettes demonstrates the danger of simply adopting an arbitrary growth rate of 6% compounding annually. In particular, he has set out in his report data obtained from the ABS concerning growth rates specific to the Australian clothing, footwear and accessories retailing market for the period 2008 to 2011 as follows:

1. The ABS data confirms that that sector of the retail market experienced negative growth in 2010 and 2011, which is inconsistent with the Tenant's contention that its business would have experienced a growth rate upwards of 6% over that same period.
2. Mr Spaleta submitted that it was not appropriate to use information from the ABS to gauge the projected financial performance of the Tenant's business because the business was unique and not necessarily analogous to other businesses within the Australian clothing, footwear and accessories retailing market.
3. However, Mr Fettes also pointed to the fact that in 2009, there were no business disruptions experienced by the Tenant. However, the gross sales for that calendar year had dropped by 21.8% from 2008. He states further:
   1. The disruption from the building work concluded in August 2008. In September and October 2008 Versus recorded better results than they had in September and October 2007, this suggests that the effects of the disruption were over.
   2. Sales in November 2008 were 37% lower than 2007 and sales in December 2008 were 27% lower than 2007.
   3. That sales improved after the disruption, before declining again, suggests the cause of the decline from November 2008 was not the disruption in May to August 2008.
   4. Given the mixed performance over the year, I believe that the most appropriate estimate of growth in 2008 would be the growth level recorded in the Australian Bureau of Statistics ("ABS") for Clothing Footwear and Accessories Retail sales (ABS series ID A 3350270 L). This was 0.987%.
4. Further, when comparing the two uninterrupted years, namely 2007 and 2009, sales receipts have fallen. In particular, according to data furnished by the Tenant, sales in 2007 amounted to $120,945. That reduced to $95,462 in 2009, leaving a deficit of $25,483. This represents a 21% drop in revenue. Interestingly, the sharpest decline occurred in the comparative December to January period of both years. As I have indicated, there is no evidence before me to explain why the revenue dropped so significantly in 2009. It is not suggested that there were any business disruptions and it appears that the vicissitudes of the retail market resulted in less lingerie being purchased over the Christmas period in 2009, compared with what was purchased in 2007.
5. Therefore, I am of the view that to continue to extrapolate an arbitrary growth rate of 6% is without foundation and contrary to Mr Fettes' expert evidence. Regrettably, however, neither party have provided any evidence as to what growth rate should be adopted for the years 2012 and following. As indicated above, the Tenant's submission is simply limited to a contention that I should continue to add 6% to the Projected Sales for 2011, compounding for each year thereafter. On the other hand, the Landlord's submits that it would be unsafe to adopt that methodology.
6. Doing the best I can with the evidence before me, I am of the opinion that the projected growth rate for 2012 and 2013 should be calculated by reference to the ABS growth rate data applicable to the clothing footwear and accessories retail market, averaged over the four year period from 2008 to 2011. This equates to 0.59%, based on the data set out in the table under paragraph 130 above. Adopting that growth rate, I determine that the Projected Sales for 2012 and 2013 are as follows:

1. The Cost of Sales essentially represents the cost of stock purchased in order to generate sales. In calculating its Cost of Sales for the years 2012 and following, the Tenant has adopted what the Tribunal found to be the Cost of Sales in 2011 and then added 6% for each following year in order to achieve parity with the growth rate it has applied to its Projected Sales. This was the approach taken by the Tribunal in the Earlier Proceeding for the period up to 2011:
   1. My calculations have used the actual cost of sales plus 6% to arrive at the gross profit figures. In doing this, I have assumed that if gross sales increase each year by a growth rate of 6%, then so too should the costs of sales. In making the calculation, I have assumed more stock would have to be purchased to meet the increased sales and this should be reflected in increased actual cost of sales. The actual cost of sales was highest in the first two years (2007 and 2008) reflecting heavy purchases of stock in those years to get the business up and running. This resulted in modest actual gross profit in each of those years.[50]
2. In that regard, I note that the data used by the Tribunal in the Earlier Proceeding was furnished by the Tenant and is set out in a number of spreadsheets recording its Sales, Cost of Sales and Expenses over the years 2006 to 2011. Those spreadsheets were also tendered in evidence in this proceeding ('the Sales and Expenses Spreadsheets').[51] As indicated above, in the Earlier Proceeding, the Tribunal took the Costs of Sales figures set out in those spreadsheets for each of those years and then added 6% uplift, in order to achieve parity with the 6% growth rate adopted by it for the years 2008 to 2011.
3. Mr Fettes opined that the methodology adopted by the Tribunal in the Earlier Proceeding appears to have been based on a cash accounting system. He said that an accruals accounting system should have been used, as it more accurately reflected profit and loss of the type of business under consideration. Mr Fettes explained that under a cash accounting system, stock is expensed when it is paid for. However, under an accruals accounting system, stock is expensed when it is sold. Therefore, he was of the view that in calculating profit and loss, one should use an accruals accounting system, otherwise profit and loss will not be matched over the same accounting period. For example, if sales are recorded for the 2008 financial year but the stock sold was purchased in the preceding year, then the net profit recorded in 2008 may not accurately reflect the cost of sales. He stated further:
   1. On a cash accounting basis purchasing stock in 2006 represents an expense in 2006. If that stock is sold in 2008, 100% of the proceeds of the sale will be booked as profit because the expense has already been registered, i.e. the Gross Profit Margin would be 100%.
   2. Under an accruals system, when stock is purchased there is no immediate expense booked. This is because the purchase of stock represents a conversion of one asset (cash) into another (stock). The expense is only booked into the accounts when that stock is sold.
   3. On an accruals basis, when a sale is made an asset is received from the customer (cash) and the stock is transferred to the customer. The difference between the cash received from the sale of the stock and the purchase price of the stock is the Gross Profit. The cost of the stock is registered at a cost of sale when sold because this is when the asset (stock) has left the business.
   4. For any given period gross profit should be calculated as follows:

1. The Gross Profit Margin is calculated as: Gross profit divided by Sales times 100%.
2. The Versus 'accounts' for FY2007 to FY2011 do not take into account opening and closing stock therefore they do not accurately reflect the Cost of Sales and Gross Profit for each year.
3. According to Mr Fettes, the Cost of Sales is a function of Sales and the Gross Profit Margin. He states_:_

Sales less Gross Profit Margin = Cost of Sales[52]

1. Therefore, Mr Fettes opined that once the Gross Profit Margin is known, the approximate Cost of Sales can be calculated using the above formula. He contended that this method is more accurate than arbitrarily adding 6% to Cost of Sales for the preceding year.
2. As indicated above, the Tenant has not used data of actual stock purchases for 2012 and following but has simply added 6% to what the Tribunal found was the Cost of Sales for 2011. For the reasons highlighted by Mr Fettes, I do not regard that as a reliable or accurate method to calculate the Cost of Sales moving forward_._ Therefore, I accept Mr Fettes' evidence that the Cost of Sales should be calculated by reference to the Gross Profit Margin applicable to the Tenant's sales.
3. According to Mr Fettes, the Gross Profit Margin in respect of the Tenant's Sales is 58.3%. He calculated this based on information set out in the Tenant's Points of Claim dated 29 March 2011, filed in the Earlier Proceeding and tendered in evidence in this proceeding. That document attached a report from accountants TTS & Associates which stated that the Tenant sold its products at a markup of 140%. Mr Fettes then used the following formula:

Mark-up divided by Sale Price x 100 = Gross Profit Margin

1. Therefore, if the cost of stock was, say $100, then:

$140 (Mark up) divided by $240 (Sale Price) x 100 = 58.3% (Gross Profit Margin)

1. Mr Fettes concluded:
   1. It seems the Order was based on a cash accounting of profits, possibly due to a lack of detail as to the opening and closing stock figures which prevented accurate Cost of Sales being determined. If it were accepted Versus made a 140% mark up, which equates to 58.3% Gross Profit Margin, details of opening and closing stock (& purchases) would not be required to determine Cost of Sales ...
2. Mr Fettes further stated that according to a report from the Reserve Bank of Australia entitled Cost & Margins in the Retail Supply Chain, gross profit margins for the clothing and footwear retail market were around 60%, which he considered to be consistent with the Tenant adopting a 140% mark up on its products. That assumption is also consistent with the average Gross Profit Margin calculated over the period 2007 to 2010 using data set out in the Sales and Expenses Spreadsheets. Using that data, the average Gross Profit Margin is 57.418 %, calculated as follows:

1. However, Mr Spaleta submitted that the Tenant operated at a minimum mark-up of 205.8%, with many products attracting a mark-up exceeding 1,000%. He argued that the adoption of a mark up rate of 140% did not accurately reflect the Tenant's business operations. He said that the Tenant was in a unique position because it imported stock through exclusive distributorship arrangements. Therefore, it was able to purchase stock at the 'landed cost' rather than wholesale cost. Mr Spaleta produced two schedules listing a number of stock items, their landed cost and their retail price as evidence that the average mark up was over 500%. I note, however, that some of the stock items are referred to as Preview Items. This was explained to me as items which were forwarded to the Tenant at a heavily discounted price as a promotion. Some of those items were then marked up by more than 6,000%.
2. In my view, the inclusion of those select few Preview Items within other stock items, skews the calculation considerably. Therefore, I do not consider it appropriate to include those Preview Items as part of the data used in calculating the average mark up of stock items. Moreover, there is no evidence as to whether those promotional stock items will continue to be provided or whether they will continue to be provided at such a reduced cost. Nevertheless, even if those Preview Items are ignored, the average mark up according to the document tendered in evidence is approximately 253%.[54]
3. I find that this mark-up accurately reflects what the Tenant's business was likely to achieve, given its unique position as importer, distributer and retailer. Therefore, the Gross Profit Margin would be approximately 70.59%, calculated as follows:[55]

$253 (Mark up) divided by $353 (Sale Price) x 100 = 71.67% (Gross Profit Margin)

1. Mr Fettes further contended that the projected expenses relied upon by the Tenant in its calculations have been underestimated by it. In that respect, the Tenant contends that its projected expenses for 2012 are $75,244.08 and that this amount is said to increase by 3% for each of the following years. It is not clear to me how this amount has been calculated or derived.
2. According to Mr Fettes, in an affidavit filed by Mr Spaleta in September 2012, he deposed to the fact that the expenses for the calendar year 2011 were $102,574. However, that affidavit was not produced in evidence. Nevertheless, the Tenant has filed a forensic accountants report prepared by Munday Wilkinson dated 6 August 2012. Although the author of that report was not called to give evidence, the report states that it received instructions from the Tenant that its actual expenses in 2011 were $102,575, which is consistent with what Mr Fettes contends are the Tenant's actual expenses in 2011.[56]
3. The 2011 expenditure amount of $102,575 is inconsistent with the Sales and Expenses Spreadsheets tendered in evidence. According to that document, the aggregate expenses for the calendar year 2011 were only $50,238, which is $39,573 less than what is recorded for the 2010 calendar year. This is partly explained by the fact that the 2010 Sales and Expenses Spreadsheet recorded bank interest in the amount of $22,737; however, the 2011 Sales and Expenses Spreadsheet only recorded $11,702 in bank interest. This is curious because according to Mr Spelata, that interest related to an overdraft facility that was paid out on 14 June 2012. There is no explanation as to why only a part of that interest component was recorded in the 2011 Sales and Expenses Spreadsheets, given that it spans the whole calendar year. Moreover, the expenditure spreadsheets attached to the Munday Wilkinson report records bank interest of $21,864 in 2010 and $22,737 in 2011, with no interest recorded in the projected expenditure for 2012 (presumably reflecting the Tenant's intention to discharge that overdraft facility during that year).
4. The Sales and Expenses Spreadsheets for 2011 records rent and outgoings of $31,289. However the schedule to the Lease states that the rent payable from 18 May 2010 was $67,530.52 plus GST, making a total of $74,283.57 per annum. Upon renewal, the rent was to be reviewed according to market.
5. There is no evidence before me as to what the market rent was as of May 2011 or what arrangements were in place concerning rent reviews during the second term of the Lease. Accordingly, for the purpose of my calculations, I will assume that the market rent did not change from the rent payable in the last year of the first term of the Lease (74,283.57).[57]
6. In order to calculate projected loss of profit, it must be assumed that the Tenant would have been liable to pay the full amount of rent and outgoings, given that the calculation is premised on an assumption that there were no disruptions to the business. Therefore, approximately $43,000 of projected expenses would need to be added to the expenses recorded in the Tenant's Sales and Expenses Spreadsheets for the calendar year 2011, if one is to examine profit and loss on the assumption that the business suffered no disruption. In addition, $11,035 would need to be added in respect of bank interest, in order to reflect the Tenant's liability under its bank overdraft facility. That would mean that the Tenant's projected expenses for the 2011 calendar year would be approximately $104,273. In my view, that rudimentary calculation is consistent with Mr Fettes' statement that he understood the Tenant's liability in respect of fixed expenses for the calendar year 2011 to be $102,574. It also approximates what is stated in the Munday Wilkinson report ($102,575). Given the unexplained discrepancies between what the Tenant has set out in its Sales and Expenses Spreadsheets for 2011 to what it contends is its fixed expenditure, and having regard to its obligations under the Lease, I find Mr Fettes' evidence to be the most reliable. Therefore, I find that the Tenant's actual expenses for 2011was $102,574.[58]
7. As indicated above, Mr Spaleta gave evidence that the overdraft facility was paid out on 14 June 2012. Therefore, interest only accrued for the first half of the 2012 calendar year. Assuming that the same interest rate applied, $12,487 in interest was no longer payable after 14 June 2013 for the 2012 calendar year. Moreover, there are two items of expenditure listed in the 2011 Sales and Expenses Spreadsheet, which I consider unique to the current dispute and therefore not what I regard as a 'fixed expenses' ordinarily to be carried forward into subsequent years. These are Legal/Prof/Registration in the amount of $2,887 and Security Storage in the amount of $1,251. Neither of these 'expenses' have been carried forward in the projected expenses set out in the Munday Wilkinson report.
8. Therefore, assuming that the expenses otherwise remain constant; the adjusted expenses for 2012 are reduced to $85,949. That does not include any uplift for inflation or any further increase in the rent that may have occurred from 19 May 2012.
9. Following that logic, no interest on the overdraft facility was payable in the 2013 calendar year. Therefore, 2012 projected expenses of $84,949 will now have all of the remaining interest deducted ($10,250) leaving the total projected expenses for the 2013 calendar year at $75,699. Again, this does not include any uplift for inflation or increase in rent that may have occurred from 19 May 2013.
10. Given the lack of evidence going to this issue, I consider that those projected expense amounts best reflect the projected or assumed expenses for the calendar years 2012 and 2013. Moreover, the aggregate of those two amounts is also consistent with the projected expenses set out in the Munday Wilkinson report over the same period.[59]

1. Given my findings for the Projected Sales and Projected Expenses, combined with the methodology I have accepted as being appropriate to estimate the Cost of Sales, I calculate the projected net profit as follows:

1. As I have already indicated, the Lease came to an end on 9 April 2013 (at the latest), with no loss of profits claim surviving after termination. Therefore, I assess the Tenant's loss of profit claim to be $33,533, which represents the whole of 2012 ($24,128) plus 98 days to 9 April 2013 ($9,405).

1. The Tenant claims that the Landlord is liable to pay for all electricity charges levied against the Premises since May 2011. It makes this claim on the ground that since that date, the Tenant gave the Landlord access to the Premises to allow the Landlord to effect repairs. The Tenant contends that all electricity usage from May 2011 to date related to usage by the Landlord.
2. A schedule of electricity charges was tended in evidence by the Tenant. It shows usage charges for the period to June 2011 to October 2013 totalling $956.06.
3. Mr Schlicht submitted that the power used by the Landlord from 12 May to 20 May 2011 was $14.96. He contends that all charges claimed by the Tenant are supply charges to the account of the Tenant. He argues that the Tenant could have avoided all these supply charges by terminating its supply contract when it closed the business in May 2011.
4. In my view, electricity charges from May to November 2011 should have been claimed as part of the Earlier Proceeding. There is no reason why that claim did not form part of the claim made in the Earlier Proceeding.
5. The balance of the electricity charges cover the period where the Tenant was unable to operate its business as a consequence of the Landlord requiring access to carry out remedial work. In my view, it is unreasonable to expect the Tenant to cancel its supply contract in circumstances where it reasonably assumed that remedial works would be completed by the Landlord, following which, it would resume occupation and recommence its business operations. The fact that it was unable to resume occupation in early 2012 results from the failure on the part of the Landlord to effect remedial work in a timely manner. Although, there are militating circumstances which had the effect of delaying remedial work, I am of the opinion that the Landlord carries the risk of not completing the remedial work in a timely manner. Therefore, I accept that the Tenant should not be liable to pay for electricity charges over the period that the Premises were unable to be occupied by it. Obviously, those electricity charges do not extend past the date that the Lease was determined, being 9 April 2013. Therefore I will allow the electricity charges claim for the period January 2012 until April 2013 in the amount of $393.76, calculated as follows:

1. Although not forming part of the Tenant's claim, a number of questions arose during the course of the hearing as to what was to happen with the chattels and other goods removed from the Premises by the remediator for mould remediation. As I understand the current situation, some of those goods were deemed impractical to remediate because the cost of doing so exceeded the value of the goods in question. Therefore, some of the goods have been placed into plastic bags and have been earmarked for disposal, while other goods were being stored by the remediator for collection.
2. At the conclusion of the hearing, I understood that the parties were in dispute as to what was to happen with the two categories of goods. I suggested that the parties should make some effort to resolve that dispute through negotiation and if that proved unsuccessful, further direction could then be sought from the Tribunal.
3. I have not received any submissions from either party as to what should happen to the goods. Nevertheless, my preliminary thoughts are that, as the Landlord accepted the obligation to remediate those goods, it would be fair that the Landlord return the remediated goods to the Tenant and dispose of the other goods at its own cost.
4. As the parties have not had an opportunity to address me on this question, I will not make any finding at this stage but will give the parties liberty to apply, in the event that they require further direction from the Tribunal relating to this aspect of the dispute. I will also give the parties liberty to apply as to the question of costs. However, in that regard, I draw the parties' attention to s 92 of the Act.

[1] These orders and Reasons were corrected under s 119 of the Victorian Civil and Administrative Tribunal Act 1998 pursuant to the Tribunal's orders dated 29 August 2014.

[2] Versus (Aus) Pty Ltd v A.N.H. Nominees Pty Ltd [2011] VCAT 2273.

[3] Versus (Aus) Pty Ltd v A.N.H. Nominees Pty Ltd [2011] VCAT 2273 at [311].

[4] By letter dated 9 April 2013, the Landlord accepted that the Lease had come to an end.

[5] It is not clear whether any further remedial work was done by the Tenant to the west wall.

[6] Expert Witness Report prepared by Ecolibria dated 20 May 2011 (single page).

[7] Versus (Aus) Pty Ltd v A.N.H. Nominees Pty Ltd [2012] VCAT 1442, where the Tribunal determined that the present proceeding constitutes a separate and distinct claim to what was prosecuted in the Earlier Proceeding.

[8] The Tenant's written closing submissions dated 31 October 2013 at paragraph 24; and in various paragraphs in its Submissions in Reply dated 24 November 2013, Further Submissions in Reply dated 5 December 2013 and supplementary Submissions dated 25 February 2014.

[10] Versus (Aus) Pty Ltd v A.N.H. Nominees Pty Ltd [2012] VCAT 1442 at [54].

[11] In addition to s 54 of the Act, where the Tribunal found that the acts or omissions on the part of the Landlord caused a significant disruption to the Tenant's trading, justifying an order that the Landlord pay compensation to the Tenant.

[12] [2009] VCAT 829.

[13] Commercial Tenancy Law (Third Edition) Bradbrook, Croft & Hay, LexisNexis Butterworths, 2009 at page 233.

[14] [1983] HCA 14; (1983) 151 CLR 447.

[16] Versus (Aus) Pty Ltd v A.N.H. Nominees Pty Ltd [2011] VCAT 2273 at [322] to [336].

[17] Email from Harold Lepp to Irene and Bob Spaleta dated 23 April 2010.

[18] [1988] HCA 7; (1988) 76 ALR 513.

[20] Waltons v Maher [1988] HCA 7; (1988) 76 ALR 513 at 522. See also full commentary at pp 521-526 and judgment of Brennan, especially at page 540.

[21] In cases such as Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1; Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 and Pao On v Lau Yiu Long [1979] UKPC 2; [1980] AC 614, the courts have shown a willingness to move away from applying the strict doctrine of consideration, in circumstances where it can be shown that the promissor has received a 'practical benefit'.

[22] [1985] HCA 14; (1985) 157 CLR 17.

[25] [1989] HCA 23; (1989) 63 ALJR 372.

[27] Witness statement of Barbara Lepp dated 4 March 2013.

[28] Report of IKW Consulting Group dated 3 April 2013 at page 5.

[29] Mouldlab report dated 26 April 2013 at page 3.

[30] LRM Global Pty Ltd report dated 14 August 2013 at page 4.

[31] Report of Mr Siket (Ecolibria) dated 16 May at page 10.

[32] [2003] FCA 79; 196 ALR 548 at [17-18]. See also Steven Bailey v Woondella Pty Ltd [2012] VSC 396.

[33] [1936] HCA 6; (1936) 54 CLR 361

[36] (1955) 72 WN (NSW) 261 at 264 cited by Muirhead J in Nominal Defendant v Owens (1978) 22 ALR 128 at 133.

[37] (1979) 25 ALR 340 at 357.

[38] [1980] 7 A Crim R 174 at 177.

[39] [1982] HCA 10; (1982) 42 ALR 46 at 48.

[40] The Tenant's written Closing Submissions dated 31 October 2013 at paragraph 53.

[41] [2012] VSC 208.

[42] [1939] HCA 23; (1939) 62 CLR 464.

[43] [2012] VSC 208 at [15].

[45] [1967] 1 AC 853.

[46] [1939] HCA 23; (1939) 62 CLR 464 ('Blair').

[47] [1968] HCA 34; (1968) 118 CLR 271 ('Ramsay').

[48] Versus (Aus) Pty Ltd v ANH Nominees Pty Ltd [2011] VCAT 2273 at [308].

[49] This was the gross Sales determined by the Tribunal in the Early Proceeding for the year 2011.

[50] Versus (Aus) Pty L:td v A.N.H. Nominees Pty Ltd [2011] VCAT 2273 at [302] and [303].

[52] Paragraph 35 of Mr Fettes' report dated 8 February 2013.

[53] Gross Profit ÷ Sales x 100 = Gross Profit Margin.

[54] This was calculated by adding a sample of the mark-up percentages for stock listed in the Tenant's schedules, but excluding preview items and then averaging the mark-up for that sample.

[56] Munday Wilkinson report dated 6 August 2012 at page 10.

[57] This is the amount stated in the Lease schedule. It applies from 18 May 2010.

[58] Expert report of Gary Fettes dated 8 February 2013 at paragraph 78. This amount assumes that all rent was payable. This amount contrasts to the estimate adopted by the Tribunal in the Earlier Proceeding.

[59] $162,767.50 compared with $162,810 as set in the Munday Wilkinson report at page 10.