JUDGMENT NO. snc! Son oo PY, AT HW RD TRADE PRACTICES - misleading or deceptive conduct - unconscionable conduct - no point of principle. PRACTICE AND PROCEDURE - no case submission - whether submission may be made before being put to election to call evidence. Bankruptcy Act 1966 ss.58, 116 ~7 NOV 1994 Stamp Duties Act 1923 (S.A.) FEDERAL COURT U Trade Practices Act 1974 ss.51AA, 52, 82, 87 AUSTRALIA ra Pract s Legislation Amendment Act 1992 Byrne Heydon, Cross_on Evidence (4th Ed.) Zumbo, F., "Unconscionability and Commercial Transactions: Exploring the Need for Further Reform Under the Trade Practices Act", Australian Business Law Reform 22 (1994) Commercial Bank of Australia Limited v. Amadio (1983) 151 C.L.R. 447 lle ummings v. Beach Petroleum N.L. (1993) 43 F.C.R. 60 Houlder Bros. §& Co. Ltd. v. Gibbs [1925] Ch. 575 Munchies Management Pty. Ltd. v. Belperio (1988) 84 A.L.R. 700 ley Investment Co. Pty. Ltd. v. Amgue Clothing Pty. Ltd. (1994] Aust. Contract Reports, 90-036 Residues Treatment and Trading Co. Ltd. v. Southern Resources Ltd. (1989) 52 S.A.S.R. 54 Secured Income Real Estate (Australia) Ltd. v. St. Martins Investments Ltd. (1979) 144 C.L.R. 596 omlinex Pty. Ltd. v. Candoura Pty. Ltd. [{1994] A.T.P.R. 41- Wh er race and Pierucci Pty. Ltd. v. Wright [1989] A.T.P.R. 40-940 WILLSHIRE- TH VV. VOTINO BROS. PTY. LTD. AND JACK Vi iD PH VOTIN -L.W -A.) PTY. LTD. D D . D_ PAUL C. NEY NO. SG59 OF 1992 LEE J. PERTH (HEARD IN ADELAIDE) 3 NOVEMBER 1994 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION NO. SG59 OF 1992 BETWEEN: DOUGLAS WILLSHIRE-SMITH Applicant and VOTINO BROS. PTY. LTD. First Respondent and JACK VOTINO Second Respondent and RALPH VOTINO Third Respondent and J.L.W. (S.A.) PTY. LTD. Fourth Respondent and DAVID C. HALL Fifth Respondent and PAUL C. MOONEY Sixth Respondent MINUTE OF ORDER E IN! RDER: LEE J. DATE OF ORDER: 3 NOVEMBER 1994 WHERE MADE: PERTH (HEARD IN ADELAIDE) RD. : The application be dismissed. The applicant pay the respondents' costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: CORAM DATE LEE J. 3 NOVEMBER 1994 NO. SG59 OF 1992 DOUGLAS WILLSHIRE-SMITH Applicant and VOTINO BROS. PTY. LTD. First Respondent and JACK VOTINO Second Respondent and RALPH VOTINO Third Respondent and J.L.W. (S.A.) PTY. LTD. Fourth Respondent and DAVID C. HALL Fifth Respondent and PAUL C. MOONEY Sixth Respondent PLACE: PERTH (HEARD IN ADELAIDE) REASONS FOR JUDGMENT The applicant ("Willshire-Smith") is a chartered accountant with a claim to broad experience in commercial matters, in particular in acting as an adviser to small businesses and as an assessor of the worth of such businesses. Until about May 1990 he practised as a management consultant at Mildura in Victoria where he resided with his wife. His wife practised as a podiatrist, employed by Mildura Podiatry Services Pty. Ltd., a company controlled by Mrs Willshire- Smith and her mother. Willshire-Smith stated that in late 1989, on instruction from his wife and mother-in-law, he inspected certain businesses with the object of recommending a suitable business for them to purchase and invest funds they had available for that purpose. Willshire-Smith said that he inspected approximately thirty properties from north Queensland through to South Australia and recommended that they purchase a newsagency business carried on at the Parafield Garden Shopping Centre ("the Centre"), Salisbury, a suburb of Adelaide. In about February 1990 a ""shelf-company", Leighton Hill Pty. Ltd. ("Leighton Hill"), was acquired by Mrs Willshire-Smith and her mother for the purpose of purchasing the newsagency business and the authorised newsagency delivery round ("the round") attached to that business. In about March 1990 Leighton Hill entered separate contracts for the purchase of the newsagency business and newspaper round. The purchase price for the business was $227,629 and the price of the newspaper round was $155,572. Willshire-Smith conducted the negotiations for purchase on behalf of Leighton Hill. In addition, Willshire- Smith made arrangements for Leighton Hill to borrow a substantial sum of money to complete the contracts. Part of the newsagency business included an agency service for the Lotteries Commission of South Australia. Under relevant State laws a person could not be an authorized newsagent or a licensed lottery agent unless that person resided in the State of South Australia. It was agreed between Leighton Hill and Willshire-Smith that he would apply to the necessary authorities to become an authorized newsagent and licensed lottery agent and that he would conduct the newsagency business and newspaper round pursuant to a "Management Agreement" with Leighton Hill. Willshire-Smith duly became an authorized newsagent and licensed lottery agent and applied to the first respondent {"Votino Bros."), the lessor of the shop on which the newsagency business was conducted, to be accepted as assignee of the lease. In April 1990, before he sought the consent of Votino Bros. to the assignment, Willshire-Smith obtained advice from a solicitor on the effect of terms of the lease. He was informed that the lease imposed a liability to pay an unquantified sum over and above the sums stated to be payable under the lease if the landlord carried out additions or renovations to the Centre. Willshire-Smith requested Votino Bros. to accept variations to the lease. As a result of that approach, negotiation of assignment of the lease took some time. Votino Bros. rejected the proposed variations. Willshire-Smith then requested the vendor of the newsagency business to reduce the price payable by Leighton Hill before he would accept an assignment of the lease of the premises. The vendor agreed to that request and the purchase price was reduced by approximately $28,000 to $199,000. Willshire-Smith agreed to accept an assignment of lease on the lessor's terms and on 20 May 1990 executed a deed of assignment for the balance of the terms of a ten year lease which had commenced on 1 November 1988. Settlement of the purchase of the newsagency business and newspaper round was effected on 21 May 1990 and from that date Willshire-Smith operated the newsagency business and newspaper round as "Manager". It was submitted by the respondents that the Management Agreement did not reflect the true position between the parties in that all trading accounts with creditors and banking accounts for the business were conducted in the name of Leighton Hill. Whatever purpose may have been served by the execution of the Management Agreement, in deciding the matters before me I have assumed that the Agreement was intended to take effect according to its terms. The fourth respondent ("J.L.W.") managed the Centre for Votino Bros. Shortly after Willshire-Smith took possession of the shop he became embroiled in disputes with Votino Bros. and J.L.W., firstly, as to the operation of terms of the lease, and, secondly, as to the role of J.L.W. as the lessor's managing agent. In August 1990 Willshire-Smith commenced proceedings against Votino Bros. in the Commercial Tribunal of South Australia ("the Tribunal"), a forum vested with a broad jurisdiction in respect of landlord and tenant disputes. The Tribunal conducted a full hearing on the disputed matters and delivered its decision on the various issues in March 1992. As will appear, some of the matters to be determined in this proceeding are related to issues determined by the Tribunal. By April 1991 Willshire-Smith had decided that he wished to return to Mildura and to delegate management of the newsagency business to another. In that month he arranged for Leighton Hill to sell the newspaper round for a price of $155,000. He then returned to Mildura and supervised the running of the business from there. Not long thereafter he put the newsagency business on the market on Leighton Hill's behalf and continued to attempt to sell the business until March 1993. By March 1993 unhappy differences had arisen between Willshire-Smith and his wife and when, in February 1993, Votino Bros. acted to terminate Willshire-Smith's leasehold interest in the shop, Mrs Willshire-Smith sought, and obtained, an order from the Family Court of Australia appointing a receiver to take over and sell the newsagency business. In April 1993 the receiver sold the business for a price of $305,000. Willshire-Smith now claims that he suffered loss by reason of misleading or deceptive conduct on the part of J.L.W. and by reason of unconscionable conduct on the part of Votino Bros. in contravention of the Trade Practices Act 1974 ("the Act") and that ss.82 and 87 of the Act entitle him to recover losses incurred by reason of that conduct. Willshire- Smith also claims that the second and third respondents (J. Votino and R. Votino) and the fifth and sixth respondents (Hall and Mooney) were natural persons involved in the contraventions of the Act committed by the corporations Votino Bros. and J.L.W. Upon the closure of Willshire-Smith's case, counsel for J.L.W., Hall and Mooney submitted that no case had been established against those respondents by Willshire-Smith and that a judgment dismissing Willshire-Smith's claim should be entered in their favour. I agreed to hear that submission before deciding whether to exercise the discretion available to the Court not to require the respondents to elect whether to call evidence before the submission was determined. A threshold point of the submission was that Willshire-Smith had no standing to prosecute his application. In the course of the cross-examination of Willshire-Smith it was revealed that Willshire-Smith had been an undischarged bankrupt until November 1991. It was submitted that any rights in property created prior to November 1991, including choses-in-action in the form of rights to sue in respect of Matters of property, were rights which had vested in Willshire-Smith's trustee in bankruptcy pursuant to ss.58 and 116 of the Bankruptcy Act 1966 and remained vested in the trustee notwithstanding Willshire-Smith's discharge from bankruptcy. It was agreed that no notice of the proceedings had been given to the trustee. Having regard to the stage the trial had reached - the hearing had then occupied ten days and Willshire-Smith's case had been concluded - I considered it inappropriate to make any determination that J.L.W., Hall and Mooney were entitled to a judgment of dismissal on that ground. If upon completion of the hearing of the matter Willshire-Smith made out a case for the grant of relief, it would be open to the Court to require notice of the proceedings to be given to the trustee and permit the trustee to be substituted, or joined, as an applicant and for judgment to be entered in favour of the trustee if the trustee consented to such substitution, or joinder. (See: Fuller, Cummings v. Beach Petroleum N.L. (1993) 43 F.C.R. 60.) However, after hearing the submission I ordered that part of the statement of claim be struck out, being satisfied that that part of the pleading was misconceived and incapable of being sustained if the proceeding continued. The portion of the claim struck out was a purported action in negligence against J.L.W. seeking the recovery of loss said to have been suffered by Willshire-Smith by reason of J.L.W.'s failure to produce to the State Commissioner of Stamp Duties for stamping the deed of assignment of lease executed by Willshire-Smith. The loss claimed was the amount of a penalty imposed by the Commissioner upon Leighton Hill for failing to produce for stamping within the time prescribed by the Stamp Duties Act 1923 (S.A.), the contract for the purchase of the newsagency business. It was obvious from the pleading, and from the case presented by Willshire-Smith, that such a claim in negligence was incapable of being made out and that it was unnecessary to assess evidence to ascertain whether it supported the existence of a duty of care, a breach of that duty, or the suffering of any loss. There was no connection between the production of the deed of assignment for stamping and the imposition of a penalty upon Leighton Hill for failure to produce the contract of purchase it had executed as purchaser. In those circumstances, where lack of merit in the pleading could not be cured by any advantage that Willshire-Smith may have gained from evidence that may be adduced by J.L.W. in the presentation of its case, it was appropriate to strike out the pleading without considering whether J.L.W. should be relieved of the obligation to elect whether to call evidence. (See: Byrne Heydon, Cross on Evidence (4th Ed.) at 309-311; Residues Treatment and Trading Co. Ltd. v. Southern Resources Ltd. (1989) 52 S.A.S.R. 54 at 56-72.) Other submissions by counsel as to the insufficiency of the evidence to support the remainder of Willshire-Smith's 10. case that J.L.W. had contravened s.52 of the Act and that Hall and Mooney were involved in those contraventions, required the Court to evaluate the evidence and, in particular to determine whether any part of the evidence permitted inferences to be drawn favourable to Willshire-Smith's case. Notwithstanding the strength of counsel's submissions, I was not persuaded that such a task should be undertaken by the Court if counsel intended to reserve the right to adduce further evidence if the Court reached the view that the evidence was capable of supporting some part of Willshire-Smith's case, thereby requiring the Court to review the whole of the evidence once more at the conclusion of the case for the respondents. Accordingly, J.L.W., Hall and Mooney were put to their election. They elected to adduce evidence. I turn now to consider whether, on the whole of the evidence, Willshire-Smith has made out any of his claims against J.L.W. Willshire-Smith claimed that J.L.W. had engaged in conduct that was misleading or deceptive and contravened s.52 of the Act in three separate instances, namely, that between February 1990 and May 1990 J.L.W. failed to inform Willshire- Smith - 11. 1. that a major upgrading of the centre was imminent; 2. of the correct area of the shop, the subject of the lease; and 3. of the detailed costings of the outgoings of the Centre I will deal with each of those claims in turn. It was not in dispute that the work Votino Bros. proposed to carry out at the Centre was a significant renovation and extension of the Centre. It would have been apparent to Votino Bros. that the proposed work would have interfered with access to shops at the Centre, including the newsagency shop, and was likely to cause some interference with the tenants' enjoyment of their demised premises. The evidence adduced as to the commencement and progress of the work was was sparse. It appears to be the case that at least in February 1990 some work may have been started in the car-park area of the Centre and that by April 1990 site works for the major work had been commenced. It also appears to be the case that Votino Bros. had commenced that work relying upon the approval granted by the local authority for a lesser development proposed by § its 12. predecessor-in-title and not until 15 May 1990 did Votino Bros. lodge an application with the local authority to obtain approval for the proposed development that it had commenced. Willshire-Smith said that he had attended at the offices of the local authority in about February or March of 1990 and satisfied himself that Votino Bros. had made no application for the grant of approval to develop the Centre. However, although no application for approval had been filed by Votino Bros. it, or its agents, had forwarded to the local authority plans for a proposed development that had been prepared on its instructions, and Willshire-Smith had inspected those plans. I am satisfied that at the time Willshire-Smith executed the deed of assignment of lease he was aware that substantial renovation and redevelopment of the Centre was contemplated and likely to occur during the term of the lease. Indeed, Willshire-Smith instructed his solicitor that such work was possible when he sought the solicitor's advice on the obligations that would be incurred if he took an assignment of the lease. His solicitor had advised him that the lease permitted the lessor to impose further liabilities on the lessee in respect of the cost of that work and to require him to accept interference with the enjoyment of his tenancy. The clause in the lease providing for quiet enjoyment of demised premises reserved the right of the lessor to undertake building works from time to time during the term of the lease. ne 13. Willshire-Smith had then sought the variation of the terms of the lease that had been refused by the lessor. If it is accepted, without deciding the point, (see contra: Radley Investment Co. Pty. Ltd. v. Amque Clothing ty. Ltd. [1994] Aust. Contract Reports, 90-036)) that a norm of commercial conduct in the circumstances described would have required Votino Bros. to bring to the attention of a prospective assignee Votino Bros.' intention to commence substantial works likely to impinge upon the assignee's uninterrupted use of the demised premises, and if it is further accepted, again without deciding, that a managing agent of the landlord, aware of the proposed work, would be expected to convey that advice on behalf of the landlord to a proposed assignee, I am satisfied on the facts of this case that J.L.W. had sufficient grounds to believe that the proposed assignee would be, or had been, informed by the assignor of the imminent upgrading of the Centre or, alternatively, that the failure of J.L.W. to so inform Willshire-Smith had no effect on Willshire-Smith's actions. (Sees Tomlinex Pty. Ltd. v. Candoura Pty. Ltd. [1994] A.T.P.R. 41-302.) J.L.W. distributed a notice to tenants in or about February 1990 advising that substantial renovation of the Centre had commenced and would be continuing. Distribution of 14, that notice entitled J.L.W. to assume that the information it had provided would be passed on by an assignor to a subsequent assignee. In any event the evidence shows that, in fact, Willshire-Smith was aware that substantial construction work was to be undertaken at the Centre and that when he was informed that Votino Bros. would not vary the lease, he decided to take the chance of an increase in the financial burden imposed by the lease. Willshire-Smith stated that he would not have agreed to the assignment had he known the extent of the upgrading work proposed, but I am satisfied that he was aware of the nature of the work to be done. Furthermore, it was, in part, his knowledge of the risk of the additional financial liability that may follow if rebuilding work was undertaken by Votino Bros. that emboldened him, before settlement of the sale of the assignor's business was effected and the deed of assignment executed, to seek, and obtain, the assignor's acceptance of a reduction of $28,000 in the purchase price payable by Leighton Hill for the newsagency business. I have no doubt that, in the circumstances, Willshire-Smith would have accepted an assignment of the lease had he been informed by J.L.W. of the extent of its knowledge of the imminence of the commencement of major renovation works at the Centre and 15. that lack of that information was not the cause of any loss Willshire-Smith claimed to have suffered. Willshire-Smith put the amount of his claim for loss under this head as the amount of anticipated trading profits the newsagency business would have received but for the work carried out by Votino Bros. between July 1990 and February 1991. Under the Management Agreement, Willshire-Smith was entitled to retain profits earned by the newsagency business. No other terms for the remuneration of Willshire-Smith were provided in the Agreement. In the light of my findings it is unnecessary to consider whether the remedy provided by s.82 of the Act permitted such a claim (see: Munchies Management Pty. Ltd. v. Belperio (1988) 84 A.L.R. 700 at 712-714). In any event, the case presented by Willshire-Smith failed to provide any evidence on which the Court could conclude that the net profit of the newsagency business would have included the sum claimed but for the building work carried on by Votino Bros. between July 1990 and February 1991. Deficiencies in the proof of that sum were identified in the reasons of the Tribunal when it determined that Willshire-Smith was entitled to recover from Votino Bros. approximately $400 for damages for breach of the covenant of 16. quiet enjoyment, and those deficiencies were not cured in this proceeding. With regard to the claim that J.L.W. failed to inform Willshire-Smith of the correct area of the shop, it appears that the claimed default related to an area of approximately 5 sq.m., being the difference between 149 and 144 sq.m. In the proceedings in the Tribunal it was accepted for the purpose of those proceedings that the area of the shop was approximately 144 sq.m. and that that was the appropriate area on which to calculate the proportion of the outgoings of the Centre Willshire-Smith was obliged to contribute. The lease contained no representations of the area of the shop premises. The rental payable under the lease was an annual sum, payable monthly, and was not shown to be calculated at a rate per square metre. Whether or not it may be said that J.L.W., as Managing agent, could have been expected to be conversant with the areas of the respective tenancies, Willshire-Smith's understanding that the area of the shop was 5 sq.m. in excess of its actual area had no connection with any decision he made in respect of the assignment of lease. He took the premises as he saw them and assumed liability for the rental stated under the lease. Votino Bros. would not have entertained any submission by Willshire-Smith that the rental payable under 17. the lease should be reduced because the area of the shop was 144 sq.m. and not 149 sq.m. as previously understood by the assignor. If, at the time he executed the assignment of lease, Willshire-Smith had known that the area of the premises was 5 sq.m. less than previously understood, I am satisfied that that knowledge would not have caused him to refrain from executing the deed of assignment. Therefore, his claim for loss under this head must fail. As assignee of the lease, Willshire-Smith covenanted to pay a proportion of outgoings. The procedure for calculating the amount of outgoings for which Willshire-Smith was liable was set out in the lease. The amount was the proportion, expressed as a percentage, of floor area of the demised premises of the total lettable area of the Centre. With regard to the claim that J.L.W. failed to inform Willshire-Smith of the detailed costings of the outgoings of the Centre, the principal evidence adduced was to the effect that J.L.W. distributed to tenants regularly, audited assessments of the outgoings of the Centre and that a recent assessment had been provided to the assignor before the assignor assigned his interest in the lease to Willshire- Smith. It is unnecessary to consider what conduct may have been expected of J.L.W. in the circumstances, in particular, whether it was obliged to satisfy itself that a proposed assignee had obtained information relevant to the 18. quantification of the financial obligations imposed on the lessee by the lease, because the case presented by Willshire- Smith failed to show that conduct, said by Willshire-Smith to be misleading or deceptive, caused Willshire-Smith to suffer any loss. It follows that the claim cannot be sustained. Willshire-Smith also claimed that conduct by J.L.W. in about August 1991, in which J.L.W. informed trade creditors of the newsagency business that the newsagency had "closed" and that Willshire-Smith had "gone broke", had caused Willshire-Smith loss and damage and was conduct that was misleading or deceptive in contravention of s.52 of the Act, or was conduct that was unconscionable and in contravention of s8.51AA of the Act. No direct evidence was adduced by Willshire-Smith to prove the cause of action pleaded and no other evidence presented in the case provided inferences capable of supporting the claim. It follows that this claim also must be dismissed. I turn now to the claims against Votino Bros. Willshire-Smith claimed that in exercising the right under the lease to increase the rental payable by the lessee, Votino Bros. had engaged in unconscionable conduct in 19. contravention of s.51AA of the Act by exercising that right when the work of renovation or enlargement of the Centre undertaken by Votino Bros. had been, and would be, the cause of loss to the lessee. In October 1990 Votino Bros. gave notice of an increased assessment of the rental payable under the lease. Votino Bros. sought to increase the rental from $23,083 per annum to $28,000 per annum. Willshire-Smith disputed the assessment and pursuant to the terms of the lease an independent valuer was appointed to determine the rental and to make that determination as an expert. The independent valuer determined that the appropriate rent was $26,340. Willshire-Smith did not accept that determination and appointed his own valuer who assessed the appropriate rent to be $23,083. The dispute about the assessment of rent was one of the issues decided by the Tribunal. The Tribunal held that the terms of the lease in respect of the review of rent had been followed and that the rent payable was $26,340. It is apparent from the facts recited above that although the approach by Votino Bros. to its tenant may have displayed a hard edge, its conduct did not involve participation in sharp practice, concealment, or underhand 20. dealing calculated to put Willshire-Smith at such a disadvantage that it would nullify the exercise of an independent and voluntary will. It was necessary for Willshire-Smith to show, at least, that Votino Bros. engaged in conduct of that character if he were to be able to submit that the conduct was unconscionable "within the meaning of the unwritten law" and, therefore, in contravention of s.51AA of the Act and the subject of remedy under s.87 of the Act. (See: Commercial Bank of Australia Limited v. Amadio (1983) 151 C.L.R. 447 per Mason J. at 461-462; Zumbo, F., "Unconscionability and Commercial Transactions: Exploring the Need for Further Reform Under the Trade Practices Act", Australian Business Law Reform 22 (1994) at 323-344.) Furthermore, the conduct relied upon occurred before s.51AA was inserted in the Act by the Trade _ Practices Legislation Amendment Act 1992, commencing on 21 January 1993, and it was submitted that s.87 of the Act provided no remedy in respect of such conduct. Having determined that the evidence did not establish that Votino Bros. engaged in unconscionable conduct, it is unnecessary to decide how s.87 should be construed, although it may be noted that s.51AA directed corporations not to breach the existing unwritten law of States and Territories and, therefore, remedies were already provided in respect of 21. such breaches. By augmenting remedies available under the Court's accrued jurisdiction, with the remedies provided in 8.87, it may be argued that the amending Act had consequences that were merely procedural rather than substantive. (Sees ler ce an Pierucci Pty. Ltd. v. Wright (1989) A.T.P.R. 40-940 at 50,254-50,255.) However, as I have said, it is unnecessary to decide the point. Willshire-Smith also claimed that Votino Bros. engaged in conduct that was unconscionable and in contravention of s.51AA of the Act between July 1991 and March 1993 by withholding its consent to the assignment of the lease from Willshire-Smith to a prospective purchaser of the newsagency business. Willshire-Smith also claimed that the withholding of consent by Votino Bros. was unreasonable and in breach of a term of the lease. The evidence adduced by Willshire-Smith failed to establish the case pleaded. Willshire-Smith pleaded that agreements for the sale of the newsagency business, which were conditional upon assignment of the lease, were executed in July 1991, December 1991, May 1992, August 1992 and March 1993. There was no evidence to show the formation, or terms, of a contract made between Leighton Hill and a purchaser in July 1991. The 22. contracts of sale made in December 1991 and May 1992 were not subject to a condition that the landlord consent to an assignment of the lease. It was a condition of each contract that the landlord accept a surrender of the existing lease and grant a new lease to the purchaser on terms set out in the contract, or to be negotiated. In fact, on 30 January 1992 Willshire-Smith filed an application in the Commercial Tribunal seeking relief in respect of the lessor's refusal to accept a surrender of the lease and to grant a new lease to the proposed purchaser. The sale agreement made in August 1992 was expressed to be subject to assignment of the lease to the purchaser. The evidence to be found in correspondence between the parties in August 1992 shows that Votino Bros. was prepared to grant its consent to an assignment subject to Willshire-Smith rectifying his default under terms of the lease, in particular for non-payment of rent and outgoings. In addition, Votino Bros. sought payment of a sum for the cost of proceedings in the Tribunal, ordered by the Tribunal to be paid by Willshire- Smith to Votino Bros. but not yet fixed, or taxed. Votino Bros. sought payment of costs in an amount of $8,594.28 but advised that it would not withhold consent to an assignment if payment of the costs was secured pending determination of the amount payable. 23. In September Willshire-Smith commenced proceedings in the Supreme Court of South Australia seeking, inter alia, an order that Votino Bros. consent to an assignment of the lease. Apparently no order was obtained in the terms sought. It is plain that the material recited above discloses none of the elements necessary to establish unconscionable conduct on the part of Votino Bros. The issue remaining is whether Votino Bros., in breach of the assignment contract, unreasonably withheld its consent to assignment of the lease. The onus of proof on that issue was on Willshire- Smith. On the material presented the consent to assignment offered by Votino Bros. was conditioned by matters which touched Votino Bros. and Willshire-Smith and which related to the subject matter of the lease and, therefore, may be held to have been a reasonable response in the absence of evidence of caprice, or of an ulterior purpose such as gaining an advantage at the expense of, or imposing a disadvantage on, Willshire-Smith. (Sees Houlder Bros _& Co. Ltd. v. Gibbs [1925} Ch. 575; Secured Income Real Estate (Australia) Ltd. v. St. Martins Investments Ltd. (1979) 144 C.L.R. 596 per Mason J. at pp.609-610.) There was no evidence of such caprice or ulterior purpose and the claim for damages for breach of contract must fail. In December 1992 Votino Bros. gave Willshire-Smith 24. notice of his default under the lease and in February 1993 purported to terminate the lease. Willshire-Smith then commenced proceedings in the Tribunal seeking, in effect, an order directing Votino Bros. to consent to an assignment of lease although no contract for the sale of the business was then on foot. Votino Bros. also commenced proceedings in the Tribunal seeking a declaration that the lease had been duly determined. Whilst those proceedings were on foot in about March 1993 Willshire-Smith arranged for Leighton Hill to execute a contract to sell the business. It is claimed that the refusal of Votino Bros. to consent to an assignment of the lease for the purpose of that contract was unreasonable. It is apparent from the foregoing that in absence of any other evidence Willshire-Smith was not in a position to offer an assignment of the lease in March 1993. Shortly thereafter, the receiver appointed by the Family Court of Australia took over the sale of the business and arranged with Votino Bros. for a new lease to be granted to the purchaser. No claim of unconscionable conduct or unreasonable withholding of consent by Votino Bros. has been made out by Willshire- Smith in that regard. Finally, Willshire-Smith claimed that in August 1991 25. Votino Bros. engaged in unconscionable conduct in contravention of s.51AA of the Act by issuing a warrant to distrain his goods for non-payment of rent. When execution of the warrant commenced Willshire-Smith obtained an injunction in the Supreme Court of South Australia suspending further execution of the warrant. A claim for damages for the consequence of execution of the warrant was one of the issues determined in the proceedings in the Tribunal. The Tribunal found that Willshire-Smith had failed to show that any loss had been suffered by him and made no finding that the execution of the warrant had been improper. Willshire-Smith presented no evidence to show how it could be said that the conduct of Votino Bros. in issuing and executing the warrant was unconscionable and the claim must be dismissed. Although perusal of the reasons of the Tribunal delivered in March 1992 shows that Willshire-Smith may have had cause to be upset by some of the actions of Votino Bros. and J.L.W., it became apparent in the conduct of these proceedings that Willshire-Smith had allowed a _ sense of grievance to cloud his judgment in deciding to initiate and prosecute the claims he pursued in this matter. The application will be dismissed with costs. 26. I certify that the preceding twenty-five (25) pages are a true copy of the Reasons for Judgment of his Honour Mr Justice Lee. Associate: t Rake hosel Date: 3 Nevcm\(yw \QQ 4 Applicant appeared in person. Counsel for the First, Second and Third Respondents: T.R. Bryant Solicitors for the First, Second and Third Respondents: Theo Kadis & Associates Counsel for the Fourth, Fifth and Sixth Respondents: P.A. McNamara Solicitors for the Fourth, Fifth and Sixth Respondents: Fisher Jeffries David Deakin Davies & Co. Dates of Hearing: 14 March 1994 - 18 March 1994 22 August 1994 - 26 August 1994 29 August 1994 - 2 September 1994 Date of Judgment: 3 November 1994