World Best Holdings Limited v Sarker & Anor

Administrative Decisions Tribunal Act 1997 (NSW) LEGISLATION CITED : Retail Leases Act 1994 (NSW) Retail Leases Amendment Act 2005 (NSW)

CASES CITED : Attorney General of New South Wales v World Best Holdings Limited & Ors (2005) 63 NSWLR 557

World Best Holdings Limited PARTIES : Abul Sarker Administrative Decisions Tribunal

COUNSEL : Mr B Walker SC/ Mr J Levingston (Pl) No Appearance (Def)

SOLICITORS : Messrs Brock Partners (Pl) No Appearance (Def)

LOWER COURT JURISDICTION : Administrative Decisions Tribunal

LOWER COURT FILE NUMBER(S) : 045136; 045137

LOWER COURT MEDIUM NEUTRAL CITATION : Sarker v World Best Holdings LTD

• 13 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

30055/06 WORLD BEST HOLDINGS LIMITED v SARKER & ANOR

JUDGMENT 1 HIS HONOUR: The parties have been involved in a long running dispute. At present, two proceedings are on foot in the Administrative Decisions Tribunal (the Tribunal). The plaintiff has brought a retail lease claim. The first defendant has brought what has been regarded as an unconscionable conduct claim (it may be that it is partly for such a claim and partly for a retail tenancy claim). 2 Section 76A of the Retail Leases Act 1994 (NSW) (the Act) is as follows:- "76A Removal of proceedings to Supreme Court (1) A party to proceedings before the Tribunal for an unconscionable conduct claim, or partly for an unconscionable conduct claim and partly for a retail tenancy claim, may apply to the Tribunal to have the proceedings transferred to the Supreme Court. (2) The Tribunal must transfer the proceedings if the Tribunal is satisfied that: (a) the nature of the claim is such that it may be more effectively and appropriately dealt with by the Supreme Court, and (b) the interests of justice do not require the matter to be continued to be dealt with by the Tribunal. (3) The Supreme Court has jurisdiction to hear and determine proceedings transferred to it under this section and may make any orders and do anything that the Tribunal may do in determining an unconscionable conduct claim or retail tenancy claim, as the case requires. (4) The Supreme Court may exercise all the functions that are conferred or imposed by or under this or any other Act on the Tribunal to determine the unconscionable conduct claim." 3 The plaintiff made an application to the Tribunal for an order pursuant to that section (it sought the transfer of both claims). The application was heard and determined by a judicial member of the Tribunal (Mr Fox). It appears that he had before him affidavit evidence provided by Mr P Biber (the solicitor for the plaintiff). He received submissions. He was given an undertaking by the first defendant to the effect that if the unconscionable conduct claim only was transferred to this Court, then the first defendant would apply to it to direct the transfer of the retail lease claim. What other material (if any) he had is unclear. On 28 March 2006, he refused the application and delivered written reasons for his decision. 4 Mr Fox came to the view that he had power to transfer the unconscionable conduct claim. He was of the view that he had no power to transfer the retail lease claim (because it was a "pure" retail tenancy claim). 5 He made the following observations:- "14 The affidavit evidence of Mr Biber, solicitor for WBH gave me a detailed chronology of the passage of the matters to date, and the alarming legal costs involved, but raised nothing which addresses the requirements of Section 76A(2). 15 In fact it seems to me that the strongest argument raised in the written submission was that the matter has had a long and difficult (and very expensive) history both before the initial hearing on the facts in the Tribunal, and subsequently in the appeal to the Supreme Court, and then to the Court of Appeal, and then back to the Tribunal, and that that long path establishes that it is a very difficult and complex matter, and that, in turn, brings it within s76A(2)(a). However, an analysis of the various stages indicates little that is not expected in a hard fought contest (by a party with deep pockets) over the forfeiture of a retail shop tenancy, once the issues arising from the question of the statutory competence of the Tribunal as constituted by Messrs Donald, Fagg and Griffith are put to one side. 16 If there is, in this part of the written submissions, a suggestion that the issue to be initially decided by the Tribunal (properly constituted) is so finely balanced that, no matter which of the parties is successful at the end of the hearing of the full facts, there will be an appeal, so it is more effective and appropriate to forgo the Tribunal hearing and go straight to the Supreme Court, then I reject that argument absolutely. 17 I am satisfied that in order to fall within Section 76A a party must be able to demonstrate that there is an aspect to the dispute between the parties which the Tribunal has no power to resolve. That aspect could be the fact that there is a likelihood of an order for payment of more than the jurisdictional limit, or the actual possibility of the need for an order which the tribunal has no statutory power to make (such as the rectification of a lease which is not consented to by the parties). Section 76A is not available in circumstances where nothing has been raised to indicate that the needs of the parties cannot be addressed within the parameters of Sections 72,72AA and 73. Apart from the alleged complexity of the matter, nothing relevant has been put to me in this regard, and so I hold that the threshold set by Section 76A(2)(a) "may be more effectively and appropriately dealt with in the Supreme Court" has not been satisfied." 6 After coming to the view that the s76A(2)(a) threshold had not been crossed, he considered that he did not have to deal with what he described as the s76A(2)(b) question. 7 The current proceedings in this Court were heard on 18 October 2006 (they were commenced by summons filed on 24 April 2006). The plaintiff was represented by senior and junior counsel. The first defendant was not represented at the hearing. He had earlier filed a submitting appearance (save as to costs). The second defendant (the Tribunal) also filed a submitting appearance. 8 The only evidence sought to be placed before the Court was an affidavit sworn by Graeme Bruce Veitch (the solicitor for the plaintiff). It annexed a copy of the reasons for decision of the Tribunal and a copy of an amended application for original decision. 9 The amendment introduces a claim for a declaration that the first defendant had engaged in unconscionable conduct. The amendment was made subsequent to the decision of the Tribunal (the amended application was filed on 26 May 2006, pursuant to leave granted 20 April 2006). 10 Before proceeding further, I should briefly look at what was said at the time of the hearing to be the applicable appellate provisions (see, inter alia, s77 of the Act). A party to any proceedings (other than a party to proceedings for an unconscionable conduct claim) may appeal to an appeal panel against an order or other decision. A party to any proceedings for an unconscionable conduct claim may appeal to the Supreme Court on a question of law against any decision of the Tribunal in those proceedings. It is the exercise of that right of appeal on a question of law that is primarily relied upon by the plaintiff. There is also an appeal to this Court by way of leave for a review of the merits of a decision by the Tribunal. This avenue was tentatively raised by way of an alternative. 11 Subsequent to the hearing of the appeal, it was ascertained that s77 had been amended (see Retail Leases Amendment Act 2005 (NSW)). This legislation commenced on 1 January 2006. One consequence of the amendment was to take away the rights of appeal sought to be exercised by the plaintiff in this case. 12 Following contact being made with counsel for the plaintiffs, a written submission was made in respect of this question. The submission argued that the relief sought in this case was not affected by the amendment.

13 It is unnecessary to express a view on the question as the appeal can be disposed of without deciding it. I shall proceed on the assumption that the submission was correctly made. 14 The matters in dispute between the parties are the subject of what has been described as overlapping jurisdiction between this Court and the Tribunal. The lodgement of proceedings in the Tribunal has the effect of removing the jurisdiction of a court (save by way of transfer or of appeal) to hear and determine retail lease claims or unconscionable conduct claims. 15 The relevant legislation came to be considered by the Court of Appeal in Attorney General of New South Wales v World Best Holdings Limited & Ors (2005) 63 NSWLR 557. The judgment of the Chief Justice deals, inter alia, with the statutory scheme (pp562-566) together with the history of the unconscionability provisions and the second reading speech (pp580-584). 16 The judgments delivered in that case disclose that the plaintiff is the owner of a shopping centre in which the first defendant was to become a tenant. Difficulties in that relationship brought about the trail of litigation that has ensued between the parties. 17 Counsel for the plaintiff has undertaken a detailed analysis of the reasons for decision given by Mr Fox. For present purposes, it is unnecessary to pursue the detail of that analysis. It suffices to refer to just certain of what was submitted. 18 I shall first refer to certain of the observations made by Mr Fox, which were accepted by the plaintiff. He observed that both matters involved much the same facts and very similar evidence. He further observed that it would be far preferable if both matters could be conducted in the same forum. 19 It was also submitted that the plaintiff accepted the view that it was a very difficult and complex matter. As I read the reasons, it seems to me that Mr Fox considered a submission to the effect that there had been a long and difficult (and very expensive) history and that the long path established that it was a very difficult and complex matter and rejected it. 20 Many submissions were made as to error on the part of Mr Fox. There clearly has been error (including certain of what was said by him in paragraph 17 of the reasons for decision). The real question is whether or not error had materiality to the ultimate decision reached by Mr Fox and justifies the disturbing of it. 21 I shall now return to the provisions of s76A. It is headed "Removal of proceedings to Supreme Court". Sub-sections (1) and (2) are relevant for present purposes. 22 Sub-section (1) deals with the question of locus standi to apply to the Tribunal to have the proceedings transferred to the Supreme Court. The sub-section confers locus standi on a party to proceedings before the Tribunal for an unconscionable conduct claim or partly for such a claim and partly for a retail tenancy claim. The literal construction of the provision would restrict its application to a party to such a claim and not extend it to a party to a retail lease claim only. The plaintiff submits an alternative construction. I will return to that question in due course. 23 The making of an order by the Tribunal is mandatory, if it is satisfied as to both of the requirements set forth in (a) and (b) of sub-section (2). The first requirement looks to the nature of the claim. The Tribunal is to be satisfied that it is such that it may be more effectively and appropriately dealt with by the Supreme Court ("more effectively and appropriately" would appear to be intended as cumulative requirements). The second requirement looks to the interests of justice. The Tribunal is to be satisfied that such interests do not require the matter to be continued to be dealt with by the Tribunal. These provisions have been said to be evaluative in nature. Each case will turn on its own particular circumstances. The onus is borne by the applicant. 24 Before looking at the question of the application of these provisions to the relevant circumstances of this particular case, I should deal with the question of the fresh evidence which the plaintiff seeks to place before the Court in the hearing of this appeal. 25 If the amended application had preceded the hearing, the task of Mr Fox would have been to consider a different set of circumstances. Mr Fox proceeded on the basis that he lacked power to transfer the retail lease claim and this was material to his decision. The amendment would have placed the plaintiff in a position where the Tribunal was empowered to transfer both of the claims to this Court. The admission of the evidence would render this appeal akin to a fresh hearing. 26 Leaving these considerations aside, there is another reason for rejecting this material. The admission of it would lack utility. It would do little (if anything) to address the crucial considerations (the satisfying of the requirements of (a) and (b) of sub-section (2) of s76A). 27 The plaintiff had the onus of demonstrating error on a question of law that justifies the disturbing of the decision of the Tribunal. At the outset it may be observed that, inter alia, the paucity of the material relied on by it presented the plaintiff with a formidable task in discharging that onus. 28 What material there is as to the nature of the first defendant's claim has to be largely gleaned from the reasons for decision. Save for what has already been mentioned, the reasons shed little other light as to the nature of the claim. There is a lack of material to demonstrate that the nature of the particular claim brought by the first defendant is such that it may be more effectively and appropriately dealt with by this Court. 29 Whilst presumably the application brought by the first defendant was before the Tribunal, it is not before the Court. Similarly, the affidavit evidence of Mr Biber is not before the Court. 30 Leaving these evidentiary deficiencies aside, there are other problems confronting the plaintiff. Mr Fox rejected the submission that it was a complex and difficult matter. No basis has been shown for the disturbing of that view. Assuming that those matters are relevant considerations, I am not of the view that they have been made out. 31 It seems to me that the thrust of the case advanced before the Tribunal did not look to the nature of the first defendant's claim itself, but to other circumstances. It looked to the long, difficult and very expensive history and, perhaps because an appeal was probable, it was more effective and appropriate to forgo a Tribunal hearing and transfer the matter to the Supreme Court. In so doing, it seems to me that the plaintiff misconceived what had to be done to satisfy the Tribunal in respect of the statutory requirements. 32 This Court has also been given limited material as to what has happened in the past in proceedings between the parties (inter alia, it does not have Mr Biber's chronology).

33 The judgments delivered in Attorney General of New South Wales v World Best Holdings Limited & Ors reveal that there was earlier dispute had in this Court following the making of orders by the Tribunal. There was an application for leave to appeal on the merits which was rejected by Sully J. There was what was said to be an appeal on questions of law which was heard by Patten AJ. The Attorney General successfully appealed to be joined as a party to those proceedings. 34 His Honour decided that the Tribunal was not properly constituted to hear and determine the first defendant's unconscionable conduct claim. The judgments dealt with an appeal from the decision of His Honour which was brought by the Attorney General. The appeal concerned matters of the constitution of the Tribunal. 35 The plaintiff has presented what was said by the Chief Justice in Attorney General of New South Wales v World Best Holdings & Ors as background to its submissions. It has placed emphasis on what are said to be the superior procedures had by this Court (inter alia, the capacity to file a cross-claim, the lack of consolidation procedures and of what was described as a lack of a balancing judgment power). 36 In Attorney General of New South Wales v World Best Holdings & Ors at p564, the Chief Justice observed that the Administrative Decisions Tribunal Act 1997 (NSW) draws a clear distinction between the provisions dealing with retail tenancy claims and provisions dealing with unconscionable conduct claims. He further observed that parliament gave careful attention to the distinction between the two kinds of jurisdiction and mandated a differently constituted tribunal wherever a claim of unconscionable conduct is made, either alone or in conjunction with a retail tenancy claim. At p580, he noted the particular significance of the recognition in the second reading speech that the test of unconscionability should be restricted to the jurisdiction of persons with a high level of judicial experience and that this was done to appease apprehension (there was an appreciation that difficult and novel issues may arise). At p584, he further observed that parliament intended that the new powers would be exercised by a person with a considerable body of judicial experience and by only such a person. 37 The plaintiff has referred to the undertaking to the Court, offered by Counsel for the first defendant to the Tribunal and has itself offered an undertaking to this Court. It is in the following terms:- "TO THE COURT World Best Holdings Limited undertakes to the Court that in the event that only the claim commenced by Mr Abul Sarker in the Administrative Decisions Tribunal No 045136 is ordered by the Court to be transferred to the Supreme Court, it will do all things necessary to terminate its proceedings in the Administrative Decisions Tribunal No 045137 and will do all things necessary to pursue a claim to the same effect by way of Defence and Cross-claim (or Defence alone as it may be advised) in the transferred Supreme Court Proceedings." 38 I do not consider that the undertakings afford much assistance to the plaintiff in these proceedings. They do no more than provide machinery which may enable both claims to be heard together in the event that the plaintiff is entitled to an order transferring the first defendant's claim to this Court. In that respect, they may address any question of injustice arising from an inability of them being heard together. 39 The plaintiff has placed emphasis on what has been said to be the superior powers had by this Court. It would seem that this submission throws up questions that were not litigated before Mr Fox. What submissions were made to him can be gleaned only from his reasons for decision. The contents of the reasons reveal that the case run before him at least mainly relied on the evidence given by Mr Biber (concerning the history of the matter and costs) and that the submissions which were made were those recorded in paragraphs 15 and 16. 40 What was argued on the matter before this Court was put in a general sense. I was not taken to the powers of the Tribunal. A reading of the legislation suggests that it may not expressly confer the powers that have been mentioned. However, the Tribunal does have the broad power (subject to the Act and Rules) to determine its own procedures. The existence of this power was not dealt with in submissions. On what has been argued before this Court, assuming that these matters give rise to relevant considerations, I am not satisfied that the plaintiff's submissions carry much weight. 41 For completeness, I make a further observation concerning one of the questions that was argued. It might be thought that the absence of a cross-claims procedure can be accommodated by the bringing of individual claims that can be dealt with together. If it is being put that the claims cannot be heard together, I am not satisfied that this is the position. 42 The Court was taken to a reference in a judgment in Attorney General v World Best Holdings Limited & Ors to there being evidence that the first defendant was then impecunious. Whether that continues to remain an accurate description is unknown. It appears that he may have played a limited role in the application before Mr Fox. An application for a stay of proceedings in the Tribunal was dealt with by Hoeben J on 8 August 2006 on an ex-parte basis. The first defendant neither opposed nor supported that application. I have already referred to his level of participation in the appeal. Whether or not he will continue with, or participate in, further conduct of the claims is somewhat of a mystery. There has to be a real concern that any transfer may be a futile exercise. 43 I should make it clear that what is said in the preceding paragraph was not relied on in reaching my views in this appeal. However, it may be added that it reinforces those views. 44 In my view, despite error, Mr Fox reached the right result in deciding that s76A(2)(a) had not been satisfied. I consider that the plaintiff fell well short of discharging the onus borne by it in relation to that matter. 45 The legislation gave the Tribunal jurisdiction in respect of unconscionable conduct claims, and did so in a manner intended to ensure that they would be heard in a jurisdiction having the appropriate degree of legal expertise. One of the matters that must be satisfied to enable a transfer to this Court concerns the nature of the particular claim that is the subject of the transfer application. As has been earlier said, it must be shown that the nature of that claim is such that it may be both more effectively and appropriately dealt with by the Supreme Court. The question of what meaning should be given to the collocation of words "more effectively and appropriately are dealt with by the Supreme Court" has not been fully argued. It does not have to be addressed in this case and is best left for another day. 46 The plaintiff, both before the Tribunal and in this Court, has either failed to address that task or address it successfully. Instead of concentrating its submissions on the nature of the subject claim, it has sought to rely on other circumstances. This may be because the nature of the claim itself was such that it gave little assistance to the success of the application. Whilst this Court has little knowledge of that claim, it appears to have arisen from what Mr Fox has described as "the forfeiture of a retail shop tenancy". This information, of itself, does not suggest that the nature of the claim had features that demonstrated that it may be more effectively and appropriately dealt with by the Supreme Court. This may have been what Mr Fox had in mind (see paragraph 15 of the reasons). In my view, there is nothing to suggest that it cannot be as effectively and appropriately dealt with by the Tribunal. 47 The other matter of which satisfaction is required (the requirements of s76A(2)(b)) is one on which neither the evidence nor the submissions provide assistance.

48 There was no need for Mr Fox to deal with that matter. The question of the meaning of this collocation of words was also the subject of little argument. It may also be a matter upon which differing views may be taken as to their meaning. It might be thought that a transfer may bring about an increase in, inter alia, costs and further delay and that these matters may be regarded as relevant circumstances. In the case of a person in the position of the first defendant, these may be regarded as matters of weight. I have earlier referred to a matter of potential futility which may be regarded as reinforcing views. For the assistance of the parties, it may be added that, having regard to the evidence and the submissions, I am of the view that those requirements were not satisfied in this case. 49 Before concluding this judgment, I shall briefly refer to two other matters raised by the plaintiff.

50 The plaintiff put an alternative argument. It was said that it was raised before Mr Fox and not dealt with. It involved the construction of sub-section (1). It looked to the use of the words "for" and "claim" and was said to involve a purposive reading of the sub-section. The effect of it was that the sub-section could be construed as having application to both the retail tenancy claim and the unconscionable conduct claim. This alternative argument was briefly put and can be briefly disposed of. I do not consider that the sub-section can be construed in the manner contended by the plaintiff. 51 There remains the application for leave. Again, this was a matter that was faintly put and I do not consider that this is a case in which leave should be granted. 52 I am not satisfied that the plaintiff has demonstrated an entitlement to any relief in this Court. Accordingly, the proceedings should be dismissed. 53 The summons is dismissed. The plaintiff is to pay the costs of the summons (including the costs of the defendants on a submitting basis). **********

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