Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Jamaican Coffee kitchen Pty Ltd trading as Dushan & Shelby Trust v M20 Pty Ltd [2022] NSWCATAP 203 Hearing dates: 22 February 2022 Date of orders: 22 June 2022 Decision date: 22 June 2022 Jurisdiction: Appeal Panel Before: G Blake AM SC, Senior Member G Burton SC, Senior Member Decision: (1) the appeal is allowed; (2) the orders made on 7 September 2021 are set aside and are replaced with orders (3) to (5) below; (3) the second respondent is to pay the applicant the sum of $14,164.92 immediately; (4) the second respondent is to pay one third of the costs of the applicant as agreed or assessed; (5) the applicant is to pay the costs of the first respondent as agreed or assessed; (6) a hearing to determine the costs of the appeal is dispensed with; (7) subject to the outcome of any costs application pursuant to order (9) below, the first and second respondents are to pay the costs of the appeal of the appellant as agreed or assessed; (8) order (5) above and order (7) above so far as they relate to the first respondent are to be set off against each other; (9) if any party wishes to make an application to vary orders (7) and (8) above, the applicant (the costs applicant) must file and serve a costs application, including submissions limited to five pages and any evidence in support, within 14 days of the date of the orders in these reasons for decision; (10) any respondent to the costs application is to file and serve any submissions limited to five pages and any evidence in reply within 14 days thereafter; (11) the costs applicant is to file any submissions limited to three pages in reply within 14 days after receipt of the submissions and any evidence of the respondent to the costs application. Catchwords: APPEALS — procedural fairness — failure to give reasons — adequacy of reasons COSTS — party/party — appeals — amount in dispute exceeds $30,000 - general rule that costs follow the event — application of the rule COSTS — party/party — exceptions to general rule that costs follow the event - proceedings at first instance — amount in dispute exceeds $30,000 — separable issues - application of the rule LEASES AND TENANCIES — retail leases — retail shop lease — lessor in breach of obligations — where lessor failed to provide disabled toilet and to clean toilets LEASES AND TENANCIES — retail leases — retail shop lease — where lessee claimed lessor breached covenant of quiet enjoyment by water ingress LEASES AND TENANCIES — retail leases — retail shop lease — where lessee claimed lessor engaged in misleading or deceptive conduct LEASES AND TENANCIES — retail leases — retail shop lease — where lessee claimed lessor engaged in unconscionable conduct LEASES AND TENANCIES — retail leases — retail shop lease — where covid-19 regulatory regime required rent to be renegotiated in good faith by lessor and lessee — where lessor failed to renegotiate in good faith — whether the tribunal has power to vary the lease Legislation Cited: Australian Securities and Investment Commission Act 2001 (Cth), s 12CB Civil and Administrative Tribunal Act 2013 (NSW), ss 35, 38, 50, 58, 60, 80, 81 Civil and Administrative Tribunal Rules 2014 (NSW), rr 4, 25, 38, 38A Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (Cth), s 18 Conveyancing (General) Regulation 2018 (NSW) Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) Insurance Act 1902 (NSW), s18 Retail Leases Act 1994 (NSW), ss 10, 11, 62B, 62C, 62D, 62E, 63, 66, 68, 70, 72, 72AB, 75, 76A Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW), cll 3, 4, 6, 7, 8, 9 (repealed) Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) Retail and Other Commercial Leases (COVID-19 Regulation (No 3) 2020 (NSW) Cases Cited: Aerolink Air Services Pty Ltd v Bankstown Airport Ltd [2022] NSWSC 587 Ajaimi v Giswick Pty Ltd [2022] VSC 131 Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 Collins v Urban [2014] NSWCATAP 17 Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774 Darzi Group Pty Ltd v Nolde Pty Ltd (No 2) [2022] NSWSC 643 First Renewable Pty Ltd v Nastevski [2020] NSWSC 1508 G v Armellin (2008) 219 FLR 359; [2008] ACTSC 68 Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75 Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638; [1984] HCA 55 Manly Council v Malouf (2004) 61 NSWLR 394; [2004] NSWCA 299 Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 NSW Land and Housing Corporation v Orr [2019] 100 NSWLR 578; [2019] NSWCA 231 NTT Australia Digital Pty Ltd v Cover Genius Services Pty Ltd [2020] NSWSC 1378; (2020) 19 BPR 40-711 Origin Concepts Pty Ltd v Wynne [2022] NSWCATAP 31 P8 Auto Ltd t/as European Automotive Ballina v Dolling [2022] NSWCATAP 41 PR v MDM [2020] NSWCATAP 151 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Re Ryals Hotels Pty Ltd [2020] NSWSC 1906 Robin Raju & Associates Pty Ltd v Kaplan Investments Pty Ltd [2021] NSWCATCD 90 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31 Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd [2020] NSWSC 996 Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 409 The Owners Strata Plan No 60182 v Bornzin [2019] NSWCATCD 30 Vella v Mir (No 3) [2020] NSWCATAP 17 Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12 Watson v Foxman (1995) 49 NSWLR 315 Yuen v Thom [2016] NSWCATAP 243 Texts Cited: National Cabinet Mandatory Code of Conduct—SME Commercial Leasing Principles During COVID-19 Category: Principal judgment Parties: Jamaican Coffee kitchen Pty Ltd trading as Dushan & Shelby Trust (Appellant) M20 Pty Ltd (First Respondent) Praxis Capital Pty Ltd (Second Respondent) Representation: Counsel: M Klooster (Appellant) J Pokoney (First and Second Respondents) Solicitors: G & S Law Group Pty Ltd (Appellant) Mills Oakley (First and Second Respondents) File Number(s): 2021/00284920 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not Applicable Date of Decision: 07 September 2021 Before: K Rickards, General Member File Number(s): COM 20/40340 REASONS FOR DECISION Overview 1. This is an internal appeal from the decision of the Consumer and Commercial Division of the Tribunal made on 7 September 2021 in proceedings between the appellant, Jamaican Coffee Kitchen Pty Ltd trading as Dushan & Shelby Trust (JCK), which is the sublessee, the first respondent, M20 Pty Ltd (M20), which is the headlessor, and the second respondent, Praxis Capital Pty Ltd (PC), which is the sublessor, of retail shop premises at Parramatta (the premises), in which JCK sought relief against M20 and PC under the Retail Leases Act 1994 (NSW) (RL Act). The Tribunal dismissed the retail leases application brought by JCK. 2. We have decided to allow the appeal, set aside the orders made on 7 September 2021, to order PC to pay JCK $14,164.92, to order PC to pay one third of JCK's costs at first instance, to order JCK to pay M20's costs at first instance, and to order M20 and PC to pay JCK's costs of the appeal. The factual background 1. The following persons were involved in the events giving rise to the proceedings: 1. Elvis Sabapathy (Mr Sabapathy), the director of JCK; 2. Joseph Napoli (Mr Napoli), the head chef and restaurant manager of JCK; 3. Michael Peters Kyriacou (Mr Kyriacou or Mr Peters), a director of M20; 4. Shun (Dennis) He (Mr He), the director of PC. 1. On 29 September 2014, M20 as the lessor and PC as the lessee entered into a lease of a six level commercial building, and an adjoining ground floor which includes the premises, for a term of ten years commencing on 1 February 2014 and ending on 31 January 2023 (the headlease). The headlease was subsequently varied by extending the term so as to end on 31 January 2024. 2. On 8 December 2017, PC as the sublessor and JCK as the sublessee entered into a sublease of the premises for a term of three years with two options of three years commencing on 1 February 2018 under which the permitted use was as a "restaurant/food outlet" (the sublease). 3. From March 2018 following the fit out, JCK operated a burger restaurant and bar at the premises. 4. On 28 June 2018, PC as the licensor and JCK as the licensee entered into a licence for JCK to use or occupy the basement safe-storage area (the storage area) near the premises for a term that was terminable on five days' notice in writing by either party (the storage licence). 5. On 23 August 2019, the parties entered into an agreement described as a "Deed of Settlement" resolving disputes relating to the payment of outgoings, and the condition and the cleaning of the premises, which included the agreement of PC to provide a building report within 6 weeks to JCK to confirm that the premises were "watertight" and to clean the common toilets seven days a week (the deed of settlement). 6. Further disputes arose between the parties in which JCK alleged that M20 and PC had committed breaches of the headlease and the sublease respectively, and the deed of settlement, and engaged in conduct in contravention of the RL Act. JCK also alleged that it was entitled to an abatement of rent pursuant to the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) (the COVID-19 Regulation). 7. JCK exercised the option for renewal of the sublease for a term of three years commencing on 1 February 2021. The proceedings between the parties in the Tribunal 1. On 21 September 2020, JCK as the applicant commenced proceedings COM 20/40340 against M20 and PC as the first and second respondents by filing the retail leases application. In its points of claim JCK: 1. made the following substantive claims for relief under the heading "Final Relief Sought": 1. M20 and PC pay compensation of $120,416.90 for breaches of s 10 of the RL Act, being the cost of $116,016.90 to repair the damage caused by a water leak and the cost of $4,400.00 to relocate the air conditioner vents; 2. M20 and PC pay compensation of $228,180.90 for breaches of s 62D of the RL Act, being the cost of $116,016.90 to repair the damage caused by a water leak, the cost of $4,400.00 to relocate the air conditioner vents, $3,000 being 20% of electricity costs for nine months, $1,564.00 for stock loss from the storeroom, $42,900.00 for the cost of cleaning toilets and damages for having no access to the disabled toilet, and $60,000.00 for four months' rent during rain disruption; 3. M20 and PC pay compensation of $228,180.90 for breaches of s 62B of the RL Act, being the same amounts comprising the claim for breaches of s 62D of the RL Act; 4. an order, pursuant to s 72(1)(c) of the RL Act, that M20 and PC comply with the deed of settlement; 5. an order, pursuant to s 72(1) of the RL Act, for the abatement of rent payable under the sublease "by reason of the extensive road works taking place immediately outside" the premises; 6. damages against M20 and PC for breach of the deed of settlement; 1. relevantly made the following allegations under the heading "Pleadings & Particulars": 1. M20 and PC had committed breaches of the sublease by reason of the failures to ensure the premises were watertight, to clean the toilets seven days a week and to provide access to the disabled toilets; 2. M20 and PC had committed breaches of the deed of settlement by reason of the failures to repair the roof of the premises, to clean the toilets seven days a week and to do an additional clean of the toilets each Saturday and Sunday night; 3. M20 and PC in December 2017 made express representations as to the condition of and facilities associated with the premises, and implied representations as to the absence of road works in front of the premises, which were misleading or deceptive or likely to mislead or deceive, and in reliance on these representations JCK entered into the sublease and fitted out the premises as a restaurant, and suffered loss and damage, whereby M20 and PC breached s 62D of the RL Act; 4. M20 and PC in December 2017 made express representations as to the condition of and facilities associated with the premises, which were false, and in reliance on these representations JCK entered into the sublease and fitted out the premises as a restaurant, and suffered loss and damage, whereby M20 and PC breached s 10 of the RL Act; 5. M20 and PC breached the sublease and the deed of settlement, made demands for rent and threatened to re-enter the premises in breach of the COVID-19 Regulation, whereby M20 and PC breached s 62B of the RL Act; 6. PC failed to comply with the COVID-19 Regulation by continuing to demand rent, and by failing to renegotiate the terms of rental payments including a failure to waive rent and defer rent, whereby JCK was entitled to an adjustment of rent. 7. JCK was entitled to a rent adjustment pending completion of roadworks in front of the premises. 1. On 8 and 9 March 2021 and 20 May 2021, the Tribunal heard the proceedings, and on 20 May 2021 reserved its decision. Each of JCK and M20 and PC was represented by counsel. 2. On 7 September 2021, the Tribunal dismissed the proceedings, ordered JCK to pay the costs of M20 and PC as agreed or assessed, and published reasons for its decision (the Tribunal Decision). The Tribunal Decision 1. In the Tribunal Decision, the Tribunal relevantly: 1. noted that the material admitted into evidence together with the respective submissions made by each of the parties had been duly considered but would not be recited (at [1]); 2. set out the factual background and the claims of JCK including that the claims for property damage had been reduced from $120,416.90 to $41,594.19 by reason of taking into account $74,466.71 received under an insurance claim (at [2]-[10]); 3. found that there was no breach of s 10 of the RL Act because it had not been adequately demonstrated upon the evidence that M20 and PC or any agent acting upon their behalf had knowledge of water leakage or any related structural defect which was affecting or was likely to affect the agreed use or amenity of the premises as at the time that the sublease was entered into in December 2017 (at [11]-[14]): " … [14] It is not adequately demonstrated upon the evidence that the respondents or any agent acting upon their behalf had knowledge of water leakage or any related structural defect which was affecting or was likely to affect the agreed use or amenity of premises as at the time that the subject lease was entered into in December 2017." 1. found that there was no breach of s 62D of the RL Act because it had not been adequately demonstrated upon the evidence that any misleading or deceptive conduct took place (at [15]-[16]): " … [16] For the same reason as is set out within paragraph 14 above, this submission is not supported upon the evidence. There is insufficient evidence to establish to the required evidentiary standard that any misleading or deceptive conduct took place." 1. found that there was no breach of s 62B of the RL Act because the evidence did not support a finding that that M20 and PC had engaged in unconscionable conduct (at [17]-[20]): " … [20] Applying such a test, the evidence admitted in this matter does not support a finding that the respondent has engaged in unconscionable conduct, …" 1. as to the claim for damages for breach of the deed of settlement, found that it was not a deed and was unenforceable due to the absence of consideration, there was no proof of loss caused by the delay in the provision of the building report until November 2020, and that there was insufficient evidence of additional cleaning costs (at [21]-[25]): " … [22] … It was not an enforceable contract involving consideration on the part of each of the parties. … [24] … the evidence as provided by the applicant has not adequately demonstrated that any actual loss or damage was caused by this delay. [25] The evidence establishes that the toilet cleaning obligations of the respondents have perhaps not been fully met, but there is insufficient evidence to properly base the claim made for "additional" cleaning costs. …" 1. made the following finding as to the claims for rent abatement based upon adjacent roadworks and the light rail (at [26]): "[26] The claims for rent abatement based upon adjacent roadworks and the light rail also have a notional basis but are unsupported by adequate evidence as to any causal link between the existence and extent of any such work and any actual loss caused." 1. dismissed the claim for alleged breach by PC of the COVID-19 Regulation (at [27]): "[27] There was previously an indication that the applicant's claim would be amended to specifically seek monetary or other orders consistent with "COVID relief". The respondents raise a jurisdictional issue about this claim which does appear, at least upon cursory review, to have merit. However, the issue of jurisdiction need not be determined because no probative evidence has been provided to support this aspect of the claim which is accordingly dismissed." 1. dismissed the claim for the cost of relocation of air conditioning vents (at [28]): "[28] The claim for the cost of relocation of air conditioning vents as made by the applicant is not supported by any acceptable expert evidence nor by any proper evidence as to expenditure. This component of the claim brought on behalf of the applicant is also accordingly dismissed." 1. found that there was no reason that costs should not "follow the cause" pursuant to r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) (at [29]-[31]). The history of the appeal 1. On 6 October 2021, JCK as the appellant commenced proceedings 2021/00284920 against M20 and PC as the first and second respondents by filing a notice of appeal in which it asserted that the Tribunal made several errors of law, and other errors for which leave to appeal should be granted, and that the proceedings should be remitted to the Consumer and Commercial Division of the Tribunal for redetermination by a differently constituted Tribunal upon the evidence already adduced to the Tribunal at first instance, and such further evidence as the Tribunal may allow (the notice of appeal). 2. On 29 October 2021, the Appeal Panel made procedural directions for the filing of an agreed bundle of documents and the written submissions of the parties. 3. On 22 November 2021, M20 and PC filed their reply to appeal, in which they contended that the Tribunal had not made any errors of law and opposed the granting of leave to appeal (the reply to appeal). The scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law and otherwise with leave of the Appeal Panel: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). 2. An internal appeal is not a re-hearing of the original proceedings or a mere opportunity for a party dissatisfied with the outcome in the original proceedings to re-argue its case: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must establish an error of law has occurred, or otherwise an error of the type that it is appropriate to grant leave to appeal. 3. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law, which relevantly includes whether there has been a failure to provide proper reasons, whether the Tribunal applied a wrong principle of law and whether there was no evidence to support a finding of fact. 4. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance." (emphasis in original) 1. In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. 2. In Collins, the Appeal Panel at [84(2)] stated as follows concerning exercise of that discretion: "[84] The general principles derived from these cases can be summarised as follows: … Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed;" 1. The Appeal Panel may decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing: s 80(3)(a) of the NCAT Act. Further, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including but not limited to any one or more of orders that the appeal is to be allowed, the decision under appeal is to be set aside, and the whole or any part of the case is to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel: s 81(1)(a), (c) and (e) of the NCAT Act. The hearing of the appeal 1. On 22 February 2022, we heard the appeal by telephone. Mr M Klooster of counsel appeared for JCK. Mr J Pokoney of counsel appeared for M20 and PC. 2. JCK relied on the following documents: 1. the notice of appeal; 2. the bundle of documents containing the pleadings, the evidence, the written submissions and the transcript of the hearing before the Tribunal filed on 17 January 2022; 3. the amended grounds of appeal filed on 18 January 2022 (the amended grounds of appeal); 4. the appellant's submissions dated 18 January 2022 (the JCK submissions); 5. the appellant's submissions in reply dated 21 February 2022 (the JCK reply submissions). 1. M20 and PC relied on the following documents: 1. the reply to appeal; 2. the transcript of the hearing before the Tribunal filed on 17 February 2022 (the transcript for 9 March was contained in three separate sections which we have referred to as Tcpt 1, Tcpt 2 and Tcpt 3); 3. the respondents' submissions dated 17 February 2022 (the M20 and PC submissions). 1. At the commencement of the hearing, we heard and delivered oral reasons for our decision to grant JCK's application for leave to rely on the amended grounds of appeal raising errors of law filed on 18 January 2022 (which we refer to as amended grounds 1 to 7): "Grounds not requiring leave 1. Having found at [25] that damage had occurred by reason of the Respondents not fully meeting its toilet cleaning obligations, the Member applied the wrong principle of law by failing to do his best to quantify the loss, even if this might involve speculation or guess work, to the extent there is uncertainty to the Appellant's loss. 2. Having found at [25] that damage had occurred by reason of the Respondents not fully meeting its toilet cleaning obligations and that there was insufficient evidence for the Appellant to properly base the claim for damages, the Member applied the wrong principle of law by failing to award nominal damages. 3. The Member failed to provide reasons, or adequate reasons, with respect to: 3.1 The finding at [25] that the Appellant had not established its loss for additional cleaning costs. 3.2 The proper construction of the Deed of Settlement. 3.3 The determination of the Appellant's claim for misleading or deceptive conduct. 3.4 The finding at [16] that there was insufficient evidence that the Respondents had engaged in misleading or deceptive conduct took place. 3.5 The finding at [28] that the Appellant had not established its claim for the cost of relocation of the air conditioning vents. 3.6 The finding at [27] that the Appellant had not established its claim for COVID relief. 4. The learned made a factual finding at [22] that there was no consideration on the part of each of the parties to the Deed of Settlement when there was no evidence to support such a finding. 5. The Member erred at [16] by applying the wrong principle of law when by considering the intent of the Respondents at [14], which is irrelevant when assessing whether the Respondents engaged in misleading or deceptive conduct. 6. The Member failed to make a finding as to the proper construction of the Deed of Settlement and therefore failed to determine a necessary issue raised by both parties, where such a finding was a necessary step for the Tribunal to reach the conclusion at [22] to [24] that the Respondent did not breach the Deed of Settlement. Grounds requiring leave 7. The following findings were against the weight of evidence, or alternatively resulted in a decision that was not fair and equitable: 7.1 The finding at [22] that there was no consideration on the part of each of the parties to the Deed of Settlement. 7.2 The finding at [25] that the Appellant had not established its loss for additional cleaning costs. 7.3 The finding at [27] that there was no probative evidence provided to support the COVID-19 relief claim." 1. Each of the parties made oral submissions. The parties indicated that they were content to deal with the costs of the appeal on the papers. 2. Since counsel for JCK submitted that we would have no power to make fresh factual findings if we decided to deal with the appeal by a rehearing or, having allowed the appeal, conduct a new hearing rather than remit the matter, at the conclusion of the hearing we made procedural directions for the filing of submissions on this question, and reserved our decision. 3. On 25 February 2022, JCK filed submissions in which it accepted that the Appeal Panel has power to make new factual findings in a rehearing under ss 80(3)(a) and 81(1)(e) of the NCAT Act. 4. On 2 March 2022, the solicitors for M20 and PC sent a letter to the Tribunal in which they agreed with the submissions of JCK that the Appeal Panel has power to make new factual findings in a rehearing under ss 80(3)(a) and 81(1)(e) of the NCAT Act. 5. Both parties sought that the Appeal Panel re-determine the matter on the evidence provided to us rather than remit it, if the appeal was allowed. The issues 1. We are satisfied that the appeal was commenced within the time of 28 days prescribed under r 25(4)(c) of the NCAT Rules. 2. The seven amended grounds of appeal arise for determination. It is convenient to deal first with amended ground 3. 3. If any of the amended grounds of appeal is upheld, then the issue will arise as to whether we deal with the appeal by a rehearing or remit the whole or part of the proceedings for redetermination in the Consumer and Commercial Division. 4. Finally, it will be necessary to decide the costs of the appeal. Amended ground 3 1. The New South Wales Court of Appeal has expressly recognised the appropriateness of abbreviated oral judgments in busy trial courts whilst, at the same time, emphasising the requirement that, as a minimum, reasons be adequate for the exercise of a facility of appeal: see, for example, Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 (Soulemezis) at 260 per Kirby P. In the end the balancing act which needs to be undertaken in considering the sufficiency of a statement of reasons involves the adoption of, at the least, a minimum standard which places the parties in a position to understand why the decision was made sufficiently to allow them to exercise any right of appeal: see, for example, Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 (Beale) at 444 per Meagher JA. 2. In NSW Land and Housing Corporation v Orr [2019] 100 NSWLR 578; [2019] NSWCA 231 (Orr) Bell P at [66], [68], [70], [71] and [77] set out the following principles with respect to the adequacy of reasons of the Tribunal (with Ward JA at [109] agreeing): "[66] In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 (Bisley)." "[68] In terms of the former parameter, the quantity (or detail) of reasons, necessary for those reasons to be adequate may vary both with the nature of the decision maker, i.e. whether or not it is a court of tribunal, and, if the latter, possibly the type of tribunal, and the nature of the question being decided: Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24 at [56] per French CJ and Kiefel J (Wainohu). Thus even superior courts are not required to give reasons for every interlocutory decision: Wainohu at [56], [98], Hogan v Hinch (2011) 243 CLR 506; [2011] HCA 4 at [42]; Lodhi v Attorney General (NSW) [2013] NSWCA 433; 241 A Crim R 477 at [29]; R v Kay; Ex parte Attorney-General (Qld) [2017] 2 Qd R 522; [2016] QCA 269 at [27]) and other aspects of decision making such as findings on pure credibility or matters that necessarily call for estimation or impression may require less or only allow for limited reasoning to be exposed: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 280 but cf. Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34], Pollard at [65] and see the discussion in Resource Pacific at [48]−[58]." (emphasis in original) "[70] As to the latter parameter identified by Basten JA in Resource Pacific, namely the quality of reasons, it is generally accepted that the sheer volume of work undertaken by tribunals is such that a perhaps more relaxed standard of review of reasons with corresponding compensation for linguistic infelicities is appropriate than may be the case when an appellate court is hearing an appeal from another court." (emphasis in original) [71] That having been said, even in the less formal setting of a tribunal which has significant powers the exercise of which is capable of affecting the lives of citizens in profound ways, there are certain minimum characteristics that a Tribunal's reasons must possess. These are really supplied, in relation to the Tribunal, by s 62(3) of the CAT Act which, as noted at [52] above, requires there to be set out in reasons (when requested by a party): (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made. [77] These principles include the following: (i) "Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole": Re Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165; [2003] HCA 30 at [14] (Gleeson CJ); (ii) the court should not read passages from the reasons for decision in isolation from others to which they may be related: Re Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14]; 20 ATR 108 at 111; (iii) the reasons must be read fairly and as a whole: Ex parte Applicant at [147] per Kirby J; Wu Shan Liang at 291; Bisley at 251; (iv) the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error: Pozzolanic at 287; Wu Shan Liang at 272, 291; (v) there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips: Pozzolanic at 287, Wu Shu Liang at 272 and 291." 1. The observations in Orr at [66], [71] and [77] have been recently applied by the Appeal Panel: Origin Concepts Pty Ltd v Wynne [2022] NSWCATAP 31 (Origin) at [20]-[23]; P8 Auto Ltd t/as European Automotive Ballina v Dolling (P8) [2022] NSWCATAP 41 at [18]. 2. In the JCK submissions, JCK referred to applicable legal principles including Soulemezis at 260, Beale at 444, and Orr at [77], and made detailed submissions which are unnecessary to set out as to the inadequacy of the reasons in the Tribunal Decision under the following four headings: 1. "Toilet cleaning costs"; 2. "Proper Construction & Breach of the Deed"; 3. "Misleading or deceptive conduct"; 4. "COVID 19 Relief". 1. In the M20 and PC submissions, M20 and PC referred to Orr at [66], [68] and [70], Origin at [20], and P8 at [18], and made detailed submissions which are unnecessary to set out as to the adequacy of the reasons in the Tribunal Decision in relation to the four claims identified by JCK. 2. During oral argument, we indicated to counsel for M20 and PC that our preliminary view was that the Tribunal Decision did not meet the minimum acceptable standard for reasons, and invited him to make submissions. He drew attention to Orr at [68], referred to the findings of the Tribunal being of a negative nature, and submitted that the failure to catalogue the evidence upon which reliance was placed by the Tribunal could be overlooked. 3. Having regard to the principles in Orr at [66], [68], [70], [71] and [77], we are satisfied that the Tribunal Decision did not meet the minimum acceptable standard for reasons, not only in relation to the four claims identified by JCK, but generally. The evidence in relation to each of the claims of JCK was not set out (Tribunal Decision at [1]). Without any indication of the evidence that was adduced, it is impossible to know the reasoning processes that led the Tribunal to make the following findings said to be based on that evidence: 1. "It is not adequately demonstrated upon the evidence" (set out at [14(3)] above); 2. "There is insufficient evidence to establish to the required evidentiary standard" (set out at [14(4)] above); 3. "the evidence admitted in this matter does not support a finding that the respondent has engaged in unconscionable conduct" (set out at [14(5)] above); 4. "It was not an enforceable contract involving consideration on the part of each of the parties" (set out at [14(6)] above); 5. "the evidence as provided by the applicant has not adequately demonstrated that any actual loss or damage was caused by this delay." (set out at [14(7)] above); 6. "The evidence establishes that the toilet cleaning obligations of the respondents have perhaps not been fully met, but there is insufficient evidence to properly base the claim made for "additional" cleaning costs." (set out at [14(7)] above); 7. "no probative evidence has been provided to support this aspect of the claim" (set out at [14(8)] above); 8. "is not supported by any acceptable expert evidence nor by any proper evidence as to expenditure" (set out at [14(9)] above). 1. We are satisfied that the principles in Soulemezis at 260 and Beale at 444 apply equally to decisions of the Tribunal. The paucity of reasoning in respect of the findings in [46] above was inadequate to place JCK in a position to understand why the decision was made sufficiently to allow it properly to exercise its right of appeal on any ground in relation to whether the evidence was sufficient to establish each of its claims. 2. For these reasons, we are satisfied that the Tribunal Decision as a whole did not meet the minimum acceptable standard for reasons. Accordingly, we uphold amended ground 3. Amended grounds 1, 2, 4, 5, 6 and 7 1. In view of our decision on amended ground 3, it is unnecessary to decide amended grounds 1, 2, 4, 5, 6 and 7. Whether to deal with the appeal by a rehearing or remit the whole or part of the proceedings for redetermination in the Consumer and Commercial Division 1. We raised with the parties whether we should deal with the appeal by a rehearing or remit the whole or part of the proceedings for redetermination in the Consumer and Commercial Division. The parties indicated that if we consider it to be appropriate they were content for us to dispense with a hearing and deal with the appeal by a rehearing on the evidence before the Tribunal. 2. Where the Appeal Panel conducts a rehearing under s 80(3) or s 81(1)(e) of the NCAT Act it is a hearing de novo, or "from the beginning": Yuen v Thom [2016] NSWCATAP 243 at [17]. In these circumstances, the Appeal Panel will make new findings of fact based on all the evidence, including the evidence that was before the Tribunal: PR v MDM [2020] NSWCATAP 151 at [25]. In the light of these principles the concession of the parties as to the power of the Appeal Panel to make new findings of fact in a rehearing under s 80(3) or s 81(1)(e) of the NCAT Act was properly made. 3. We are satisfied that it is appropriate to deal with all issues in the appeal by a rehearing by determining the claims of JCK on the basis of the evidence before the Tribunal at first instance, applying the following principles: 1. the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation: Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34] per Keane JA (with Philip McMurdo J at [64] and Douglas J at [65] agreeing; Aerolink Air Services Pty Ltd v Bankstown Airport Ltd [2022] NSWSC 587 (Aerolink) at [21] per Leeming JA; 2. we have considered each of the issues arising in respect of the claims of JCK, notwithstanding that we have determined an issue adversely to JCK, in case we are later found to be wrong: Aerolink at [110] per Leeming JA. 1. Before considering the claims of JCK, it is appropriate to set out the material that is available for the rehearing to determine the dispute between the parties as to the claims of JCK which were before the Tribunal at first instance. The material that is available for the rehearing of the proceedings 1. The claims of JCK and defences of M20 and PC to those claims in the proceedings were set out in the following documents: 1. the points of claim of JCK (the points of claim); 2. the points of defence dated 21 December 2020 of M20 (the M20 points of defence); 3. the points of defence dated 21 December 2020 of PC (the PC points of defence). 1. The following documents of JCK were admitted into evidence before the Tribunal: 1. the statutory declaration of Mr Sabapathy dated 21 September 2020 (Ex A) (the first Sabapathy declaration); 2. the statutory declaration of Mr Sabapathy dated 16 February 2021 (Ex B) (the second Sabapathy declaration); 3. the statutory declaration of Mr Napoli dated 8 February 2021(Ex C) (the Napoli declaration); 4. searches of various companies and entities (not marked with an exhibit number). 1. The following documents of M20 and PC were admitted into evidence before the Tribunal: 1. the statement of Mr Kyriacou dated 3 March 2021 other than [11] and [12] (Ex 1) (the Kyriacou statement); 2. the statement of Mr He dated 4 March 2021 (not marked with an exhibit number) (the He statement). 1. There was also before the Tribunal a bundle of documents used in cross-examination of witnesses (the cross-examination documents). 2. Each of Messrs Sabapathy, Napoli, He and Kyriacou gave oral evidence before the Tribunal which is recorded in the transcript of the hearing. 3. JCK relied upon the following written submissions before the Tribunal: 1. Applicant's Submissions dated 7 June 2021 (the applicant's submissions); 2. Applicant's Submissions in Reply dated 16 June 2021 (the applicant's reply submissions); 3. Applicant's Facts, Chronology and Contentions. 1. M20 and PC relied upon the following written submissions before the Tribunal: 1. Respondents' Outline of Submissions dated 7 June 2021 (the respondents' submissions); 2. Respondents' Submissions in Reply dated 16 June 2021 (the respondents' reply submissions); 3. Respondents' Facts, Chronology and Contentions. The claims of JCK which were before the original Tribunal at final hearing Introduction 1. There is no dispute between the parties that the following claims of JCK were before the Tribunal at first instance: 1. whether JCK is entitled to damages for breach of the deed of settlement (the deed of settlement claim); 2. whether JCK is entitled to compensation for pre-sublease misrepresentations by M20 and PC (the pre-sublease misrepresentations claim); 3. whether JCK is entitled to compensation for unconscionable conduct by M20 and PC (the unconscionable conduct claim); 4. whether JCK is entitled to an adjustment in rent (the rent adjustment claim); 5. the costs of the proceedings. 1. However, there is a dispute between the parties as to whether the following claims of JCK were before the Tribunal at first instance: 1. whether JCK is entitled to damages for breach of the sublease (the sublease claim); 2. whether JCK is entitled to rent relief pursuant to the COVID-19 Regulation (the rent relief claim). Whether JCK is entitled to raise the sublease claim and the rent relief claim 1. As set out in [11(1)] above, JCK in the points of claim under the heading "Final Relief Sought" did not include claims for damages for breach of the sublease and for relief from the rent payable under the sublease. However, as set out in [11(2)(a)] and [11(2)(f)] above, JCK in the points of claim under the heading "Pleadings & Particulars" alleged that M20 and PC committed breaches of the sublease and PC failed to comply with the COVID-19 Regulation. 2. In their respective Points of Defence M20 and PC denied or did not admit the alleged breaches of the sublease. 3. In its Points of Defence PC denied that it had failed to comply with the COVID-19 Regulation by reason that JCK had failed to provide it with evidence that it was an impacted lessee and accordingly it was not obliged to renegotiate the rent payable under the sublease. 4. JCK under the heading "Contentions/Issues in dispute" in the Applicant's Facts, Chronology and Contentions included the following (at [23A] and [23G]): "A. Was the Sublessor required to clean the Common toilets at the Property after 8.pm, on weekends and public holidays?" "G. Is the Applicant an impacted lessee under the Covid-19 Regulation?" 1. In the second Sabapathy declaration, Mr Sabapathy said he sought rent relief from April 2020 to September 2020, and as he had paid the rent payable under the sublease he was in credit for the amount determined by the Tribunal to be the appropriate COVID-19 rent relief. 2. In the applicant's submissions, JCK: 1. submitted that, contrary to the sublease, PC did not clean the toilets on weekends and on public holidays prior to the deed of settlement; 2. sought rent relief of $60,128.76 by orders that it does not have to pay $30,126.46 in waived rent and that rent of $30,126.46 be deferred to be repaid over 24 months in equal monthly instalments commencing on the 14th day after the date of the Tribunal order. 1. The question of the claims being pursued by JCK was raised at the commencement of the original hearing before the Tribunal. Counsel for JCK said the Applicant's Facts, Chronology and Contentions should be treated as an opening. JCK declined to amend its points of claim. Counsel for M20 and PC objected to any claims being determined other than the six substantive claims for relief under the heading "Final Relief Sought" in the points of claim. 2. In the applicant's submissions, JCK referred to Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12 (Moustakas) where a majority of the High Court held that failure to amend will not necessarily preclude a verdict upon the facts as they have emerged. 3. In the respondents' submissions, M20 and PC referred to The Owners Strata Plan No 60182 v Bornzin [2019] NSWCATCD 30 (Bornzin) where, at [77], the Tribunal stated: "[77] Although the Tribunal is not a court of strict pleading and is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 38 (4) of the NCAT Act) it must apply principles of procedural fairness and natural justice, as well as giving parties a reasonable opportunity to be heard and have submissions considered (s 38 (5) of the NCAT Act). Ambush is not an acceptable feature of modern litigation and a party is entitled to know the case it has to meet: Bellingen Shire Council v Colavon Pty Ltd [2012] NSWCA 34 at [33]." 1. In the applicant's reply submissions, JCK distinguished Bornzin where during the course of the hearing the applicant in that case sought to develop a completely different legal basis for a claim which had never been raised prior to the final submissions. In contrast, the case of JCK was raised in opening. Further, each claim of JCK was identified in the Applicant's Facts, Chronology and Contentions tendered at the beginning of the hearing. At no point was there any objection taken to the evidence of JCK, M20's and PC's witnesses traversed all of the issues in their evidence in chief, and there was no objection to the questions being put to their witnesses which were clearly relating to each of the claims of JCK including the claims sought to be excluded from consideration. 2. In the respondents' reply submissions, M20 and PC said JCK's reliance on Moustakas was misplaced. It concerned the raising of new issues on appeal and the majority held that the plaintiff should not be permitted to depart from the case it had put against the defendant at trial. It would be repugnant to the requirement of procedural fairness to allow JCK to raise any additional claims. 3. Pursuant to s 38(4) of the NCAT Act, the Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. Further, pursuant to s 38(5) of the NCAT Act, the Tribunal is to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. 4. We are satisfied that JCK sufficiently raised the rent relief claim in its points of claim. When the points of claim is read as a whole it is clear that JCK was not only raising the six substantive claims for relief under the heading "Final Relief Sought", but also (as previously mentioned) the claims for sublease damages and for rent relief for failure to comply with the COVID-19 Regulation under the heading "Pleadings & Particulars". While we accept the principle in Moustakas may have application to proceedings in the Tribunal, it has no application in these proceedings because the sublease claim and the rent relief claim being pursued by JCK were sufficiently raised in its points of claim when they are fairly read as a whole having regard to the principles in s 38(4) and (5) of the NCAT Act. 5. While we accept that the principles in Bornzin at [77] are applicable to proceedings in the Tribunal, we are not satisfied that they have any application to these proceedings. Given the sublease claim and the rent relief claim on a fair reading of the points of claim were being made and were answered in the points of defence, there was no ambush of PC by JCK. There would be no failure to comply with s 38(5) of the NCAT Act by not affording procedural fairness to M20 and PC if both these claims are determined. The evidence of the parties extended to both these claims. There has been no articulation by PC of any prejudice which would be suffered if both these claims are determined. The sublease claim and the deed of settlement claim Introduction 1. It is convenient to deal with the sublease claim and the deed of settlement claim together. 2. The sublease claim and the deed of settlement claim were contested before the Tribunal and involved: 1. the following alleged breaches of the sublease by PC: 1. the failure to provide JCK with access to the unisex disabled toilets located on the ground floor behind the elevators; 2. the diversion of the air conditioner servicing the premises to the common area in or around December 2017 before entry into the sublease; 3. the locking of JCK out of the storage area without giving it the opportunity to remove its goods in or around May 2019; 4. the failure to maintain and repair the roof of the premises and keep the premises watertight; 5. the failure to clean the toilets seven days a week since February 2018; 1. the following alleged breaches of the deed of settlement by M20 and PC: 1. the locking of JCK out of the storage area without giving it the opportunity to remove its goods; 2. the failure to maintain and repair the roof of the premises since February 2018; 3. the failure to clean the toilets seven days a week; 4. the failure to do an additional clean of the common toilets each Saturday and Sunday night after trading; 1. losses totalling $228,180.90 by reason of the breaches of the sublease by PC and the deed of settlement by M20 and PC comprising the following items: 1. the cost of $116,016.90 to repair the damage caused by a water leak; 2. the cost of $4,400.00 to relocate the air conditioner vents; 3. $3,000 being 20% of electricity costs for nine months; 4. $1,564.00 for stock loss from the storeroom; 5. $42,900.00 for the cost of cleaning toilets and damages for having no access to the disabled toilets; 6. $60,000.00 for four months' rent during rain disruption. 1. The sublease, in which PC and JCK are referred to as "the Sublessor" and "the Sublessee" respectively, relevantly included clauses 9.1, 15.1, 27.1 and 27.2, and items 3(b) and 12 in the reference schedule: "9.1. Repair and Use Where any Air Conditioning Equipment, Fire Equipment or lifts or escalators are provided or installed in the Building or the Premises by the Sublessor: (a) the Sublessor must use reasonable endeavours to keep the Air Conditioning Equipment, Fire Equipment, lifts and escalators working and reasonably available for the use of the Sublessee (delays or stoppages due to repairs, maintenance, accidents, strikes or other unavoidable causes beyond the Sublessor's control excepted);" "15.1. Quiet Enjoyment The Sublessee paying the Rent and duly and punctually observing and performing the covenants, obligations and provisions in this Sublease on the part of the Sublessee to be observed and performed must and may peaceably possess end enjoy the Premises during the Term without any interruption or disturbance from the Sublessor or any other person or persons lawfully claiming by, from or under the Sublessor." "27.1 Right to Access Toilets The Sublessor agrees to provide as part of this sublease right to access to the unisex disable toilets, and a Male and Female toilet (the toilets) which are located on the ground floor behind the elevators. A direct point of entry (a door) will be provided to the tenancy to access the corridor and toilets." "27.2 Clean Toilets & Record Cleaning The toilets are cleaned nightly weekdays excluding public holidays by cleaners, the cost of which will be invoiced together with consumables and paid by the Sublessor. Beyond these times being after 8pm weekdays and weekends and public holidays the Sublessor will be responsible to install all consumables and clean the toilets." "REFERENCE SCHEDULE … ITEM 3(b) TOILET CLEANING FEE AND SUPPLIES WEEKDAYS ONLY $300 / week plus GST with CPI annual reviews 1 February and cost of supplies as invoiced … ITEM 8 OPERATING HOURS The operating retail hours 9.00 am to 11.00 pm Monday to Friday, Saturday, Sunday and public holidays as permitted by statute … ITEM 12 CONDITION OF PREMISES Subleased on an as is basis … …" 1. The deed of settlement provides: "(Lessor) M20 Pty Ltd & Praxis Capital Pty Ltd And (Lessee) Jamaican Coffee Kitchen Pty Ltd Deed of Settlement 23.8.19 1. Within 7 days of the Lessee obtaining a withdrawal of caveat or permission to register, the Lessor will endeavour to register the Sublease and the Head Lease in an agreed form or in the form that was presented at the time of the commencement of Lease; 2. Within 7 days the Lessors provide access to the storage area for the Lessee to remove their belongings and stock; 3. All default notices served by the Landlord/Lessors to date are withdrawn including any breach notices and invoices associated with those breaches/allegations, without prejudice to the Sublessor's right to re-issue such notices; 4. The Lessor to meet with the Lessee once a month to update on any disputes and to read water-meter. 5. The Lessee to pay water usage costs already served within 7 days. 6. The mediation is adjourned, and the parties will not take any adverse action against the other in relation to current complaints, issue or claims for a period of 3 months until mediation is concluded whichever first occurs. 7. The Sublessor will provide the Sub-lessee with a building report to confirm that the tenancy is watertight in accordance with the applicable building standard within 6 weeks. 8. The Sublessee to provide the Sublessor written copies of the service agreement that the Sublessee has entered into with all service providers in connection with the servicing of the grease trap, exhaust system, waste management and pest control within 7 days. 9. In accordance with Clause 27.2, the Sublessor will clean the common toilets 7 days a week and install a card recording that is a fixed to each entry door on the inside and the Sublessee will do an additional clean each Saturday and Sunday night after trading and sign the card." 1. The following two issues arise for determination of the sublease claim and the deed of settlement claim: 1. whether PC breached the sublease and M20 and PC breached the deed of settlement; 2. whether JCK suffered any, and if so what, loss by reason of any such breaches of the sublease and the deed of settlement. 1. For each of these issues it is convenient to summarise the evidence and submissions of the parties at first instance and on appeal before turning to their consideration and determination. Whether PC breached the sublease and M20 and PC breached the deed of settlement The evidence of JCK The contemporaneous documents 1. On 17 January 2020 at 1.24pm, Mr Sabapathy sent an email to Mr He in which he referred to water leaking in the men's toilet (the 17 January 2020 email). 2. On 30 January 2020 at 5.27pm, Mr Sabapathy sent an email to Mr He in which he referred to water leaking on 26 January 2020 from all windows and ceilings that resulted in evacuation of the premises (the 30 January 2020 email). 3. On 7 February 2020 at 1.24pm, the venue manager of JCK sent an email to Mr He in which he referred to water leaking in the kitchen area (the 7 February 2020 email). 4. On 22 May 2020 at 1.07pm, Mr Sabapathy sent an email to Mr He in which he referred to water leaking on the previous night in the kitchen, toilet and main restaurant area (the 22 May 2020 email). 5. On 25 May 2020 at 5.49pm, Mr Sabapathy sent an email to Mr He in which he referred to water leaking on 7 and 8 February 2020, and being still there (the 25 May 2020 email). 6. On 7 August 2020 at 2.44pm, the venue manager of JCK sent an email to Mr He in which he referred to water leaking from the ceiling in three locations in the premises (the 7 August 2020 email). 7. On 26 August 2020, JCK's lawyers G & S Law Group sent a letter to PC's lawyers Mills Oakley in which they relevantly asserted that PC was not cleaning on weekends and the disabled toilets had been locked off since November 2019 (the 7 August 2020 letter). The first Sabapathy declaration 1. In the first Sabapathy declaration Mr Sabapathy gave the following evidence: 1. in January 2020, February 2020, May 2020 and July 2020, there were many leaks in the premises causing JCK to close its business and clean up. The water leaks caused the fit out of the premises to be damaged (at [19]); 2. M20 and PC have failed to clean the toilets in accordance with the headlease or the sublease or the deed of settlement. The only time they have cleaned the toilets was in the weeks of 3 September 2020 and 12 September 2020, but there was no card on any door to provide a list of when cleaning took place in those weeks (at [20]); 3. the fit out of the premises was damaged during the heavy rain in February 2020 (at [23]); 4. in about November 2018, he discovered that M20 and PC caused the air conditioner of the premises to be diverted to the common area, reducing the use of the air conditioner and increasing electrical costs (at [26]); 5. in about August 2019, M20 and PC locked him out of the storage area without giving him the opportunity to remove JCK's goods. One day he tried to open the door and it was welded shut (at [29]). The Napoli declaration 1. In the Napoli declaration Mr Napoli gave the following evidence: 1. he had been aware of the leaking roof at the premises since early 2018. He recalled one major leak that caused the restaurant to shut down which was in about 18 December 2018 (at [4]); 2. based on photographs he took, the major leaks occurred on the following dates: 18 December 2018; 8 February 2019; 26 January 2020; 1-3, 7, 8, 10 and 29 February 2020; 28 July 2020; 7, 22 and 23 August 2020 (at [5]); 3. the roof still leaked in the kitchen after repairs and in the common bathroom (at [8]); 4. during the week the toilets are cleaned. However, there was a major problem on Fridays as the PC cleaner did not attend on Friday nights and JCK was left to clean up after the mess caused by people from the Centrelink unemployment agency on the ground floor of the building (at [9]); 5. the toilets had not been cleaned by the landlord on the weekends and JCK hired contract cleaners to clean the toilets on the weekends (at [10]); 6. since about early 2018 the disabled toilets were locked by PC and JCK could not have access; they were opened in only about January 2021 (at [11]); 7. a technician who was called showed him what he discovered in the ceiling, which was that the air conditioner ducted for the premises was diverted into the common area of the building. He saw the technician move the ducting back into the premises. Thereafter the air conditioner was working much better and JCK was able to even reduce the power of the air conditioner to cool the premises on most days, reducing the use of the air conditioner and electrical costs (at [21]); 8. in about August 2019, the storage area was welded shut. He was unable to remove stock from the storage area (at [21]-[22]). The second Sabapathy declaration 1. In the second Sabapathy declaration Mr Sabapathy gave the following evidence: 1. in about August 2019, M20 and PC locked him out of the storage area without giving him the opportunity to remove JCK's goods (at [5]); 2. cleaning was still not done every Friday, Saturday or Sunday night, had never been done since the commencement of the sublease, and seemed to be done on some Sunday nights. JCK had been paying $300 plus GST for cleaning (at [7]). The oral evidence of Mr Sabapathy 1. In cross-examination Mr Sabapathy gave the following evidence: 1. he accepted that he did not know when the ducts of the air conditioning system were installed (Tcpt, 8 March 2021, paras 435-436); 2. he denied that Mr He told him that he would have to ask for a key to the disabled toilets after they were locked. JCK traded until 11.00pm when the office of PC was not manned (Tcpt, 8 March 2021, paras 624-639); 3. he said that the toilets were cleaned only on weekdays (Tcpt, 8 March 2021, paras 640-643); 4. he left goods in the storage area between 3 and 10 May 2019; he removed the goods months later (Tcpt 1, 9 March 2021, paras 92-97). The oral evidence of Mr Napoli 1. In cross-examination Mr Napoli gave the following evidence: 1. the disabled toilets were locked in around 2019 (Tcpt 2, 9 March 2021, paras 64-65); 2. he denied that Mr He told him he would have to ask for a key to the disabled toilets after they were locked (Tcpt 2, 9 March 2021, paras 70-81). 1. In re-examination Mr Napoli gave the following evidence: 1. the restaurant closed at 10.00pm on Sunday to Thursday and 11.00pm on Friday and Saturday (Tcpt 2, 9 March 2021, paras 317-326); 2. when he raised with Mr He regaining access to the disabled toilets, Mr He refused (Tcpt 2, 9 March 2021, paras 343-352). The evidence of M20 and PC The contemporaneous documents 1. On 14 February 2019, Steve Bisilas (Mr Bisilas), Director of Rize Constructions Pty Ltd (Rize), sent a letter to Alexis Insurance which contained an assessment of the damage to the building as a result of the storm on 8 February 2019. He opined that the roof on the ground floor and of the tower was in a satisfactory condition, repaired and well maintained and likely to be reasonably watertight under normal weather conditions (the 14 February 2019 letter). 2. On 3 May 2019, Mr He sent a letter to Mr Sabapathy terminating the storage licence with effect from 10 May 2019 and requesting JCK to remove all its property by 10 May 2019 (the 3 May 2019 notice). 3. On 20 June 2020, Mr Bisilas sent a letter to M20 in which he stated that he carried out work to the building on 20 and 30 May 2020 and 20 June 2020, and repaired a hole in the ventilation system which should eliminate leaks on the ground floor including the men's toilet (the 20 June 2020 letter). The Kyriacou statement 1. In the Kyriacou statement Mr Kyriacou gave the following evidence: 1. Rize carried out maintenance and other work to the roof of the premises in March, April and July 2019, and in February, June and November 2020, and he attached invoices of TeePee Metal Roofing (TeePee) and Rize that recorded the work which included cleaning the guttering in March and April 2019 and February and June 2020 (at [20]-[30]); 2. at the time JCK entered into possession of the premises in December 2017, the ducts were in the same position as they had been when they were first installed (at [30]). The He statement 1. In the He statement Mr He gave the following evidence: 1. during the term of the sublease, JCK has complained that water has leaked into the premises from time to time. Roofing contractors have been engaged each time there is a reported leak (at [18], [31]); 2. on 8 February 2019, Parramatta experienced a once in a hundred year weather event whereby water entered into the premises, resulting in the restaurant needing to be closed for a period of approximately two hours (at [20]); 3. on or around 8 February 2020, the premises again experienced water leakage following a further significant storm in the Parramatta area; the restaurant was closed for approximately three hours (at [28]); 4. he had become aware that JCK made an insurance claim against Alliance Australia Insurance Limited in relation to the damage it alleged it had suffered as a result of water leaks at the premises and he understood that the insurer paid to JCK an amount of $74,466.71 in relation to that insurance claim (at [34]); 5. the toilets are cleaned nightly on weekdays excluding public holidays (at [37]); 6. the cleaning contractor is Balanced Works as set out in a bundle of invoices for the period between 30 September 2019 to 30 November 2020 (at [38]-[39]); 7. JCK had access to the disabled toilets until around 17 May 2019. Around that time, he was directed by M20 to remove access to the disabled toilets as there had been ongoing damage and complaints that the toilets were being misused and they presented a danger (at [44]); 8. JCK is the only tenant that operates after hours; when the toilets are cleaned early Saturday and Sunday mornings, by night the toilets are often left with vomit or in an unclean state (at [54]); 9. in order for JCK to access the disabled toilets, it needs to request a key from either PC or M20. Mr Sabapathy was asked to pick up keys and to make sure that the toilets are not misused by JCK's customers (at [56]); 10. since December 2020, JCK has had access to the disabled toilets (at [57]); 11. PC has not altered the air conditioning ducting since the sublease was entered into (at [59]); 12. on or around 10 May 2019, he caused the storage area to be locked (at [68]); 13. on or around 16 May 2019, he provided access to JCK to remove its belongings and stock from the storage area (at [70]). The oral evidence of Mr Kyriacou 1. In cross-examination Mr Kyriacou gave evidence that M20 and PC had an office on the fifth floor of the building in 2019 (Tcpt 3, 9 March 2021, paras 32-51). The oral evidence of Mr He 1. In cross-examination Mr He gave the following evidence: 1. he conceded that, up to the time of entry into the deed of settlement, PC had not been carrying out its obligation to clean the toilets seven days a week (Tcpt, 20 May 2021, paras 188-189); 2. he said the cleaners clean every day (Tcpt, 20 May 2021, paras 197-206); 3. as to the key to the disabled toilets, he agreed that the PC office was open between 9.00am and 5.30pm; he said that the key could have been requested prior to the office closing; he accepted that he did not speak to Mr Sabapathy about the key being available (Tcpt, 20 May 2021, paras 268-298); 4. access to the disabled toilets was provided in December 2020 (Tcpt, 20 May 2021, paras 299-300); 5. he accepted that JCK was entitled to some amount for water damage (Tcpt, 20 May 2021, paras 585-588); 6. he disagreed that there were significant leaks to the premises (Tcpt, 20 May 2021, paras 687-688). The submissions of the parties at first instance 1. Except in relation to cl 7 of the deed of settlement, neither JCK nor M20 and PC engaged in any analysis as to whether JCK had established a breach of particular terms of the sublease or the deed of settlement. The submissions of JCK 1. In the applicant's submissions and the applicant's reply submissions JCK made the following submissions: 1. the serious damage occasioned by water leaks which occurred in the premises happened in December 2018, February 2019 and February 2020; 2. contrary to the sublease, PC did not clean the toilets on weekends and on public holidays prior to the deed of settlement and even after the deed of settlement, PC cleaned the toilets only on weekdays excluding public holidays; 3. the suggestion that JCK was able to obtain access to the disabled toilets by picking up the keys from PC or M20 was easily disproved by Mr He's admission that no one was there after hours and that neither of them actually spoke to Mr Sabapathy about the key being available; 4. clause 7 of the deed of settlement contained within it at least three elements: first, there was an acknowledgement that the PC is obliged to keep the premises the subject of the sublease watertight in accordance with applicable building standards; secondly, the lessor undertook to make the premises watertight in accordance with its obligation; thirdly, the lessor would provide a report within 6 weeks that it had done this. The submissions of M20 and PC 1. In the respondents' submissions and the respondents' reply submissions M20 and PC made the following submissions: 1. JCK's case that it has been denied access to the disabled toilets at the premises cannot be accepted for three reasons: 1. first, Mr Sabapathy and Mr Napoli gave differing accounts of when the disabled toilets were locked; 2. secondly, the sublease does not provide for access simpliciter, but provides that JCK will be provided with a right to access; they accepted that the disabled toilets were locked in mid-2019 following misuse by patrons of the premises, but it did not follow that JCK's right to access the disabled toilets was also taken away - it was simply made conditional upon the observation of certain safeguards in order to maintain the integrity of the premises; 3. thirdly, it was not contested that, since December 2020, full and unconditional access to the disabled toilets has been granted to JCK; 1. JCK elected not to lead any cogent evidence to enable the Tribunal to make factual findings as to the state of the premises; 2. nothing in cl 7 of the deed of settlement imposed upon them an obligation to perform works to the premises, nor does the clause constitute a warranty that the premises were watertight; 3. it is not in doubt that there had been, at one time or another, water ingress at the premises, but that finding alone was insufficient to discharge the onus which JCK had and there was no reliable and cogent evidence as to the number, source, cause, duration and extent of the water leaks. Consideration and determination The alleged breach of the sublease - failure to provide access to the disabled toilets 1. We are satisfied that PC breached cl 27.1 of the sublease by failing to provide access to the disabled toilets between November 2019 and December 2020. We accept that the refusal of access commenced in November 2019 as set out in the 7 August 2020 letter and the provision of access resumed in December 2020 as stated by Mr He in cross-examination. The possibility of obtaining a key for the disabled toilets from the office of M20 and PC on the fifth level of the building did not constitute a right of access within cl 27.1 of the sublease, having regard to the absence of personnel at the office throughout the period of the daily trading hours of JCK permitted under item 8 of the sublease. The alleged breach of the sublease – diversion of the air conditioner 1. We are not satisfied that PC breached cl 9.1(a) of the sublease by diverting the air conditioner servicing the premises to the common area in or around December 2017 before entry into the sublease. As item 12 of the reference schedule specifies, JCK subleased the premises in its then condition. The alleged breach of the sublease – locking of JCK out of the storage area 1. We are not satisfied that PC breached the sublease by locking JCK out of the storage area without giving it the opportunity to remove its goods in or around May 2019. As is clear from the storage licence, the storage area was separate from the premises and not encompassed by the provisions of the sublease. There was no breach of the storage licence as PC by the 3 May 2019 notice gave JCK an opportunity to remove its goods. The alleged breach of the sublease – leaking of the roof 1. We understand that JCK alleges that PC breached cl 15.1 of the sublease by failing to maintain and repair the roof of the premises and keep the premises watertight. 2. We are satisfied that there was water ingress to the premises on the following dates: 1. on 18 December 2018, as set out in the Napoli declaration at [5]; 2. on 8 February 2019, as set out in the 14 February 2019 letter; 3. on 17 and 26 January 2020, 7 and 8 February 2020, 21 May 2020 and 7 August 2020, as set out in the 17 January 2020 email, the 30 January 2020 email, the 7 February 2020 email, the 22 May 2020 email, the 25 May 2020 email and the 7 August 2020 email; 4. on 28 July 2020 and 22 and 23 August 2020, as set out in the Napoli declaration at [5]. 1. We are satisfied that PC was not negligent in its maintenance of the roof of the premises by reason of the work carried out in March, April and July 2019, and in February, June and November 2020 as recorded in the invoices of TeePee and Rize, the 14 February 2019 letter, and the 20 June 2020 letter. 2. In Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 (Martins Camera) Yeldham J held that a lessor had breached the covenant of quiet enjoyment in circumstances where water had entered the lessee's premises following heavy rain which caused the downpipes to overflow and water seep into the shop premises occupied by the lessee, and which caused damage to the lessee's stock. His Honour at 20 found that the water damage to the plaintiff's goods was a result of the blockage of at least one, and probably both, of the drains upon the roof area, due to dirt and rubbish generally, causing water to build up and enter the shop below. He was satisfied, notwithstanding that the rain was very heavy and that premises elsewhere were flooded, that, if such blockage had not occurred, the water would in all probability have dispersed without building up as it did, and that none, or certainly none of any consequence, would have entered the premises below. His Honour at 23 held that the covenant for quiet enjoyment entitled the lessee not merely to possession but to the enjoyment of the premises and that there would be a breach of this covenant if the lessee's ordinary and lawful enjoyment of the premises was substantially interfered with by the negligent acts or omissions of the lessor. 3. Martins Camera has recently been cited with approval: Ajaimi v Giswick Pty Ltd [2022] VSC 131 (Ajaimi) at [146]-[147]. 4. In G v Armellin (2008) 219 FLR 359; [2008] ACTSC 68 (Armellin) at [106], [110]-[112] Bennett J relevantly made the following observations with respect to admissions: "[106] In considering the effect of admissions, courts have distinguished between admissions of fact and admissions of law. In Shine v Williams [2007] WASCA 194, the Court of Appeal of the Supreme Court of Western Australia considered the applicable rule, O 30, r 3(1) of the Rules of the Supreme Court 1971 (WA), (the WA Rules) which states: Where admissions of fact have been made on the pleadings or otherwise, any party may at any stage of a cause or matter apply to the Court for such judgment or order as upon such admission he may be entitled to, without waiting for the determination of any other question between the parties, and the Court may on such application make such order or give such judgment as the Court thinks just." [110] In Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 the High Court considered the distinction between admissions of fact and of law where admissions were made in a media release and in correspondence in terms of (at [19]-[20]): We apologise … This situation should not have occurred … this does not excuse Dovuro in failing in its duty of care to inform growers as to the presence of these weed seeds. We got it wrong in this case … Counsel also made concessions as to the existence of the duty of care in closing submissions at trial: Dovuro at [48]-[49]. [111] Justice Gummow (with whom McHugh and Heydon JJ agreed), expressed the view (at [68]), that a party may make an admission not only of a fact but also of a conclusion from facts but that to say that a party may undo an admission as "a mixture of fact and law, or even of law" (citing Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 231 per Mahoney JA) was to state the proposition too widely. Further, "a party may admit the facts from which a conclusion of law may then be drawn" (at [69]). However, a conclusion with respect to the legal standard, or its application, is for the court (at [70]-[71]). [112] Dovuro and Shine stand for the proposition that admissions will be valid insofar as they pertain to facts. Questions of law and concessions by a party concerning those questions of law remain for the Court to decide." 1. In the light of our finding that PC was not negligent in its maintenance of the roof of the premises we are not satisfied that PC breached cl 15.1 of the sublease by failing to maintain and repair the roof of the premises and keep the premises watertight. 2. This conclusion is not altered by the admission made by Mr He that JCK was entitled to some amount for water damage. Having regard to the principles in Armellin at [106], [110]-[112], this admission is properly to be characterised as a concession by JCK concerning a question of law and was a matter for the Tribunal to decide. For the reasons already, given we are satisfied that PC was not negligent in its maintenance of the roof of the premises and accordingly is not liable to JCK. The alleged breach of the sublease - failure to clean the toilets seven days a week 1. We are satisfied that cl 27.2 of the sublease on its proper construction required PC to clean the toilets seven days a week. 2. We are satisfied that PC only cleaned the toilets on weekdays as conceded by Mr He in cross-examination and as set out in the 7 August 2020 letter. 3. In the light of our findings as to the proper construction of cl 27.2 of the sublease and that PC only cleaned the toilets on weekdays, we are satisfied that PC breached cl 27.2 of the sublease by failing to clean the toilets seven days a week since March 2018. The alleged breach of the deed of settlement – locking of JCK out of the storage area 1. We are not satisfied that M20 and PC breached cl 2 of the deed of settlement by locking JCK out of the storage area without giving it the opportunity to remove its goods. There is no evidence that M20 and PC did not provide access to the storage area by 30 August 2019. The alleged breach of the deed of settlement – leaking of the roof 1. We are satisfied that cl 7 of the deed of settlement on its proper construction contained an implied term that the premises would be watertight in accordance with the applicable building standard by 4 October 2019. 2. There was no evidence of the applicable building standard. 3. For the same reasons that we are not satisfied that PC breached cl 15.1 of the sublease by failing to maintain and repair the roof of the premises and keep the premises watertight, we are not satisfied that M20 and PC breached cl 7 of the deed of settlement. The alleged breach of the deed of settlement - failure to clean the toilets seven days a week 1. We are satisfied that cl 9 of the deed of settlement on its proper construction required M20 and PC to clean the toilets seven days a week, but did not require them to do an additional clean of the common toilets each Saturday and Sunday night after trading. 2. For the same reasons that we are satisfied that PC breached cl 27.2 of the sublease by failing to clean the toilets seven days a week from March 2018, we are satisfied that M20 and PC breached cl 7 of the deed of settlement from 23 August 2019. Whether JCK suffered any, and if so what, loss by reason of any such breaches of the sublease and the deed of settlement 1. In view of our findings the only claim that needs to be determined is whether JCK suffered a loss of $42,900.00 for the cost of cleaning toilets and damages for having no access to the disabled toilets. However, in case we are later found to be wrong, we have proceeded to determine whether JCK would have suffered a loss in respect of the other alleged breaches of the sublease and the deed of settlement. The evidence of JCK The first Sabapathy declaration 1. In the first Sabapathy declaration Mr Sabapathy gave the following evidence: 1. since February 2018 he has paid staff to work four hours every Saturday and Sunday to clean the common toilets and walkway. His staff costs him $35 per hour including superannuation. The only time M20 and PC have cleaned the toilet was on the week of the 3 September 2020 and 12 September 2020 (at [20]); 2. JCK incurred cleaning fees issued by PC in the sum of $42,900.00 (1 March 2018 to 1 September 2020 = 130 weeks x $330 per week = $42,900.00) (at [21]); 3. on 18 February 2020, he obtained a quote from SCY One Projects for $116,016.90 for the repair of the fit out of the premises (the SCY quote) (at [23]); 4. in February 2019, he caused the air conditioner system to be repaired and relocated back into the premises at a cost of $4400.00 (at [28]), and attached: 1. the quote dated 18 February 2019 of Modified Air Conditioning Pty Ltd for $4400.00 (the Modified quote); 2. the tax invoice of Alinta Energy (Alinta) dated 19 July 2018 for $14,741.33 for the period from 8 March 2008 to 22 June 2018 recording an average daily cost of $100.66 (the 19 July 2018 Alinta invoice); 3. the tax invoice of Alinta dated 17 August 2018 for $4,392.95 for the period from 23 June 2018 to 10 August 2018 recording an average daily cost of $89.65 (the 17 August 2018 Alinta invoice); 4. the tax invoice of AGL Sales Pty Limited (AGL) dated 19 September 2018 for the period from 10 August 2018 to 17 September 2018 recording an average daily cost of $94.41 (the 19 September 2018 AGL invoice); 5. the tax invoice of AGL dated 18 December 2018 for the period from 18 September 2018 to 12 December 2018 recording an average daily cost of $39.50 (the 18 December 2018 AGL invoice); 1. JCK lost goods costing $1564 which has been stored in the storage area as set out in a list of spoilt stock (the spoilt stock list) (at [29]). The Napoli declaration 1. In the Napoli declaration Mr Napoli gave the following evidence: 1. he estimated a loss of $3000 in revenue on the night of 18 December 2018 (at [4]); 2. he calculated a total $5,817.00 (277 hours x $21.00 minimum wage) to which superannuation of 9.5% should be added on staff cleaning up after the major leaks which occurred on the following dates: 18 December 2018, 8 February 2019; 26 January 2020; 1-3, 7, 8, 10 and 29 February 2020; 28 July 2020; 7, 22 and 23 August 2020 (at [5]-[7]); 3. during the weekends, Friday, Saturday and Sunday nights, JCK has extra staff spend two hours for two staff, one female and one male staff member (four hours in total per weekend shift) cleaning the common area toilets costing $276.00 each weekend (12 hours x $21 minimum wage x 9.5%), and since January 2021 an additional hour cleaning the disabled toilets costing $63.00 each weekend (3 hours x $21 minimum wage x 9.5%) (at [16]-[18]); 4. Mr Sabapathy paid $4400 in cash to reinstate the air conditioning (at [22]); 5. he priced the spoilt stock in the storage area adding up to $1564 (at [24]). The second Sabapathy declaration 1. In the second Sabapathy declaration Mr Sabapathy gave the following evidence: 1. on or about 20 February 2019, he paid $4400.00 in cash to avoid delays for the air conditioner system to be repaired and relocated back into the premises (at [4]), and attached: 1. the 19 July 2018 Alinta invoice; 2. the tax invoice of AGL dated 20 June 2019 for $8,926.57 for the period from 19 March 2019 to 18 June 2019 recording an average daily cost of $97.03 (the 20 June 2019 AGL invoice); 1. he attached invoices for most of the stock in the spoilt stock list (at [5]); 2. he calculated that, on the days where water leaks affected trading, cleaning costs were $8507 and loss in sales was $70,330 based on the difference from comparable day sales as set out in a spreadsheet derived from the total daily takings as recorded in extracts of JCK's computerised accounting system (the cleaning and the loss in sales spreadsheet) (at [6]); 3. he pays about $350 every weekend in order to clean the toilets (at [7]). The oral evidence of Mr Sabapathy 1. In cross-examination Mr Sabapathy gave the following evidence: 1. the only record that he had of the payment of $4,400.00 for the air conditioning system to be repaired and relocated back into the premises was the Modified quote (Tcpt, 8 March 2021, paras 483-496); 2. there was one electricity bill for the premises; having been shown the 19 July 2018 Alinta invoice, the 17 August 2018 Alinta invoice, the 19 September 2018 AGL invoice, the 18 December 2018 AGL invoice and the 20 June 2019 AGL invoice, he accepted that before and after the relocation of the air conditioning system the electricity costs were not markedly different (Tcpt, 8 March 2021, paras 497-601); 3. as to the spoilt stock list, he accepted that "knives and forks assorted" could be used, the "small metal basket small" and "20 ltr container & lids" were not perishable, and that no use by date had been recorded for the other items (Tcpt 1, 9 March 2021, paras 109-156); 4. as to the cleaning and the loss in sales spreadsheet, the number of people involved in cleaning was an estimate. He compared the sales on a day where there were leaks with the sales on the same day of the previous week (Tcpt 1, 9 March 2021, paras 183-298); 5. he prepared the cleaning and the loss in sales spreadsheet without the assistance of Mr Napoli and did not assist Mr Napoli in preparing the table in the Napoli declaration at [5] (Tcpt 1, 9 March 2021, paras 335-378); 6. JCK received $74,466.71 under an insurance claim for water damage to the premises (Tcpt 1, 9 March 2021, paras 379-386). The oral evidence of Mr Napoli 1. In cross-examination Mr Napoli gave evidence that he did not collaborate with Mr Sabapathy in preparing the table in the Napoli declaration at [5] and prepared this table independently (Tcpt 2, 9 March 2021, paras 245-305). The submissions of the parties at first instance The submissions of JCK 1. In the applicant's submissions and the applicant's reply submissions JCK submitted the Tribunal should accept the evidence of JCK of the losses it suffered by reason of the breaches of the sublease by PC and the breaches of the deed of settlement by M20 and PC. The submissions of M20 and PC 1. In the respondents' submissions and the respondents' reply submissions M20 and PC made the following submissions: 1. JCK's evidence of the payment of $4,400.00 for the air conditioning system to be repaired and relocated back into the premises should not be accepted because it provided no proper invoice, receipt, financial ledger or other documentary record to support its assertion that the Modified quote was paid; 2. the spoilt stock list is inadequate as proof of compensable loss and lists items which Mr Sabapathy conceded in cross-examination were incapable of spoilage, including 20 litre containers, knives, forks and metal baskets; 3. the sum of $42,900 for the alleged costs of cleaning toilets and having no access to the disabled toilets was arbitrarily selected; 4. JCK arbitrarily selected a figure of 4 months' rent (at $60,000) as the quantum of its claim for rain disruption and led no evidence to demonstrate that the equivalent of 4 months' disruption occurred; 5. the evidence given by Mr Napoli and Mr Sabapathy on the costs of cleaning was inconsistent and in any event provided no more than a broad and speculative calculation; 6. JCK's evidence of the costs of cleaning failed to differentiate between those costs incurred in performing the cleaning activities that it was obliged to carry out under cl 9 of the deed of settlement and what it alleged were additional costs said to have been incurred; in the absence of this evidence, the claim must fail; 7. the evidence to substantiate a figure of $70,330 for loss of sales rested upon the opinion evidence of Mr Sabapathy and was not the subject of proper expert evidence upon which the Tribunal could make appropriate findings of fact based on lost earnings (if any). The submissions of the parties on appeal The submissions of JCK 1. In the JCK submissions and the JCK reply submissions JCK made the following submissions: 1. it referred to the principles regarding the assessment of damages; 2. as to the cost of cleaning the toilets: 1. it referred to the evidence of Mr Sabapathy and Mr Napoli which was not inherently improbable or otherwise unreliable; 2. M20 and PC did not adduce any evidence on the issue of damages, and did not put to either Mr Sabapathy or Mr Napoli that the evidence they provided regarding the time spent by staff members or the hourly cost claimed was unreasonable or otherwise inflated; 3. to the extent that the additional cleaning costs were imprecise the Tribunal must do the best it can to assess the damages; it was difficult to see how precise evidence could be called to determine exactly how much additional time was spent cleaning the toilets; plainly the additional time would vary from week to week and would be subject to the use of the toilets by patrons; this was a case where precise evidence was not available and the Tribunal had sufficient evidence before it to do the best it can to assess damages. The submissions of M20 and PC 1. In the M20 and PC submissions M20 and PC made the following submissions: 1. they referred to the principles regarding the assessment of damages; 2. as to the additional cost of cleaning the toilets since 23 August 2019: 1. JCK did not direct its evidence to the question of additional costs but, rather, to cleaning costs generally without the necessary differentiation required by its own case; JCK was not assisted by the evidence it led below as to the estimate of staff costs, nor was JCK assisted by asserting that it did not adduce evidence on the issue of cleaning costs as it bore no onus to do so; 2. what JCK was required to establish was the additional costs incurred and caused by the respondents' alleged breach of their counterpart cleaning obligations under cl 9 of the deed of settlement; it failed to do so. Consideration and determination The applicable principles 1. The principles for the assessment of damages for breach of contract were recently summarised in Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31 (Sabouni) at [41]-[42] per Black J: "{41] The damages to which RBD is entitled, in respect of Mr Sabouni's breach of or repudiation of the Contract is the monetary sum which, so far as money can, represents "fair and adequate compensation for the loss or injury" which it sustained by reason of that breach or repudiation: Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 116 per Deane J. The Court must do the best it can to make a reliable assessment of damages, where damages are difficult to assess, including where a party has failed to lead the best evidence of damages: Commonwealth of Australia v Amann Aviation Pty Ltd above at 83, per Mason CJ and Dawson J, 125 per Deane J, 153 per Gaudron J. In Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 at [135], Beazley JA observed that: "Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provides for breach of contract, an award of damages … . Such damages should not be nominal only, notwithstanding that the award may be difficult to assess. …" (Citations omitted) [42] On the other hand, the case law also recognises that damages must be proved with a degree of precision which reflects the proof that is reasonably available to the parties: State of New South Wales v Moss (2000) 54 NSWLR 536 at [72]; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 at [38]. In Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 319, Pincus J noted that "if the evidence called on behalf of [the plaintiff] fails to provide any rational foundation for a proper estimate of damages, the Court should simply decline to make one". That approach was approved by Brooking J in JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 243 and by the Court of Appeal in Troulis v Vamvoukakis [1998] NSWCA 237 where Gleeson CJ observed that, where damages were susceptible of evidentiary proof, but there was an absence of raw material to which good sense may be applied, "[j]ustice does not dictate that … a figure should be plucked out of the air". That decision has been approved in subsequent cases, including McCrohan v Harith [2010] NSWCA 67 at [128], where McColl JA (with whom Campbell JA and Handley AJA agreed) held that an estimate of damages, in the nature of a "guess", should not be made where precise evidence of the damages suffered could have been adduced, but was not. I followed that decision in Re Hair Industrie Penrith Pty Ltd, Hair Industrie Merrylands Pty Ltd [2015] NSWSC 1578 at [20], on which I have drawn for the summary which appears above." The failure to provide access to the disabled toilets 1. Having regard to the principles in Sabouni at [41]-[42], we are not satisfied that JCK has established any loss consequent upon the failure of PC to provide access to the disabled toilets between November 2019 and December 2020. The evidence called on behalf of JCK fails to provide any rational foundation for a proper estimate of damages and we decline to make one. The failure to clean the toilets seven days a week 1. The issue of whether JCK suffered any, and if so what, loss by reason of the failure of JCK to clean the toilets seven days a week raises the following two questions: 1. whether JCK is entitled to a refund of the fees for the cleaning of the toilets paid to PC; 2. whether JCK is entitled to damages for the costs of cleaning the toilets on the weekends. 1. While item 3(b) of the reference schedule is not referred to in any clause of the sublease, we are satisfied that this item provides that the cleaning fee charged to JCK was $330.00 inclusive of GST per week for the cleaning of the toilets on weekdays. 2. As the amount of $330.00 inclusive of GST per week paid by JCK to PC was for the cleaning of the toilets on weekdays which was done, we are not satisfied that JCK is entitled to any refund of the cleaning fee which it has paid since March 2018. 3. As to the question of damages for the costs of cleaning the toilets on the weekends, it is necessary to separately consider the period from March 2018 to 23 August 2019 when the deed of settlement was signed, and the period since 23 August 2019. As to the earlier period comprising 77 weeks, the question is the cost of cleaning the toilets on the weekends. As to the later period, the question is the additional cost of cleaning the toilets on the weekends. 4. As to the earlier period, we are satisfied that there is sufficient evidence to enable a proper assessment of damages. Subject to one qualification, we accept the evidence of Mr Napoli in preference to that of Mr Sabapathy because it is more precise. The qualification is that the calculation of the staff cost of cleaning was based on 12 hours for a weekend being four hours for each of Friday, Saturday and Sunday nights. As we found that PC did not breach the sublease in respect of cleaning on Fridays, the calculation should have been based on eight hours each weekend. On this basis PC is entitled to $183.96 (8 hours x $21.00 x 9.5%) for each weekend, and $14,164.92 ($183.96 x 77 weeks) for this period. 5. As to the later period, we are not satisfied that JCK has established any loss. As the evidence called on behalf of JCK fails to provide any rational foundation for a proper estimate of damages, we decline to make one. JCK could have adduced evidence as to the additional time taken for cleaning the toilets because they had not been cleaned by M20 and PC, but did not do so. In these circumstances, making an assessment of damages would involve a process of guesswork. The diversion of the air conditioner 1. If we had been satisfied that PC had breached cl 9.1(a) of the sublease by diverting the air conditioner servicing the premises to the common area in or around December 2017 before entry into the sublease: 1. we would have awarded JCK damages of $4,400.00 being the amount of the Modified quote. We accept the evidence of Messrs Sabapathy and Napoli that this work was done and was paid for in cash; 2. we would not have awarded JCK any damages for increased electricity costs. As conceded by Mr Sabapathy in cross-examination, the electricity costs were not markedly different before and after the relocation of the air conditioning system. The locking of JCK out of the storage area 1. If we had been satisfied that PC breached the sublease by locking JCK out of the storage area in or around May 2019, and/or that M20 and PC breached cl 2 of the deed of settlement by locking JCK out of the storage area without giving it the opportunity to remove its goods, we would have awarded JCK damages of $782.00 on the basis that, doing the best one can with the available evidence, we estimate that one half of the amount claimed was in respect of perishable goods that had passed their use-by date. The leaking of the roof 1. If we had been satisfied that PC breached cl 15.1 of the sublease, and/or that M20 and PC breached cl 7 of the deed of settlement by failing to maintain and repair the roof of the premises and keep the premises watertight: 1. we would have awarded JCK damages of $5,817.00 for the costs of cleaning as set out in the Napoli declaration at [5]. We would have accepted this evidence of Mr Napoli in preference to that of Mr Sabapathy in the cleaning and the loss in sales spreadsheet because it is more precise; 2. we would have awarded JCK damages of $70,330.00 for the loss in sales. We would have accepted this evidence of Mr Sabapathy in the cleaning and the loss in sales spreadsheet; 3. we would have awarded JCK damages of $41,550.19 for property damage (being $116,016.90 specified in the SCY quote less $74,466.71 received by JCK under its insurance claim). Conclusion 1. We are satisfied that JCK should recover damages of $14,164.92 as against PC in respect of the sublease claim. The pre-sublease misrepresentations claim Introduction 1. The pre-sublease misrepresentations claim was contested before the Tribunal, and on appeal with respect to amended grounds 3 and 5. This claim consists of claims under s 10 and 62D of the RL Act, and was based on the following alleged misrepresentations made in or around December 2017: 1. the following alleged express misrepresentations: 1. all additions and alterations to the premises had been done in a proper and workmanlike manner; 2. the building and the roof had been upgraded; 3. the premises were fitted with a new air conditioning unit that was purpose built for the premises; 4. table and chairs could be used at the premises as a take away shop and no work in that regard was required by JCK; 5. JCK would have access to the disabled toilets; 1. the following alleged implied misrepresentations: 1. there would be no road works in front of the premises; 2. the premises were fit for occupation and otherwise watertight; 3. the premises were in a state of repair such that JCK would be provided with their quiet use and enjoyment. 1. The following five issues arise for determination of the pre-sublease misrepresentations claim: 1. whether M20 and PC made the express representations; 2. whether M20 and PC made the implied representations; 3. whether any express or implied representations made by M20 and PC were false or misleading and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act; 4. whether any contravening express or implied representations caused or materially contributed to JCK being under a misapprehension, and whether JCK suffered loss because of that misapprehension; 5. what is the amount of any such loss. 1. Before considering these issues it is appropriate to set out the applicable provisions of the RL Act. We have then considered each of these issues in turn after first having summarised the evidence and submissions of the parties at first instance. The applicable provisions of the RL Act 1. Part 2 (ss 9-16) is headed "Entering into a lease". Section 10 deals with the right to compensation for pre-lease misrepresentations, and relevantly provides: 10 Right to compensation for pre-lease misrepresentations (1) A party to a retail shop lease is liable to pay another party to the lease (the injured party) reasonable compensation for damage suffered by the injured party that is attributable to the injured party's entering into the lease as a result of a false or misleading statement or representation made by the party, or any person acting under the party's authority, with knowledge that it was false or misleading. (2) The giving of a lessor's disclosure statement to a prospective lessee under a retail shop lease is considered to be the making of a representation by the lessor to the lessee as to the information in the disclosure statement. … 1. Section 11 deals with the lessor's disclosure statement, and relevantly provides: 11 Lessor's disclosure statement (1) At least 7 days before a retail shop lease is entered into, the lessor must give the lessee a disclosure statement for the lease (the lessor's disclosure statement) that complies with the following requirements— (a) the lessor's disclosure statement is to be in writing and is to be in or to the effect of Parts A and B of the form in Schedule 2 (the prescribed form), … (4) If a lease is entered into by way of the renewal of a lease, a written statement (a lessor's disclosure update) that updates the provisions of an earlier disclosure statement given to the lessee is, in conjunction with that earlier disclosure statement, considered to be a disclosure statement given for the purposes of this section at the time the lessor's disclosure update is given. 1. Part 7A Division 2 (ss 62C-62E) is headed "Misleading or deceptive conduct". Section 62C deals with the interpretation and application of Div 2, and relevantly provides: 62C Interpretation and application of Division (1) In this Division— misleading or deceptive conduct means conduct to which section 62D applies. … 1. Section 62D deals with misleading or deceptive conduct in connection with retail leases, and provides: 62D Misleading or deceptive conduct in connection with retail leases A party to a retail shop lease must not, in connection with the lease, engage in conduct that it is misleading or deceptive to another party to the lease or that it is likely to mislead or deceive another party to the lease. 1. Section 62E deals with the right to compensation, and provides: 62E Right to compensation A party or former party to a retail shop lease who suffers loss or damage by reason of misleading or deceptive conduct of another party may recover the amount of the loss or damage by lodging a claim against the other party under section 71. Whether M20 and PC made the express representations The evidence of JCK The first Sabapathy declaration 1. In the first Sabapathy declaration, Mr Sabapathy gave the following evidence (at [24]-[25]): "Representations made prior to entry into Sublease 24. In December 2017 I meet with Mr Michael Peters who introduced himself as the director of the First Respondent and Mr Dennis, who introduced himself as the director for the Second Respondent. In. December 2017 had a conversation with Mr Peters and Mr Dennis He to the following effect: Mr Peters: "The whole building has been refurbished and is like new". Mr Peters: "The roof and the air conditioner unit for your restaurant has been upgraded" Mr He: "We also spend $800,000 on shop I restaurant for the last tenant Outback Jack including the air conditioner". Mr Peters: "This is Prime restaurant location and this street is getting busier ". (No mention of construction of light rail in the street"). Mr He: "The toilets have been refurbished and you have access to toilets, the walk way and the disabled toilets with shower 24 hours a day. We clean the toilets and common areas every day'. 25. I relied on what Mr Peters and Mr He's told me when I caused the Applicant to enter the Sublease and thereafter complete a fit out of a restaurant at the Leased Premises. The oral evidence of Mr Sabapathy 1. In cross-examination, Mr Sabapathy gave evidence that the conversation set out in the first Sabapathy declaration at [24] occurred before the sublease was signed, said "I can't specify the exact works but the … general things that were mentioned are correct as I recall", denied that the conversation was a reconstruction, and agreed that the representations were not recorded in the contemporaneous correspondence between the parties. The cross-examination documents 1. The cross-examination documents included a for lease sign which relevantly stated: "New air conditioning … Dennis He … Praxis Capital" The evidence of M20 and PC The Kyriacou statement 1. In the Kyriacou statement, Mr Kyriacou denied the conversation set out in the first Sabapathy declaration at [24] (at [13]). The oral evidence of Mr Kyriacou 1. In cross-examination, Mr Kyriacou conceded that he may have had a conversation about the air conditioner with Mr Sabapathy and that he could not recall whether Mr He was also present (Tcpt 3, 9 March 2021, paras 242-245). The oral evidence of Mr He 1. In cross-examination, Mr He gave evidence that there may have been a conversation about the air conditioning with Mr Peters, Mr Sabapathy and himself and that he made statements to the effect that more than $800,000.00 had been spent on the air conditioners servicing the premises by the previous tenant during that conversation. Mr He also accepted that there may have been a further conversation in about November 2018 where he may have stated to Mr Sabapathy that the air conditioning was brand new (Tcpt, 20 May 2021, paras 447-554). The submissions of the parties at first instance The submissions of JCK 1. In the applicant's submissions, JCK did not address the pre-sublease misrepresentations claim. The submissions of M20 and PC 1. In the respondents' submissions, M20 and PC made the following submissions: 1. they referred to Watson v Foxman (1995) 49 NSWLR 315 at 319; 2. the Tribunal would not accept the evidence of Mr Sabapathy in the first Sabapathy declaration at [24] for the following reasons: 1. it was standalone evidence of oral representations made some years before the first Sabapathy declaration; 2. the evidence was equivocal and lacking in precision; 3. little weight should be placed upon Mr Sabapathy's recollection of the alleged conversation in circumstances where, during cross-examination, he sought to respond to questions as to his recollection of a conversation by reference to documents not put before him; 4. the conversation alleged is incredible on its face. It is said to comprise a series of disjunctive representations of fact, volunteered in an entirely unprompted manner, by Mr Kyriacou and Mr He, the directors of both M20 and Praxis, apparently in an alternating procession. As a matter of ordinary human experience, that evidence of the alleged conversation is fanciful; 5. as was accepted by Mr Sabapathy under cross-examination, the content of the representations cannot be found in any of the contemporaneous documentation prepared in connection with the sublease; 6. even were this evidence accepted, JCK still cannot succeed on much of its pleaded claim; nothing in the alleged conversation conveys a representation by either respondent that: 1. the works to the premises were conducted in a "proper and workmanlike manner"; 2. the "building" had been "upgraded"; 3. the air conditioner was "purpose built for the Premises"; or 4. "table and chairs could be used at the Premises as a takeaway shop". 1. In the applicant's reply submissions, JCK said the evidence of Mr Sabapathy in the first Sabapathy declaration at [24] should be accepted. It referred to the "For Lease" sign in the front of the premises which relevantly stated "Access to Male/female amenities" and "New air conditioning". Mr He did not deny the conversation in his oral evidence. Consideration and determination 1. In Watson v Foxman at 318-319, McLelland CJ in Eq noted the challenges confronting a plaintiff seeking to rely on oral representations in the context of cases of misrepresentation: "Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. … Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration." 1. We regard it as significant that the "For Lease" sign in the front of the premises contained an express statement of "New air conditioning". In the light of this statement it is likely that oral representation to the same effect would have been made by M20 and PC in negotiations prior to entry into the sublease. 2. However, having regard to the principles in Watson v Foxman at 318-319, we are not satisfied that any of the pleaded representations were made to Mr Sabapathy except that PC made the representation that the premises were fitted with a new air conditioning unit. There is a significant disparity between the evidence of Mr Sabapathy in the first Sabapathy declaration at [24] and the express representations which JCK alleges were made. Whether M20 and PC made the implied representations The evidence of JCK The first Sabapathy declaration 1. In the first Sabapathy declaration Mr Sabapathy attached the lessor's disclosure statement of PC which contained the box with adjoining word "No" marked for the following question: "17 Alteration works 17.1 Are there any alteration works, planned or known to the lessor at this point in time, to the premises or building/centre, including surrounding roads, during the term or any further term or terms?" 1. In the He statement Mr He gave the following evidence: "Roadworks 78 To the best of my knowledge, Mr Sabapathy ran a café in Parramatta known as Platform No.8 in 2017. 79 On or around September 2017 flyers were sent to landlords and tenants detailing the roadworks that were going to occur in the area. 80 Given that Mr Sabapathy ran a café in Parramatta at that time, it is my understanding that he would have received a flyer." The evidence of M20 and PC The oral evidence of Mr He 1. In cross-examination Mr He gave the following evidence (Tcpt, 20 May 2021, paras 670-681): "670. Mr Young: What I want to suggest to you is that the matters that are referred to in the box, that is the light rail and related works are or would be carried out on Macquarie Street and its surrounds were known to Praxis Capital at the time that it entered the sublease with the applicant in 2017. 671. Mr He: Yes informally, yes. 672. Mr Young: They were not disclosed in the disclosure statement? 673. Mr He: That is correct. 674. Mr Young: I suggest to you that they are matters that would materially affect any person that is in the position of the applicant. 675. Mr He: I disagree. 676. Mr Young: There has been a significant effect on Macquarie Street to your knowledge, hasn't there? 677. Mr He: No, not to this section of Macquarie Street where the building is situated. 678. Mr Young: Doesn't it entail there being an inability to park in that area? 679. Mr He: There has been no parking regardless prior to the project took place anyway. 680. Mr Young: Prior to this work happening there was street parking there. 681. Mr He: I would steer (sic) this matter for the state government." The submissions of the parties at first instance The submissions of JCK 1. In the applicant's submissions, JCK referred to the He statement at [76]-[78], the evidence given in cross-examination by Mr He and the lessor's disclosure update. 2. In the applicant's reply submissions, JCK made the following submissions: 1. Mr He admitted that he knew about the roadworks and failed to disclose it; 2. Mr He admitted that it should have been disclosed; 3. Mr He admitted that there were road works during the tenancy and loss of parking in the street. The submissions of M20 and PC 1. In the respondents' submissions, M20 and PC made the following submissions: 1. there is no evidential foundation for the implied representations which JCK alleges were made; 2. JCK provides nothing to suggest that there was a "reasonable expectation" of disclosure of facts readily available in the circumstances. The parties were arms-length commercial participants, the information was readily available to both parties upon reasonable enquiry, no warranty or other positive assertion was made to the contrary, nor was any specific requisition or enquiry raised; 3. the lessor's disclosure update says nothing as to whether the circumstances of "reasonable expectation" existed at the time of the sublease. 1. In the respondents' reply submissions, M20 and PC made the following submissions: 1. they referred to the principle that commercial parties are ordinarily under no obligation to volunteer information to their counterparts and cited Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 (Miller) at [22]; 2. the question is whether a reasonable expectation of disclosure arose between these two commercial parties in December 2017; JCK made no attempt to explore those circumstances, or to articulate why such an expectation would arise, given that both parties were commercial parties with an equal capacity to make enquiries and to safeguard their own interests. Consideration and determination 1. We note that, surprisingly, JCK made no claim that by the answer to question 17.1 in the lessor's disclosure statement PC engaged in misleading or deceptive conduct. This claim arises by virtue of the silence of PC. 2. We also note that the submissions of JCK did not address any implied representation as to the condition of the premises. 3. In Ajaimi at [126]-[127] M Osborne J set out the following principles for engaging in misleading or deceptive conduct under s 18 of the Australian Consumer Law (which is the statutory analogue to s 62D of the RL Act): "[126] Turning first to the claim by silence, silence may constitute misleading or deceptive conduct 'where it embodies a false representation or where there is a reasonable expectation that a relevant fact will be disclosed'.30 The essential question is whether, having regard to the circumstances constituted by acts, omissions, statements or silence, there has been conduct likely to mislead or deceive. It is clear that silence alone cannot give rise to a breach of s 18 of the ACL. In Addenbrooke Pty Ltd v Duncan (No 2), Gilmour and White JJ summarised the principles relevant to cases of silence: (a) conduct involving silence or nondisclosure may, in some circumstances, constitute misleading or deceptive conduct; (b) in considering whether conduct is misleading or deceptive, silence or nondisclosure is to be assessed as a circumstance like any other; (c) mere silence is unlikely to constitute misleading or deceptive conduct. However, remaining silent will constitute misleading or deceptive conduct if the circumstances give rise to a reasonable expectation that, if some relevant fact does exist, it will be disclosed; (d) the existence or otherwise of such a reasonable expectation is to be determined objectively; (e) it is not possible to categorise all of the circumstances in which a reasonable expectation of disclosure may arise. Such circumstances may exist, for instance when either the law or equity imposes a duty of disclosure, when a statement conveying a half-truth only is made, when the respondent has undertaken a duty to advise, when a representation with continuing effect, although correct at the time it was made, has subsequently become incorrect, and when the respondent has made an implied representation. (f) in commercial dealings, in assessing whether there is a reasonable expectation that a fact, if it exists, will be disclosed, it will often be the case that one party to a commercial dealing has more knowledge about a relevant matter than the other but will not, in accordance with ordinary commercial expectations, be guilty of misleading or deceptive conduct by failing to make that knowledge known to the other party. (citations omitted) [127] It is clear from the above that the landlord's silence alone is unlikely to constitute misleading or deceptive conduct. Further, the silence has to be assessed as a circumstance amongst many others, which relevantly in the present case includes a provision in the Lease that the Premises were leased in their present state and condition. It is not the case that, without more, a prospective landlord of premises must positively disclose defects in the premises to a prospective tenant such that if it does not, the landlord will be liable under the ACL for the failure to disclose that matter." 1. In Miller at [22] French CJ and Kiefel J said: "[22] However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. …" 1. Having regard to the principles in Ajaimi at [126]-[127] and Miller at [22], we are not satisfied that M20 and PC made any of the implied representations. The circumstances prior to entry into the sublease did not give rise to a reasonable expectation that PC would disclose anything about the prospective roadworks or the condition of the premises. Whether any express or implied representations made by M20 and PC were false or misleading, or misleading deceptive in contravention of s 10 and/or 62D of the RL Act Whether any contravening express or implied representations caused or materially contributed to JCK being under a misapprehension, and JCK suffered loss because of that misapprehension What is the amount of any such loss? 1. In view of our finding that PC made the express representation that the premises were fitted with a new air conditioning unit, these issues arise for determination in respect of this representation. 2. In view of our finding that M20 and PC did not make any of the other express representations or any of the implied representations, these issues do not arise for determination. In case these findings are later found to be wrong, we have considered the remaining issues. The evidence of M20 and PC The Kyriacou statement 1. In the Kyriacou statement Mr Kyriacou gave the following evidence: 1. the air conditioner had been installed for a previous tenant in about December 2016 (at [13]); 2. in late 2016 and early 2017, M20 engaged AGC Residential Roof Maintenance Pty Limited (AGC) to undertake work on the roof of the premises which included steps to prevent water leaks as set out in the attached tax invoices and bank receipts from AGC dated 23 November 2016, 21 December 2016 and 9 January 2017 (at [25-[26]). The first Sabapathy declaration 1. In the first Sabapathy declaration Mr Sabapathy gave evidence that he relied on what Mr Kyriacou and Mr He told him when he caused JCK to enter into the sublease and thereafter complete a fit out of a restaurant at the premises (at [25]). The oral evidence of Mr He 1. In cross-examination Mr He gave the following evidence: 1. that the light rail and related works would be carried out in the street in which the premises are located and surrounds were known to PC when it entered into the sublease (Tcpt, 20 May 2021, paras 670-671); 2. he disagreed that the light rail and related works had had a significant effect on the street in which the premises are located (Tcpt, 20 May 2021, paras 672-681). Consideration and determination 1. As we have found that PC made the representation that the premises were fitted with a new air conditioning unit, we are satisfied that it was false or misleading, and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and that JCK relied upon the express representations in entering into the sublease. 2. In Gould v Vaggelas (1985) 157 CLR 215 at 236; [1985] HCA 75 Wilson J relevantly restated the principles as to inducement including that, if a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract, there arises a fair inference of fact that he was induced to do so by the representation. 3. If we had found that PC had made any one or more of the other express representations and the implied representations we would have found that they were false or misleading, and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and that JCK relied upon the express representations in entering into the sublease. 4. In Ajaimi at [131] M Osborne J held that the measure of damages for breach of s 18 of the Australian Consumer Law in most if not all cases is the measure of damages representing the prejudice or disadvantage suffered in consequence of the party having altered their position under the inducement of the relevant representation; in broad terms this is analogous to tortious damages. This involves an analysis of the difference in the position as induced and the relevant counterfactual position. 5. Notwithstanding that JCK in its points of claim claimed that, had the express or implied representations not been made, it would have found alternative premises in the Parramatta district and thereby suffered loss, it adduced no such evidence, including that any such premises would have been less expensive or otherwise more advantageous than the premises the subject of these proceedings. Accordingly, even though we have found that one express representation concerning the airconditioning was made, was false or misleading, and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and that JCK relied upon the express representations in entering into the sublease, we dismiss the pre-sublease misrepresentations claim in the absence of any evidence of established loss. If JCK had established one or more of the other express representations and the implied representations had been made, and were false or misleading and/or misleading or deceptive in contravention of s 10 and/or 62D of the RL Act, and caused or materially contributed to its entering into the sublease, we would have dismissed the pre-sublease misrepresentations claim in the absence of any evidence of established loss. The unconscionable conduct claim Introduction 1. The unconscionable conduct claim was contested before the Tribunal. This claim consisted of a claim under 62B of the RL Act and was based on the following alleged unconscionable conduct: 1. PC had failed to honour the contractual obligations under the sublease; 2. M20 and PC had each failed to honour its obligations under the deed of settlement; 3. the conduct of each of M20 and PC in respect of the sublease claim, the deed of settlement claim and the pre-sublease misrepresentations claim demonstrated a lack of good faith generally; 4. by making the pre-sublease misrepresentations M20 and PC engaged in unfair tactics; 5. M20 and PC had failed to discuss in good faith and with fair consideration the requests made by JCK to resolve the issues identified in the deed of settlement; 6. M20 and PC have continued to make and publish demands for false amounts of rental owing when they agreed not to engage in that conduct under the deed of settlement; 7. M20 and PC have continued to make and publish demands for false amounts of rental owing and threatened to re-enter the premises when they have been in breach of the COVID-19 Regulation. 1. The following three issues arise for determination of the unconscionable conduct claim: 1. whether M20 and PC engaged in unconscionable conduct; 2. whether JCK suffered loss because of that unconscionable conduct; 3. what is the amount of any such loss. 1. Before considering these issues it is appropriate to set out the applicable provisions of the RL Act and legal principles. The applicable provisions of the RL Act 1. Part 7A Division 1 (ss 62A-62B) is headed "Unconscionable conduct". Section 62B deals with unconscionable conduct in retail shop lease transactions, and relevantly provides: 62B Unconscionable conduct in retail shop lease transactions (1) A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable. … (3) Without in any way limiting the matters to which the Tribunal may have regard for the purpose of determining whether a lessor has contravened subsection (1) in connection with a retail shop lease, the Tribunal may have regard to— (a) the relative strengths of the bargaining positions of the lessor and the lessee, and (b) whether, as a result of conduct engaged in by the lessor, the lessee was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the lessor, and (c) whether the lessee was able to understand any documents relating to the lease, and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the lessee or a person acting on behalf of the lessee by the lessor or a person acting on behalf of the lessor in relation to the lease, and (e) the amount for which, and the circumstances under which, the lessee could have acquired an identical or equivalent lease from a person other than the lessor, and (f) the extent to which the lessor's conduct towards the lessee was consistent with the lessor's conduct in similar transactions between the lessor and other like lessees, and (g) the requirements of any applicable industry code, and (h) the requirements of any other industry code, if the lessee acted on the reasonable belief that the lessor would comply with that code, and (i) the extent to which the lessor unreasonably failed to disclose to the lessee— (i) any intended conduct of the lessor that might affect the interests of the lessee, and (ii) any risks to the lessee arising from the lessor's intended conduct (being risks that the lessor should have foreseen would not be apparent to the lessee), and (j) the extent to which the lessor was willing to negotiate the terms and conditions of any lease with the lessee, and (k) the extent to which the lessor and the lessee acted in good faith. … (8) A lessor or lessee, or former lessor or lessee, who suffers loss or damage by reason of unconscionable conduct of another person that is in contravention of this section may recover the amount of the loss or damage by lodging a claim against the other person under section 71A. (9) If the matter of such loss or damage arises in connection with a matter the subject of proceedings in the Tribunal, the Tribunal may proceed to decide it, and in so doing may award such sum as it thinks fit. … The applicable legal principles 1. In Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557; [2005] NSWCA 261 (World Best) at [120]-[121] Spigelman CJ (with Tobias JA at [183] agreeing) made the following observations with respect to unconscionable conduct within s 62B of the RL Act: "[120] Unconscionability is a well-established but narrow principle in equitable doctrine. It has been applied over the centuries with considerable restraint and in a manner which is consistent with the maintenance of the basic principles of freedom of contract. It is not a principle of what "fairness" or "justice" or "good conscience" requires in the particular circumstances of the case. … [121] … Even if the concept of unconscionability in s 62B of the Retail Leases Act is not confined by equitable doctrine, as the decisions under s 51AC of the Trade Practices Act (Cth) suggest, restraint in decision-making remains appropriate. Unconscionability is a concept which requires a high level of moral obloquy. If it were to be applied as if it were equivalent to what was "fair" or "just", it could transform commercial relationships in a manner which the Minister expressly stated was not the intention of the legislation. The principle of "unconscionability" would not be a doctrine of occasional application, when the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute about a retail lease arises." 1. The meaning of the term unconscionable conduct was recently considered by the High Court in Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18 (Kobelt). That case concerned the use of the term in s 12CB(1) of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) (which is substantially similar to the proscription contained in s 62B of the RL Act). Keifel CJ and Bell J (who participated in the majority) at [14] and [15] stated as follows (footnotes and references omitted): "[14[ The term "unconscionable" is not defined in the ASIC Act and is to be understood as bearing its ordinary meaning. The proscription in s 12CB(1) is of conduct in connection with the supply of financial services that objectively answers the description of being against conscience. The values that inform the standard of conscience fixed by s 12CB(1) include those identified by Allsop CJ in Paciocco v Australia and New Zealand Banking Group Ltd: certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and: "the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage". [15] It is the application of the last-mentioned value with which the appeal is concerned. In Kakavas v Crown Melbourne Ltd and Thorne v Kennedy it was said that a conclusion of unconscionable conduct requires not only that the innocent party be subject to special disadvantage, but that the other party must also unconscientiously take advantage of that special disadvantage. This has variously been described as requiring victimisation, unconscientious conduct or exploitation." 1. In Kobelt Gageler J (one of the majority) stated at [89]-[93] (footnotes and references omitted): "[89] Parliament's appropriation of that terminology in s 12CB shorn of the constraints of the unwritten law is indicative of an intention that conduct of the requisite gravity need not be found only in a fact-pattern which fits within the equitable paradigm of a stronger party to a transaction exploiting some special disadvantage which operates to impair the ability of a weaker party to form a judgment as to his or her best interests. The requirement to administer the standard in the totality of the circumstances taking account of the considerations identified in s 12CC is a further indication that the standard has potential application within a range of factual scenarios not all of which would be recognised in equity as giving rise to relief on the basis of unconscionable conduct. For example, whereas undue influence constitutes a distinct (albeit often overlapping) ground for relief in equity, under s 12CC(1)(d) the presence or absence of undue influence is one, and only one, of the considerations to be taken into account in determining whether conduct is or is not unconscionable. [90] Important to the resolution of this appeal, in my opinion, is that what Parliament's appropriation of the terminology of equity in the expression of the normative standard in s 12CB does not do is to authorise a court exercising jurisdiction in a matter arising under that section to dilute the gravity of the equitable conception of unconscionable conduct so as to produce a form of equity-lite. The appropriation of the terminology of equity does not allow a court to adopt a process of reasoning which starts with the equitable conception of unconscionable conduct, involving exploitation of a special disadvantage, and then uses considerations identified in s 12CC to water down the court's assessment of what amounts to a special disadvantage or to allow the court to arrive more easily at an assessment that conduct amounts to exploitation. [91] In Paciocco v Australia & New Zealand Banking Group Ltd, I referred to unconscionable conduct within the meaning of s 12CB as requiring "a 'high level of moral obloquy' on the part of the person said to have acted unconscionably". "Moral obloquy" is arcane terminology. Without unpacking what a high level of moral obloquy means in a contemporary context, using that arcane terminology does nothing to elucidate the normative standard embedded in the section. The terminology also has the potential to be misleading to the extent that it might be taken to suggest a requirement for conscious wrongdoing. My adoption of it has been criticised judicially and academically. The criticism is justified. I regret having mentioned it. [92] What I meant to convey by the reference was that conduct proscribed by the section as unconscionable is conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience. To that view of the statutory standard I adhere. [93] The judgment required of a court exercising jurisdiction in a matter arising under s 12CB is a heavy one. For a court to pronounce conduct unconscionable is for the court to denounce that conduct as offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society. Those values are not entirely confined to, or entirely removed from, the values which historically informed courts administering equity in the development of the unwritten law of unconscionable conduct. They include respect for the dignity and autonomy and equality of individuals." 1. In Kobelt, Keane J (one of the majority) stated at [118] (footnotes and references omitted): "[118] The use of the word "unconscionable" in s 12CB – rather than terms such as "unjust", "unfair" or "unreasonable" which are familiar in consumer protection legislation – reflects a deliberate legislative choice to proscribe a particular type of conduct. In its ordinary meaning, the term "unconscionable" requires an element of exploitation. The term imports the "high level of moral obloquy" associated with the victimisation of the vulnerable. As five members of this Court observed recently in Thorne v Kennedy, a finding of unconscionable conduct requires the unconscientious taking advantage of a special disadvantage, which has "been variously described as requiring 'victimisation', 'unconscientious conduct', or 'exploitation'". And in Kakavas v Crown Melbourne Ltd, this Court unanimously confirmed that "[h]eedlessness of, or indifference to, the best interests of the other party is not sufficient" to establish the "predatory state of mind" that must be shown." 1. In Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 409 (Stubbings) the High Court again considered the meaning of unconscionable conduct in s 12CB(1) of the ASIC Act. Gordon J at [56]-[58] observed: "[56] "Unconscionable" is not defined in the ASIC Act. Unconscionable conduct under s 12CB "is not limited by the unwritten law of the States and Territories relating to unconscionable conduct", a clear reference to the equitable doctrine of unconscionable conduct. The statutory conception of unconscionability is more broad-ranging than the equitable principles; it does something more. [57] Section 12CB of the ASIC Act, like equity, requires a focus on all the circumstances. The court must take into account each of the considerations identified in s 12CC if and to the extent that they apply in the circumstances. The considerations listed in s 12CC are non-exhaustive, but they provide "express guidance as to the norms and values that are relevant to inform the meaning of unconscionability and its practical application". They assist in "setting a framework for the values that lie behind the notion of conscience identified in s 12CB". "The assessment of whether conduct is unconscionable within the meaning of s 12CB involves the evaluation of facts by reference to the values and norms recognised by the statute, and thus, as it has been said, a normative standard of conscience which is permeated with accepted and acceptable community standards. It is by reference to those generally accepted standards and community values that each matter must be judged". [58] Put in different terms, the s 12CC considerations assist in evaluating whether the conduct in question is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience". A court should take the serious step of denouncing conduct as unconscionable only when it is satisfied that the conduct is "offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society." 1. Steward J at [155] said: "[155] There was no dispute concerning the governing test for when equity will bar a remedy because a party has acted contrary to conscience. The applicable principles were summarised by Kiefel CJ, Bell, Gageler, Keane and Edelman JJ in Thorne v Kennedy as follows: A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage 'which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests'. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring 'victimisation', 'unconscientious conduct', or 'exploitation'. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage. (footnotes omitted)" 1. The Tribunal should follow the principles articulated in Kobelt and Stubbings when determining a claim under 62B of the RL Act. Whether M20 and PC engaged in unconscionable conduct The evidence of JCK The first Sabapathy declaration 1. In the first Sabapathy declaration Mr Sabapathy gave evidence that M20 and PC had failed to meet with him on behalf of JCK to update on any disputes (at [22]). The evidence of M20 and PC The contemporaneous documents 1. On 4 September 2020, PC sent a letter to JCK requiring JCK to remedy the breach of the sublease by failing to pay the toilet cleaning fee under item 3(b) of the reference schedule since on or about September 2019 (the 4 September 2020 notice). 2. On 11 September 2020, PC sent a letter to JCK requiring JCK to remedy the breach of the sublease by failing to pay the rent of $99,926.76 for April to September 2020 (the 11 September 2020 notice). The He statement 1. In the He statement Mr He gave evidence that he had only entered the premises to check the water meter on or about the 18th day of each month so that the water usage can be correctly billed to JCK (at [17]). The submissions of the parties at first instance The submissions of JCK 1. In the applicant's submissions and in the applicant's reply submissions, JCK did not address the unconscionable conduct claim. The submissions of M20 and PC 1. In the respondents' submissions, M20 and PC made the following submissions: 1. they referred to World Best at [120]-[121]; 2. the Tribunal could not be satisfied that the alleged conduct took place at all; 3. even were JCK to demonstrate the existence of the alleged conduct, it has wholly failed to demonstrate that the conduct attracts the high level of moral obloquy required by s 62B of the RL Act. Consideration and determination 1. For the reasons already set out, we are not satisfied that JCK has established the sublease claim except for the failure of PC to clean the toilets seven days a week, the deed of settlement claim and the pre-sublease misrepresentations claim. 2. We are not satisfied that the deed of settlement on its proper construction prohibited PC issuing a breach notice for any future breaches. Accordingly, it follows that PC did not breach cl 3 of the deed of settlement by giving the 4 September 2020 notice and the 11 September 2020 notice. 3. For the reasons set out below we are satisfied that PC breached the COVID-19 Regulation by giving the 4 September 2020 notice and the 11 September 2020 notice. 4. Notwithstanding that we are satisfied that that JCK has established the sublease claim by reason of the failure of PC to clean the toilets seven days a week and that PC breached the COVID-19 Regulation by giving the 4 September 2020 notice and the 11 September 2020 notice, we are not satisfied that M20 and PC engaged in unconscionable conduct for the following reasons: 1. there is no evidence that JCK was subject to a special disadvantage; 2. there is no evidence that M20 and PC knew or ought to have known of the existence and effect of any special disadvantage of JCK; 3. there is no evidence that M20 and PC unconscientiously took advantage of any special disadvantage of JCK. Whether JCK suffered loss because of that unconscionable conduct What is the amount of any such loss? 1. In view of our finding that M20 and PC did not engage in unconscionable conduct, these issues do not arise for determination. It follows that the unconscionable conduct claim should be dismissed. In case these findings are later found to be wrong, we have considered the remaining issues. 2. JCK in its points of claim has not claimed that it suffered any loss by reason of the unconscionable conduct of M20 and PC. Accordingly, even if JCK had established that M20 and PC had engaged in unconscionable conduct in contravention of s 62B of the RL Act, we would have dismissed the unconscionable conduct claim in the absence of any evidence of loss. The rent adjustment claim Introduction 1. The rent adjustment claim was contested before the Tribunal. The statutory foundation of this claim was never identified by JCK. 2. In the points of claim JCK relevantly claimed an adjustment in rental to make the rent just and equitable pending completion of road works in front of the premises and indicated that it would rely on expert valuation evidence to establish the reduced value of the premises due to road works which it estimated at $50,000.00. The submissions of the parties at first instance The submissions of JCK 1. In the applicant's submissions and in the applicant's reply submissions, JCK did not address the rent adjustment claim. The submissions of M20 and PC 1. In the respondents' submissions, M20 and PC made the following submissions: 1. the rent adjustment claim is manifestly hopeless and must fail because JCK has led no evidence at all to demonstrate to the satisfaction of the Tribunal: 1. the existence of any alleged road works; 2. the extent of any alleged road works; 3. the timing and duration of any alleged road works; 4. the impact of any alleged road works on JCK's business; 5. the disruption to JCK's use and enjoyment of the premises was causally linked to the road works; 1. JCK has led no evidence to establish the reduced value of the premises due to road works. Consideration and determination 1. In the absence of any evidence adduced by JCK and submissions in support, we accept the submissions of M20 and PC. It follows that the rent adjustment claim should be dismissed. The rent relief claim Introduction 1. The rent relief claim was contested before the Tribunal and on the appeal. In the applicant's submissions, JCK made the following submission: "78. The Claim for rent relief should be determined as per the National Cabinet Code of Conduct and Leasing principles are annexed to these submissions) as follows: Rent relief of 63% being $ ($15907 (monthly rental x 63% = $10,021.41 per month for six months April 2020 to September 2020 including three months recovery period total $60,126.46) i. The Applicant seeks an order that the tenant does not have to pay $30,126.46 in waived rental; and ii. The Applicant seeks an additional order of $30,126.46 be deferred to be repaid in equal monthly instalment commence on the l4th day after the date of the Tribunal order and repaid equal of 24 months thereafter. Given that the parties agreed that the tenant would pay the rental pending orders an order needs to take into account the above and order ii should allow for the landlord to repay the Deferred rental and allow the tenant to repay it over 24 months." 1. The following four issues arise for determination of the rent relief claim: 1. whether the Tribunal has power to provide a remedy by way of rent relief for breach of the COVID-19 Regulation; 2. whether JCK is an impacted lessee within the COVID-19 Regulation; 3. whether PC breached the COVID-19 Regulation by failing to renegotiate the sublease in good faith; 4. whether there is any evidence to enable the provision of a remedy for breach of the COVID-19 Regulation. 1. Before considering these issues it is appropriate to set out the applicable statutory provisions. The applicable statutory provisions RL Act 1. Part 8 is headed "Dispute Resolution". Division 1 (s 63) is headed "Preliminary" and relevantly provides: 63 Interpretation (1) In this Part— … retail tenancy dispute means any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates, … … 1. Division 2 (ss 64-69) is headed "Mediation", and contains provisions dealing with the mediation of retail tenancy disputes. 2. Division 3 (ss 70-76A) is headed "Determination of claims by Civil and Administrative Tribunal". Section 70 contains definitions including: retail tenancy claim means any of the following: (a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned, being: … (ii) a claim for relief from payment of a specified sum of money, … (vii) a claim for the rectification of the lease or the lessor's disclosure statement, … 1. Section 72 deals with the powers of the Tribunal relating to retail tenancy claims, and relevantly provides: 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, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings— … (iv) do or perform, or refrain from doing or performing, any specified act, matter or thing, … (e) an order (as permitted by section 72AB) requiring the rectification of the lease or the lessor's disclosure statement, … (f) an order— … (iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not, or … (g) such other order, in the nature of an interlocutory order of a kind referred to in paragraphs (a)–(f), as the Tribunal considers proper to be made in order to resolve or assist resolution of the dispute between the parties. … 1. Section 72AB deals with the power of the Tribunal to order rectification of a lease or disclosure statement, and provides: 72AB Power of Tribunal to order rectification of lease or disclosure statement In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is not to make an order requiring the rectification of the lease or the lessor's disclosure statement or deeming a disclosure statement to have been given (as provided by section 72 (1) (e) or (e1)) unless— (a) the order is made with the consent of the parties, or (b) the Tribunal is satisfied that the order is necessary to correct an error or omission, or (c) the Tribunal is satisfied that the order is necessary to give effect to the intention of the parties when the lease was entered into, or (d) the Tribunal is satisfied that the order is necessary to give effect to the actual disclosure of information between the parties. 1. Section 75 deals with the removal of court proceedings to the Tribunal, and relevantly provides: 75 Removal of court proceedings to the Tribunal … (2) In determining whether or not it is appropriate that a matter be dealt with by the Tribunal, a court is to have regard to the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court. … COVID-19 Regulation 1. The COVID-19 Regulation commenced on 24 April 2020, was in force until 23 October 2020 when it was repealed and was amended by the Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) (COVID-19 Amendment Regulation) which commenced on 3 July 2020. 2. Clause 3 contained definitions of "business", "commercial lease", "impacted lessee", "lessor", "National Code of Conduct", "prescribed action", "prescribed period", and "the Act". Relevantly, "commercial lease" means a retail shop lease, "impacted lessee" is dealt with in cl 4, and "the Act" means the RL Act. 3. Clause 4 contained a definition of "impacted lessee", and relevantly provided: 4 Meaning of "impacted lessee" (1) A lessee is an impacted lessee if— (a) the lessee qualifies for the jobkeeper scheme under sections 7 and 8 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 of the Commonwealth, and (b) the following turnover in the 2018–2019 financial year was less than $50 million— (i) if the lessee is a franchisee—the turnover of the business conducted at the premises or land concerned, (ii) if the lessee is a corporation that is a member of a group—the turnover of the group, (iii) in any other case—the turnover of the business conducted by the lessee. … 1. Clause 6 relevantly provided that, if a lessee is an impacted lessee, a lessor must not take any prescribed action against the lessee on the grounds of a breach of the commercial lease during the prescribed period: cl 6(1). 2. Clause 7 dealt with the obligation to renegotiate rent and other terms of commercial leases before prescribed action, prior to the commencement of the COVID-19 Amendment Regulation did not include subcll (1A), (3A) and (3B), and provided: 7 Obligation to renegotiate rent and other terms of commercial leases before prescribed action (1A) This clause applies to a commercial lease to which an impacted lessee is a party (an impacted lease). (1) A lessor under an impacted lease must not take or continue any prescribed action against the impacted lessee concerned on grounds of a breach of the impacted lease consisting of a failure to pay rent during the prescribed period unless the lessor has complied with this clause. Note. This clause does not prevent parties to an impacted lease coming to agreements relating to the lease. For example, an impacted lessee may voluntarily agree to pay full rent during the prescribed period. The clause prevents the lessor taking unilateral prescribed action without complying with the requirements set out in subclauses (2)–(4). (2) Any party to an impacted lease may request the other parties to renegotiate the rent payable under, and other terms of, the impacted lease. (3) A party to an impacted lease must, if requested, renegotiate in good faith the rent payable under, and other terms of, the impacted lease. (3A) An impacted lessee must give the lessor the following in respect of the impacted lease— (a) a statement to the effect that the lessee is an impacted lessee, (b) evidence that the lessee is an impacted lessee. (3B) If the impacted lessee does not comply with subclause (3A), the lessor is taken to have complied with this clause. (4) The parties are to renegotiate the rent payable under, and other terms of, the impacted lease having regard to— (a) the economic impacts of the COVID-19 pandemic, and (b) the leasing principles set out in the National Code of Conduct. Note. See leasing principles No. 3–5, 7–10 and 12 in the National Code of Conduct. In particular, leasing principle No. 3 in the National Code of Conduct requires landlords to offer rent reductions, in the form of waivers or deferrals of rent, proportionate to lessees' reductions in turnover. 1. Clause 8 dealt with dispute resolution, and provided: 8 Dispute resolution (1) To avoid doubt, Part 8 (Dispute resolution) of the Act extends to an impacted commercial lease dispute as if it were a retail tenancy dispute within the meaning of that Part. (2) In this clause, impacted commercial lease dispute means any dispute concerning the liabilities or obligations (including any obligation to pay money) under a commercial lease to which an impacted lessee is a party, being liabilities or obligations which arose under the commercial lease concerning circumstances occurring during the prescribed period and includes a dispute regarding a renegotiation (or a failure to take part in a renegotiation) of rent payable under the commercial lease under clause 7. 1. Clause 9 specified when the Tribunal was to have regard to the leasing principles set out in the National Code of Conduct, and provided: 9 Tribunal and court consideration of National Code of Conduct leasing principles The Tribunal and any court, when considering whether to make a decision or order relating to any of the following, is to have regard to the leasing principles set out in the National Code of Conduct— (a) the recovery of possession of premises or land from a lessee, (b) the termination of a commercial lease by a lessor, (c) the exercise or enforcement of another right of a lessor of premises or land. National Code of Conduct 1. The National Cabinet Mandatory Code of Conduct—SME Commercial Leasing Principles During COVID-19 (National Code of Conduct) was adopted on 7 April 2020. 2. The National Code of Conduct relevantly has the following purpose: "PURPOSE The purpose of this Code of Conduct ("the Code") is to impose a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, where the tenant is an eligible business for the purpose of the Commonwealth Government's JobKeeper programme. These principles will apply to negotiating amendments in good faith to existing leasing arrangements – to aid the management of cashflow for SME tenants and landlords on a proportionate basis – as a result of the impact and commercial disruption caused by the economic impacts of industry and government responses to the declared Coronavirus ("COVID-19") pandemic. …" 1. The National Code of Conduct provides for overarching principles: "OVERARCHING PRINCIPLES The objective of the Code is to share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to appropriately balance the interests of tenants and landlords. It is intended that landlords will agree tailored, bespoke and appropriate temporary arrangements for each SME tenant, taking into account their particular circumstances on a case-by-case basis. …" 1. The National Code of Conduct relevantly contains the following leasing principles: "LEASING PRINCIPLES In negotiating and enacting appropriate temporary arrangements under this Code, the following leasing principles should be applied as soon as practicable on a case-by-case basis: … 3. Landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals (as outlined under "definitions," below) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant's trade during the COVID-19 pandemic period and a subsequent reasonable recovery period. 4. Rental waivers must constitute no less than 50% of the total reduction in rent payable under principle #3 above over the COVID-19 pandemic period and should constitute a greater proportion of the total reduction in rent payable in cases where failure to do so would compromise the tenant's capacity to fulfil their ongoing obligations under the lease agreement. Regard must also be had to the Landlord's financial ability to provide such additional waivers. Tenants may waive the requirement for a 50% minimum waiver by agreement. 5. Payment of rental deferrals by the tenant must be amortised over the balance of the lease term and for a period of no less than 24 months, whichever is the greater, unless otherwise agreed by the parties. …" 1. The National Code of Conduct provides for mediation: "BINDING MEDIATION Where landlords and tenants cannot reach agreement on leasing arrangements (as a direct result of the COVID-19 pandemic), the matter should be referred and subjected (by either party) to applicable state or territory retail/commercial leasing dispute resolution processes for binding mediation, including Small Business Commissioners/Champions/Ombudsmen where applicable. … CERP Rules 1. The Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) (CERP Rules) commenced on 9 April 2020. 2. Clause 5 relevantly provides a simplified outline of the jobkeeper payment: 5 Simplified outline The jobkeeper payment is intended to assist businesses affected by the Coronavirus to cover the costs of wages of their employees. The jobkeeper scheme starts on 30 March 2020 and ends on 27 September 2020. A business that has suffered a substantial decline in turnover can be entitled to a jobkeeper payment of $1,500 per fortnight for each eligible employee. It is a condition of entitlement that the business has paid salary and wages of at least that amount to the employee in the fortnight. A business that has suffered a substantial decline in turnover can also be entitled to a jobkeeper payment of $1,500 per fortnight for one business participant who is actively engaged in operating the business. … 1. Clause 7 dealt with when an entity qualifies for the jobkeeper scheme, and as in force between 24 April 2020 and 1 May 2020 relevantly provided: 7 When an entity qualifies for the jobkeeper scheme (1) For the purposes of paragraphs 6(1)(b) and 11(1)(c), an entity qualifies for the jobkeeper scheme at a time if: (a) on 1 March 2020, the entity carried on a business in Australia, or was a non‑profit body that pursued its objectives principally in Australia; and (b) the entity has satisfied the decline in turnover test at or before the time (see section 8). … 1. Clause 8 as in force between 24 April 2020 and 1 May 2020 set out the decline in turnover test relevantly provided: 8 Decline in turnover test Basic test (1) An entity satisfies the decline in turnover test at a time (the test time) if: (a) the entity's projected GST turnover for a turnover test period in which the test time occurs falls short of the entity's current GST turnover for a relevant comparison period (the comparison turnover); and (b) the shortfall, expressed as a percentage of the comparison turnover, equals or exceeds the specified percentage for the entity (see subsection (2)). … (2) The specified percentage for an entity is: (a) if the lower threshold applies to the entity (see subsection (3))—15%; or (b) if the higher threshold applies to the entity (see subsection (4))—50%; or (c) otherwise—30%. … Whether the Tribunal has power to provide any remedy by way of rent relief for breach of the COVID-19 Regulation The submissions of the parties in chief at first instance The submissions of JCK 1. In the applicant's submissions, JCK made the following submissions: 1. the relevant legislative provisions for determination of the rent relief claim are contained in the Retail and Other Commercial Leases (COVID-19 Regulation (No 3) 2020 (NSW) (the COVID-19 (No 3) Regulation); 2. the comments of Robb J in Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 (Sneakerboy (No 2)) at [79] to [87] were dicta comments about the power of the Tribunal in relation to matters not falling for decision in that case; 3. with reference to ss 72(1)(a), (b), (c), (f), and (g) and 75(2) of the RL Act and cl 8 of the COVID-19 Regulation, there is a legislative intention for the Tribunal to use its available powers to bring a solution to the problem where the principal means of resolving the issue (renegotiation between the parties) has failed. The submissions of M20 and PC 1. In the respondents' submissions, PC made the following submissions: 1. nothing in the RL Act, the COVID-19 Regulation, nor the succeeding regulations, confers jurisdiction upon the Tribunal to alter the terms of a lease, or to compel a party to grant "Covid-19 relief"; 2. it referred to Sneakerboy (No 2) at [79], and [83]-[85], NTT Australia Digital Pty Ltd v Cover Genius Services Pty Ltd [2020] NSWSC 1378; (2020) 19 BPR 40-711 (NTT) at [219]-[225] per Ward CJ in Eq, and Re Ryals Hotels Pty Ltd [2020] NSWSC 1906 (Ryals) at [28] per Black J. The submissions of the parties in reply at first instance The submissions of JCK 1. In the applicant's reply submissions, JCK made the following submissions: 1. neither Ryals nor NTT was concerned with the powers or jurisdiction of the Tribunal; 2. in Sneakerboy (No 2) Robb J did not make any decision one way or the other as to the jurisdiction of the Tribunal and referred to the lack of clarity as to the power of the Tribunal to effectively resolve the dispute; 3. the powers of the Tribunal under s 72 of the RL Act enable it to resolve the failure of negotiations by PC as required by cl 7 of the COVID-19 Regulation; 4. the COVID-19 Regulation should not be given a narrow or semantic construction and the powers of the Tribunal should be reasonably applied to particular disputes. The submissions of M20 and PC 1. In the respondents' reply submissions, PC made the following submissions: 1. the COVID-19 (No 3) Regulation commenced on 1 January 2021 (outside the period claimed), and it was not explained by JCK as to how this Regulation is intended to have retrospective effect; 2. nothing in cl 8 of the COVID-19 Regulation supported JCK's view that the Tribunal has jurisdiction to make the orders now sought. Indeed, the considered dicta of Robb J in Sneakerboy (No 2) at [79]-[85] rejected that argument; 3. JCK did not go on to point to the "available powers" which enable the Tribunal to amend the terms of a retail lease in order to waive and/or defer rent pursuant to a hypothetical renegotiation by the parties under the COVID-19 Regulation, which is consistent with the observations of Robb J in Sneakerboy (No 2) at [85]; 4. the COVID-19 Regulation is not a panacea, as observed by Lindsay J in First Renewable Pty Ltd v Nastevski [2020] NSWSC 1508 (First Renewable) at [22]. The submissions of the parties on appeal The submissions of JCK 1. In the JCK submissions, JCK in substance repeated its submissions before the Tribunal at first instance. The submissions of M20 and PC 1. In the M20 and PC submissions, PC in substance repeated its submissions before the Tribunal at first instance and referred to Robin Raju & Associates Pty Ltd v Kaplan Investments Pty Ltd [2021] NSWCATCD 90 (Raju) at [55]. Consideration and determination 1. In Sneakerboy (No 2), one of the issues was whether the Court should make any orders concerning the compliance by the parties with the COVID-19 regime and, if so, what those orders should be. Robb J at [7] noted that both parties accepted that the Court must make a finding as to the outcome of a notional renegotiation of the terms of the Lease that would have been required by the COVID-19 regime had the Lease not been terminated. His Honour at [10] further noted that the contest between the parties required the Court to consider the role of the Court in the COVID-19 regime and whether, in the case of disputes between landlords and tenants subject to the COVID-19 regime, the Court had jurisdiction to determine the variations that ought to be made to the lease. 2. Robb J at [58]-[87] set out or summarised cll 3, 5, 6, 7, and 8 of the COVID-19 Regulation, leasing principles 3, 4 and 5 of the National Code of Conduct and ss 66, 68, 70, 72, 72AB, and 75 to 76A of the RL Act. He relevantly made the following observations at [79]-[90] and [158]-[159]: "[79] It is not entirely clear what is to happen if the parties to a lease to which the COVID-19 regime applies do not succeed in renegotiating the lease, or a party refuses to enter into the renegotiation, or does not do so in good faith. … … [83] … but it may be observed that the consequences of an unsuccessful renegotiation under clause 7 of the COVID-19 Regulation, or the failure of parties to participate or to participate in good faith, do not fit neatly into the claims listed. Perhaps the consequences may fit into: "(ii) a claim for relief from payment of a specified sum of money"; or "(viii) a claim for the rectification of the lease". Given the technical meaning of rectification in equity, that concept would have to be considerably stretched by the Tribunal to encompass the compulsory renegotiation of the terms of a commercial lease in the manner required by clause 7 of the COVID-19 Regulation. [84] Section 72AB of the Retail Leases Act sets out the power of the Tribunal to order rectification of a lease in a manner that is generally consistent with the concept of rectification in equity, insofar as the power concerns the correction of an error or omission, or giving effect to the intention of the parties when the lease was entered into. Consequently, the Tribunal's power to rectify a lease will not extend to correcting a failed renegotiation under clause 7 of the COVID-19 Regulation. [85] The powers of the Tribunal relating to retail tenancy claims are set out in s 72 of the Retail Leases Act. The powers effectively mirror the description of the individual types of retail tenancy claim in s 70, with the result that it is not clear that the Tribunal is given power to effectively resolve disputes concerning the failure of the renegotiation process required by clause 7 of the COVID-19 Regulation. [87] … As I have said, the effect of clause 8 is not entirely clear. [89] … It seems at least to be clear that, if the renegotiation required by clause 7 fails, a party has a right to refer the dispute to mediation by the Registrar under the Retail Leases Act, and proceedings cannot be commenced in a court until the Registrar has certified that the mediation has failed, or the court is otherwise satisfied that the mediation it is unlikely to resolve the dispute. It is at least doubtful that the Tribunal has the necessary powers to resolve a dispute arising out of a failed renegotiation, even though it is possible that the drafters of clause 8 of the COVID-19 Regulation intended that disputes could be resolved in the Tribunal. [90] It is not necessary for the Court to decide now the circumstances in which this or any other Court might have jurisdiction to resolve any dispute arising out of a failed renegotiation under clause 7 of the COVID-19 Regulation. This Court is not given any specific power to do so, and it does not fit comfortably within this Court's historical jurisdiction that it be required to remake contracts on the basis of commercial considerations, although it must be acknowledged that it may do so to some extent under the Contracts Review Act 1980 (NSW). How this problem should be resolved must be left for the future when a case comes before the Court that requires its resolution.… [158] However, for the reasons that I have given above, the Court does not have jurisdiction to make orders varying the terms of commercial leases that are subject to the COVID-19 regime. It is for the parties to renegotiate the terms, and in the absence of agreement a dissatisfied party must refer the dispute to mediation by the Registrar. Thereafter, it may be that the Tribunal or the Court has some jurisdiction to resolve the dispute, but that is not a question that is in issue in these proceedings; and in any event, the course to be taken would depend upon presently unknown future circumstances. [159] The short minutes of order proposed by the Lessors simply includes an order that within seven days of the Court making the orders as a result of these reasons, the parties meet for the purpose of attempting to renegotiate in good faith the terms of the Lease pursuant to the COVID-19 Regulation. That is the only type of order that the Court can make in the present circumstances." 1. In NTT Ward CJ in Eq considered Schedule 5 ("Commercial leases - COVID-19 pandemic special provisions") to the Conveyancing (General) Regulation 2018 (NSW). Her Honour at [200]-[225] outlined the statutory regime and the decisions of Robb J in Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd [2020] NSWSC 996 and Sneakerboy (No 2). After setting out the parties' submissions, Her Honour at [298] decided that she would not permit the tenant to rely on the COVID-19 Regulation. 2. In First Renewable at [22] Lindsay J observed: "[22] I do not exclude the possibility that, in an appropriate case, the Court might grant, or withhold, discretionary relief or impose conditions (for example, upon an exercise of equitable jurisdiction or jurisdiction under section 129 or 130 of the Conveyancing Act) by reference to considerations of hardship identified by reference to the COVID legislation generally or, more particularly, the "leasing principles" and other provisions set forth in the "National Cabinet Mandatory Code": cf, Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No. 2) [2020] NSWSC 1141 at [97], [100] and [102]. However, care needs to be taken not to overreach the pragmatism manifested by the COVID legislation. Although the legislation invites a pragmatic approach to some questions, and encourages compromise solutions, at core it governs rights and obligations." 1. In Ryals Black J dismissed a winding up application. His Honour observed at [28] "there may be uncertainty as to the extent of the consequences of non-compliance with a lessor's obligation to re-negotiate the lease, or to do so in good faith under the COVID-19 Regulation." 2. In Raju at [55] the Tribunal held it did not have jurisdiction to grant relief under the RL Act or COVID-19 Regulation because it was not satisfied that the tenant was "an impacted lessee". 3. In Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774 (Darzi) at [142]-[143] Robb J made the following observations as to the consequences of the breach of the COVID-19 Regulation: "[142] In its submissions, Nolde relied on the observations that I made in Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 at [158] to the effect that the COVID-19 regime does not empower the Court to decide the appropriate rent to be paid under an impacted lease, if the parties are unable to renegotiate the lease and the dispute is not able to be resolved by mediation. I accept that there may be cases that must be addressed by the courts where this question arises in future. The difficulty is that, although it may appear to be a mathematical exercise to determine the appropriate reduction in rent by comparing the turnover figures for the current period with the equivalent figures for the 12 months prior, no principles have been established for determining the appropriate split between the waiver and deferral of rent, the appropriate period to allow the lessee to catch up on deferred rent, and whether an extension of the lease should be granted. For the reasons given above, I do not think that this question arises in the present case. That is because a failure by the lessor to comply with the requirements of clause 7 of any version of the COVID-19 Regulation will lead to a permanent prohibition on the lessor taking any prescribed action against the lessee for non-payment of rent while the lessee was an impacted lessee. The position may be different in cases where the lessor complies with clause 7 in good faith, but the parties to the impacted lease are unable to reach an agreement. [143] It is also unnecessary in this case for the Court to consider whether the NSW Civil and Administrative Tribunal would be empowered by s 72(1)(a) and (b) of the Retail Leases Act to determine the rent payable by an impacted lessee during the prescribed period: see Nolde's closing submissions pars 15 and 16." 1. In Darzi Group Pty Ltd v Nolde Pty Ltd (No 2) [2022] NSWSC 643 (Darzi (No 2)) at [45] Robb J referred to the uncertainty as to the power of the Tribunal to determine the amount of the rent reduction that should be made or the period over which deferred rent should be paid. 2. We are satisfied that the purported reliance by PC on the COVID-19 (No 3) Regulation was a mistake and that it intended to refer to the COVID-19 Regulation which was in force between 24 April 2020 and 23 October 2020. 3. In Manly Council v Malouf (2004) 61 NSWLR 394; [2004] NSWCA 299 (Manly Council) at [74] Tobias JA held the objective of the RL Act was to protect tenants, the RL Act was "beneficial legislation" and accordingly it should not be construed narrowly (with Mason P at [1] agreeing). 4. In Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638; [1984] HCA 55 (Khoury) Mason, Brennan, Deane and Dawson JJ made the following observation in relation to s 18 of the Insurance Act 1902 (NSW): "Section 18 is remedial in character and its language should be construed so as to give the most complete remedy which is consistent "with the actual language employed" and to which its words "are fairly open"". 1. Notwithstanding the principles in Manly Council at [74] and Khoury at 638, we are not satisfied that the Tribunal has power under s 72(1) of the RL Act to effectively resolve disputes concerning the failure of the renegotiation process required by cl 7 of the COVID-19 Regulation in relation to the payment of rent. 2. A successful renegotiation of a lease in accordance with leasing principles 3, 4 and 5 of the National Code of Conduct will result in the variation of the lease providing for the waiver of rent and the deferral of rent. 3. Where, however, there is a failed renegotiation of a lease or a breach by a landlord of the obligation to renegotiate a lease, then the Tribunal has no power to vary the terms of a lease. The Tribunal may make orders under s 72(1)(a) and (b) of the RL Act that a party to the proceedings pay money to a person specified in the order and that a specified amount of money is not due or owing by a party to the proceedings to a specified person. We accept that an order under s 72(1)(b) of the RL Act could give effect to an agreed or determined waiver of rent and that orders under s 72(1)(a) and (b) of the RL Act would give effect to an agreed or determined deferral of rent. 4. In the absence of principles based in the relieving statutory provisions for determining the appropriate split between the waiver and deferral of rent, the appropriate period to allow the lessee to catch up on deferred rent and whether an extension of the lease should be granted as recognised in Darzi at [142], there is no basis whereby the Tribunal can determine to the split between the amount of rent to be waived and deferred, and the period of the amortisation of the deferred rent. We agree for the reasons in Sneakerboy (No 2) at [84] that s 72A of the RL Act does not confer power on the Tribunal to waive or defer rent where there is a failed renegotiation under cl 7 of the COVID-19 Regulation. Whether JCK is an impacted lessee within the COVID-19 Regulation Whether PC breached the COVID-19 Regulation by failing to renegotiate the sublease in good faith Whether there is any evidence to enable the provision of a remedy for breach of the COVID-19 Regulation 1. In view of our finding that the Tribunal does not have power to provide any remedy by way of rent relief for breach of the COVID-19 Regulation, these issues do not arise for determination. It follows that the rent relief claim should be dismissed. In case these findings are later found to be wrong, we have considered the remaining issues. The evidence of JCK The first Sabapathy declaration 1. In the first Sabapathy declaration Mr Sabapathy gave the following evidence: 1. JCK does not have any related entities, "is eligible for Job Keeper" and its turnover in 2019 was less than $50 million (at ([30]); 2. on 17 August 2020 his solicitor sent an email to the respondent's solicitor and counsel (the 17 August 2020 email), relevantly attaching a letter dated 21 July 2020 of Savva Roubis, Chartered Accountants (the 21 July 2020 letter), and Business Activity Statements for the periods 1 July 2018 to 30 June 2019, and 1 July 2019 to 30 June 2020. The 21 July 2020 letter relevantly stated: "4. Sales turnover figures for the period: • 1 April 2019 to 30 June 2019 $712,307 • 1 April 2020 to 30 June 2020 $264,064 • Reduction of 63% in sales turnover (Attached AS for quarter ended 30 June 2020)" The oral evidence of Mr Sabapathy 1. In cross-examination, Mr Sabapathy was not challenged as to the eligibility of JCK for Job Keeper. The cross-examination documents 1. On 24 June 2020 PC sent a letter to Mr Sabapathy (the 24 June 2020 letter) which provided: "Notice to Comply with COVID Code On or about the 23 April 2020, you applied for relief under the Retail and Other Commercial Leases (COVI D-19) Regulation 2020 ("the Code"). On the 30 April 2020, Santoro & Co Pty Ltd, on behalf of the Sublessor, asked you to provide specific information and documents via the Sublessor's Rental Payment Proposal, COVlD-19 Pandemic Form ("Form"), to enable the Sublessor to determine whether you are an "impacted lessee" for the purposes of the Code and, if so, to assesses any downturn in turnover. On the 1 May 2020, you provided a completed Form and a letter from your accountant, however you did not provide the documents requested in the attachment to the Form. On the 20 May, you provided a copy of ATO JobKeeper enrolment and payment correspondence. On the 26 May 2020, Santoro & Co Pty Ltd wrote to you and re-requested documents referred to in the Form, including specific BAS statements, profit and loss statements and other information necessary to enable the Sublessor to verify the information that you provided in your Form and the letter from your accountant. The requested documents were not provided. On 1 June 2020, Santoro & Co Pty Ltd wrote to you again and advised that the information you had provided to date was insufficient to enable the Sublessor to determine whether you are an impacted lessee under the Code, and to assess any downturn in turnover. For the purposes of and in accordance with the Code, the Sublessor requires the following to determine whether you are an impacted lessee and to assess your turnover: a. your franchise or group status; b. tax returns and BAS's for the 2018/19 financial year; C. a copy of the ATO integrated client account to confirm the BAS amounts for the 2018/2019 financial year; d. BAS's for the 2019/20 financial year; and e. a copy of the ATO integrated client account to confirm the BAS amounts for the 2019/20 financial year to date. If you do not provide these by close of business Friday 26 June 2020, the Sublessor will conclude that you are not an impacted lessee for the purposes of the Code. The Sublessor reserves its rights under the sublease and at law." The evidence of M20 and PC The contemporaneous documents 1. On 28 April 2020, Savva Roubis sent a letter to PC advising a decline in turnover for the last two weeks of March 2020 compared to March 2019 of 69.71% and for four weeks in April 2020 compared to April 2019 of 93.57% (the 28 April 2020 letter). 2. On 16 September 2020 at 6.15pm, JCK's solicitor sent an email to PC"s solicitor in which he advised PC had not complied with the COVID-19 Regulation (the 16 September 2020 email). The submissions of the parties The submissions of JCK 1. In the JCK submissions and in the JCK reply submissions, JCK did not address the issue of whether JCK is an impacted lessee within the COVID-19 Regulation. In the JCK submissions JCK provided the following summary of the evidence before the Tribunal at first instance: "5.34. With to (sic) COVID-19 relief, the evidence-in-chief confirmed the differing views of the parties: (a) Mr Sabapathy confirmed the closure of the business due to COVID-19 for four weeks, the reduction in turnover and the financial material to the Second Respondent and expressly set out the closed period of relief sought being April 2020 to September 2020. (b) Mr Napoli confirmed the closure of the business due to COVID-19. (c) Mr He provided evidence that: (i) The financial information provided was insufficient for Second Respondent to determine whether JCK had met the COVID-19 relief criteria; and (ii) He formed the view that JCK had not demonstrated that it was eligible for a reduction in rent payable during COVID-19. 5.35. During cross-examination Mr He: (a) Confirmed he understood that an issue in the case was a claim for COVID-19 relief. (b) Confirmed that correspondence issued by Mills Oakley on 25 November 2020 stated that the Second Respondent only required a BAS statement for the quarter April 2019 to June 2019 in order to assess JCK's rent reduction claim. (c) Conceded that the business records provided by the BAS Statements provided showed a "massive" drop in turnover of well over 50% when April and June 2019 were compared to April and June 2020. (d) That he was aware of a confirmed case of COVID-19 at the Leased Premises and capacity restrictions imposed by the NSW government during the period of rent relief claimed." (footnotes omitted) The submissions of PC 1. Neither before the Tribunal at first instance nor on appeal did PC address the issue of whether JCK is an impacted lessee within the COVID-19 Regulation. 2. In the M20 and PC submissions, PC made the following submissions: 1. the remedy for a breach of the obligations under the COVID-19 Regulation requires findings to be made as to the outcome of a "notional renegotiation" conducted between the parties on the question of rental relief, and referred to Sneakerboy (No 2)) at [7]; 2. in order to make such findings as to a "notional renegotiation", the Tribunal would be required to assess (and therefore would require evidence as to) the following matters: 1. the notional date upon which the renegotiations would have commenced and concluded; 2. the "reduction in rent that the parties would have agreed"; 3. the "split of the reduced rent between rent that is waived and rent that is deferred", and 4. the length of the amortisation period, and referred to Sneakerboy (No 2) at [135]-[150] and NTT at [246]ff; 1. JCK did not adduce evidence directed to the issue of "notional renegotiation". It instead sought to demonstrate that JCK was an impacted lessee. Such evidence failed to grapple with the correct question. Consideration and determination 1. In NTT at [313] Ward CJ in Eq considered the question of the proper construction of cl 4 of the COVID-19 Regulation: "[313] Furthermore, I accept that there is difficulty, as a matter of statutory construction, in construing cl 2 as embracing eligibility under s 8A when the instrument expressly refers only to eligibility "under sections 7 and 8". More specifically, I do see that to construe cl 2 as defining an "impacted lessee" as also including a lessee who qualifies under s 8A would require the Court to read additional words into the clause in order to give effect to what may be perceived to be the statutory purpose; and that to do so would be to favour impermissibly a construction that fills gaps disclosed in the legislation (noting, again, what was said in Taylor v Owners-Strata Plan No 11564 at [37]-[38]). Indeed, while it seems patent that the intention was to include eligibility under s 8A, it is not for the Court here to speculate on that matter, in circumstances where the plain and ordinary meaning does not disclose any patent ambiguity or absurdity, nor is this necessary to remedy or repair a perceived deficiency in the instrument as presently enacted." 1. Having regard to NTT at [313], the issue of whether JCK is an impacted lessee within cl 4 of the COVID-19 Regulation requires consideration of the following two questions: 1. whether it qualifies for the jobkeeper scheme under ss 7 and 8 of the CERP Rules; 2. whether its turnover in the 2018–2019 financial year was less than $50 million. 1. We note that PC has not made any submission as to whether JCK is an impacted lessee within cl 4 of the COVID-19 Regulation. Having regard to the unchallenged evidence of the 21 July 2020 letter and the accompanying Business Activity Statements, and the absence of any contrary submission by PC, we would have been satisfied that JCK was an impacted lessee within cl 4 of the COVID-19 Regulation for the following reasons: 1. on 1 March 2020 it carried on a business in Australia; 2. it qualified for the jobkeeper scheme under ss 7 and 8 of the CERP Rules because it satisfied the decline in turnover test - there was a 63% decline in GST turnover between 1 April 2018 and 30 June 2019 and 1 April 2019 and 30 June 2020; 3. its turnover in the 2018–2019 financial year was less than $50 million. 1. In Sneakerboy (No 2) at [120] Robb J held that, if the notional renegotiation required by cl 7(3) of the COVID-19 Regulation had occurred "as soon as practicable" after the commencement of the COVID-19 Regulation on 24 April 2020, and had been conducted in a good-faith manner, it would have been commenced in May 2020. 2. Robb J at [135]-[150] undertook an assessment of notional renegotiated rent and outgoings. His Honour at [135], [139], [143] and [148] said: "[135] The primary issue is the estimation of the reduction in rent that the parties would have agreed, the split of the reduced rent between rent that is waived and rent that is deferred, and the length of the amortisation period." "[139] I propose to act upon the basis that the financial information that Sneakerboy's solicitor annexed to his affidavit permits a reasonably accurate comparison between Sneakerboy's total turnover for the months of April to July 2019 and April to July 2020." "[143] The COVID-19 regime does not contemplate that the rent payable under retail leases will be proportionately reduced on the basis of separate monthly calculations comparing turnover with the equivalent month in the preceding year. It contemplates a single renegotiation for the COVID-19 pandemic period and a subsequent reasonable recovery period. However, the COVID-19 regime does not prevent the parties to a commercial lease from agreeing some other formula, or from initiating more than one renegotiation." "[148] I will accept Sneakerboy's submission that the subsequent reasonable recovery period should be no less than six months. That is all that Sneakerboy has asked for, and it does not seem to be a long time for Sneakerboy's trade to recover after the COVID-19 pandemic period. On that basis, the recovery period will end on 30 April 2021." 1. In NTT at [246]-[253] Ward CJ in Eq set out the submissions of the assignee of a commercial lease as to the notional renegotiation required by cl 7(3) of the COVID-19 Regulation. It was unnecessary for Ward CJ in Eq to consider these submissions. 2. We would have been satisfied that the 28 April 2020 letter, and the 17 August 2020 email and the attached 21 July 2020 letter and accompanying Business Activity Statements, were sufficient evidence to enable the notional renegotiation required by cl 7(3) of the COVID-19 Regulation. 3. In the light of the request for relief under the COVID-19 Regulation made by JCK on or about 23 April 2020 referred to in the 24 June 2020 letter and the fact that the National Code of Conduct requires that the leasing principles should be applied "as soon as practicable", we would have been satisfied that the notional renegotiation would have commenced within a few days of 23 April 2020. Since there was no requirement at 23 April 2020 for a lessee to provide evidence that it was an impacted lessee as was subsequently required from 3 July 2020 pursuant to cl 7(3)(b) of the COVID-19 Regulation, we would not have accepted that the notional renegotiation could not have commenced before the provision of the financial information attached to the 17 August 2020 email. 4. Having regard to the 24 June 2020 letter and the correspondence referred to in this letter, the 17 August 2020 email and the attached 21 July 2020 letter and accompanying Business Activity Statements, and the 16 September 2020 email, we would have been satisfied that PC breached the COVID-19 Regulation by failing to renegotiate the sublease in good faith. 5. Having regard to JCK's 63% decline in GST turnover between 1 April 2018 and 30 June 2019, and 1 April 2019 and 30 June 2020, and leasing principles 3, 4 and 5 in the National Code of Conduct, we would have been satisfied that the notional renegotiation would have resulted in a waiver of rent of $30,064.38, and a deferral of rent of $30,064.38 to be repaid over 24 months. 6. We would not have been satisfied that there is a utility in making any order for the deferral of rent as we understand that JCK paid the rent payable under the sublease between 1 April 2020 and 30 September 2020. 7. It follows that we would have found that JCK would have been entitled to an order under s 72(1)(a) of the RL Act that PC pay $30,064.38 by way of refund to JCK immediately. The costs of the proceedings at first instance and on appeal Introduction 1. Before determining the costs of the proceedings at first instance and on appeal it is appropriate to set out the applicable statutory provisions and legal principles. The applicable statutory provisions NCAT Act 1. Section 60(1), (2) and (5)(b) of the NCAT Act relevantly provide that each party to an appeal is to pay the party's own costs and the Tribunal may award costs in relation to an appeal only if it is satisfied that there are special circumstances warranting an award of costs. 2. In proceedings commenced in the Consumer and Commercial Division, by reason of the operation of s 35 when read with par (a) of the definition of "procedural rules" and the definition of "Tribunal rules" in s 4(1) of the NCAT Act, s 60 is subject to the NCAT Rules. NCAT Rules 1. Rule 38 of the NCAT Rules relevantly provides: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if— … (b) the amount claimed or in dispute in the proceedings is more than $30,000. 1. Rule 38A of the NCAT Rules relevantly provides: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of— … (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal. The applicable legal principles 1. The general principles concerning the awarding of costs under r 38 of the NCAT Rules were considered by the Appeal Panel in Vella v Mir (No 3) [2020] NSWCATAP 17 (Vella (No 3)) at [28]-[33]: "[28] Clause 38 gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal must take into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: see, for example, Ruddock v Vadarlis [2001] FCA 1865 at [9]. [29] Where an application has been heard and determined on the merits and Clause 38 applies, the appropriate starting point for the exercise of the discretion is not that the parties are to pay their own costs. Rather, it is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour, subject to exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11. [30] In BNT Constructions Pty Ltd v Allen [2017] NSWCATAP 186 the Appeal Panel, having set aside a costs order made in the Consumer and Commercial Division, decided to re-exercise the costs discretion. Clause 38 was the applicable costs provision in that case. At [67] the Appeal Panel noted the following principles relevant to the exercise of the discretion: (1) the starting point is that a successful party should be entitled to an order for costs in his favour; (2) an award of costs is by way of an indemnity and not as punishment; (3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party; (4) the factors to be considered are not to be confined as to do so would constrain the general discretion; (5) the relative success of the parties on different issues and the time taken to determine them may be relevant; (6) the nature of the proceedings is relevant; (7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious. [31] Generally, costs are awarded in favour of the successful party based on the outcome of the proceedings as a whole, without differentiating between particular issues on which the party may not have been successful. That said, a different costs order may be made if the losing party succeeds on significant issues: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31]–[36]; Sydney Ferries v Morton (No 2) [2010] NSWCA 238 at [10]–[12]. The dollar amount of a particular claim does not determine its dominance in the proceedings. Rather, regard must be had to all of the work involved in prosecuting and defending the parties' various claims, including but not limited to the time taken up at the hearing. [32] In Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) (2011) 288 ALR 385, Campbell JA (with Macfarlan JA and Young JA agreeing) held at [107] that an issue or group of issues is "clearly dominant" when it is clearly dominant in the proceedings as a whole. In that case, the approach by counsel to analysing the percentage of costs between the parties - counting the proportion of paragraphs and pages devoted to each factual topic - was held at [84] to be "a highly artificial way of proceeding" which gave "a false air of mathematical precision". [33] In relation to separable issues, a successful party's entitlement to the whole of the costs of the proceedings should not be discounted to allow for another party's success in a separate issue that played a very minor part in the proceedings as a whole: Macourt v Clark (No 2) [2012] NSWCA 411 at [7]. Further, in Hawkesbury District Health Service Ltd v Chaker (No 2) [2011] NSWCA 30 at [14], the Court of Appeal held that the severability of one issue on which the successful party failed is not, without more, sufficient to warrant departure from the general approach. The exercise of discretion will often depend upon matters of impression and evaluation: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [11]." 1. The principles as to the apportionment of costs on an issue-by-issue basis were recently set out in Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 (MIBT (No 2)) at [6]-[8], [33]-[34] per Ward CJ in Eq. 2. For the purpose of r 38A of the NCAT Rules the amount claimed or in dispute is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57]. Consideration and determination The costs of the proceedings at first instance 1. We are satisfied that the amount in dispute in the proceedings at first instances exceeded $30,000 and accordingly that r 38 of the NCAT Rules rather than s 60 of the NCAT Act applies to the proceedings. 2. We are satisfied that there were the following three clearly separable groups of issues before the Tribunal at the first instance which each occupied substantially the same amount of time: 1. the issue relating to conduct prior to entry into the sublease represented by the pre-sublease misrepresentations claim; 2. the issues relating to conduct subsequent to entry into the sublease other than the rent payable under its provisions represented by the sublease claim, the deed of settlement claim and the unconscionable conduct claim; 3. the issues relating to the rent payable under the sublease represented by the rent adjustment claim and the rent relief claim. 1. We have found that JCK succeeded on the second group of issues in respect of part of the sublease claim as against PC, but failed on the first group of issues as against M20 and PC, the second group of issues in respect of part of the sublease claim as against PC and in respect of the deed of settlement claim and the unconscionable conduct claim as against M20 and PC, and the third group of issues as against PC. Having regard to the principles in Vella (No 3) at [28]-[33] and MIBT (No 2) at [6]-[8], [33]-[34], we have decided that M20 and PC should pay one third of the costs of JCK at first instance as agreed or assessed, and JCK should pay the costs of M20 at first instance. The costs of the proceedings on appeal 1. We are satisfied that we can determine the costs of the proceedings on appeal on the papers, and accordingly have decided pursuant to s 50(2) of the NCAT Act to dispense with a hearing on the costs of the appeal. 2. We are satisfied that the amount in dispute in the appeal exceeds $30,000 and accordingly that r 38A of the NCAT Rules applies to the appeal. 3. As JCK has been successful in the appeal, it is entitled to an order for costs in its favour. It follows that M20 and PC should pay the costs of the appeal of JCK as agreed or assessed. 4. As each of JCK and M20 has obtained a costs order against the other, it is appropriate that we make an order pursuant to s 58 of the NCAT Act that these costs orders be set off against each other. 5. However, in case JCK or M20 and PC wish to make an application to vary this order, we have decided to make procedural directions to accommodate such an application as follows: 1. if any party wishes to make an application to vary the order as to the costs of the appeal, the applicant (the costs applicant) must file and serve a costs application, including submissions limited to five pages and any evidence in support, within 14 days of the date of the orders in these reasons for decision; 2. any respondent to the costs application is to file and serve any submissions limited to five pages and any evidence in reply within 14 days thereafter; 3. the costs applicant is to file any submissions limited to three pages in reply within 14 days after receipt of the submissions and any evidence of the respondent to the costs application. Orders 1. We make the following orders: 1. the appeal is allowed; 2. the orders made on 7 September 2021 are set aside and are replaced with orders (3) to (5) below; 3. the second respondent is to pay the applicant the sum of $14,164.92 immediately; 4. the second respondent is to pay one third of the costs of the applicant as agreed or assessed; 5. the applicant is to pay the costs of the first respondent as agreed or assessed; 6. a hearing to determine the costs of the appeal is dispensed with; 7. subject to the outcome of any costs application pursuant to order (9) below, the first and second respondents are to pay the costs of the appeal of the appellant as agreed or assessed; 8. order (5) above and order (7) above so far as they relate to the first respondent are to be set off against each other; 9. if any party wishes to make an application to vary orders (7) and (8) above, the applicant (the costs applicant) must file and serve a costs application, including submissions limited to five pages and any evidence in support, within 14 days of the date of the orders in these reasons for decision; 10. any respondent to the costs application is to file and serve any submissions limited to five pages and any evidence in reply within 14 days thereafter; 11. the costs applicant is to file any submissions limited to three pages in reply within 14 days after receipt of the submissions and any evidence of the respondent to the costs application. ********** 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: 22 June 2022