Lush Hair Designs Pty Ltd v Shopping Centres Australasia Property Group Re Limited [2022] NSWCATCD 218

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Lush Hair Designs Pty Ltd v Shopping Centres Australasia Property Group Re Limited [2022] NSWCATCD 218 Hearing dates: 10 August 2022 Date of orders: 14 October 2022 Decision date: 14 October 2022 Jurisdiction: Consumer and Commercial Division Before: D Bluth, Senior Member Decision: 1. The Respondent is to pay the Applicant the sum of $21,000 within 7 days of these Orders together with interest from 15 August 2019 at the prescribed rate in accordance with Section 100 of the Civil Procedure Act 2005 (NSW). 2. The Respondent is to pay the costs of the Applicant as agreed or as assessed. Catchwords: Retail Lease dispute, jurisdiction Legislation Cited: Civil and Administrative Tribunal Act 2013 (No 2) NSW Retail Leases Act 1974 ( NSW) Category: Principal judgment Parties: Lush Hair Designs Pty Limited (Applicant) Shopping Centres Australasia Property Group Re Limited (Respondent) Representation: Solicitors: Edmond Khoury Solicitors (Applicant) JKR Lawyers (Respondent) File Number(s): COM 22/03359 Publication restriction: NIL

REASONS FOR DECISION 1. The Respondent is the registered proprietor of a shopping centre known as Clemton Park Shopping Village. 2. The Respondent entered into a lease of shop T8 with Ali Hijazi for a term of five years commencing on 22 March 2017 (the Lease). 3. Mr Hijazi traded with an ABN 13270814899 as the business 'ATH - All Things Hair' (the Business). 4. Pursuant to clause 23.1 of the lease, Mr Hijazi provided a bank guarantee to the Respondent. 5. Mr Nehme Chraif was an employee of the Business and he managed the business on behalf of Mr Hijazi. In early 2019 he approached the Respondent about an assignment of the Lease to himself. 6. There were arrears owing under the lease and it was agreed by Mr Chraif (presumably on behalf of Mr Hijazi) for the Respondent to draw down the bank guarantee and the funds applied to reduce the outstanding rent. 7. The Respondent says that Mr Chraif agreed to provide a replacement Bank Guarantee. 8. The Tribunal notes that Mr Chraif is not a party to these proceedings nor did he provide any evidence, nor also did Mr Hijazi provide any evidence. 9. In around late 2018 or early 2019, Mr Naji Doomid, who was a customer of the Business expressed an interest to Mr Chraif, then operating the Business (although not an approved assignee) that he was interested in purchasing the Business. 10. On the evidence of Mr Doomid, he set up a company called Lush Hair Designs Pty Limited and was prevailed upon by Mr Chraif to obtain a Bank guarantee for $21,000 in favour of the Respondent, in anticipation of obtaining consent to the transfer of the Business including the Lease to Mr Doomid's company. 11. On or about 28 February, Mr Doomid obtained a Bank Guarantee for $21,000 from the ANZ Bank (ANZ Bank Guarantee) and handed it over to Mr Chraif. At the same time or before he completed a Retailer Application Form and provided that form to Mr Chraif, as well. 12. Mr Chraif then provided the ANZ Bank Guarantee to the Respondent. 13. Subsequently Mr Chraif (again as agent for Mr Hijazi, who by this time was no longer involved in the Business) submitted a Retailer Application Form to the Respondent requesting an assignment of the Lease. 14. Mr Chraif was included in the Retailer Application Form as a guarantor as it was intended that Mr Chraif manage the Business. 15. In late February 2019 Mr Doomid had a conversation with Mr Chraif and Mr Chraif advised him that he would pass on the ANZ Bank Guarantee and the Retailer Application Form to Ms Duniya Noor, the Centre Manager at the Respondent. 16. Mr Doomid heard nothing further and contacted Ms Noor direct in May 2019 enquiring as to progress of the request for assignment of lease. 17. Ms Noor advise him that further arrears of rent were owing and that the Respondent did not consent to the assignment of lease. 18. Mr Doomid advised Ms Noor that he intended to remove Mr Chraif from the Business in the event that the Lease was assigned to him and Ms Noor requested that he complete a new assignment of lease application form which excluded Mr Chraif. Mr Doomid also enquired as to whether it was possible to negotiate a new lease. 19. By 15 August 2019 the sum of $90,728.23 was owing under the Lease and the Respondent terminated the Lease and called on the ANZ Bank Guarantee. 20. This is then a claim by the Applicant for either return of the ANZ Bank Guarantee or a claim for the sum of $21,000 plus interest and costs. 21. The Applicant commenced proceedings for recovery in the Local Court on 25 April 2021. 22. The Respondent maintained that the dispute was a retail lease dispute and moved the Local Court to transfer the proceedings to this Tribunal pursuant to section 75(1) of the Retail Leases Act 1974 (the Act). 23. The Local court on 7 December 2021 transferred these proceedings. 24. The Respondent has now submitted that the jurisdiction of the Tribunal is not enlivened by this dispute.