Civil and Administrative Tribunal New South Wales Medium Neutral Citation: CCS 251 Elizabeth St Pty Ltd v Hellenic Club Ltd [2021] NSWCATAP 279 Hearing dates: 18 March 2021 Date of orders: 16 September 2021 Decision date: 16 September 2021 Jurisdiction: Appeal Panel Before: M. Harrowell, Deputy President A.Bell SC, Senior Member Decision: 1. The appeal is dismissed 2. Subject to order 3, the appellants are to pay the respondent's costs as agreed or assessed on an ordinary basis 3. Either party may apply for a different costs order to that in order 2 in which case order 2 will cease to have effect and the following directions apply: a) The applicant for costs (costs applicant) is to file and serve any evidence and submissions on costs within 14 days of the date of publication of these orders; b) The respondent to the costs application (costs respondent) is to file and serve any evidence and submissions in reply within 14 days of the date of publication of these orders; c) The costs applicant is to file and serve any submissions in reply within 21 days from the date of publication of these orders; d) The submissions of the parties are to include submissions about whether an order should be made dispensing with a hearing of the costs application pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 Catchwords: LANDLORD AND TENANT – Retail Lease – tenant's failure to pay rent – breach of essential term – entitlement of landlord to re-enter premises – construction of lease term regulating right to effect re-entry – collateral right to accept repudiation by effecting a re-entry Legislation Cited: Civil and Administrative Tribunal Rules 2014 Conveyancing Act 1919 (NSW) Cases Cited: DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117 Foran v Wright (1989) 168 CLR 385 Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 272 Koompahtoo Local Aboriginal Land Council v Sandpine Pty Ltd (2007) 233 CLR 115 Macquarie International Health Clinic Pty Ltd v South West Area Health Service [2010] NSWCA 268 Majik Markets Pty Ltd v Motor Repairs Pty Ltd (No.1) (1987) 10 NSWLR 49 NatWest Markets Australia Pty Ltd v Tenth Vandy Pty Ltd (2008) 21 VR 68; [2008] VSCA 207 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 Shevill v Builders Licensing Board (1982) 149 CLR 620 The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256 World Best Holdings Ltd v Sarker [2010] NSWCA 24 Texts Cited: Cheshire and Fifoot Law of Contract, 10th Australian Edition Category: Principal judgment Parties: First Appellant: CCS 251Elizabeth St Pty Ltd Second Appellant: Jamal Gebara Respondent: Hellenic Club Ltd Representation: First Appellant: H. Soltan (agent) Second Appellant: No appearance Respondent: F.Salama (counsel) Solicitors: Respondent: Sparke Helmore Lawyers File Number(s): 2020/371146 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 06 October 2020 Before: G. Ulman, Senior Member File Number(s): COM19/37271 and COM 19/43186 reasons for decision Introduction 1. This is an appeal from decisions made in the Consumer and Commercial Division of the Tribunal in relation to two applications concerning a lease of retail premises in Elizabeth Street Sydney (premises). 2. The first appellant, CCS 251 Elizabeth St Pty Ltd (CCS), was the lessee of the premises under a lease for a term of three years commencing on 9 November 2016 and ending on 8 November 2019 (lease). The second appellant, Mr Jamal Gebara (Mr Gebara), was a guarantor of CCS' obligations under the lease. The respondent to the appeal, Hellenic Club Ltd (Hellenic) is the owner of the premises. Background 1. The lease was signed on behalf of CCS by Mr Gebara and a Mr Sameer Al-Amayreh (Mr Al-Amayreh) as the company's directors at that time. Both directors also signed the lease in their personal capacity as guarantors. 2. Clause 4.1 of the lease contained the covenant to pay rent. Cl 4.2(a) provided that the rent must be paid by equal monthly instalments in advance on the first day of each month. Cl 5.1 of the lease prohibited an assignment of the lease by CCS without the written consent of Hellenic, which was not to be unreasonably withheld. Clause 9.4 (a) of the lease provided that if any rent or other money payable by CCS was in arrears for 14 days after the provision of written notice, then Hellenic could re-enter the premises and terminate the lease. Clause 9.4 (b) provided that if CCS defaulted in respect of any other obligation and the default continued for 14 days after the provision of written notice, then Hellenic could re-enter the premises and terminate the lease. 3. Clause 11.7 of the lease dealt with essential terms of the lease. Clause 11.7(a) of the lease provided that CCS and Hellenic agreed that a breach of cl 4.1 or 4.2(a) (among other cls) was a breach of an essential term of the lease. The cl also entitled Hellenic to damages. 4. The full text of these terms and their effect is dealt with below. 5. From about July 2017 CCS began falling behind in its rent and outgoings payments. By December 2017 CCS had not paid rent for the three months commencing 9 October 2017, 9 November 2017 and 9 December 2017. In the period from July to December 2017 it appears that there were also changes in the ownership and control of CCS. According to an ASIC search of CCS dated 13 December 2017 the sole director of CCS at that time was Mr Saddam Mohammad Maqableh and the shareholders were Brashes Convenience Store Pty Ltd and Mr Al-Amayreh. 6. On 13 December 2017 Hellenic served a notice of breach on CCS requiring payment of outstanding rent of $28,213.89 plus legal costs of $550 within 7 days, which was stated to be a "reasonable time". The notice stated that "The Lessor will be entitled to re-enter or forfeit the Lease in the event of the Lessee failing to comply with this Notice within a reasonable time, see section 129 of the Conveyancing Act 1919 (NSW)." 7. On 13 December 2017 Mr Al- Amayreh on behalf of CCS sent an email to Mr Balayannis on behalf of Hellenic stating that he had left for an overseas holiday, he did not know what was happening in the premises, he was busy with his father who was sick and hospitalised, that he apologised for the rental arrears and that he promised to make payment in 48 hours. 8. Mr Balayanis replied by email on 15 December 2017. He said he was sorry to hear about Mr Al-Amayreh's father, he confirmed that the breach notice had been issued for rental arrears and said that if payment in full was not received within seven days of the notice, Hellenic was entitled to re-enter or forfeit the lease. 9. On 15 December 2017 Mr Al- Amayreh sent another email to Mr Balayannis. He apologised for the rent not being paid said he would like to assign the lease to a business friend whom he believed would take care of the outstanding rent. 10. On 18 December 2017 Hellenic served a further notice of breach on CCS claiming that there had been a transfer of shares in CCS "effecting an effective assignment of Lease in breach of clause 5 of the lease". The notice required a transfer of shares in CCS to the original shareholders within 14 days and payment of legal costs of $550 "within seven (14) (sic) days". The notice continued by stating "All requirements must be satisfied within seven (14) (sic) days from the date of this Notice being a reasonable time. The Lessor will be entitled to re-enter or forfeit the Lease in the event of the Lessee failing to comply with this notice within a reasonable time, see section 129 of the Conveyancing Act 1919 (NSW)." 11. Section 129 of the Conveyancing Act 1919 (NSW) (Conveyancing Act) relevantly provides: (1) A right of re-entry or forfeiture under any proviso or stipulation in the lease, for a breach of any covenant, condition, or agreement (express or implied) in the lease, shall not be enforceable by action or otherwise unless and until the less or serves on the lessee a notice – (a) specifying the particular breach complained of, and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and (c) in case the less or claims compensation in money for the breach, requiring the lessee to pay the same, and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and where compensation in money is required to pay reasonable compensation to the satisfaction of the less or for the breach…. (8) This section shall not affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent. (10) This section applies to leases made either before or after the commencement of this Act and shall have effect notwithstanding any stipulation to the contrary. 1. On 19 December 2017, Mr Balayannis sent an email to Mr Al-Amayreh informing him that if CCS did not pay the rent in full by the following day, Hellenic would re-enter the premises. Later on 19 December 2017 Mr Al- Amayreh sent a further email to Mr Balayannis asking for further time to pay the rent. 2. On 20 December 2017 Mr H Soltan, who describes himself as a lay advocate, sent an email to the solicitors for Hellenic. Mr Soltan said that he acted for Mr Gebara and Sunshine Supplies Australia Pty Ltd. Mr Soltan noted that Hellenic intended to re-enter the premises and forfeit the lease due to breaches of the lease by CCS. Mr Soltan stated that his clients were willing to enter into a new lease on the same terms as the existing lease to CCS and would reimburse Hellenic for losses suffered as a result of the breaches of the lease by CCS. The solicitors for Hellenic replied the same day noting that Mr Soltan did not act for the tenant but for a guarantor and a proposed new tenant company. They stated that Hellenic had received direct correspondence from the director of CCS and that it intended to re-enter the premises as a result of the defaults by CCS. 3. On 21 December 2017, Hellenic re-entered the premises and took possession. 4. On 22 December 2017 Mr Soltan wrote to Hellenic acknowledging that Hellenic had re-entered the premises. Mr Soltan made a further offer to Hellenic on behalf of Mr Gebara. The offer involved Hellenic granting a new lease to a company called CCS 209 Castlereagh Street Pty Ltd, with Mr Gebara offering to reimburse Hellenic for legal costs of the breach notice, locksmith's costs and legal costs of the new lease. 5. On 19 January 2018 Hellenic's solicitors wrote to Mr Soltan stating that Hellenic rejected the lease offer from CCS 209 Castlereagh Street Pty Ltd. The solicitors stated that CCS was obliged to undertake a full make good of the premises and informed him that a number of suppliers wished to access the premises to recover certain property. 6. In February 2018 Hellenic entered into a new lease of the premises with Ezymart Leasing Pty Ltd (Ezymart). 7. Having obtained three quotations and having offered CCS the opportunity to undertake the make good work, Hellenic instructed Freedom Operations, which had submitted the lowest quotation, to undertake the make good work. This work was completed in March 2018 at a cost of $36,686 plus GST. 8. On 9 March 2018 Mr Soltan wrote to the solicitors for Hellenic stating that he acted for Mr Gebara and had instructions from CCS. Mr Soltan stated, among other things, that CCS wished to reinstate the lease. 9. Ezymart took possession of the premises on 15 March 2018. 10. Following the make good work and Ezymart taking possession of the premises, Hellenic placed property said to belong to CCS into storage. Between April and August 2018 Hellenic sent a number of emails to Mr Soltan requesting CCS to make arrangements to collect its property. CCS did not do so. 11. On 22 March 2018 CCS lodged application COM18/14534 against Hellenic seeking, among other things, relief against forfeiture of the lease. On 31 December 2018, Hellenic lodged application COM19/00023 against CCS and against Mr Gebara as guarantor seeking, among other things, damages and storage costs. Tribunal proceedings and decision 1. The applications have a long and complicated history. On 1 April 2019 the applications were listed for hearing. On 1 April 2019 the Tribunal dismissed the application by CCS, COM18/14534, with costs on the basis of a Notice of Withdrawal by Mr Gebara on behalf of CCS. In relation to the application by Hellenic, COM 19/00023, on 16 April 2019 the Tribunal ordered CCS and Mr Gebara to pay Hellenic $145,202.52 and other amounts claimed plus costs. 2. Following a number of procedural steps which it is unnecessary to recount in full, ultimately on 17 December 2019 the Tribunal made orders by consent setting aside the orders made in COM 18/14534 and COM19/00023 on 1 and 16 April 2019. Application COM18/14534 was re-registered as COM19/37271 and application COM19/00023 was re-registered as COM19/43186. Both applications were re-listed for hearing with no further evidence to be filed or served. 3. The hearing took place on 12 May 2020, with written submissions filed on 26 May, 9 and 12 June 2020.CCS was represented by Mr Soltan. Hellenic was represented by Mr Salama of counsel. There was no appearance by Mr Gebara. 4. Because of the issues raised on appeal, it is necessary to describe the steps which took place in the conduct of the hearing and the reasoning of the Tribunal in some detail. By its amended points of claim in proceedings COM 19/37271, CCS sought orders including relief against forfeiture, a declaration that Hellenic had engaged in unconscionable conduct a declaration that Hellenic had unlawfully converted CCS' stock and equipment and damages in the alternative to relief against forfeiture. At the commencement of the hearing Mr Soltan stated that CCS abandoned its relief against forfeiture claim. 5. In proceedings COM19/43186 Hellenic sought damages of $241,094.40, which included outstanding rent under the lease, the rental shortfall between the rent payable under the lease and the rent payable under the new lease with Ezymart, make good costs and storage costs. 6. The only witness statement served in either application was by Mr Balayannis the Chief Executive Officer of Hellenic. This statement had been served prior to 17 December 2019 when the Tribunal, by consent, ordered that no further evidence was to be filed or served. No witness statements were filed on behalf of CCS or Mr Gebara either in support of CCS' application or in reply to Mr Balayannis' statement. Mr Balayannis was cross- examined by Mr Soltan to support CCS' unconscionable conduct and conversion claims. 7. It appears that the Tribunal did not direct that points of claim or points of defence be filed in relation to Hellenic's application. At the commencement of the hearing on 12 May 2020 Mr Soltan stated that the ground on which CCS defended Hellenic's claim was that as the breach notice had been served on 13 December 2017 and as Hellenic had re-entered the premises on 21 December 2017, Hellenic had acted prematurely because the 14 day period specified in cl 9.4 (a) of the lease had not expired. Mr Soltan contended that as a consequence Hellenic's termination of the lease was invalid and amounted to repudiation which CCS elected to accept. 8. At the conclusion of the hearing on 12 May 2020 the Tribunal made directions for the filing of written submissions by CCS and then by Hellenic in reply confined to the issue of whether Hellenic served or was required to serve a notice in accordance with cl 9.4 (a) of the lease prior to re-entering the premises on 21 December 2017. 9. In his written submissions Mr Soltan on behalf of CCS submitted, among other things, that cl 9.4 (a) required giving 14 days' written notice before there could be lawful re-entry for non-payment of rent notwithstanding section 129 (8) of the Conveyancing Act. In its written submissions in response, Hellenic submitted, among other things, that it had a contractual common law right to terminate the lease because CCS breached essential terms, namely failure to pay rent and failure to pay rent monthly in advance, thereby repudiating the lease and entitling Hellenic to terminate. 10. Although this had not been directed by the Tribunal, Mr Soltan filed submissions in reply on behalf of CCS. Among other things, Mr Soltan objected to Hellenic's submission that CCS had repudiated the lease entitling Hellenic to terminate, contending that this submission did not accord with the directions which the Tribunal had made on 12 May 2020. In support of that objection, Mr Soltan submitted that if he had known Hellenic contended that the lease was terminated as result of repudiation, CCS would have tendered fresh evidence in opposition and Mr Balayannis would have been cross-examined so as to undermine Hellenic's contention. However, Mr Soltan did not apply to re-open his case to tender any further evidence and nor did he apply for leave to further cross-examine Mr Balayannis. 11. The Tribunal rejected Mr Soltan's submission that the submission by Hellenic that CCS had repudiated the lease entitling Hellenic to terminate did not accord with its directions. At [92] the Tribunal held that Hellenic's submission was pertinent to the issue of whether Hellenic was required to serve a notice in accordance with cl 9.4(a) of the lease prior to re-entering the premises on 21 December 2017. 12. The Tribunal added at [93] that CS had only articulated the ground on which it defended Hellenic's claim at the commencement of the hearing and in these circumstances it was not unexpected or inappropriate for Hellenic to take time after the conclusion of the hearing in order to formulate a response. At [94] the Tribunal rejected the submission that CCS could have tendered evidence to meet the allegation of repudiation as CCS had tendered no evidence at all and the Tribunal had previously ordered that no further evidence was to be filed. At [95] the Tribunal added that in his letter to Hellenic dated 22 December 2017 Mr Soltan had acknowledged that CCS had repudiated the lease. In these circumstances the Tribunal held in [96] that it was satisfied that was not unjust nor unfair in the circumstances for the proceedings to be determined on the basis of the evidence tendered and the written submissions filed. 13. The Tribunal rejected the unconscionable conduct claim by CCS and its claim for conversion and ordered that the application in COM19/37271 be dismissed. Costs of the application were reserved. 14. In relation to Hellenic's application, the Tribunal noted at [135] that except for rent owing by CCS as at 21 December 2017, most of which was admitted by CCS, the balance of Hellenic's claim depended on whether it lawfully terminated the lease when re-entering the premises on that date. At [145] the Tribunal held that the contractual right under the lease to re-enter the premises could only be exercised if a valid notice were given under cl 9.4 (a) and that no such notice had been given entitling Hellenic to re-enter the premises on 21 December 2017. At [164] the Tribunal held that section 129 (10) of the Conveyancing Act did not override the requirements of cl 9.4(a) of the lease, which required arrears of rent or other money to have continued for 14 days after the provision of written notice before the contractual right to re-enter the premises and terminate the lease could be exercised. 15. The Tribunal then dealt with Hellenic's submission that it had a separate right to terminate the lease and sue for damages due to the breach of an essential term of the lease by CCS or due to repudiation. The Tribunal stated at [166] that where a party to a lease has breached a term that is expressed to be an essential term, the party not in default may elect to terminate the lease and sue for damages. At [170] the Tribunal noted that it was not in dispute that CCS was behind in its rental payments when Hellenic re-entered the premises and nor was it in dispute that the contractual obligations to pay rent and pay rent monthly in advance in cls 4.1 and 4.2 of the lease were by cl 11.7 deemed to be essential terms. The Tribunal held at [170] that CCS' breaches of essential terms of the lease entitled Hellenic to re-enter the premises and terminate the lease and that accordingly Hellenic validly terminated the lease when it re-enter the premises on 21 December 2017. 16. At [171] the Tribunal noted that, having found that Hellenic had validly terminated the lease by reason of CCS' breach of essential terms, is not necessary to decide whether CCS's conduct separately amounted to a repudiation of the lease entitling Hellenic to terminate. However, the Tribunal stated at [171] – [173] that, although it was not necessary to be decided, it would have concluded on the basis of Mr Balayannis' uncontradicted evidence that by 21 December 2017 CCS was expressing an intention to no longer be bound by the terms of the lease based on the communications to Hellenic by or on behalf of CCS or its principals. The Tribunal stated that these communications constituted repudiatory conduct entitling Hellenic to terminate the lease by re-entering the premises. 17. At [173]-[224], the Tribunal assessed the damages which had been claimed by Hellenic. At [173] Tribunal stated that having found that Hellenic was entitled to terminate the lease, Hellenic was entitled to recover loss of bargain damages. The Tribunal noted at [174] – [175] that Hellenic's right to recover damages was also based on cl 11.7 (b) and ( e) of the lease and that was 11.7 (f) provided that CCS' liability for damages was not affected by Hellenic re-entering the premises, terminating the lease or accepting CCS' repudiation of the lease. 18. The Tribunal assessed damages at $87,140.25. This comprised outstanding rent up to 21 December 2017 of $26,821.69 ( to which, on any view, Hellenic was entitled irrespective of whether it lawfully terminated the lease by re-entry on 21 December 2017, as the Tribunal noted at [135]); a licence fee from 22 December 2017 to 13 March 2018 of $24,802.07 due to CCS failing to make good the premises and remove its property; outgoings for the period 22 December 2017 to 15 March 2018 of $250.00; rental shortfall between the lease and the Ezymart lease of $2,199.67 ; make good costs of $36,686.00; storage costs of $10,000; legal costs on re-letting the premises of $2,005.82; and a re-letting fee of $8,125.00.These amounts totalled $110,890.25, from which the proceeds of a bank guarantee available to Hellenic of $23,750.00 was deducted , making a net sum of $ 87,140.25. 19. The Tribunal ordered CCS and Mr Gebara as guarantor to pay Hellenic $87,140.25 within 28 days. The Tribunal also made orders in relation to the property of CCS's which had not been collected from Hellenic. Tribunal reserved the costs of Hellenic's application. 20. The Tribunal's orders in respect of both applications were made on 6 October 2020. 21. On 4 January 2021, following receipt of written submissions from Hellenic in relation to costs, the Tribunal made orders that CCS pay Hellenic's costs of both applications. Notice of appeal and preliminary matters 1. On 3 November 2020 CCS lodged its Notice of Appeal, which was within the 28 day time period specified in cl 25(4)( c) of the Civil and Administrative Tribunal Rules 2014 . 2. In the Notice of Appeal, CCS stated that the orders which it sought were a declaration that Hellenic had repudiated the lease by unlawfully re-entering the premises on 21 December 2017; a declaration that CCS is entitled to damages for its stock, equipment, materials and fit out; an order for costs of the proceedings below; and an order for costs of the appeal. 3. On 4 December 2020 the Appeal Panel had joined Mr Gebara as a second appellant to the appeal. The hearing of the appeal proceeded by telephone. Mr Gebara did not dial in for the hearing and nor did anyone dial in for the hearing on his behalf. Being satisfied that notice of the hearing of the appeal had been given to Mr Gebara, we decided to proceed with the hearing of the appeal in Mr Gebara's absence. 4. On 4 December 2020 the Appeal Panel also made directions for the appellants to lodge with the Appeal Panel and give to Hellenic by 22 January 2021 all the materials on which they intended to rely, including their written submissions in support of the appeal. Hellenic was directed to lodge with the Appeal Panel and give to the appellants by 19 February 2021 all the materials on which it intended to rely, including its written submissions in opposition to the appeal. 5. CCS did not comply with the directions made by the Appeal Panel. CCS did not lodge its written submissions and other documents in support of the appeal until 4 March 2021, approximately six weeks after the due date. Meanwhile Hellenic complied with the directions made by the Appeal Panel and lodged its written submissions and other documents in opposition to the appeal on 19 February 2021. This meant that Hellenic's written submissions did not address the matters raised by CCS in its submissions. At the hearing of the appeal Mr Soltan, who represented CCS, stated that CCS was not seeking an adjournment or to rely on any further documents other than those which had been lodged on 4 March 2021. Mr Salama, Counsel for Hellenic, said that he was in a position to deal with the written submissions and documents lodged by CCS on 4 March 2021 notwithstanding that Hellenic's written submissions did not address those matters. In circumstances where Hellenic did not assert any prejudice due to the late lodgment by CCS of its written submissions and other documents, we made an order extending the time for CCS to lodge the documents in support of its appeal, including its written submissions, to 4 March 2021. Grounds of appeal 1. There are three grounds of appeal specified in the Notice of Appeal. The grounds of appeal focussed on the Tribunal's award of damages in the application brought by Hellenic (COM19/43186) rather than on the dismissal of CCS' application (COM19/37271). 2. The first ground of appeal is that the Tribunal denied CCS procedural fairness, and thus made an error of law, by considering and taking into account Hellenic's submission that CCS had repudiated the lease entitling Hellenic to terminate the lease on 21 December 2017. CCS contended in the Notice of Appeal that this was advanced for the first time in Hellenic's written submissions in reply. In particulars in support of this ground of appeal stated in the Notice of Appeal, CCS contended that the Tribunal had ignored that there had been no direction for CCS to file points of defence to Hellenic's claim; that the Tribunal "is not a court of pleadings"; that the Tribunal had erred in determining that Hellenic's submission fell within the directions for written submissions made by the Tribunal; that the Tribunal erred in not concluding that Hellenic's submission amounted to reopening its case, which required that CCS be afforded an opportunity to tender evidence in opposition and further cross examine Hellenic's witness; that the Tribunal unfairly advantaged counsel for Hellenic while unfairly expecting the non-lawyer agent representing CCS to predict that Hellenic would raise its repudiation submission in reply to the submissions by CCS. 3. The second ground of appeal specified in the Notice of Appeal is that a Tribunal made an error of law in stating at [166] that where a party to a lease has breached a term that is expressed to be an essential term, the party not in default may elect to terminate the lease and sue for damages. In particulars in the Notice of Appeal in support of this ground of appeal, CCS contended that in this regard the Tribunal had misconstrued the decisions of the High Court in Shevill v Builders Licensing Board (1982) 149 CLR 620 (Shevill) at 627 and Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 272 (Gumland) at 259. CCS also contended in its particulars that the Tribunal had erred in equating a breach of an essential term amounting to a repudiation with breach of a term which is expressed to be an essential term. CCS also stated in its particulars that the Tribunal had erroneously construed cl 4.2 of the lease as an essential term so as to render cl 9.4 (a) of the lease to be without purpose. 4. The third ground of appeal specified in the Notice of Appeal was that the Tribunal erred in law by failing to consider and determine a submission which had been advanced by CCS and failing to refer to evidence tendered by CCS. Submissions 1. CCS' written and oral submissions expanded upon the matters raised in its particulars to the grounds set out in its notice of appeal. In relation to the first ground of appeal, CCS submitted: 1. The directions made by the Tribunal at the conclusion of the hearing on 12 May 2020 directed CCS to provide submissions confined to the issue whether Hellenic served was required to serve a notice in accordance with cl 9.4 (a) of the lease prior to re-entering the premises on 21 December 2017 and directed Hellenic to file and serve written submissions in reply. CCS contended that Hellenic's submissions which raised the issue whether Hellenic could terminate for repudiation were not in reply to the submissions from CCS; 2. Prior to its written submissions on 9 June 2020 Hellenic had not contended it was entitled to terminate for repudiation; 3. The Tribunal had overlooked that CCS was entitled to only raise the issue of whether Hellenic had acted prematurely in re-entering the premises on 21 December 2017 at the hearing on 12 May 2020 because it had not been directed to file points of defence or written submissions in response to Hellenic's claim; 4. The Tribunal had erred in in the context of rejecting a submission that CCS could have tendered evidence to meet Hellenic's repudiation submission in stating that CCS had tendered no evidence at the hearing; in fact CCS had tendered documentary evidence; 5. The Tribunal had unfairly disadvantaged Mr Soltan, who was a lay advocate, on behalf of CCS and had unfairly advantaged counsel for Hellenic in the manner in which had dealt with this issue; 6. Repudiation is a question of fact. Whilst there was no dispute that CCS was in default of paying rent, repudiation was not determined solely by the non-payment of rent. In objecting to Hellenic raising its termination by repudiation submission, Mr Soltan submitted that if the matter had been raised earlier he would have called and conducted his cross examination differently. 1. Mr Soltan acknowledged in oral submissions that he had not applied to the Tribunal to reopen CCS' case in light of Hellenic's repudiation submission. When asked what evidence he would have called or how he would have run the case differently if he had successfully applied to re-open CCS' case, Mr Soltan said he would have called evidence of a conversation between CCS and Hellenic at about the time of re-entry in which CCS had requested a few more days to make payment. Mr Soltan said he had not called such evidence in the context of the allegation which CCS had made of unconscionable conduct by Hellenic. Mr Soltan submitted that Hellenic had not sought to reopen its case to introduce its repudiation submission. 2. Mr Salama, for Hellenic, submitted that Hellenic had made submissions orally at the hearing on 12 May 2020 that CCS had repudiated the lease entitling Hellenic to terminate by re-entering the premises on 21 December 2017 and that this is not a new issue raised for the first time after hearing. This was disputed by Mr Soltan in reply. Neither party provided the Appeal Panel with the sound recording of the hearing before the Tribunal nor any transcript of the hearing. 3. In relation to the second ground of appeal, amplifying the matters raised in the Notice of Appeal, CCS submitted that: 1. The Tribunal erred in equating the breach of an essential term amounting to repudiation with a breach of a term expressed to be essential. Proof that the lessee has breached a term identified in the lease as an essential term does not necessarily constitute proof that the lessee has repudiated the lease, in the sense necessary to entitle the lessor to accept the repudiation, terminate the lease and re-enter the premises. Mr Soltan referred to Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 (Tabali) and World Best Holdings Ltd v Sarker [2010] NSWCA 24; 2. The Tribunal misinterpreted the decision in Shevill; that decision did not assist a lessor who has not complied with a contractual provision to re-enter premises for unpaid rent ; 3. The Tribunal erred in interpreting cl 11.7 of the lease in a manner which rendered cl 9.4 (a) as without purpose; 4. The Tribunal erred in deciding that Gumland and NatWest Markets Australia Pty Ltd v Tenth Vandy Pty Ltd (2008) 21 VR 68; [2008] VSCA 207 (Natwest) supported the conclusion that Hellenic could terminate the lease for repudiation by re-entering the premises without notice, notwithstanding the provisions of cl 9.4(c). 1. Mr Salama contended that the Tribunal had not been in error. Mr Salama submitted that it was open to Hellenic to terminate the lease for repudiation by re-entering the premises on less than 14 days' notice even though cl 9.4 of the lease required CCS to be in arrears for 14 days after the provision of written notice before Hellenic could re-enter the premises and terminate the lease. 2. In relation to the third ground of appeal, CCS submitted that there had been further procedural unfairness in the Tribunal overlooking that CCS had tendered documentary evidence to the Tribunal which contradicted the Tribunal's finding at [206] that Hellenic had requested CCS to arrange for the removal or collection of its property from the premises and that CCS had failed to act on those requests. CCS pointed to a communication by it to Hellenic on 3 September 2018 in which CCS had asked how it could go about retrieving its belongings which Hellenic had removed from the subject premises. CCS submitted that Hellenic had not responded to this communication. 3. CCS also submitted that the Tribunal did not consider a submission which it had made that Hellenic had failed to mitigate its loss by accepting either of the two offers made by Mr Soltan on 20 and 22 December 2017. 4. Mr Salama submitted that the Tribunal did take into account the documents which Mr Salama tendered, including the communication on 3 September 2018, as those documents were part of Exhibit 1 tendered by Hellenic. In reply, Mr Soltan did not accept that the communication of 3 September 2018 was part of Exhibit 1. The contents of Exhibit 1 were not however provided to us. Consideration First Ground of Appeal: Procedural Unfairness 1. The determination of whether there has been a relevant denial of procedural fairness requires an examination of the issues raised by the parties prior to and at the hearing as well as submissions which were made at the conclusion of the hearing. 2. We were provided with the respondent's points of claim (POC) filed 14 February 2019. The document is found in the respondent's bundle (RB) at pp 80-86. Apparently no points of defence were filed by the appellant in response to this document. 3. While the Tribunal is not a court of pleading, the legal and factual issues can be defined by points of claim and it is appropriate to identify the allegations made in the present case. Relevant claims include: 7. Breach of the Lease … 7.9 The [respondent] provided written submissions to [CCS] as to the multiple defaults on or about 1 August 2017, 1 September 2017, 1 October 2017, 1 November 2017, 1 December 2017 and 13 December 2017 8. Termination of the Lease 8.1 As a result of the accumulating and mounting arrears of [CCS], the [respondent] caused breach notices to be served upon the [appellants] by Sparke Helmore on 13 December 2017 in relation to arrears calculated at that time to be a total of $28,213.89, not including interest, for the periods 9 October 2017 to 8 January 2018 (First Breach Notice). 8.2 It was determined by ASIC searches conducted by Sparke Helmore on about 18 December 2017, that a change on the controlling share of [CCS] company had occurred in breach of clause 5 of the Lease and, as a result, the [respondent] caused breach notices to be served upon the [appellants] on or about 18 December 2017 (Second Breach Notice). 8.3 [CCS] by email affirmed the arrears payable, by multiple failures and the breaches it sustained, and promised to rectify the breach as before 20 December 2017. 8.4 [CCS] failed to rectify the breaches by the specified period and was advised by the [respondent] by email that termination would follow as a result. 8.5 [CCS] acknowledged the continued breaches and failure to abide by the terms and consented to termination of the Lease. 8.6 Under clause 9.4 of the Lease, the [respondent] is entitled to re-enter the Premises and terminate the Lease if rent and other monies payable under the Lease are in arrears for more than 14 days. 8.7 Under clause 9.4 of the Lease and pursuant to s 129 of the Conveyancing Act 1919 (NSW), the [respondent] is entitled to re-enter the Premises and terminate the Lease if the [first respondent] fails to rectify a default following notification of that bridge and being provided a reasonable period of time to rectify such breach. 8.8 Under s 129 (8) of the Conveyancing Act 1919 (NSW) a landlord is entitled to terminate the lease without notice in the event of failure to pay rent and is exempt from the requirements of s 129 of the Conveyancing Act 1919 (NSW). 8.9 [CCS] conceded that it had rental arrears for a period that exceeded 14 days and had breached multiple provisions of the Lease. 8.10 On about 20 December 2017 [Mr Gebara] admitted [CCS's] breach of the Lease and acknowledged and accepted that re-entry and termination of the Lease would occur as a result and stated that [Mr Gebara] was "not able to pay the arrears in the capacity of guarantors under the prior lease". 8.11 The [respondent] re-entered and took possession of the Premises on about 20 December 2017 with the acceptance and consent of the [appellants]. 1. We were also provided with the respondent's submissions filed on 14 February 2019, prior to the commencement of the original hearing (RB 87 and following). At 1.4 the respondent submitted: Since July 2017, [CCS] failed to pay the full amount of rent and outgoings as required under the Lease. As a result of further communications with the director of [CCS] at the time, [CCS] consented to termination admitting it was unable to rectify the multiple breaches and as a result on 20 December 2017, the [respondent] re-entered and resumed control and occupation of the Premises. The Lease was formally terminated by consent between the [respondent] and [CCS] on 21 December 2017. 1. The primary claim was that termination was effected by re-entry and the respondent also contended consent had been given and/or there was an agreement to terminate the Lease. While notices had been served under cl 9.4, which permits re-entry in the circumstances permitted by the Lease as described below, the entitlement to re-enter was not claimed to have been exercised under cl 9. Rather, the entitlement to re-enter was expressed in general terms arising from a number of breaches including failure to pay rent over a long period and a breach of cl 5 (which relates to a change in the controlling share and a deemed assignment of the Lease). Further, it was asserted that there had been an agreement to permit re-entry. 2. As to the evidence provided to the Tribunal concerning what had occurred, it included evidence from CCS's representative in these proceedings, Mr Soltan, about what occurred in December 2017. That evidence was in the form of an email written by Mr Soltan on 20 December 2017. At that time, Mr Soltan was, according to the terms of that email, representing the second respondent (Mr Gebara) and a company Sunshine Supplies Australia Pty Ltd (Sunshine), formerly known as City Convenience Store. The email is set out in the Tribunal's reasons at [29]. It contains a proposal from Mr Gebara, Sunshine or a related entity to enter a new lease with the respondent in light of the ongoing default of CCS. Relevantly the email says: We refer to the registered lease AM53819 (`the lease') as to the premises known as Shop 2/ 251 Elizabeth Street SYDNEY (`the premises'). We act for Mr Jamal Gebara ('JG') and SUNSHINE SUPPLIES AUSTRALIA PTY LIMITED ACN 099 602 874, formally known as City Convenience Store (`CCS'). We note that you act for Hellenic Clun Limited ('Hellenic'), the lessor under the lease. We note that JG and CCS are guarantors under the lease. We note that Hellenic intends to re-enter the premises and forfeit the lease due to breaches of the lease by the current lessee CCS 251 Elizabeth Pty Limited (`CCS251'). The breaches resulted from the inability of the former director of CCS251 Mr Sameer Alamayreh to properly run the business and his apparent permanent travel overseas. As you are aware, neither JG of (sic) CCS are currently in control of CCS251 [the first appellant]. We also note that JG and CCS maybe liable for losses suffered by Hellenic resulting from CCS25I's breaches that will ultimately lead to Hellenic terminating the lease. As you know CCS operates a national chain of convenience stores throughout Australia and utilise an informal franchise/licence as its business structure. This applies to its relationship with CCS25I. In order to eliminate Hellenic's losses resulting from CCS251's breaches and/or repudiation of the lease (emphasis added), following the imminent re-entry by Hellenic of the premises JG and CCS are willing to enter into a new lease by JG, CCS or another related entity on the following terms: … 1. As to what was said at the rehearing on 12 May 2020, the parties are in dispute about whether the issue of what has been broadly and loosely described as "repudiation" was raised in oral argument. While we have the reasons given by the Tribunal, those reasons do not contain any indication that the issue of repudiation arose at the oral hearing. However, it is for the appellants to make good any contention in respect of what occurred. In circumstances where neither party has provided us with the sound recording of the hearing on 12 May 2020, nor any transcript of the hearing, we are not in a position to resolve that dispute. 2. What is otherwise clear from the material provided to us is that at the re-hearing on 12 May 2020, CCS raised a new issue of some complexity which had not been previously considered. This issue was whether, in light of the terms of cl 9.4 (a) of the lease which permitted re-entry by the lessor if arrears existed for 14 days after the provision of written notice, Hellenic had acted prematurely in re-entering the premises on 21 December 2017. 3. It is not surprising in these circumstances that the Tribunal made directions at the conclusion of the oral hearing in the terms in which it did, which exposed for further consideration the issue of whether Hellenic had served, or was required to serve a notice in accordance with cl 9.4 (a) of the lease prior to re-entering the premises on 21 December 2017. 4. The fact that the terms of the directions required Hellenic to reply to submissions from CCS on this issue did not mean that Hellenic was limited only to responding to matters expressly raised by CCS in its submissions. We agree with the Tribunal's observations at [92] of the reasons that Hellenic's submission that CCS had breached essential terms of the lease entitling Hellenic to terminate without notice was pertinent to the issue on which submissions had been directed, namely whether Hellenic was required to serve a notice in accordance with cl 9.4 (a) prior to re-entry. 5. In response to Hellenic's written submissions, CCS made further submissions which the Tribunal took into account. Those submissions took the form of objecting to Hellenic's submission. CCS stated that it would have tendered further evidence and asked further questions of Mr Balayannis in cross examination if the point had been taken earlier. However CCS made no application to re-open its case to take that course. Having failed to make that application and seek the opportunity to present further evidence, CCS cannot now complain that it did not have the opportunity to present further evidence. 6. Mr Soltan said in his oral submissions to us that the evidence CCS would have called would have been to the effect that there was an oral conversation between a representative of CCS and a representative of Hellenic in which CCS had requested a few more days to make payment. 7. This is a surprising submission, particularly having regard to: 1. the respondent's POC and the asserted facts concerning what occurred at the time of re-entry, including the respondent's claims that: 1. There were multiple breaches for failing to pay rent; 2. There were multiple notices given concerning these breaches; 3. There was in fact an acknowledgement that the arrears of rent could not be paid; and 4. Mr Gebara, as guarantor, was not proposing to make good the arrears or rent; and 1. the fact there was other evidence already provided to the Tribunal concerning requests for time to pay: see reasons at [21] and [28]. 1. Consequently, it seems to us that evidence of the alleged conversation now asserted is material relevant to the claims made by the respondent outlined above and should have been provided in any event. It follows that we do not accept there has been any relevant denial of procedural fairness on the basis there was evidence not originally provided because it was unnecessary or irrelevant to the matters then in dispute. 2. Further, that evidence would only be relevant to the question of repudiation. In this regard it is important to emphasise that the issue of whether a party can legitimately terminate a contract for breach of an essential term is conceptually different from the issue of whether the party can terminate the contract due to repudiation of the contract by the other party. As the High Court emphasised in Koompahtoo Local Aboriginal Land Council v Sandpine Pty Ltd (2007) 233 CLR 115 at [44], the term "repudiation" has been used in different senses. In its broader sense, it refers to any breach of contract which justifies termination by the other party. However in its more precise articulation, repudiation refers to renunciation of the contract by a party. This is constituted by conduct which evinces an unwillingness or an inability to render substantial performance of the contract (see also DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117 at [39]). 3. The rationale for the Tribunal's decision in this case at [170] was that Hellenic was entitled to terminate due to the breach of terms in relation to the payment of rent made essential by the parties in the lease agreement. Although the Tribunal went on to add at [171] – [173] that if it had been necessary to decide the point, it would have concluded that CCS had, by its conduct, repudiated the lease (in the sense of renunciation), this was not an essential component of the Tribunal's decision. 4. Consequently, any evidence from CCS of oral conversations in which CCS sought additional time to pay the rent could not have rebutted the central fact that CCS was considerably in arrears in the payment of rent, an obligation made essential by the terms of the lease. It was this incontrovertible fact which underpinned the Tribunal's conclusion that CCS' breaches of essential terms entitled Hellenic to re-enter the premises and terminate the lease. Evidence of communications between the parties prior to re-entry was irrelevant to the Tribunal's conclusion. 5. As to the evidence being relevant to the issue of repudiation or renunciation of the lease by CCS, as we said above, there was evidence before the Tribunal of written communications between Mr Al-Amayreh and Mr Balayannis in December 2017 in which Mr Al-Amayreh had sought further time to pay outstanding rent. It seems to us that the suggested oral conversations, if they occurred, only corroborated the written communications which were already in evidence. Moreover, any such oral conversations would have been relevant to the issue as to whether Hellenic acted unconscionably, which was already an issue before the Tribunal. However evidence to that effect was not led. 6. It follows that we are not persuaded that evidence of any oral conversations seeking further time to pay rent would, in any event, have had a material impact on the issue of termination, whether under the agreement or in consequence of repudiation. 7. CCS also submitted that the Tribunal unfairly disadvantaged the lay advocate appearing for CCS and correspondingly gave an unfair advantage to counsel for Hellenic. No evidence has been placed before us to support that submission and we reject the claim. 8. Having regard to the above, we are satisfied there was no procedural unfairness in the manner in which the Tribunal dealt with the "repudiation" submission advanced by Hellenic and we reject the first ground of appeal. Second ground of appeal: the construction of the lease 1. Ground 2 is in the following terms: The Tribunal erred in law at [166] in stating "… where a party to a lease has breached a term that is expressed to be an essential term, the party not in default may elect to terminate the lease and sue for damages". 1. This ground was supported by the following particulars: (a) The Tribunal, out of context, misconstrued/overstated a passage within Shevill v Builders Licensing Board (1982) 149 CLR 620 at 627 and Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd and Others (2008) 234 CLR 272 at 259 that is subject to rules of law and any applicable statutory provision including s 13 of Conveyancing Act 1919 deeming non-timely payment of rent as non-essential breach. (b) The Tribunal erred in equating "a breach of an essential term amounting to repudiation" to simply "a breach of a term expressed to be essential term". (c) The Tribunal erroneously construed clause 4.2 of the lease expressing timely payment of rent as essential to render clause 9.4 (a) without purpose. 1. This ground was developed in written submissions and orally at the hearing before us, although the submissions appeared to weave various of the grounds of appeal together. The appellant also supported its position by its reliance of the submissions made to the Tribunal at first instance. Essentially, these submissions put forward the following propositions: 1. on its proper construction, termination of the lease in the present circumstances for non-payment of rent required compliance with cl 9.4 and the provision of notice in the form prescribed; 2. the re-entry which occurred on 21 December 2017 was unlawful and not in accordance with the requirements of cl 9.4; 3. the authorities referred to by the Tribunal did not support the proposition that re-entry could be affected without compliance with cl 9.4, even where there was a breach of an essential term as defined by cl 11.7 of the lease; 4. the mere fact an obligation under the lease was defined as an essential term did not mean that a breach thereof constituted conduct amounting to repudiation of the lease. 1. At [166] of its reasons the Tribunal said: It is well-established that ordinary contract principles apply to leases and that where a party to a lease has breached a term that is expressed to be an essential term, the party not in default may elect to terminate the lease and sue for damages. In Shevill v Builders Licensing Board (1982) 149 CLR 620 at 627, Gibbs CJ said: It is clear that a covenant to pay rent at specified times would not, without more, be a fundamental or essential term having the specified effect that any failure, however slight, to make payment at the times would entitle the less or to terminate the lease. However, the parties to a contract may stipulate that a term will be treated as having a fundamental character although in itself it may seem of little importance, and effect must be given to any such agreement: see Schuler(L) v Wickham Tools [1974] AC 235 at 251. In other words, a right to forfeit a lease might arise "in any case of any breach of covenant however trifling, if the parties have agreed that a breach of that covenant should create a forfeiture": Campbell v Payne and Fitzgerald [1953] 53 (NSW) (sic) 537 at 539 1. Having referred to other cases, including Gumland, Tabali and NatWest, the Tribunal concluded at [170]: As I previously said, there is no dispute that when Hellenic re-entered the premises, CCS was behind in its rental payments. There is also no dispute that the contractual obligation to pay rent and to pay rent monthly in advance found in clauses 4.1 and 4.2, are by clause 11.7 deemed to be essential terms. Hellenic's solicitor even signalled to Mr Soltan on 20 December 2017 that their client intended to re-enter the premises as a result of CCS being in breach of essential terms of the Lease. It follows, in my view, consistently with the authorities to which I have referred, that CCS' breaches of essential terms entitled Hellenic to re-enter the premises and terminate the Lease. Accordingly I find that Hellenic validly terminated the lease when it re-entered the premises on 21 December 2017. 1. The Tribunal then dealt with the issue of repudiation at [171]-[172] as follows: 171 In his submissions, Mr Salama also said that CCS' "communications with (Hellenic) and that of Mr Gebara as guarantor, affirm the position that (CCS) at the time had no intention of paying the arrears affirming the repudiation of the Lease….". It is not entirely clear to me whether Mr Salama is submitting, in the alternative, that their actions amounted to repudiatory conduct on the part of CCS entitling Hellenic to also terminate the lease on that basis. Having found that Hellenic had validly terminated the Lease by reason of CCS' breach of essential terms, it is not necessary for me to decide whether CCS and Mr Gebara's conduct, separately amounted to a repudiation of the Lease by CCS entitling Hellenic to terminate the Lease. Had I been required to do so, I would have concluded, on the basis of Mr Balayannis' uncontradicted evidence, that by 21 December 2017's CCS was expressing an intention to no longer be bound by the terms of the Lease. I will briefly state my reasons. 172 Between 13 and 21 December 2017, Mr Balayannis was informed that CCS two principals, Mr Gebara and Mr Al-Amayreh, were no longer involved in the management and operation of CCS. Mr Al-Amayreh said he was overseas and did not know what was happening to the business being conducted from the premises, he had left a manager and his partner, Mr Soltan, to run the business but he would like to assign the lease to Mr Okili who will be taking care of outstanding rent when he gets the approval. Mr Soltan also informed Hellenic's solicitors that Mr Al-Amayreh was permanently travelling overseas, Mr Gebara and CCS were unable to pay the arrears, they were not in control of the business and had no hope of being able to run it. In the same communication Mr Soltan noted, without objection, that Hellenic intended to re-enter the premises and forfeit the lease due to breaches by CCS. He also conveyed an offer on behalf of Mr Gebara and Sunshine Supplies to enter into a new lease. All of this was against the backdrop of CCS being three month's in arrears of the rental payments and not having taken issue with either of the two (albeit invalid) breach notices served by Hellenic's solicitors. In my opinion, what I have described in the preceding paragraph was sufficient to have constituted repudiatory conduct on the part of CCS that also entitled Hellenic to terminate the Lease by re-entering the premises. 1. A resolution of this ground of appeal requires consideration of the following: 1. Did termination for breach of an essential term require the lessor to comply with cl 9.4 if it wished to effect a termination by re-entry of the premises? 2. Could a repudiation by the lessee be accepted and the lease terminated by the lessor effecting a re-entry of the premises without first complying with cl 9.4? These issues raise questions of construction of the lease. Relevant legal principles 1. It is appropriate to briefly state the legal principles which are applicable. 2. Principles of contract law apply to leases and the termination thereof: Tabali per Mason J (as he then was) at 29; Gumland at 259. 3. Subject to s 129 of the Conveyancing Act and the provisions of the lease, termination of a lease may be effected: 1. by re-entry as permitted by an express term of the lease; 2. on notice following breach of an essential term or condition; or 3. by the party not in breach electing, by conduct or notice, to accept repudiatory conduct and terminate the lease. 1. The mere presence of a right of re-entry does not exclude other methods of terminating a lease including the right to terminate for repudiation or breach of a fundamental term: NatWest per Neave JA at [50] (Nettle JA and Ashley JJA agreeing). Tabali per Deane J at 55-6. 2. Section 129 of the Conveyancing Act limits the right to effect a re-entry of the leased premises and terminate the lease unless the requirements for notice found within that section are met: s 129(1). However, this section does not apply to "re-entry or forfeiture … in case of non-payment of rent": s 129(10). 3. In respect of termination based on repudiation, s 129 of the Conveyancing Act does not apply. In Sarker in the Court of Appeal, at [42]-[43], Handley AJA said (Tobias JA and Campbell JA agreeing): 42 Section 129(1) applies where a landlord wishes to terminate the lease "for a breach of any covenant, condition or agreement … in the lease". It may be accepted that the tenant's repudiation of the lease is not within this language and that the landlord's common law right to accept the repudiation and terminate the lease is not affected. 43 Breaches of contract or covenant, falling short of repudiation, fall squarely within the language of the section. The Court must start with the section and give full effect to its language. There is nothing, other than the dicta in Marshall, to support the view that compliance with the section is optional so that a landlord is free to choose between exercising an express right of termination or forfeiture which required compliance with s 129, and his common law right of termination for fundamental breach where that is not necessary. 1. A similar view was expressed by Hodgson JA (Allsop P (as he then was) and McFarlan JA agreeing) in Macquarie International Health Clinic Pty Ltd v South West Area Health Service [2010] NSWCA 268 at [301]. 2. Repudiation occurs when a party evinces an intention no longer to be bound by an agreement, or to fulfil it only in a manner substantially inconsistent with that party's obligations: Tabali at 33, Shevill at 625-6 and the other authorities referred to in Cheshire and Fifoot Law of Contract, 10th Australian Edition at 21.12. Repudiation may arise where there is an anticipatory breach if, prior to performance being due, a party manifests an inability or unwillingness to perform the contract at all or in substance: Foran v Wright (1989) 168 CLR 385 at 441. In this case, the other party may terminate forthwith: Cheshire and Fifoot at 21.13. 3. Actual breach may also amount to repudiation whether or not the breach is of an essential term or condition: Cheshire and Fifoot at 21.14. As stated by the authors: Successive breaches may have a combined significance in determining whether repudiation has occurred. However, repeated failure to perform is not in itself enough to establish repudiation. Thus, consistently late payment of rent by the lessee plainly endeavouring to meet his obligations was held not to be repudiatory in Shevill v Builders Licensing Board. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd, on the other hand, the lessee was not merely late in paying rent, but asserted the right not to pay it at all, and committed other breaches of lease; these factors added up to repudiation. Failure to perform an obligation on time may constitute repudiation even if performance on time was not agreed to be essential: see 21.20 1. The right to terminate following repudiation is separate to a right to terminate for breach of condition. Acceptance discharges the party not in default from further performance: Shevill at 626. 2. Finally, an innocent party may support its termination of a contract by reference to conduct constituting breach which it had not relied on at the time of termination: Shepherd and Felt & Textiles of Australia Ltd [1931 HCA 21, 41 CLR 359 (Shepherd) at 377-8, referred to by Handley AJA in Sarker at [28]. The Lease Provisions 1. In the present case, the relevant provisions of the lease are cls 4.1, 4.2, 9.4, 11.6 and 11.7. These cls provided as follows: 4.1 Covenant to pay Rent (a) The Lessee covenants to pay the Rent to the lessor during the Term (and any holding over) without any set-off or deduction and without demand by the Lessor. (b) The amounts payable by the Lessee o the Lessor form or in connection with, any Supply under this Lease do not include any GST. (c) The Lessee must pay the Lessor an additional amount on account of GST equal to the amounts payable by the Lessee for the Supply multiplied by the prevailing GST rate. (d) The additional amount on account of GST is payable at the same time and in the same manner as the amounts payable by the Lessee are required to be paid to the Lessor for the Supply. (e) Immediately on receiving the amount for the Supply and the additional amount on account of GST, the Lessor must provide the Lessee with a tax invoice which is an approved form for GST purposes. 4.2 Manner of paying the rent (a) The Rent must be paid by the Lessee by equal monthly instalments in advance on the first day of each month (and proportionately for any part of a month), the first instalment to be paid on the Rent Commencement Date. (b) All payments of Rent and other money required to be paid by the Lessee under this Lease must be paid to the Lessor or as the Lessor may in writing otherwise direct, and in any manner specified by the Lessor. 9.4 Lessee's default If at any time during the occupation of the Premises by the Lessee: (a) any Rent or other money payable by the Lessee is in arrears and remains in arrears for 14 days after the provision of written notice; or (b) if the Lessee defaults in respect of any obligation on its part arising out of any provision of this Lease other than referred to in sub-clause (a) and the default continues 14 days after the provision of written notice or in case of repairs required to be effected by the Lessee, the repairs are not completed within a reasonable time; or (c) execution is levied against any of the Lessee's assets; or (d) the Lessee (not being a company) becomes bankrupt or assigns his or her estate or enters into a deed of arrangement for the benefit of creditors; or (e) the Lessee (being a company) either: (1) goes into liquidation (including a voluntary liquidation for the purposes of re-organisation) (2) is wound up or dissolved; or (3) enters into a scheme of arrangement with its creditors or any class of them; or (4) a receiver, receiver and manager or provisional liquidator of any of its assets is appointed, then despite any prior waiver or failure to take action by the Lessor or indulgence granted by the Lessor to the Lessee in respect of any matter or default whether past or continuing, the Lessor or any other person duly authorised by it may: (A) re-enter the Premises or any part of them and terminate the lease; (B) remove or otherwise deal with as provided in clause 6.7(b), all goods, fittings, fixtures and effects found on the Premises; (C) recover all arrears of Rent and other money payable by the Lessee under this Lease, without releasing the Lessee from any liability in respect of the breach or non-observance of any provision of this Lease. 11.6 Lessor's rights not affected The rights, powers and remedies of the Lessor under this Lease are in no way affected or limited by the Lessor; (a) granting to the Lessee any time or indulgence regarding paying Rent; (b) releasing the Lessee from paying Rent or any part of it; (c) agreeing to the substitution of a different Rent either for the unexpired term of this Lease or during any part of the Term; (d) extending the time for payment or any money due on account of Rent; (e) postponing any rights, powers or remedies conferred on the Lessor following the Lessee's default under this Lease or the exercise of any of those rights, powers or remedies at any time and in any manner; (f) not enforcing any covenant of the Lessee contained in this Lease; or (g) granting any other concession to the Lessee regarding paying rent or otherwise complying with the Lessee's covenants under this Lease. 11.7 Essential Term (a) The Lessor and Lessee agree that the breach of any of the following clauses is a breach of an essential term of this lease: (1) clauses 4.1, 4.2(a), 4.3 and 4.6(a); (2) clauses 5.1 and 5.2; (3) clause 6.1; (4) clause 7.1; (5) clause 8.1; (6) clause 13; (7) clause 14; and (8) clause 15; (b) The Lessee is liable to the Lessor for any loss or damage suffered by the Lessor resulting from any breach of an essential term of this Lease. (c) The Lessor's entitlement to damages under this clause 11.7 is in addition to any other remedy or entitlement to which the Lessor is entitled or which may result from any breach of an essential term of this Lease. (d) The covenants referred to in paragraph (a) above are essential terms of this Lease despite the Lessor accepting arrears of Rent or of any late payment of Rent or despite the Lessor waiving the Lessee's continuing obligation to pay Rent during the Term. (e) If the Lessee repudiates this Lease or breaches any covenants contained in the Lease, the Lessee is liable for any loss or damage suffered by the Lessor as a result of repudiation or breach and this loss or damage includes any loss of benefits which the performance of the obligations contained in this Lease by the Lessee would otherwise have conferred on the Lessor. (f) The Lessee's liability to the Lessor under paragraph (b) above is not affected or limited in any way by: (1) the Lessee abandoning or vacating the Premises; (2) the Lessor re-entering the Premises or terminating this Lease; (3) the Lessor accepting the Lessee's repudiation of this Lease or; (4) any conduct by either the Lessor or the Lessee which constitutes a surrender of this Lease by operation of law. Did termination for breach of an essential term require the lessor to comply with clause 9.4 if it wished to effect a termination by re-entry of the premises? 1. While the authorities make clear that the payment of rent is not ordinarily a condition or essential term, the obligation to pay rent (cl 4.1) and the manner of payment (cl 4.2) are prescribed to be such in the present lease: cl 11.7. Prima facie, this would permit termination on notice for breach of an essential term. 2. However, that did not occur in this case. Rather, as recorded in the reasons, a re-entry was effected on 21 December 2017. The Tribunal found this action was lawful as there was a breach of an essential term, namely the obligation to pay rent: reasons at [170]. 3. The appellant says that this method of termination, namely re-entry following breach of an essential term, was not permitted because cl 9.4 set out a process to be followed before re-entry could be effected. That process required a 14 day notice. 4. In our view, the appellant's submission should be accepted. Our reasons are as follows. 5. Despite making the failure to pay rent a breach of an essential term, cl 9.4 specifies the manner in which the Lessee's default is to be dealt with where a right of re-entry is being exercised. 6. The clause, headed up "Lessee's default", expressly deals with the manner in which a re-entry might be effected where there is a failure to pay rent. While the heading is "for guidance only and [does] not affect the interpretation of the lease" (cl 1.2(a)), the clause is expressed to permit a re-entry on notice where there is a non-payment of rent. The requirement for notice is imposed by the lease, even though s 129(10) would not otherwise require such notice. 7. While the clause might be seen as only providing a mechanism by which a Lessor could give notice permitting the lessee to rectify a breach in the prescribed time before re-entry is effected and not otherwise affecting common law rights to terminate for breach of an essential term or condition, in our view such an interpretation should not be preferred. 8. Significantly, by its terms, the clause does not reserve a right to terminate for breach of an essential term by re-entry without notice or to exercise other rights available at common law for breach of an essential term. 9. This position is to be compared to that in Shevill where the clause regulating re-entry on 14 days notice was expressed to be "without prejudice to any action or other remedy which the Lessor has or might or otherwise could have for arrears of rent or breach of covenants or for damages as a result of any such event": Shevill at 624. 10. It seems to us that without reservation of other rights, termination for breach of a condition or essential term by re-entry can only occur in the manner prescribed by cl 9.4. 11. Our interpretation is supported by the following: 1. In addition to breach for non-payment of rent, cl 9.4 applies "if the Lessee defaults in respect of any obligations on its part arising out of any provision of his Lease other than referred to in sub-clause (a) and the default continues for 14 days after the provision of written notice or in the case of repairs required to be effected by the Lessee, the repairs are not completed within a reasonable time": cl 9.4(b) 2. the lease does not otherwise expressly permit termination on notice without providing 14 days 1. Clause 11.6 does not support an interpretation to the contrary. That clause only operates to preserve "rights, powers and remedies of the Lessor under this Lease". 2. It follows that the Tribunal was in error in concluding the respondent was entitled to terminate the lease by re-entry following breach of the essential term being the obligation to pay rent. Could repudiation by the lessee be accepted and the lease terminated by the lessor effecting a re-entry of the premises without first complying with clause 9.4? 1. The entitlement to terminate following repudiation is not excluded by the express terms of the lease and the terms of the lease do not support an implication that termination following repudiation is impermissible. To the contrary, cl 11.7(e) recognises the right and draws a distinction between repudiation and breaches of any covenants in the lease. 2. As stated in the authorities referred to above, where a party repudiates a lease, the party not in default may accept the repudiation and terminate the lease. The right arises where the defaulting party indicates an intention not longer to be bound by the lease or that the defaulting party will fulfil the lease only in a manner substantially inconsistent with that party's obligations. Acceptance must be conveyed to the defaulting party in a manner that indicates an intention to bring the contract to an end. 3. It is an immediate right arising at common law about which an election must be made immediately or within a reasonable time: Majik Markets Pty Ltd v Motor Repairs Pty Ltd (No.1) (1987) 10 NSWLR 49 at 54. 4. Clause 9.4 does not, by its terms, operate in circumstances of repudiation. Indeed, such an interpretation would be anathema to the entitlement to immediately terminate following repudiatory conduct, cl 9.4 requiring notice rather than permitting the party who has not repudiated the lease to discharge the lease and be released from future performance. The Conveyancing Act does not otherwise operate to regulate rights of re-entry following repudiation. Rather, re-entry in these circumstances is to be seen as acceptance of the repudiatory conduct by conduct inconsistent with the continuation of the lease, thereby terminating the lease. 5. At [171] of the reasons and following, the Tribunal found the appellant had repudiated the lease. The facts supporting that finding included the non-payment of rent and the evidence that Mr Gebara and Mr Al-Amayreh were no longer involved in the management and operation of the appellant. In the case of Mr Al-Amayreh, he was "permanently overseas". 6. In the case of Mr Gebara, who was a guarantor under the lease, he was not prepared to pay the outstanding rent on behalf of the appellant. Rather, his only offer was that a new lease be entered into with a new lessee. 7. Those otherwise involved did not raise objection when advised by the respondent of its intention to re-enter the premises, the challenge to the validity of such action occurring after that action had been taken. 8. In our view, no error is shown to have been made in the finding of repudiation. Our reasons are as follows. 9. At the date re-entry was effected there was outstanding rent and evidence of a clear intention that neither the appellant or those managing or guaranteeing its obligations would do so in the future. The Tribunal was entitled to accept the evidence of the respondent's witness Mr Balayannis. The proposal from Mr Al-Amayreh to assign the Lease "to my business friend (Ethan Okili)" in his email dated 15 December 2017 (set out at [21] of the reasons) was not an offer to perform the Lease and make good the breaches including the failure to pay rent. Repeated promises by Mr Al-Amayreh that outstanding rent would be paid remained unfulfilled. 10. Further, there had been a breach arising from the change of ownership of CCS because that change in "effective control" constituted "an assignment of the Lease under the deeming provision of cl 5.10 for which consent was required: see cl 5.1 of the Lease. This breach was also a breach of an essential term: see cl 11.7(a)(2) of the Lease. 11. Consequently, even if repudiation was not relied on at the time of termination, the respondent is entitled to do so now: Shepherd above. 12. It follows that we are satisfied the respondent was entitled to terminate the lease by accepting the repudiation of the appellant and did so by re-entering the premises on 21 December 2017. 13. Therefore, the appellant has not established this ground of appeal. Third ground of appeal: failure to consider evidence and submission 1. CCS contends that the Tribunal failed to consider certain evidence and failed to consider a submission advanced by CCS. If this was the case, we do not consider that this amounts to errors of law. Rather these are matters which, if established, would be relevant to whether or not we would grant leave to appeal. In any event, this ground of appeal can be disposed of briefly. 2. CCS first submits that the Tribunal did not consider certain evidence which it tendered, being an email dated 3 September 2018 in which CCS asked Hellenic how it could retrieve its belongings which had been located at the premises. CCS says that the only reply to this email was a response on 14 September 2018 in which Hellenic said that it was confirming suitable times for the collection of the property in storage and would revert shortly, but that there was in fact no substantive response to the email from CCS of 3 September 2018. 3. The point of this submission, as we understood it, was to challenge the finding of fact made by the Tribunal at [206] of the reasons that on a number of occasions Hellenic requested CCS to arrange for the removal or collection of its property from the premises and CCS failed to act on those requests. 4. There was a dispute between the parties as to whether these emails were considered by the Tribunal because they formed part of Hellenic's Exhibit 1. As the documents in Exhibit 1 were not provided to us it is not possible to resolve that dispute. 5. However even if the Tribunal failed to have regard to the communications in September 2018 to which we have referred, in our view an analysis of those communications would not have required the Tribunal to modify the substance of the finding of fact which it made. It is clear that there were a number of requests by Hellenic to CCS to remove its property, but that CCS did not arrange for its removal. 6. CCS secondly submits that the Tribunal did not have regard to its submission that Hellenic failed to mitigate its loss by failing to accept either of the two offers made by Mr Soltan on 20 or 22 December 2017. The first of those offers was made by Mr Soltan on behalf of Mr Gebara and Sunshine. The second offer was made on behalf of Mr Gebara. Even if the Tribunal failed to have regard to CCS' submission, we consider that it was not unreasonable for Hellenic to reject offers made by on behalf of parties including Mr Gebara in circumstances where Mr Gebara had been associated with, and was a guarantor for CCS which was substantially in default of its obligations to Hellenic to pay rent. 7. In our opinion the third ground of appeal is without merit and we reject it. Conclusion 1. The first appellant has been unsuccessful in its appeal. The second appellant failed to appear. 2. In these circumstances the appeal should be dismissed. 3. In the proceedings at first instance r 38 of the Civil and Administrative Tribunal Rules (NSW) applied as the amount claimed or in dispute was greater than $30,000. Consequently, that rule applies to this appeal: r 38A. 4. Inter alia the appellants were challenging the order for payment of $87,140.25. Consequently, the amount claimed or in dispute was greater than $30,000: The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256. In these circumstances a general discretion applies and there is no need for a party to establish special circumstances. 5. Prima facie, the respondent was successful. We will make an order for costs in its favour but grant liberty for the parties to apply if they contend a different order should be made. Orders 1. The Appeal Panel makes the following orders. 1. The appeal is dismissed. 2. Subject to order 3, the appellants are to pay the respondent's costs as agreed or assessed on an ordinary basis. 3. Either party may apply for a different costs order to that in order 2 in which case Order 2 will cease to have effect and the following directions apply: 1. a) The applicant for costs (costs applicant) is to file and serve any evidence and submissions on costs within 14 days of the date of publication of these orders; 2. The respondent to the costs application (costs respondent) is to file and serve any evidence and submissions in reply within 14 days of the date of publication of these orders; 3. The costs applicant is to file and serve any submissions in reply within 21 days from the date of publication of these orders; 4. The submissions of the parties are to include submissions about whether an order should be made dispensing with a hearing of the costs application pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013. ********** r I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 September 2021