WASCF ALLIANCES PTY LTD -v- BOWLING CENTRES AUSTRALIA PTY LTD [2020] WASC 41 (14 February 2020)

The Tribunal erred in law in finding that the terms of clause 29 of the relevant lease 'take effect as a grant of a term of 3 years with conditional rights of renewal or holding over'.

Particulars

(1) Clause 29 of the lease between the appellant (lessor) and the respondent (tenant) anticipates redevelopment of the cinema complex within which the premises are located and provides both parties with the right of early termination if one month's notice is given during the fourth or fifth year of the term if the complex's anchor tenant (an independent third party) has previously vacated the complex.

(2) By subsections 13(6)(ab), (6)(c) and (7) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) the appellant is unable to rely on cl 29 to determine the lease without the Tribunal's approval.

(3) The Tribunal's jurisdiction to approve cl 29 is dependent upon the term of the lease being 5 years or longer.

(4) Clause 29 is a 'break' clause and allows for an early determination of a five year lease. It does not provide for a right of renewal or holding over following a shorter term.

1. The Lessee has entered an appearance and given notice that it will abide the decision of the court.
2. Order 65 r 4 of the Rules of the Supreme Court 1971 (WA) provides that, in an appeal to the General Division of the Court, 'a judge has jurisdiction to make any order that the judge considers will or may facilitate the appeal being conducted and concluded efficiently, economically and expeditiously', including to decide an application on the basis of the documents filed without listing it for a hearing. In those circumstances, the court is required to make a 'provisional decision' with each party entitled to request a hearing after being served with notice of the provisional decision.[1]
3. In the unusual circumstances of this case, where the Tribunal gave no reasons for its decision, the respondent abides the decision of the court, and where the decision turns on a very limited point, I propose to proceed on the papers. The appellant was given notice of this proposed course.

1. The Lease provides, that the Term of Lease is five years; the Commencement Date is 1 January 2017; and the Expiry Date is 31 December 2021: schedule, items 6, 7 and 8.
2. By cl 2.1(a):

The Premises will be held by the Lessee as lessee for the Term. The Term will commence on the Commencement Date and will expire on the Expiry Date at the Rent specified calculated and payable in the manner provided in clause 11 and subject to the further provisions of this Lease.

1. Clause 29.1 defines some relevant terms, including:

Notice means one (1) months' written notice from the Lessee to the Lessor or from the Lessor to the Lessee, as the case may be.

Notice Period means the fourth and fifth Years of the Term.

A Surrender of Lease means any surrender documentation (which shall provide for this Lease to terminate on the Termination Date in a form reasonably required by the Lessor.

Termination Date means the date one 1 month after the date of the Notice.

Termination Right

The parties acknowledge that the Cinema Lessee may vacate the cinema complex situated on the Land during the Term and that the Lessor intends to demolish the Centre for the purposes of a residential mixed use redevelopment prior to the Expiry Date and agree that if the Cinema Lessee so vacates the cinema complex during the Term then either the Lessee or the Lessor may terminate this Lease by giving Notice at any time during the Notice Period.

1. Subclause 29.3 provides for the Lessee, on the Termination Date (if either the Lessor or Lessee gives Notice), to cease trading, vacate the Premises, and execute a Surrender of the Lease.

The nature of an appeal under the State Administrative Tribunal Act

1. By s 105 of the State Administrative Tribunal Act 2004 (WA), a party to a proceeding in the Tribunal may appeal on a question of law, but only if the court to which the appeal lies gives leave to appeal. The intention of s 105 is that, unless affected by a material error of law, the decision of the Tribunal should be the final decision.
2. The jurisdiction which this court exercises under s 105 is well settled. Although s 105 uses the word 'appeal', the court is exercising original jurisdiction. The proceedings are not a rehearing: the essential character of s 105 is that it provides for proceedings in which the legal correctness of what the tribunal has done can be challenged.[2] The subject matter of the appeal is the question or questions of law which are both a qualifying condition to the invoking of the court's jurisdiction under s 105 and the subject matter of the 'appeal' itself. [3]
3. The distinction between errors of law and errors of fact has been described as elusive. It is neither possible nor necessary to state exhaustively what will constitute an error of law.
4. The ordinary meaning of a word or its non-legal technical meaning is a question of fact. The meaning of a technical legal term is a question of law. Whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law.
5. Here there is no question about the facts. The question is whether the terms of cl 29, construed in the context of the whole of the Lease, come within s 13(7) of the Commercial Tenancy (Retail Shops) Agreements Act. In my opinion, they do. First, the Lease expressly provides for a term of five years, with a defined commencement and expiry date. Second, cl 23.4 expressly provides for holding over as a monthly tenant if the Lessee, with the consent of the Lessor, continues in occupation after the defined Expiry Date. Third, the right of either Lessor or Lessee to give notice of early termination is subject to the Cinema Lessee vacating the cinema complex during the Term. Fourth, Notice may be given by either Lessor or Lessee at any time during the Notice Period. Fifth, should Notice not be given, there is no 'renewal' or holding over of the Lease, the Term of which continues to run until the Expiry Date.
6. In my opinion, the order of the Tribunal, and the finding within it, is wrong in law. The material before the Tribunal, consisting of the Lease and the application, did not admit of that conclusion.
7. Section 105 also requires that the appellant obtain leave to appeal. There are no rigid or exhaustive guidelines governing the grant of leave. The guiding principle is whether substantial injustice would result if the error of law were not corrected.[4] I am satisfied that the appellant would suffer substantial injustice in this case were the error not corrected.

1. The Tribunal did not proceed to determine whether special circumstances exist by reason of which approval ought to be given.
2. The words 'special circumstances' are found in many contexts and 'will always take their colour from their surroundings'. In whatever context the phrase appears, the circumstances must be 'special', that is, 'out of the ordinary', 'unusual'.[5] In the context of s 13(7), the term requires some circumstances be shown which are special in this sense, and sufficient to justify a departure from the ordinary rule that a lease may not include a provision which permits its early determination.
3. The application to the Tribunal disclosed that that Lessor is redeveloping and plans to demolish the centre. The major tenant of the centre intends to vacate, and cl 29 of the Lease only operates should that occur. Those facts are, in my opinion, out of the ordinary. The fact that the Lessee agrees to the proposed clause is not itself a special circumstance, but is relevant to the decision.
4. I am satisfied that the circumstances in which cl 29 is proposed to be included in the Lease are special and sufficient to justify approval. Pursuant to s 105(9) of the State Administrative Tribunal Act, the court may make any decision that the Tribunal could have made in the proceeding. The application to the Tribunal was with the agreement of the Lessee, and the Lessee abides the decision of this court. There are no contested facts. I believe that it is in the interests of justice to finally dispose of the matter.
5. Leave to appeal should be granted, and the appeal allowed. The application to the Tribunal for approval of the inclusion of cl 29 in the Lease, under which the Lessor may determine the Lease in accordance with that clause, will be allowed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Rules of the Supreme Court 1971 (WA) O 65 r 7.

[2] Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; (2001) 207 CLR 72 [15]; Osland v Secretary, Department of Justice [No 2] [2010] HCA 24; (2010) 241 CLR 320 [18]. And see City of Mandurah v Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc [2016] WASCA 185; (2016) 50 WAR 466 [37] ‑ [39]; Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361.

[3] City of Mandurah v Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc [39].

[4] King v Commissioner for Consumer Protection [2018] WASCA 194 [166].

[5] Transglobal Capital Pty Ltd v Yolarno Pty Ltd [2004] NSWCA 136; (2004) 60 NSWLR 143 [20].