Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Rokheya Kane Pty Ltd v Lam [2022] NSWCATAP 8 Hearing dates: 5 October 2021 Date of orders: 12 January 2022 Decision date: 12 January 2022 Jurisdiction: Appeal Panel Before: G Curtin SC, Senior Member A Boxall, Senior Member Decision: 1. Appeal upheld. 2. Orders 2.1, 2.2 and 3 made by the Tribunal on 21 June 2021 are set aside. 3. In lieu thereof, order the appellant to pay the respondents the sum of $35,706.54 together with any interest due under Order 2.3. 4. If any party desires to make an application for costs of the appeal: (a) that party is to so inform the other party within 7 days of the date of these reasons; (b) the applicant(s) for costs is to lodge with the Appeal Panel and serve on the respondent(s) to the costs application any written submissions of no more than three pages on or before 14 days from the date of these reasons; (c) the respondent(s) to any costs application is to lodge with the Appeal Panel and serve on the applicant(s) for costs any written submissions of no more than three pages on or before 28 days from the date of these reasons; (d) any reply submissions limited to two pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons; (e) the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers. Catchwords: ADMINISTRATIVE LAW — particular administrative bodies — NSW Civil and Administrative Tribunal – jurisdictional error – power to order a party to pay money to a person specified in the order, whether by way of debt, damages or restitution, under the Retail Leases Act – power dependent upon the existence of a cause of action giving rise to a claim for debt, damages or restitution – the absence of a cause of action amounts to the absence of a jurisdictional fact needed to exercise the power Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 36(1), 38(2), 38(4) Corporations Act 2001 (Cth), ss 206B, 601AD(1), 601AD(2), 601AH(5) Retail Leases Act 1994 (NSW), s 72 Cases Cited: Allen and Ors v Tricare (Hastings) Pty Ltd and Anor [2015] NSWSC 416 Cominos v Di Rico (No 2) [2016] NSWCATAP 133 Cotogno v Lamb (Court of Appeal (NSW), 9 August 1985, unrep Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 McMillan v Coolah Tourist Park Pty Ltd [2021] NSWCATAP 73 Metwally v University of Wollongong (1985) 59 ALJR 481; [1985] HCA 28 Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631; [1997] NSWCA 214 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 White v Baycorp Advantage Business Information Services Ltd [2006] NSWSC 441 Texts Cited: Young, Croft & Smith, On Equity, (2009, Thomson Reuters) Category: Principal judgment Parties: Rokheya Kane Pty Ltd (Appellant) Dickson Lam (First Respondent) Luisa Cheong (Second Respondent) Representation: Counsel: M McMahon (Respondents) Solicitors: Mosman LNS Legal Service (Appellant) LegalVision ILP Pty Ltd (Respondents) File Number(s): 2021/00206037 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 21 June 2021 Before: D G Charles, Senior Member File Number(s): COM 19/43382; COM 20/25680 REASONS FOR DECISION 1. The central question in this appeal is whether the Tribunal fell into jurisdictional error in awarding the respondents (the landlords) what was called "damages for loss of rent" for a period commencing on and post-dating the date the lease between them and the appellant (the tenant) indisputably came to an end. 2. Alternatively, the question is whether we should grant leave to the appellant to amend its Grounds of Appeal to raise the question mentioned above but as an error of law of a different kind (as it was not previously raised by the appellant and was only raised by us on the hearing of the appeal). 3. For the reasons set out below the Tribunal did fall into jurisdictional error. Alternatively, we would have granted leave to the appellant to amend its grounds of appeal to raise the point as a different error of law (misapplication of the relevant statutory provisions). Allowing the point to be considered, although first raised by us, is consistent with the reasons of Kirby P in Cotogno v Lamb (Court of Appeal (NSW), 9 August 1985, unrep) is consistent with s 38(4) of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act") – namely, that we should act "according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms" – and corrects a clear injustice to the appellants. 4. The remaining issues, being the Grounds of Appeal originally propounded by the appellant, have no substance and must be dismissed. 5. We shall first set out the background to the appeal, interspersed with our decision on various points argued where convenient to do so. We shall then turn to the central issue – the award of "damages for loss of rent" - and then the remaining issues argued. Background 1. In 2014, Mr Mohamed Diagne and his wife, Bineta, owned a commercial property at Enmore from which they, or the appellant (of which Mr Diagne was sole director and shareholder) operated a retail café/restaurant. 2. Mr and Mrs Diagne decided to sell the property and have the café/restaurant premises leased back to the appellant by the purchaser of the property under a commercial lease to allow the continued trading of the café/restaurant. 3. Mr and Mrs Diagne sold the property to the respondents under a Contract for Sale (the "Contract") which was settled on 4 November 2014. 4. Under the terms of the Contract, the respondents were required to enter into a commercial lease of the property with the appellant. 5. A form of retail lease was attached to the Contract with provision for a fixed term of five (5) years with one option to renew for a further period of ten years. When the Contract was completed on 4 November 2014, the retail lease contemplated by the Contract was not signed. 6. A lease was subsequently signed on 18 March 2015. The signed lease (the "Lease") differed from that attached to the Contract in that it provided for a fixed term of five years with two options to renew, each for five years. 7. The Tribunal found that the Lease commenced earlier than the date it was executed, being on 23 September 2014 when the appellant entered into possession and commenced paying rent. 8. The result was that the term of the Lease expired on 22 September 2019 unless the appellant exercised the first option to renew. The Tribunal found (for reasons to which we will need to return) that no option to renew was exercised. The result was that the Lease ended on 22 September 2019 at the end of the lease period. The Tribunal made this finding at [47], [51] and [59] of its decision wherein it held: "47. In consequence of the finding as to the commencement date of the Lease, it follows that the fixed (5 year) term of the Lease expired on or about 22 September 2019." … "51. I find that in the events which occurred, there was no renewal of the Lease by (the appellant). … 59. By reason of the finding that there had been no exercise of the option to renew the Lease, it follows, subject to the Lessee's further arguments referred to below, that the Lease ended by effluxion of time on or about 22 September 2019." 1. The circumstances which led to that non-renewal of the Lease and which gave rise to other disputes between the parties were these. 2. Shortly after the Lease was signed, and on 1 April 2015, Mr Diagne was declared bankrupt. 3. One effect of that bankruptcy was that Mr Diagne was automatically disqualified from being a director of the appellant pursuant to s 206B of the Corporations Act 2001 (Cth). No other person was appointed as an alternative director until Mr Diagne was re-appointed on 27 December 2019 having been discharged from his bankruptcy on 2 April 2018. 4. In or about October 2018, the appellant was deregistered as a company by the Australian Securities and Investments Commission ("ASIC"). 5. One effect of that deregistration was that the appellant ceased to exist and all property belonging to the appellant vested automatically in ASIC – s 601AD(1) and (2) of the Corporations Act. That included the appellant's property in the Lease. 6. On 1 May 2019, at a point in time before Mr Diagne's re-appointment as a director and whilst the appellant was de-registered (and thus did not exist), Mr Diagne says he exercised the first option to renew on behalf of the appellant by sending a letter to the respondents in the following terms: "Dear Landlords, 150 Enmore Road, Enmore I intend and on behalf of Rokheya Kane Pty Limited, to renew the lease for the African Eatery and accordingly have by this letter given notice. Referable to clause 16.2 I give notice that it is my intention to renovate the leased premises and to do for the purposes of extending the upstairs seating area. This will require a development authorisation and authority to be lodged with the local government authority. I have made arrangements to have the lessee placed back on the register of incorporated entities. The company became deregistered as filing fee forms forwarded to 150 Enmore Road, Enmore, 2042 were not received. I have and request again a copy of the statement of current rentals in order that I may respond as to: (i) Any arrears; (ii) Make good those arrears as may exist (If any). I have not received statements and previously allegations I have been behind in the rental have been proven wrong. A new letter in identical terms will issue when the company is re-registered but for the moment this letter is sent in my capacity as an officer of the de-registered corporation, pending its re-registration and at which time it will be proposed that the provisions of clause 16.1 of the lease will be of effect. Sincerely (Mr Diagne's signature) Mohamed Diagne 1 May 2019" 1. The Tribunal said that on 24 September 2019 the respondents: "… re-possessed the Premises … (and) … terminated the Lease on the grounds of non-payment of rent." 1. We divert briefly to note that that statement could not be literally correct given the Lease ended on 22 September 2019 and so there was nothing to terminate on 24 September. Rather, and by reference to [76] of the Tribunal's reasons, that paragraph of the Tribunal's reasons should be read as a finding that, if the Tribunal were wrong as to the non-renewal of the first option to renew, the Tribunal would have found that the Lease was terminated for non-payment of rent. 2. That repossession precipitated a flurry of legal proceedings and applications. It is those legal proceedings and applications which seems to underpin, at least on a factual level, the basis of the Tribunal's award of "damages for loss of rent" from 22 September 2019 onwards. Those proceedings and applications included the following. 3. On or about 25 September 2019, Mr Diagne, purporting to act on behalf of the appellant, lodged two applications with the Tribunal. The first was a substantive application (COM 19/43382) seeking relief against forfeiture. The second was an application for interim orders (COM 19/43381) seeking an order to reinstate the appellant to the property. 4. On 1 October 2019, the Tribunal dismissed Mr Diagne's application for interim orders as being misconceived because the correct applicant for relief was the appellant, and it had been deregistered since 20 October 2018 and remained de-registered as of 1 October 2019. 5. On the same date the Tribunal adjourned the application for substantive relief to allow Mr Diagne time to have the appellant reinstated and joined as the proper applicant to the proceedings. 6. On 17 December 2019, the appellant was reinstated as a company by order of the Supreme Court of New South Wales and, by operation of s 601AH(5) of the Corporations Act, Mr Diagne regained his office as director of the appellant from that date (see [44] below). 7. On 14 January 2020, and by order of the Tribunal, the appellant was substituted for Mr Diagne as applicant in the substantive proceedings. 8. The substantive claim (COM 19/43382) was listed for hearing on 8 April 2020. 9. Before that hearing, and on 25 February 2020, the appellant made an application for interim orders to the effect that it be given possession of the property on condition that it paid rent of a certain amount. 10. The Tribunal refused that application for reasons which we need not set out here. 11. On 27 March 2020, the Tribunal vacated the specially fixed hearing of the substantive matter listed for 8 April 2020. The appellant was granted leave to amend its application, with other orders and directions made for the respondents to lodge any cross application and for the parties to file and serve further lay and expert evidence in support of their respective cases. 12. The substantive matter came on for hearing before the Tribunal on 4 November 2020 by which time the respondents had filed their own application (COM 20/25680) for arrears of rent and other amounts. 13. The two proceedings were heard together on 4 November 2020, followed by a further hearing date on 7 April 2021. Subsequently, both parties lodged written submissions dated 20 and 21 April 2021, and 4 and 5 May 2021. The Competing Claims 1. The appellant's claims against the respondent were described by the Tribunal as follows: "18. In its case for relief under the Retail Leases Act 1994 (RL Act) the Lessee now relies upon an Amended Points of Claim filed and served on 6 March 2020, and it does so pursuant to the Tribunal's leave granted on 27 March 2020. 19. The Lessee seeks a range of orders and declarations; in essence, reinstatement of the Lease for another 10 years, or alternatively, "restitutionary damages equivalent to that value". As to an order for re-possession of the Premises, (the appellant) argues that it exercised the option to renew under the Lease for another 5 years from the date of re-possession and seeks a declaration to that effect. 20. (The appellant) alleges a breach of the Lease by the Lessors by reason of their failure to make major repair or replacement of the roof of the Premises and seeks an order that the Lessors pay the cost to (the appellant) of its repair of the roof of the Premises and any ancillary costs of storm damage in February 2020. 21. Relying upon allegations of unconscionable conduct and/or misleading or deceptive conduct on the Lessors' part, as well as the allegation that (the appellant) had exercised the option to renew the Lease for another 5 years beyond the initial 5-year term, the Lessee seeks orders of the Tribunal, generally, for restitution and compensation, including damages for loss of revenue and profits in respect of an 'unusable first floor of the Premises'." 1. Some ten particulars were then given (and set out by the Tribunal) of the alleged unconscionable and/or misleading or deceptive conduct. 2. The respondents submitted to the Tribunal (at least as is revealed by the Tribunal's reasons) that the Lease ended in September 2019 when it was terminated for non-payment of rent, and that the appellant had not exercised the first option to renew. 3. The respondents' claim against the appellant consisted of claims for rental arrears, outgoings and other associated matters, "damages for loss of rent since September 2019" (as described at [27] of the Tribunal's decision) and costs of the proceedings. 4. The basis for the "damages for loss of rent since September 2019" claim was set out in the respondents' Points of Claim in the following terms: "5. Rokheya entered into a lease with the Landlords in September 2014 for an initial period of 5 years (Lease). 6. The Lease contained an option to renew, which the Landlords say was not exercised or not capable of being exercised for the following reasons: a. numerous breaches of the lease by Rohkeya including non-payment of rent; b. the purported exercise of the option to renew the Lease by Mr Diagne on behalf of Rokheya was not valid because Mr Diagne was not a director at the time and Rokheya in fact had no director in May 2019. 7. The Landlords say the Lease validly terminated on 20 September 2019. 8. Rokheya has resisted that termination and has instituted and maintained proceedings against the Landlords. 9. Part of the claim by Rokheya is to seek re-occupation of the Property and a continuation of the Lease. 10. As a result, the Property has remained vacant since the Lease to Rokheya expired on 20 September 2019. 11. Since October 2019 the Landlords have made attempts to secure a tenant for the Property but have not been able to rent the property. Some potential tenants have rejected the option after the Landlords disclosed the Property was the subject of these proceedings. 12. If it were not for these proceedings, the Landlords would have secured a tenant for the property and received rent in the amount of $5,000 per month and continuing. 13. Should the Tribunal find the Lease was validly terminated by the Landlords, the Landlords seek the following by way of damages: a. Lost income in the sum of $5,000/month from 21 September 2019 and continuing." 1. In defence of those claims, the appellant relied on its claims for unconscionable and/or misleading or deceptive conduct, and also that the respondents had failed to mitigate their loss. The Tribunal's Findings 1. As mentioned earlier in these reasons, the Tribunal found that the Lease (for a five-year term) commenced on 23 September 2014 and expired on 22 September 2019. 2. In relation to the first option to renew, the Lease provided that the option had to be exercised between three and six months prior to the expiration of the Lease, i.e., between 22 March and 22 June 2019. 3. The appellant's case was that the option had been renewed by Mr Diagne's letter of 1 May 2019 (set out at [18] above). The Tribunal rejected that submission, correctly in our view, because the appellant was not in existence at the time (having been de-registered) and Mr Diagne was not (and could not be) a director of the appellant at the time. The correct position, as the Tribunal said, was that the property in the lease had vested in ASIC, and only ASIC could have exercised the option at that point in time. 4. The Tribunal rejected the appellant's submission on four bases: first, that the appellant was not in existence at the time of the purported exercise of the option (because it remained deregistered); second, Mr Diagne was not a director of the appellant at that time (and therefore could not do anything on behalf of the appellant); third, the letter of 1 May 2019, upon its proper construction, only communicated an intention to renew at some future time, and; fourth, the appellant was in breach of the Lease and thus unable to exercise the option due to the terms of cl 4.4 of the Lease. 5. As to the fourth matter, the Tribunal accepted the respondents' evidence of breaches of the Lease (at [65]), and found the respondents were entitled to terminate the Lease on the grounds of non-payment of rent and to re-enter the property on 24 September 2019 (at [66]). As we have noted at [20] above, this was an alternative finding against the event the Tribunal was wrong about non-renewal of the Lease. 6. The appellant argued that the reinstatement of the appellant on 17 December 2019 retrospectively cured the fact that the company was not in existence on 1 May 2019, but this submission was rejected by the Tribunal, with the Tribunal relying upon the terms of s 601AH(5) of the Corporations Act. 7. The Tribunal was correct in that finding, at least so far as concerns the purported exercise of the option by Mr Diagne. JC Campbell J (as his Honour then was) summarised the position in White v Baycorp Advantage Business Information Services Ltd [2006] NSWSC 441 at [115]. His Honour said: "Approaching the matter purely as one of statutory construction, the effect of s 601AH(5) is that, now, the statute requires everyone to treat Capital Corporate as though it had never been deregistered. However, that does not mean that anything which purported to be done on behalf of Capital Corporate during the period of its deregistration is thereby regarded as valid. If a director had purported to act on behalf of a deregistered company during the period of deregistration, mere reinstatement would not validate his action, because s 601AH(5) provides only a limited measure of retrospectivity, so that the director regains his office only from the time of reinstatement. Similarly, s 601AH(5) provides only a limited measure of retrospectivity concerning title to the property of the company, so that the property revests in it only from the time of reinstatement. Thus, notwithstanding the reinstatement, any contractual power which Capital Corporate had prior to the deregistration is still regarded, even after the deregistration, as having been vested in ASIC during the period of deregistration. If the contractual power was vested in ASIC, Capital Finance could not have had authority to exercise that contractual power. 1. Thus, the re-registration of the appellant did not retrospectively validate the actions of Mr Diagne in purportedly exercising the first option to renew. 2. The Tribunal noted that the appellant did not pursue its claim for relief against forfeiture, an order for which is normally made on condition that payment is made of arrears of rent. Rather, the appellant pursued its claims for unconscionable, misleading or deceptive conduct dating back to the time around the commencement of the Lease. 3. The Tribunal considered those various claims in some detail and dismissed them all on the facts. In addition, the Tribunal held that there was no evidence of loss even if the claims had been made out (at [97]). 4. The Tribunal then turned to the respondents' claims. 5. The Tribunal made findings as to amounts owed under rights accrued prior to 22 September 2019 (when the term of the Lease expired). 6. The Tribunal then turned to the respondents' claims for the period post-22 September 2019 and held as follows: "111. The Lessors also claim loss of rent for the period from 21 September 2019 to 20 April 2021 (19 months @ $4,287.55 per month) being $81.463.45 and continuing at $4,287.55 per month (or $140.96 per day) until judgment. I accept the Lessors' evidence that but for the proceedings brought by the Lessee, which includes a claim for relief by way of reinstatement to the Premises, the Lessors would have secured another lessee for the Premises. This is in circumstances where there is evidence that the market rental of the Premises from September 2019 was up to $5,000.00 per month. 112. I do not accept the Lessee's submission that the Lessors have failed to mitigate their loss. … 113-114 … 115. The Lessors' claim in damages for loss of rent is, in fact, less than the market rent, which it might otherwise have obtained according to the Lessors' evidence. ... In all of the circumstances I find that the Lessors should have damages for loss of rent during the currency of the Lessee's proceedings i.e. until judgment, in the amount of $81,463.45 and continuing, at $4,287.55 per month (or $140.96 per day). The dismissal of the Lessee's proceedings removes the impediment to the Lessors re-letting the Premises, so it is appropriate that the order for damages by way of loss of rent is up to and including the date of these orders." 1. The Tribunal then made various findings in relation to interest and other matters and made various orders. 2. The substance of the relevant orders made by the Tribunal so far as concerns this appeal were that: 1. the appellant's case was dismissed; 2. the appellant was ordered to pay the respondents the sum of $35,706.54 for rent arrears and other amounts payable under the terms of the Lease (the rights to which accrued prior to 22 September 2019); 3. the appellant was ordered to pay the respondents "damages for loss of rent" for the period 23 September 2019 (what was called the "termination date") – 21 June 2021 (the date the Tribunal's decision was published) amounting to approximately $81,463.45 (as at the date of the Tribunal's reasons); and 4. the appellant was ordered to pay the respondents interest on the above amounts at 10% per annum pursuant to the terms of the Lease. Damages for Loss of Rent 1. In our opinion the amount awarded for damages for loss of rent was erroneous as no cause of action existed to support the award. Clearly enough the award could not be for damages for breach of contract because the Lease had ended on 22 September 2019, and so no contract was in existence for the period specified. 2. The appellant did not raise this ground in its Grounds of Appeal, and the point was only raised by us during the hearing of the appeal. Time was given for the parties, and particularly the respondents, to consider the point and to subsequently provide written submissions. The orders we made at the end of the hearing of the appeal on 5 October 2021 were as follows: "1 The hearing is adjourned. 2 The appellant is to file and serve by 5 pm on 12 October 2021 written submissions: a) setting out the proposed new ground of appeal; b) reasons why leave should be granted to amend the Notice of Appeal to include that new ground; c) why the Tribunal's award of rent/damages post 21 September 2019 was an error of law or otherwise, and if otherwise, why leave to appeal on that ground should be granted. 3 The respondents are to file and serve by 26 October 2021 written submissions: a) as to why leave to amend the Notice of Appeal should be refused; b) (if it wishes to do so) as to the power, or lack thereof, of an Appeal Panel to raise an apparent error of law made by the Tribunal when no such error was raised by the appellant in its Notice of Appeal; c) identifying the cause of action relied upon by the respondents at the hearing before the Tribunal supporting the claim for rent/damages post 21 September 2019 and which are referred to in [111] of the Tribunal's reasons dated 21 June 2021; d) identifying any cause of action which would support the award of rent/damages referred to above; e) why the Tribunal's award of rent/damages post 21 September 2019 was not an error of law or other error; f) assuming leave to appeal is required for the proposed new ground, why leave to appeal should not be granted. 4 The appellant is to file and serve by 5 pm on 2 November 2021 written submissions in reply to those of the respondents referred to in Order 2 above. 5 The parties are to include in their submissions a statement as to whether they consent to an order dispensing with an oral hearing on the issues referred to in these directions, and if they do not consent, submissions as to why an oral hearing should not be dispensed with." 1. On 12 October 2021 the parties were asked to consider the following: "The Appeal Panel would be assisted if the parties would include in their submissions any submissions they wish to make as to whether the Tribunal had jurisdiction to make the award in favour of the respondent for damages for loss of rent from 21 September 2019 (referred to in the Tribunal's reasons at [111] and [115]) if it is found no cause of action existed to support that award. That is, if the Appeal Panel finds no cause of action existed to support that award, did the Tribunal fall into jurisdictional error in making that award. The parties may wish to consider McMillan v Coolah Tourist Park Pty Ltd [2021] NSWCATAP 73 at [43] and [50] and what power the Tribunal had to award the sum identified to the respondent." 1. Submissions were received from both parties although neither party complied fully with the directions made. That is, neither party addressed all of the matters identified by us in the Orders of 5 October and the communication of 12 October 2021. 2. Per Order 5 of 5 October 2021 the appellant consented to an order dispensing with an oral hearing on the issues referred to in those directions. Despite Order 5, the respondents did not indicate their position. In our opinion an order should be made dispensing with a further oral hearing as we are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering their written submissions provided to the Tribunal. The Appellant's Submissions 1. The new ground of appeal provided by the appellant was: "The Tribunal erred in law for jurisdictional error - including consideration of irrelevant matters, and failure to consider relevant factors - and otherwise made an unfair and inequitable decision dated 21 June 2021 ("Decision") in the circumstances of finding damages and interest payable by the appellant for lost rent after termination of the Lease (21 September 2019 ongoing), in the absence of a cause of action such as contract or debt - in the amount of $81,463.45 (at order 2.1 page 1) and $140.96 per day from 21 April to 21 June 2021." 1. The essence of that ground was that the Tribunal erred in awarding "damages for loss of rent" in the absence of any supporting cause of action. 2. The appellant relied upon s 36 of the NCAT Act, namely that the guiding principle for the NCAT Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The appellant submitted that justice required that a claim have a lawful basis with a cause of action as a foundation for an order by the Tribunal. 3. The appellant relied on s 38(2) of the NCAT Act which says that the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. This section is not relevant to this issue as it concerns evidence as distinct from whether the "damages for loss of rent" has a legal basis. 4. The appellant relied upon s 38(4) of the NCAT Act (to which we referred at [3] above) and cited Cominos v Di Rico (No 2) [2016] NSWCATAP 133, with particular reference to [10]-[12] and [23]-[24] of that decision. 5. In that case the Appeal Panel said: "11 Although in his notice of appeal Mr Cominos identifies only the order in proceedings HB 14/18947 as the subject of the appeal, it was obvious from the submissions of both parties and the way in which this appeal was conducted that this was an oversight and that the appeal in fact related to the virtually identical costs orders made in each of proceedings HB 14/18947 and HB 14/18936. 12 In order to give effect to the guiding principle in s 36(1) of the NCAT Act by facilitating the just, quick and cheap resolution of the real issues in the proceedings and to act with as little formality as the circumstances of the case permit and according to the substantial merits of the case without regard to technicalities or legal forms, as required by s 38(4), the Appeal Panel intends to deal with this appeal on the basis that the costs decisions in both proceedings are being appealed against." 1. And: "23 It is appropriate for an Appeal Panel to review a self-represented appellant's stated grounds of appeal, along with the submissions and other material provided and the first instance decision, to see whether it is possible to discern any grounds that raise a question of law. In Cominos v Di Rico [2016] NSWCATAP 5 it was said at [13]: "It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]-[316])." 24 Adopting this approach in the present appeal, it is possible to view each of the grounds as raising a question of law. To the extent that this is correct, leave to appeal is not required." 1. Cominos has limited, if any, application in this case because the appellant in this case, unlike Mr Cominos, was legally represented at the hearing before the Tribunal and on this appeal. No submissions were provided by the appellant as to why and how Cominos should be applied to this case given that significant distinguishing fact, the appellant being content to simply refer to the paragraphs of Cominos identified above. 2. The appellant submitted that the original grounds of appeal touched obliquely, not directly, on the new appeal ground, and accepted that leave to amend its grounds of appeal was appropriate. For the avoidance of doubt, we do not accept the original grounds of appeal touched on the new ground, obliquely or otherwise. 3. The appellant submitted that it was clear from the material in the Appeal Book including the original appeal grounds that post-lease damages were a real issue in the proceedings and referred to various pieces of evidence. We do not accept that submission. Oblique references to post-lease damages in some of the evidence, in the presence of a complete absence of such a mention in the appellant's written and oral submissions, both before the Tribunal and on appeal, is not sufficient to base a submission to the effect that the respondents were on notice of the point. 4. The appellant submitted that the Tribunal's award of "damages for loss of rent" was an error of law because it was unsupported by a cause of action. The Respondents' Submissions 1. The respondents submitted that leave should not be granted for the appellant to raise this new appeal point because the appellant failed to raise the point at first instance and failed to raise it on appeal. The respondents correctly said that this point was first raised by the Appeal Panel on the day of the appeal hearing, without prior notice to the respondents. 2. The respondents submitted that even then the appellant failed to seek leave to amend the grounds and that it was not until the appellant was replying to the respondents' submissions that the Appeal Panel interjected and invited the appellant to seek leave to raise the point of appeal. The first proposition is correct, but the second ("invited") is incorrect. Rather, the appellant was asked whether it intended to seek leave to amend its grounds of appeal, rather than being invited to do so. 3. The respondents submitted that per Metwally v University of Wollongong (1985) 59 ALJR 481; [1985] HCA 28, the appellant is bound by the conduct of the proceedings at first instance and a point not taken at first instance should not be allowed on appeal. 4. That submission slightly, but in an important respect, overstates the principle set out in Metwally. In that case the High Court said that a new point could be first raised on appeal in "exceptional circumstances". The Court said at 71.40: "It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so." 1. However, as was pointed out by Mason P, with whom Gleeson CJ and Priestly JA agreed, in Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631; [1997] NSWCA 214, at 645, whilst the above-quoted principle was compelling, it needed to be recognised that Metwally did not involve an appeal by way of re-hearing, nor did it involve an appeal at all. Rather, the President said, the principles to apply were those set out in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 at 438 and Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 at 7 – 9. 2. Those principles, summarised by his Honour, are that a party seeking to advance for the first time on appeal a new ground not taken at trial will be precluded from doing so if the new ground could possibly have been met by calling evidence at the hearing or if, had the ground been raised below, the respondent might have conducted the case differently at trial. A party does not have a right to insist that a new point be decided on appeal simply because all of the facts have been established beyond controversy or the point is one of construction or of law. This is because it remains a question of whether an appellate court "may find it expedient and in the interests of justice to entertain the point". 3. The respondents submitted that Cominos did not apply because the appellant had been legally represented, a submission we accept (and which we have addressed at [66] above). 4. As to the possible jurisdictional point, the respondents submitted: "9. While the submission sought is slightly confusing, in the manner in which it is asked, the respondents contend as follows: a. The Tribunal had jurisdiction to hear the dispute between the parties pursuant to Division 3 of the Retail Leases Act 1994 (RLA); b. As per s72(1) RLA, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate. 10. In this matter, the appellant (lessee), argued that the lease was still in place and it should be allowed to re-enter the premises. The respondents (landlord) disagreed. 11. Essentially the Tribunal was called upon to determine the respective rights and liabilities of each party. Until that determination was made, the landlord lost the use of the premises pending that determination, as to all intents and purposes it was essentially injuncted from leasing out the property. 12. Alternatively, the lessee failed to surrender the premises at the end of the lease and has embarked upon a course of conduct wherein it has accused the landlord of breaching the contract (the lease). This has resulted in consequential loss for the landlord, being the inability to rent out the premises whilst ever that position has been maintained. 13. The respondents note the following powers pursuant to s72 RLA and says that the Tribunal had the power to award lost rent from 21 September 2019 (being the date they say the lease terminated) under one or both of the following provisions: a. S72(1)(a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, b. S72(1)(f)(iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not. 14. Ultimately, however, whichever way the appeal point is determined, it will have no consequence to the respondents, given that the appellant is financially destitute and unable to pay anything to the landlord, be it damages or costs. 1. No submissions were made by the respondents in relation to the matters identified in Order 3(b)-(e) of 5 October 2021. Decision 1. No cause of action supporting the award for "damages for loss of rent" is found in the respondents' Points of Claim, was referred to by the respondents in their submissions to the Tribunal, is mentioned in the Tribunal's reasons and no cause of action is identified in the respondents' written submissions provided in response to our Orders of 5 October 2021. 2. We accept the respondents' submissions that the Tribunal had the jurisdiction to hear the parties' disputes, and it was empowered to make certain orders under s 72 of the Retail Leases Act 1994 (NSW) (the "RLA") if the preconditions for the exercise of those powers was met. 3. But jurisdiction to hear a dispute and the statutory power to make certain orders are not the same as a cause of action. 4. The respondents did not identify any known cause of action which may have supported the award of "damages for loss of rent" but submitted that they were "essentially injuncted from leasing out the property" because the appellant was saying that the Lease had been renewed. This submission overstates the position. The respondents were not injuncted at all. They voluntarily decided not to rent out the premises to another party whilst the appellant pursued its case against them. That position may be understandable in that a landlord may not wish to take the risk of being potentially liable to a tenant for breach of a lease (if the appellant was successful in arguing the first option had been exercised, the respondents may have been liable for repudiation of the Lease). Be that as it may, those facts do not give rise to a cause of action sounding in damages against the appellant in the eventuality the appellant lost its case. 5. It follows that the award of "damages for loss of rent" for the period post-dating the end of the Lease had no legal basis and amounts to a clear injustice to the appellant. In effect, it was ordered to pay a little over $81,000 to the respondents when the respondents had no legal entitlement to those monies. 6. As we shall now explain, in our opinion the Tribunal made a jurisdictional error in awarding that sum to the respondents (although it had jurisdiction to hear the parties' disputes). If we were wrong about that, we would have granted leave to the appellant to amend its grounds of appeal to include the ground stated and upheld that ground on the basis of an error of law in that the Tribunal misapplied the law in awarding damages when no cause of action existed to support such a claim. 7. The jurisdictional error arises because the Tribunal may only do what various statues permit it to do. As the Appeal Panel said in McMillan v Coolah Tourist Park Pty Ltd [2021] NSWCATAP 73 at [43]: "The Tribunal has such jurisdiction and functions as may be conferred or imposed on it by or under the NCAT Act or any other legislation: NCAT Act, s 28(1). Further, by operation of s 29(1) of the NCAT Act, "The Tribunal has general jurisdiction over a matter if… legislation … enables the Tribunal to make decisions … of a kind specified by the legislation in respect of that matter" and the matter does not otherwise fall within certain other types of jurisdiction. It may be seen, then, that the Tribunal's general jurisdiction (the jurisdiction purportedly exercised by the Tribunal in this matter) depends upon legislation conferring upon it the power to consider a matter and make decisions in relation to the matter." 1. In this case, the only statutory authority relied upon to award "damages for loss of rent" was s 72(1)(a) of the RLA which provides as follows: 72 Powers of Tribunal relating to retail tenancy claims (1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate— (a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, 1. As will be observed, the sub-section is limited to making orders to pay money "by way of" debt, damages or restitution. There was no cause of action for monies due as a debt, nor damages (for, as an example, a breach of contract) and restitution (in this context) is a remedy rather than a right (see, for example, the discussion of restitution and unjust enrichment in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 and Young, Croft & Smith, On Equity (2009, Thomson Reuters) in Ch 18). The point being that there must exist a cause of action (giving rise to a claim in debt, damages or restitution) before the Tribunal is empowered under s 72(1)(a) to order one party to pay money to another under s 72(1)(a), and no such cause of action existed to support the award of "damages for loss of rent". 2. The position is analogous to that described in Allen and Ors v Tricare (Hastings) Pty Ltd and Anor [2015] NSWSC 416 in which Beech-Jones J (as his Honour then was) described the jurisdictional error as follows: "[49] Before NCAT could order termination of a residential site agreement under s 113(1) it had to be "satisfied" of one of ss 113(3A)(a) to (c). Satisfaction of one of those matters was a jurisdictional fact upon which the making of NCAT's order depended (Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at [131] per Gummow J). In this case it only (arguably) purported to be satisfied of one matter, namely s 113(3A)(a). If satisfaction of s 113(3A)(a) was arrived at by NCAT taking into account irrelevant matters or misconstruing the provision then the "basis for the exercise of [its] power [was] absent" (R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42 ; 69 CLR 407 at 432 per Latham CJ; see also Buck v Bavone (1976) 135 CLR 110 at 118–119 per Gibbs J), and it fell into jurisdictional error (Kirk at [72])." (Emphasis added) 1. In this case, before the Tribunal could award "damages for loss of rent" under s 72(1)(a) of the RLA, it needed to be satisfied that a cause of action existed which gave rise to an entitlement to a debt, damages or restitution. As no cause of action existed, there was an absence of a jurisdictional fact upon which the Tribunal's order depended. The absence of that jurisdictional fact means that there was jurisdictional error in awarding those "damages for loss of rent". 2. Given this jurisdictional error exists we are required to address it even if the appellant did not raise the point. In McMillan, at [50], the Appeal Panel said: "The respondent has not appealed from the Tribunal's decision. However, if a real issue as to jurisdiction suggests itself to the Tribunal, even if the parties do not take the point, it must be addressed: SAS Trustee Corporation v Rossetti [2018] NSWCA 68 at [3]; Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employees' Association (1906) 4 CLR 488 at 493-495; [1906] HCA 94; Cockle v Isaksen (1957) 99 CLR 155 at 161; [1957] HCA 85." 1. We note that this passage was specifically drawn to the attention of the respondents, but the respondents made no submissions about it. 2. Accordingly, the point must be addressed even if the appellant did not raise it. 3. Alternatively, if we are wrong about there being a jurisdictional error, we would have granted leave to the appellant to amend its grounds of appeal. It is true, as the respondents submit, that the appellant's solicitor was not the author of the point, the point being first raised by us at the commencement of the hearing of the appeal. 4. A similar situation occurred in Cotogno where the particular point there discussed was raised by the Court and not the appellant. Kirby P said: "Fundamental error at trial and demands of justice. What is to be done in a case such as this where, apparently by oversight, an important element in the matter is not adequately raised, not addressed to the court and not considered in the assessment of the injured person's entitlement to damages? In some cases it may be adequate to hold the parties to the manner in which the case is presented by their counsel and, in the interest of finality in litigation, to refuse the amendments necessary to permit the enlargement of the issues on the appeal to matters that were never canvassed at the trial. This is especially appropriate if the other party would be prejudiced by the amendment, eg because had the matter been in issue at the trial it might have called evidence or pursued additional lines of cross examination relevant to the issue. Cf Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438. In other cases, where it appears that a serious and fundamental oversight has occurred, including on the part of the court itself, the demands of justice will require the enlargement of the appeal so that it can be considered whether the failure to address a particular matter result in such an injustice that the appeal court should rectify it or require that it be rectified on a retrial. See Burston v Melbourne and Metropolitan Tramways Board (1948) 78 CLR 143, 167 (Dixon, J); General Motors-Holden's Pty Ltd v Moularas (1964) 111 CLR 234, 256 (Menzies, J); Burchett v Kane [1980] 2 NSWLR 266 esp Samuels, JA at p 272. See also the recent authority of the Court in Holcombe & Ors v Coulton & Ors, unreported CA, 25 June 1985; (1985) NSWJB 143. In the present case I am of the view, that the demands of justice would not be served adequately by holding the appellant to the case presented before the Master. The omission is so important and so fundamental, given the manner in which the case was pleaded and the circumstances surrounding this unusual injury, that to override it in the name of finality of litigation could result in serious unfairness to the appellant by reason of a misunderstanding or misapplication of the principles of law governing damages in cases framed in trespass to the person." 1. In this case we are bound to apply s 38(4) of the NCAT Act which requires us to act "according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms". 2. We are also to exercise any power given us by the NCAT Act (which includes the power to permit an amendment to the grounds of appeal) in accordance with the guiding principle, namely, to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 3. In our opinion it is just that we allow the amendment to the grounds of appeal. To do otherwise would be to allow a party to pursue another for some $81,000 to which it was never legally entitled. To allow that to happen would also to abrogate our duty to act according to equity and good conscience. 4. There is no prejudice suffered by the respondents in allowing the amendment. Time was granted them to lodge further written submissions on the point and those submissions were received and considered. 5. It is correct of course, as the respondents submitted, that this point was not taken by the appellant before the Tribunal. The force of that point is substantially tempered by the fact the appellants were seeking a significant sum without a supporting cause of action, and the Tribunal should also have noted that there was no cause of action supporting the award. In any event, per the principles summarised by Mason P in Multicon (set out at [75] above) we should allow the point to be raised in the interests of justice. 6. We note that no submission was made that new ground could possibly have been met by calling evidence at the hearing or if, had the ground been raised before the Tribunal, the respondents might have conducted their case differently. Thus, that impediment to allowing the amendment does not exist in this case. Other Grounds of Appeal 1. The original grounds of appeal have no substance. We shall mention them briefly in the order they were addressed in oral submissions. 2. Ground 1 asserted that the Lease commenced on 4 November rather than 23 September 2014. No error of law was identified, nor any other error. In any event, even if correct the appellant was unable to say what difference that factual finding would have made to the orders in the case. 3. Ground 2 asserted that, in some way not adequately explained, the respondents were somehow at fault in not informing Mr Diagne the appellant was de-registered as at the date of the purported exercise of the first option (by the letter dated 1 May 2019). But that letter itself revealed that Mr Diagne was aware the appellant was de-registered. The letter included the following paragraph: "I have made arrangements to have the lessee placed back on the register of incorporated entities. The company became deregistered as filing fee forms forwarded to 150 Enmore Road, Enmore, 2042 were not received." 1. Ground 3 raised a different point about the "damages for loss of rent" than the one we have discussed earlier in these reasons. It has no merit and need not be further addressed as we have upheld the appeal in relation to that award. 2. Ground 4 sought to challenge the findings as to arrears of rent. The appellant's solicitor did not engage with the Tribunal's reasons, did not identify any error of law or any other error, and simply made a number of factual submissions not appropriate to an appeal where error must be demonstrated. 3. Ground 5 asserted that the Tribunal erred in not drawing a Jones v Dunkel inference against the respondents for not calling various identified witnesses. No error of law was identified, nor any other error, nor was it explained how the drawing of the inference (that those witnesses' evidence would not have assisted the respondents' case) could possibly have altered the outcome of the case. 4. Ground 6 sought to assert that it was unconscionable of the respondents to have "harassed" the appellant for the bank guarantee referred to in the Lease. This ground is irrelevant as no orders were made by the Tribunal in relation to any bank guarantee. 5. Ground 7 sought to contend that the Tribunal erred in relation to its findings about the appellant renovating the upstairs of the premises (in order to expand seating capacity and therefore, on the appellant's case, income). This ground has no merit as Mr Diagne's letter of 1 May 2019 said that he "intended" to renovate (at some unidentified time in the future), and any such renovations would require "development authorisation and authority to be lodged with the local government authority." As the appellant was de-registered at the time (and therefore not in existence) and not re-registered until after the Lease ended, the appellant could not have undertaken any renovations during the period alleged. 6. Ground 8 sought to assert that the Tribunal erred in preferring one witness (Mr Lam) over Mr Diagne where their evidence differed. No submissions were advanced as to why the Tribunal so erred, and none are apparent. Mr Lam's evidence was substantially corroborated by contemporaneous material whilst Mr Diagne's was not, and to the extent there was contemporaneous material, it contradicted Mr Diagne at important points. His letter of 1 May 2019 is one example. 7. Ground 9 asserted that the Tribunal's characterisation of an accounting error in the respondents' rent ledger as "innocent" rather than something more sinister is irrelevant. The respondents themselves corrected the error and the appellant has failed to demonstrate how the outcome of the case would have altered if their submission were accepted. 8. Ground 10 asserted some, unexplained, complaint about the fact the Lease was never registered. The appellant submitted that registration of the Lease would have given the appellant a more valuable asset, but given there was no evidence the appellant would have sought to sell the Lease before its de-registration or in some way gained by having this more valuable asset, this ground goes nowhere. 9. Ground 11 raised several irrelevant matters relating to factual findings as to Mr Diagne's bankruptcy and like matters, and who was supposed to tell whom about those matters. The basal facts are that the appellant was in arrears (and an award made in favour of the respondents for those arrears) and the Lease ended (after which the appellant has no liability for "damages for loss of rent"). Costs 1. We have not heard the parties on costs. Uninformed by any submissions we would be inclined to order each party to pay their own costs. The appellant succeeded on a point raised by us, and not by it, and failed on all other grounds. On the other hand, the respondents promulgated a substantial claim for a little over $81,000 which had no legal basis. In our preliminary view, and without the benefit of the parties' submissions, we would be inclined to think that the most appropriate costs order in those circumstances would be to order that each party pay their own costs. 2. This is just a preliminary view of course. But in the event either party seeks a different order, we shall make directions below for the filing and service of submissions on costs. Orders 1. We make the following orders: 1. Appeal upheld. 2. Orders 2.1, 2.2 and 3 made by the Tribunal on 21 June 2021 are set aside. 3. In lieu thereof, order the appellant to pay the respondents the sum of $35,706.54 together with any interest due under Order 2.3. 4. If any party desires to make an application for costs of the appeal: 1. that party is to so inform the other party within 7 days of the date of these reasons; 2. the applicant(s) for costs is to lodge with the Appeal Panel and serve on the respondent(s) to the costs application any written submissions of no more than three pages on or before 14 days from the date of these reasons; 3. the respondent(s) to any costs application is to lodge with the Appeal Panel and serve on the applicant(s) for costs any written submissions of no more than three pages on or before 28 days from the date of these reasons; 4. any reply submissions limited to two pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons; 5. the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers. ********** 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: 12 January 2022