Civil and Administrative Tribunal New South Wales Medium Neutral Citation: 357 Thornleigh Place Pty Limited v Shams [2023] NSWCATAP 127 Hearing dates: 23 February 2023 Date of orders: 12 May 2023 Decision date: 12 May 2023 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member E Bishop SC, Senior Member Decision: (1) The appeal is allowed. (2) Orders 1, 2, 3, 4 and 5 made by the Tribunal on 12 October 2022 are set aside. (3) The following claims in proceedings COM 21/23200 and COM 21/25982 are remitted to a differently constituted Tribunal for re-determination: (a) The respondent's claim for relief for an alleged contravention of s 62B (1) of the Retail Leases Act 1994 (NSW); (b) The respondent's claim for relief against forfeiture; (c) The appellant's cross-application for arrears of rent. (4) Such re-determination is to be on the basis that the appellant did not give the required notice under s 129 of the Conveyancing Act 1919 (NSW) in respect of any breach of the lease concerning the provision of a replacement bank guarantee before the action taken by it to retake possession of the leased premises on 20 May 2021. (5) The respondent's claims for relief as an alleged "impacted lessee", for compensation pursuant to s 34 of the Retail Leases Act 1994 (NSW) and for relief in respect of the alleged misleading and deceptive conduct by the appellant, the subjects of the Orders 2, 4 and 5, respectively, sought by the respondent in the amended application are dismissed. (6) The question as to what costs order, if any, should be made in respect of proceedings COM 21/23200 and COM 21/25982 is also remitted to the differently constituted for re-determination. (7) As to the costs of the appeal, the parties are to lodge with the Appeal Registry and serve written submissions concerning such costs, including whether a decision about such costs should be made on the papers, commencing with the appellant's submissions within 7 days from the date of the publication of this decision, followed by the respondent's submissions 7 days after service of the appellant's submissions, followed by any written submissions of the appellant in reply within 7 days after service of the respondent's submissions. Catchwords: APPEALS — retail lease of pharmacy — whether lessor engaged in unconscionable conduct in contravention of s 62B of the Retail Leases Act 1994 (NSW) — dealings between lessor and lessee about rent during the COVID-19 pandemic — lessee in arrears of rent before the pandemic — lessor withdrew rent rebate applied before the pandemic — legislative measures introduced during the pandemic concerning an 'impacted lessee" — no COVID rent relief agreed upon — lessee did not provide lessor with documents showing any decline in sales as a result of the pandemic — Tribunal did not examine all circumstances pertaining to alleged unconscionable conduct — whether questions of law raised on appeal — findings of fact without probative evidence — leave to appeal sought in the alternative if questions of law not raised — remitter of some claims to differently constituted Tribunal Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Conveyancing Act 1919 (NSW) Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth) Retail Tenancies Act 1994 (NSW) Retail and Other Commercial Leases (COVID-19) Regulation 2020 Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 Cases Cited: Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 267 CLR 1 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (No 2) [2020] FCA 802 Chapman v Nicolosi (No 2) [2023] NSWCATAP 73 Collins v Urban [2014] NSWCATAP 17 Forbes v Wan [2020] NSWCATAP 129 Norsk Dor Pty Limited v Tuxfend Pty Limited [2020] NSWCATAP 183 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Stubbings v Jams 2 Pty Ltd [2022] HCA 6; 96 ALJR 271 Texts Cited: None cited Category: Principal judgment Parties: 357 Thornleigh Place Pty Ltd (Appellant) Halimah Shams (Respondent) Representation: Counsel: A F Fernon SC (Appellant) R Higgins (Respondent) Solicitors: Fortis Law (Appellant) Quest Legal (Respondent) File Number(s): 2022/00334747 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: [2022] NSWCATCD 177 Date of Decision: 12 October 2022 Before: D Bluth, Senior Member File Number(s): COM 21/23200 and COM 21/25982 REASONS FOR DECISION Overview 1. The appellant is the owner of a small shopping centre in Thornleigh, Sydney (the Lessor). The respondent is the lessee of a pharmacy in the shopping centre under a written lease that expires on 14 September 2023 (the Lessee). 2. The Lessor appeals from orders made by the Tribunal on 12 October 2022 founded upon the Tribunal's conclusion that the Lessor contravened s 62B(1) of the Retail Leases Act 1994 (NSW) (RLA) concerning unconscionable conduct. 3. On 20 May 2021, on the basis of alleged breach by the Lessee, the Lessor purported to exercise a right of re-entry and retook possession of the pharmacy premises by changing the locks. This followed the issue of a notice of termination of the lease for non-payment of rent, dated 19 May 2021. 4. Shortly afterwards, the Lessee commenced proceedings in the Tribunal in which she sought relief pursuant to s 72 of the RLA, including relief against forfeiture. 5. By interim orders made on 3 June 2021, the application for relief against forfeiture was granted by the Tribunal conditional upon the Lessee "paying 70% of the rent payable in respect of the premises, as and when rent falls due": (Order 1). It was also ordered that the Lessor restore possession of the leased premises to the Lessee by 5pm that day. These orders were to remain in force until the application for substantive orders was determined, or until further order of the Tribunal. The Lessee gave the usual undertaking as to damages. 6. Also on 3 June 2021, directions were made by the Tribunal for the future conduct of the proceedings, including for the service of any amended application and any cross-application by the Lessor. Subsequently, the Lessor filed and served a cross-application for unpaid rent. At the time of the Lessor's written submissions at first instance (1 August 2022), the outstanding rent was claimed to be $113,041.44. 7. One of the orders which the Lessee sought in her proceedings, based upon alleged unconscionable conduct, was (as described in the Lessee's Outline of Final Submissions at first instance): "a 30% abatement of gross rent calculated for the period from 1 January 2019 to the expiration of the Lease on 13 September 2023 or such other date as the Tribunal may determine….to be offset against any alleged arrears and credited towards it and future rent properly due and payable." 1. The Lessee also sought an order for the payment of damages in the sum of $91,214 in respect of the purported termination and re-entry of the premises in May 2021. 2. As will be seen, the Lessee achieved a considerable measure of success in respect of her application for such orders. 3. In finding that the Lessor engaged in unconscionable conduct, the Tribunal gave significance to two aspects of the Lessor's conduct. First, it was found that the Lessor had manipulated the rent default that led to termination. Secondly, that steps taken by the Lessor to withdraw a rent rebate, to the financial disadvantage of the Lessee, had occurred in the context of the COVID-19 pandemic. 4. For the reasons set out below, we have decided that important parts of the Tribunal's reasoning about each of these aspects were affected by appealable error. 5. At the hearing of the appeal, we were informed by each of the parties that it was their position that if we decided that the appeal should be allowed then the proceedings (both the application and the cross-application) should be remitted to the Tribunal for redetermination. As appears below, there were good reasons for that course to be adopted in respect of three of the claims the subject of the proceedings. 6. In the circumstances, we have decided that orders should be made for the appeal to be allowed and for two of the claims the subject of the proceedings to be redetermined by a differently constituted Tribunal. The proceedings 1. The Lessee sought the following relief in its application: 1. That it be granted relief against forfeiture pursuant to s 72(1)(d) of the RLA. 2. A declaration pursuant to s 72(1)(f)(iii) of the RLA that the Lessee is an "impacted lessee" and that the Lessor should have or must grant the Lessee relief required under the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) (the COVID-19 Regulation). 3. An order that the Lessor pay the Lessee an amount for damage suffered by the Lessee as a result of the Lessor's unlawful termination of the Lease. 4. An order pursuant to s 34 of the RLA that the Lessor compensate the Lessee for the reduction in the flow of customers to the premises from about June 2018 to date. 5. A declaration pursuant to s 72(1)(f)(iii) of the RLA that in resiling from the representation that the Lessor would give the Lessee the 30% rent rebate the Lessor engaged in misleading or deceptive conduct in contravention of s 62D of the RLA and an order for compensation pursuant to s 62E of the RLA. 6. A declaration pursuant to s 72(1)(f)(iii) of the RLA that in; 1. purporting to withdraw the 30% rent rebate; 2. refusing to negotiate in good faith for any abatement of rent due to the impact of the construction works, the closure of other shops and the impacts of the pandemic; and 3. purporting to terminate the lease and re-enter the premises without any proper notice; the Lessor engaged in unconscionable conduct in contravention of s 62B of the RLA; and in respect of which compensation was sought pursuant to the RLA. 1. At the hearing at first instance the Lessee withdrew the claim under s 34 of the RLA (see Tribunal's reasons at [58]). 2. By a cross-application the Lessor claimed an amount in excess of $100,000.00 for arrears of rent. Orders made by the Tribunal and claims not dealt with 1. The orders made by the Tribunal on 12 October 2022, the subject of this appeal, were as follows: (1) The [Lessor] breached section 62B (1) of the Retail Leases Act 1994 (NSW). (2) The [Lessor] is to pay to the applicant the sum of $21,525 within 7 days of publication of these orders. (3) The [Lessee] is entitled to a rent rebate of 30% of the base rent from 1 January 2019 until the date of publication of these orders. (4) The cross claim of the [Lessor] is dismissed. (5) The [Lessor] is to pay the costs of the applicant on an indemnity basis. (6) Any written submissions the [Lessor] wishes to make regarding Order 5 are to be provided to the Tribunal and the [Lessee] on a before 5 weeks after the date of publication of these orders. (7) If such submissions lodged any submissions in reply are to be provided to the Tribunal and the [Lessor] within 3 weeks of receipt of the submissions from the [Lessor]. (8) Any such submissions are to indicate whether it is agreed that the costs should be decided on the papers without the need for a further hearing. 1. The Tribunal rejected the Lessee's claim for misleading or deceptive conduct in contravention of s 62D of the RLA. There was no cross-appeal in relation to that conclusion. 2. In view of the Tribunal's conclusion that the claim for unconscionable conduct should be upheld, the Tribunal found that it was unnecessary to determine the claims for relief against forfeiture and the alleged breach by the Lessor of the COVID-19 Regulation. 3. Despite the terms of Order 5 concerning costs, the Tribunal in its reasons made it clear that this was based upon a preliminary view that the Lessor should pay the Lessee's costs on an indemnity basis pursuant to the power in r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (where the amount of the claim exceeded $30,000) because it found that the Lessor's conduct was unconscionable. Accordingly, it made provision in Orders 6, 7 and 8 for the parties to make submissions about this costs order. 4. At the hearing of the appeal, we were informed that, following submissions from the parties, the Tribunal varied Order 5 to provide that the Lessor pay the Lessee's costs on the ordinary basis. There was no dispute between the parties that both at first instance and on appeal the amount in dispute exceeded $30,000 and that, accordingly, an order for costs was not dependent upon a party establishing that special circumstances warranted the making of a costs order. Retail Leases Act provisions 1. Section 62B of the RLA, 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. 1. Section 71A of the RLA, relevantly, provides: 71A Lodging of unconscionable conduct claims with Tribunal (1) A lessor or lessee, or former lessor or lessee, under a retail shop lease or former retail shop lease may lodge an unconscionable conduct claim with the Tribunal for determination of the claim. 1. Section 72 of the RLA, 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, … (d) an order granting a party to the proceedings relief against forfeiture, … (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. … (4) The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so. 1. For the purposes of s 72, "a retail tenancy claim" was defined in s 70, relevantly, as: 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— (i) a claim for payment of money (whether or not stated to be by way of debt, damages, restitution or refund), (ii) a claim for relief from payment of a specified sum of money, … (vi) a claim for relief against forfeiture, … (ix) a claim for a declaration of the rights, obligations and liabilities of the parties under a lease, (x) without limiting the generality of subparagraph (i), a claim for compensation under section 10, 34, 35 or 62E, … The limited right of appeal 1. The appellant has a right of appeal on any question of law (s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW)) (the NCAT Act). The appellant requires leave to appeal on any other grounds, in respect of which cl 12 of Schedule 4 of the NCAT Act is applicable because this is an appeal from a decision of the Consumer and Commercial Division of the Tribunal. 2. Clause 12 of Schedule 4 provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because— (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. We adopt what the Appeal Panel said in Collins v Urban [2014] NSWCATAP 17 at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 may have been suffered where, because of any of the circumstances referred to in cl 12(1) (a), (b) or (c): "... [T]here 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." 1. As confirmed by the Appeal Panel in Collins v Urban at [84(2)], leave to appeal is usually only granted in the following circumstances: "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…" Grounds of Appeal 1. Although not as clear as it should have been, given that the appellant was legally represented, through grounds of appeal set out in the Notice of Appeal and written submissions, it emerged that the Lessor's grounds of appeal included, at least, the following alleged errors raising questions of law: 1. Concluding that the Lessor manipulated the default by the Lessee in the payment of rent, which led to the termination of the lease (at [106]), without probative evidence (Ground 1). 2. In connection with Ground 1, concluding that the Lessor "reversed" rent rebate credits (at [97], [105], [106]), without probative evidence (Ground 2). 3. The Tribunal failed to apply that part of the statutory test of unconscionable conduct prescribed by s 62B of the RLA that required it to consider "all the circumstances", or put another way, failed to have regard to relevant considerations (Ground 3). The Tribunal erred in this way by: 1. failing to consider that the Lessee, despite requests from the Lessor, had failed to demonstrate to the Lessor that it was an "impacted lessee" within the meaning of the COVID-19 Regulation. 2. failing to consider that the Lessor was entitled to withdraw the rent rebate not, simply, because it could do so at its discretion but because the Lessee had failed to comply with the terms upon which the rebate was granted. 1. Concluding that because of the COVID-19 lock downs and other strictures imposed in connection with the pandemic the Lessee could not regain the trading position it was in during 2017/8, before the closure of shops in the Centre and the erection of hoarding on adjacent shops, without probative evidence for this conclusion (Ground 4). 2. Concluding that the Lessee provided evidence of a drop in turnover, albeit for one month only (at [97] without probative evidence for this conclusion (Ground 5). 3. Concluding that the Lessor withdrew from a mediation with the Lessee and that such a mediation did not really occur, without probative evidence for such conclusions (Ground 6). 4. Concluding that the Lessor could not rely upon an alleged breach of an obligation under the lease to provide a replacement guarantee in order to support the termination of the lease because no notice in accordance with s 129 of the Conveyancing Act 1919 (NSW) was served on the Lessee regarding the alleged default. As to this, it was contended that the Tribunal erred by failing to conclude that notices served on 11 December 2019, 20 December 2019 and 14 May 2021 complied with the section because they were to a "similar effect" to a notice in the form of the Sixth Schedule, within the meaning of that term in s 129(9) of that Act (Ground 7). 1. Alternatively, if not raising questions of law, the Lessor contended that the Tribunal's conclusion as to unconscionability was affected by errors of fact concerning the matters referred to in Grounds 1 to 6, in respect of which leave to appeal should be granted because the decision was not fair and equitable and it would be unjust to allow the decision to stand (Ground 8). 2. In proceeding to determine these grounds of appeal, we recognise that the Notice of Appeal, whilst stating that the main grounds of appeal relied upon were errors of law, failed to articulate such errors and were not assisted by correspondence between the parties before the provision of written submissions, in which the Lessor identified no other errors in support of a very generally expressed Ground 1 of appeal other than the alleged incorrect findings of fact set out in Ground 2. 3. Nevertheless, through the provision of written submissions in chief and in reply, well before the hearing of the appeal, a sufficient articulation of these errors of law emerged so as to provide the Lessee with a reasonable opportunity to address them. The Lessee did not contend otherwise. The Lessee's case of unconscionable conduct 1. An important element of the Lessee's unconscionable conduct case was the Lessor's withdrawal from 1 July 2020 of a 30% rebate to the monthly rental charge, which rebate had been applied from before September 2019. 2. We mention here the difference between the Lessee's claim for a rebate on the gross rent and the order made by the Tribunal for the rebate to be 30% of the base rent. The Tribunal referred to this issue in its reasons (at [132]) and expressed the conclusion that the Lessor always considered the rebate applied to the base rent. 3. No cross-appeal was brought by the Lessee in relation to this issue, although we note that fairly extensive submissions were made by the Lessee to the Tribunal at first instance about different positions and evidence from the parties concerning the components of the rebate. The Tribunal made no detailed findings concerning the evidence on this subject. On appeal, we received no submissions about this issue. 4. In relation to this, we go no further than to note that under the written lease the rental obligation was to pay the "Base Rent" (defined as a specific amount in Year 1) by equal monthly instalments in advance on or before the first day of each month (cl 5.1). There was no provision for the payment of gross rent. 5. Whether this emerges as an issue in the redetermination of claims remains to be seen. 6. The Tribunal outlined (at [61]) the Lessee's case that it was unconscionable for the Lessor to withdraw the 30% rent rebate in circumstances where: • the [Lessor] inhibited the flow of customers to the premises by the erection of the hoarding; • the [Lessor] failed to take all reasonable steps to ensure that the Centre did not have a large number of vacant shops and an appropriate mix of tenants that resulted in a significant decline in foot traffic to the Centre; • as a result the applicant suffered an approximate 30% decline in sales: and that Mr De Graaf of Colliers on behalf of the [Lessor] acknowledged this as the rationale for the abatement of 30%; • the [Lessee] first asked the [Lessor] in writing to address these issues on 14 November 2018: and again on 29 January 2019; • the 30% rebate was commensurate with the approximately 30% downturn that the [Lessee's] business had suffered as a result of the ongoing decline of the Centre and foot traffic to it; • the [Lessee] extended the rebate in recognition of the downturn in sales that the [Lessee] had suffered; • having recognised the deterioration in trading conditions at the Centre by applying the rebate, the [Lessor's] conscience was bound not to revoke the rebate unless trading conditions in the Centre improved; • if, as the [Lessor] contends, the rebate was merely a gratuitous act of "good faith", it did not act in good faith in withdrawing the rebate when there had been no improvement in trading conditions; • there is no objective evidence to suggest that foot traffic to the Centre had improved or that the [Lessor] had taken any adequate steps within a reasonable time to address these issues since it first applied the rebate; • in withdrawing the rebate, the [Lessor] was not acting in good conscience or in good faith but rather, exploiting its superior bargaining position in that, in the absence of any formal agreement between the parties or an order of the Tribunal varying the Lease, the [Lessee] was wholly at the mercy of the [Lessor's] discretion as to whether it applied or revoked any rent rebate; • as a further indicator of the [Lessor's] lack of "good faith", the [Lessor] withdrew the rebate shortly after the onset of COVID, regardless of the consequences to the [Lessee's] business at a time of unprecedented business disruption and uncertainty; and • the withdrawal of the rebate at such a time and purported termination of the Lease was not reasonably necessary to protect the [Lessor's] position, given that with the onset of COVID and the long-standing vacancies of some shops of several years in the Centre, it may be inferred that the [Lessor] was unlikely to find a tenant willing to pay rent as high as that demanded by the [Lessor] of the [Lessee] before the expiration of the Lease on 13 September 2023. 1. The Tribunal continued as follows: 62 The submission continues that the [Lessor] did not negotiate in good faith for any continuation of the rebate past June 2020, notwithstanding that there was no improvement in trading circumstances over at least the preceding year from June 2019 the June 2020 and where COVID gave rise to unprecedented business disruption and uncertainty. 1. As will be seen below, the Tribunal's conclusion about unconscionable conduct did not include an express acceptance of contentions that good conscience or good faith required that the rebate be continued, absent the COVID-19 context, although part of the reasoning appears to have come close to doing so. 2. On appeal, the Lessee did not seek to uphold the Tribunal's conclusion of unconscionable conduct on broader grounds than the Tribunal relied upon. 3. The Tribunal identified "three conduct actions" of the Lessor to be considered as follows (at [74]-[76]): 1. withdrawing the 30% rental rebate as flagged by Ms Chuck, on behalf of the Lessor, in her email of 23 April 2020 and the subsequent withdrawal of the rent rebate on 1 July 2020. 2. The Lessor's refusal to reinstall the rent rebate upon repeated requests by the Lessee between August and November 2020. 3. The Lessor's re-entry and taking possession of the pharmacy premises on 20 May 2021. The Lessor's defence to the unconscionable conduct claim 1. At first instance, having outlined the legal standard for statutory unconscionability, the Lessor relied upon submissions, which included that: 1. It was entitled to withdraw the rent rebate given the terms on which it was granted, as evidenced by letters sent on behalf of the Lessor, dated 14 April 2019 and 30 September 2019, which terms were not complied with by the Lessee well before the COVID-19 pandemic. 2. Despite the non-compliance, the rebate was extended until June 2020 and the Lessee was given ample notice and opportunity to avoid that consequence. 3. When the Lessee made a COVID claim on 1 April 2020 for a substantial rent- free period, requests were made for documentation to establish that the Lessee was an "impacted tenant", consistent with the COVID-19 Regulation, but the relevant material was not supplied at the relevant time. 4. Such financial information about sales at the Thornleigh pharmacy that, ultimately, came to be provided in December 2020 revealed that the Lessee had suffered no relevant decline in sales at the Thornleigh pharmacy. The Tribunal's key conclusions concerning unconscionable conduct 1. Having addressed various events and dealings between the parties, the allegations of unconscionable conduct and the meaning of such conduct within the terms of s 62B of the RLA, the Tribunal's key conclusions concerning the unconscionable conduct case were as follows (we have highlighted various passages with italics): 77 Mr Fernon SC [for the Lessor] submits that the [Lessee] repeatedly did not keep to the arrangement regarding rent rebate in that payments were always late. That the rebate was always given by the [Lessor] on terms and it was the [Lessee] who continuously did not comply with those terms, so the [Lessor] was entitled to withdraw the rebate. There was no unconscionable conduct by the [Lessor] in withdrawing the rebate. 78 However, the above does not take into account the overall circumstances in which the parties were operating, the COVID pandemic. Ms Chuck in her email of 23 April 2020 notes that the applicant was trading "during the time of disruptions due to COVID-19 as mandated by the Government Code of Conduct" and "that allowances have been made for late payment due to the supply disruption". Here is an acknowledgement that the parties were operating in unprecedented times as a consequence of the COVID-19 pandemic. 79 Ms Chuck then says in her email that the rent due is the full rent, unabated, due on 30 April 2020 with a seven-day allowance for late payment. 80 Later in the email Ms Chuck appears to be responding to the request from the applicant for COVID rent relief under the code by setting out the minimum requirements to qualify for relief being a successful Jobkeeper application and a 30% drop in audited sales. 81 In the last paragraph of the email she states "Given that the current lease is on an abated rent the landlord will not be applying a further 30% discount to the already abated rent". 82 This paragraph leads to a number of interpretations. It seems contrary to the first part of the email where the rent is to be restored to the full amount, but yet here she talks about the Lease being on an abated rent reduction. It is an acknowledgement that the rent abatement is still operative and will be for some time notwithstanding the earlier statement of intention to withdraw. 83 A further interpretation is that even if the applicant was successful in qualifying for rent relief under the Code, the respondent was not going to consider providing rent relief. Such a bald statement of intention appears to be contrary to the spirit and the requirements of the Code. 84-96 [The Tribunal sets out parts of the "Code", being the National Cabinet Mandatory Code of Conduct adopted by the Federal Cabinet on 7 April 2020, amongst other matters, including communications about the grant of the rebate] … 97 In fact the rent rebate of 30% was withdrawn on July 1, 2020 and the credits reversed, so that the applicant was in arrears of rent. No Covid rent relief was provided to [the Lessee]. [The Lessee] provided evidence of Jobkeeper status and a drop in turnover, albeit for one month only. The parties failed to negotiate an outcome under the Code and Mediation did not really occur as [the Lessor] withdrew. [The Lessor] during the unprecedented period of the pandemic did not restore the 30% rebate. [The Lessee] continued to pay 70% of the rent, but as the rebate was reversed the applicant was not paying the full rent. … 99 The granting of the 30% rent rebate whilst a gesture of goodwill, was in my view rounded on commercial consideration that the [Lessor] wish to assist the [Lessee] considering there was a downturn in turnover, but which the [Lessor] did not wish to be seen as responsible for. However, notwithstanding what the Colliers leasing executives maintained in their evidence, it was in the commercial interests of the landlord to make the rent rebate gesture. In normal circumstances such gesture would at some stage be withdrawn, depending again on commercial reality. That is if the turnover of the [Lessee] improved, then there was no longer a commercial basis for continuing the rebate. Otherwise maintaining the rebate would be uncommercial for the [Lessor]. 100 However, the COVID pandemic ensured that there were no longer normal trading conditions. Given the lock downs, and the strictures imposed by the Governments both Federal and State, the [Lessee] could not regain the trading position it was in during 2017/8 before the closure of shops in the Centre and the erection of hoarding on adjacent shops and the [Lessee] saw her turnover subsequently reduced by 30%. 101 Colvin J in Quantum distilled from the decision of the High Court in Kobelt that "the majority view supports the adoption of a standard that requires exploitation of disadvantage by a party in a stronger position by conduct that is well outside the bounds of what is generally seen to be moral, right, or acceptable commercial behaviour.., unconscionable conduct involves dealing with those who are vulnerable in a manner that exploits that vulnerability by engaging in conduct that may be plainly or obviously criticised when viewed through the lens of an understanding of proper commercial behaviour according to prevailing norms and standards". 102 The prevailing norms and standards of proper commercial behaviour can be found in the Overarching Principles of the Code as set out in paragraph 85 of these Reasons. They call for the parties to work together to ensure business continuity, negotiate in good faith and the emphasis being on landlords agreeing on tailored, bespoke and appropriate temporary arrangements for each tenant, take into account their particular circumstances on a case- by- case basis. 103 Whilst the Code was introduced as a result of the COVID pandemic, the Code is drawn on the common and acceptable practices of expected commercial behaviour between landlords and tenants. The Update for Centre Management of 28 March 2020 appears to reflect these sentiments when referring to "collaborative focus on equitable outcomes for both parties and take a long-term view". 104 However, the email subsequently of 23 April 2020 threatening to withdraw the 30% rebate and then saying that nevertheless, even if the applicant was entitled to COVID relief, no further discount was to be applied, appears to cut across collaborative and equitable outcomes, and prejudge an outcome, based on the assumption that the 30% rebate would continue, in fact, the applicant has always maintained that if the rebate had continued, as she had requested there was no expectation of COVID rent relief on top. She was satisfied with the rebate. But neither happened. The rent rebate was withdrawn and not restored and no Covid rent relief was granted. 105 The withdrawal of the rebate on 1 July 2020 and the reversal of the rent concessions to default the applicant is also contrary to the sentiments expressed in the Update from Centre Management regarding the approach to be taken in working collaboratively. The withdrawal of the rent rebate, the exercising the rights of default and re-entry in circumstances of the COVID pandemic, is not working collaboratively at all, and is not proper commercial behaviour according to the prevailing norms and standard as set by the Code. 106 The [Lessor] maintains that it had a legal right to withdraw the rent rebate and whether the applicant complied with its terms or not, irrelevant of the circumstances, that having reversed the rent rebates the applicant was in default and the Lease could be terminated with notice. Section 129 of the Conveyancing Act 1919 (NSW) requires notice of breach to be served prior to any re-entry and forfeiture of the lease. Subsection (8) provides for an exception to rent default, when no notice is required. However, in circumstances where the rent default is manipulated in the circumstances as here, where a rent rebate is withdrawn and not restored are breaches of the Act, then the basis of the rent default by the applicant falls away. 107 The respondent points to another breach by the applicant to support the termination of the lease and re-entry. The applicant did not provide a replacement Bank Guarantee upon repeated requests. Albeit the applicant sought to provide a guarantee from her bank with a termination date, well after the Lease termination date but the respondent insisted on a Bank Guarantee without a termination date, in accordance with the covenant under the Lease. However, no notice in accordance with section 129 of the Conveyancing Act 1919 (NSW) was served on the applicant regarding this specific default and providing time to comply, so the re-entry on that basis of default is prohibited by section 129. 108 Section 62B (3) of the Act does not limit the Tribunal to the matters listed in (a-k) when having regard to determining whether a lessor has acted unconscionably. The Overarching Principles of the Code clearly indicate that lessees generally are in a poorer bargaining position compared to landlords, this being one of the main reasons for the Code. The Code specifically provides Any agreed arrangements will take into account the impact of the COVID-19 pandemic on the tenant, with specific regard to its revenue, expenses and profitability. Such arrangements will be proportionate and appropriate based on the impact of the COVID 19 pandemic plus a reasonable recovery period. Here is a clear acknowledgement that lessees are in a disadvantage as their interests are to be considered primarily, especially during the pandemic. 109 The Tribunal in reviewing the conduct of the respondent pursuant to section 62B (3) of the Act and specifically to the extent to which the [Lessor] acted in good faith or not, for the reasons expressed already, finds that the respondent did not in respect of its conduct towards the applicant act in good faith especially in the unprecedented circumstances of the COVID-19 pandemic. The Tribunal finds that the respondent has breached section 62B (1) of the Act. 1. In connection with one aspect of this reasoning, the Tribunal had earlier made a finding (at [32]): "On 1 July 2020 the [Lessee] reverses the agreed rent credits and ceases applying the agreed 30% abatement going forward." 1. In the above passages we have sought to highlight significant features of the Tribunal's reasoning that are criticised by the appellant on appeal, namely: 1. The Tribunal's reference to the reversal of credits "so that" the Lessee was in default or "to default" the Lessee and the associated conclusion that the rent default was "manipulated". 2. The Tribunal's apparent adoption of the Lessee's contention that in normal circumstances the rebate would continue unless and until the pharmacy's turnover was restored to the position before the pre-COVID pandemic decline in sales. 3. The Tribunal's reliance upon the National Cabinet Code of Conduct only as reflecting community standards and expectations. 4. The Tribunal's conclusion that the Lessee provided evidence to the Lessor of a decline in turnover due to the COVID-19 pandemic, albeit for one month only, but no COVID relief was granted to the Lessee. 5. The Tribunal's conclusion that it was because of the COVID pandemic that the pharmacy's turnover could not be restored to what it was in 2017/18 before the pre-COVID pandemic decline. COVID-19 and other factual circumstances COVID-19 1. On 11 March 2020, the World Health Organisation declared COVID-19 to be a pandemic. 2. On 15 March 2020, the NSW government announced that all major events involving the attendance of more than 500 people were to be cancelled. 3. On 24 March 2020, the NSW Parliament passed the COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 containing amendments to various laws to implement emergency measures as a result of the COVID-19 pandemic. 4. In April 2020, the Federal government's Coronavirus Economic Response Package was issued, including the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) (the Rules), dated 9 April 2020. This established the JobKeeper scheme administered by the ATO, which was intended to assist businesses affected by COVID-19 to cover the costs of wages of their employees. The scheme started on 30 March 2020 and was to end on 27 September 2020. A business that had suffered a substantial decline in turnover could be entitled to a JobKeeper payment of $1,500 per fortnight for each eligible employee. The payment was to be made shortly after the end of each calendar month, for fortnights beginning on 30 March 2020. 5. An entity satisfied the decline in turnover test to qualify under the JobKeeper scheme if the entity's projected GST turnover for a turnover test period fell short of the current GST turnover for a relevant comparison period equal to or exceeding, relevantly, by 30% (ss 6; 7(1)(b); 8(1) and (2)(c) of the Rules). The example given in the Rules was of an entity that assessed its eligibility for JobKeeper payments on 6 April 2020 based on a projected GST turnover for April 2020 of $6 million, which it considered was to be compared with a current GST turnover of $10 million in April 2019, in which event the April 2020 turnover fell short of the April 2019 turnover by $4 million, which was 40% of the April 2019 turnover. This exceeded the specified percentage, so the decline in turnover test was satisfied. 6. If the Commissioner of Taxation was satisfied that an entity was entitled to a JobKeeper payment for a fortnight, the Commissioner was required to pay the entity the JobKeeper payment (section 14(1)). For that purpose, the Commissioner could accept a statement in the approved form lodged with the Commissioner by the entity (section 14(2)). The Commissioner could pay JobKeeper payments for the first two fortnight periods without being satisfied that the entity qualified for the payment if it was thought reasonable do so in the circumstances (s 14 (3). 7. However, s 14(4) provided: To avoid doubt, the fact that the Commissioner pays an entity a jobkeeper payment under this section does not mean the entity is entitled under section 6 or section 11 to the jobkeeper payment. 1. In this regard, the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth) made provision for the recovery of overpayments, if the entity was in fact not entitled to a JobKeeper payment that was paid (ss 9-11). 2. On 7 April 2020, a National Cabinet Mandatory Code of Conduct concerning "SME Commercial Leasing Principles during COVID-19" was approved by the Federal Cabinet. 3. The leasing principles set out in the National Code of Conduct, relevantly, included the following: NATIONAL CABINET MANDATORY CODE OF CONDUCT SME COMMERCIAL LEASING PRINCIPLES DURING COVID-19 PURPOSE The purpose of this… Code is to impose a set of good faith leasing principles for application to commercial tenancies… where the tenant is an eligible business 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 cash flow 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…. (COVID-19) pandemic. … OVERARCHING PRINCIPLES … 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. The following overarching principles of this Code will apply in guiding such arrangements: • Landlords and tenants share a common interest in working together, to ensure business continuity, and facilitate the resumption of normal trading activities at the end of the COVID-19 pandemic during a reasonable recovery period. • Landlords and tenants will be required to discuss relevant issues, to negotiate appropriate temporary leasing arrangements, and to work towards achieving mutually satisfactory outcomes. • Landlords and tenants will negotiate in good faith. • Landlords and tenants will act in an open, honest and transparent manner, and will each provide sufficient and accurate information within the context of negotiations to achieve outcomes consistent with this Code. • Any agreed arrangements will take into account the impact of the COVID-19 pandemic on the tenant, with specific regard to its revenue, expenses, and profitability. Such arrangements will be proportionate and appropriate based on the impact of the COVID-19 pandemic plus a reasonable recovery period. … • All leases must be dealt with on a case-by-case basis, considering factors such as whether the SME tenant has suffered financial hardship due to the COVID-19 pandemic;… • Leases have different structures, different periods of tenure, and different mechanisms for determining rent. Leases may already be in arrears…. These factors should also be taken into account in formulating any temporary arrangements in line with this Code. … 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: 1. Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic (or reasonable subsequent recovery period). 2. Tenants must remain committed to the terms of their lease, subject to any amendments to their rental agreement negotiated under this Code. Material failure to abide by substantive terms of their lease will forfeit any protections provided to the tenant under this Code. 3. Landlords must offer tenants proportionate reductions in rent payable the form of waivers and deferrals (as outlined under "definitions" below) of up to 100% of the amount ordinary payable, on a case-by-case basis, based on the reduction in the tenant's trade during the COVID-19 pandemic. In a subsequent reasonable recovery period. 4. Rental waivers must constitute no less then 50% of the total reduction in rent payable under principle #3 above over the COVID-19 pandemic. 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. … BINDING MEDIATION Where landlords and tenants cannot reach agreement on leasing arrangement (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,… DEFINITIONS The following definitions are provided for reference in the application of this Code. 1. Financial Stress or Hardship: an individual, business or company's inability to generate sufficient revenue as a direct result of the COVID-19 pandemic (including government-mandated trading restrictions) that causes the tenant to be unable to meet its financial and/or contractual (including retail leasing) commitments. SME tenants which are eligible for the federal government's Job Keep payment our water medically considered to be in financial distress under this Code. … COMMENCEMENT/EXPIRY This Code comes into effect in all states and territories from a date following 3 April 2020 (being the date that National Cabinet agreed to a set of principles to guide the Code to govern commercial tenancies is affected by the COVID-19 pandemic) to be defined by each jurisdiction, for the period during which the Commonwealth JobKeeper program remains operational. 1. These principles were given effect to in New South Wales by the COVID-19 Regulation, which commenced on 24 April 2020 (provision was made for the Regulation to be repealed on the day that was six months after the day on which it commenced). 2. The COVID-19 Regulation (which commenced on 24 April 2020), included the following provisions in cl 7: (1) A lessor under a commercial lease must not take or continue any prescribed action against an impacted lessee on grounds of a breach of the commercial lease consisting of a failure to pay rent during the prescribed period unless the lessor has complied with this clause. (2) If an impacted lessee is a party to a commercial lease, any party to the lease may request the other parties to renegotiate the rent payable under, and other terms of, the commercial lease. (3) A party to a commercial lease must, if requested, renegotiate in good faith the rent payable under, and other terms of, the commercial lease. (4) The parties are to renegotiate the rent payable under, and other terms of, the commercial 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. 1. Under cl 4 of the COVID-19 Regulation, a lessee was defined as an impacted lessee if the lessee qualified for the JobKeeper scheme under ss 7 and 8 of the Coronavirus Economic Response Package Rules. 2. The COVID-19 Regulation was the subject of an amendment which took effect on 3 July 2020: the Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW). This included an amendment to cl 7 as follows: (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. 1. The relevant requirements concerning retail leases set out in the COVID -19 Regulation were remade, with some amendments, through subsequent regulations covering distinct periods through to 3 December 2021. 2. For example, in the Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 (NSW), which commenced on 25 October 2020, there was included a provision which required the Tribunal to have regard to the leasing principles set out in the National Code of Conduct when considering whether to make a decision relating to recovery of possession of premises from an impacted lessee (cl 9). There was also included a provision that nothing in the regulation "prevents a lessor taking prescribed action on grounds not related to the economic impacts of the COVID-19 pandemic" (cl 10). 3. In June 2021, a new lockdown due to the COVID-19 pandemic commenced in NSW. Dealings between the parties 1. The Tribunal was presented with various affidavits exhibiting documents from which a narrative of relevant events and communications could be obtained. Regrettably, the documentary record must be discerned from a number of different places in the evidence, rather than from a combined chronological bundle. This made the fact-finding task an unnecessarily difficult one for the Tribunal and also complicated our task on appeal. Nevertheless, the relevant material needed to be addressed by the Tribunal, but as we point out below, from time to time, material documents were not referred to by the Tribunal. Some of the evidence given by the Lessee and her husband in their affidavits and at the hearing was challenged by the Lessor. The status of such evidence remained uncertain because the Tribunal made a finding, which it did not develop, that it made no finding on credit but would treat the evidence of each witness on their own merits (at [65]). 2. Despite these deficiencies, for the purpose of the appeal, we proceed to examine, as best we can, the pertinent dealings between the parties as revealed by the documents. 3. A written lease in respect of the pharmacy, dated 14 September 2015, applied to the parties. The Lessor was an assignee in respect of this lease, following its acquisition of the shopping centre. It was a lease for a fixed term of 8 years expiring on 14 September 2023. Under the lease a base rent, stated as an annual amount, was payable by equal monthly instalments in advance on or before the first day of each month (cl 5). No turnover rent was payable. Provision was made for annual rent reviews under which the rent was to increase by a fixed percentage. No provision was made for an adjustment of rent due to any decline in foot traffic at the shopping centre. 4. Well before the commencement of the first of the COVID-19 restrictions in New South Wales, the Lessee experienced a material decline in sales at the pharmacy in the Thornleigh shopping centre. This had occurred through a combination of matters from the time, in June 2018, when the Lessor acquired the shopping centre. There were declines in foot traffic at the shopping centre because of new shopping centres which opened in Westleigh and Beecroft, and also because of a hoarding erected near the pharmacy which impacted the visibility of the pharmacy to potential customers. 5. Before commencing these proceedings in May 2021, it does not seem as though the Lessee went so far as to make allegations of any breach by the Lessor in respect of any of these adverse changes prior to the COVID-19 pandemic. 6. However, the rental records and other correspondence show that from the beginning of May 2019 the Lessee was credited with a monthly adjustment to the rent equal to 30% of the agreed base rental. The parties referred to this as a rent rebate. At the beginning of May 2019, an amount was credited to the Lessee so as to apply the rebate, retrospectively, from 1 March 2019. 7. In what was, possibly, the first written reference to the rent rebate in the correspondence between the parties, by a letter dated 14 April 2019 from Colliers, the Lessee was informed that the Lessor had agreed to provide a rebate on rent equal to 30% of the base rent for a period of three months on stated terms, including that the Lessee made payments on the first day of each month and made additional payments to reduce the overall rent arrears position. 8. Subsequent documents referred to extending the period of the rebate, including an internal Colliers email sent on 7 June 2019, which referred to the Lessee being advised that the rent rebate would be extended until 31 December 2019, subject to various terms. 9. In a letter from Colliers, dated 30 September 2019 (set out at [88] of the Tribunal's reasons), in response to a letter from Mr Engeman, on behalf of the Lessee, dated 18 September 2019 (set out at [87] of the Tribunal's reasons), the Lessee was informed that the Lessor would continue to give the 30% rent rebate, to be effective from 1 January 2019, on condition that prompt payment of rent was made on the first day of each month. Other terms were referred to, including that the Lessee provided a payment plan showing how it proposed to pay all outstanding arrears of rent by 30 June 2020 and that the Lessee must provide full financial details of her business and personal accounts by a certain date. In an affidavit sworn by Mr Whitaker from Colliers on 13 October 2021, he gave evidence that none of these terms were ever met. The Tribunal made no specific findings about these circumstances. 10. The letter from Mr Engeman, dated 18 September 2019, referred to rental arrears, at the time of his letter, totalling $84,297.73. Mr Engeman's letter said that the Lessee had requested that the rent rebate commence on 1 July 2018 but they were prepared to accept that it should commence on 1 January 2019. 11. In an email to the Lessor, sent on 23 October 2019, the issue of the payment of the outstanding debt due to the Lessor was addressed. Subject to an attempt being made to make early repayment, it was said that the Lessee could enter into a repayment arrangement for all the arrears to be paid by the end of March 2020. It was recognised that the Lessor might, nevertheless, decide to cash in the bank guarantee. 12. In late November 2019, the Lessor called on a bank guarantee provided by the Lessee to recover some, but not all, of the arrears of rent. An email from the Lessee to the Lessor's agent, sent on 19 December 2019, noted that $12,836.20 in arrears of rent remained outstanding. A letter from Colliers to the Lessee, dated 20 December 2019, set out various conditions to be met by the Lessee in respect of the arrears situation, including that a new bank guarantee be supplied by the Lessee to replace the old guarantee that had been called upon. No such guarantee was ever supplied by the Lessee. The Tribunal made no findings about these circumstances. 13. From the Tenant Reconciliation, dated 24 September 2021 (at pp 230-239, Vol 1 of the appellant's bundle), which we were referred to at the appeal hearing, it seems that the abated rent for January, February and March 2020, due at the commencement of each month (at times which could not have been impacted by the COVID pandemic) were paid late. According to this document, it would also appear that the arrears due to the Lessor increased over the period up until the withdrawal of the rebate on 1 July 2020 and that components of these arrears were amounts that were overdue for reasons that could not have had anything to do with the pandemic. 14. The Tribunal made no specific findings about any breaches by the Lessee in failing to pay these amounts. 15. On 28 March 2020, Ms Chuck, at Colliers, sent an email to the Lessees with an update about the COVID-19 situation (referred to by the Tribunal at [93]). The email stated that they were carefully monitoring the current COVID-19 situation and stated that: "… We know that irrespective of the depth or duration of this scenario, it will raise significant challenges for many businesses. For this reason we hope that as a priority, any business affected by the COVID 19 situation take advantage of the opportunities being offered to them. … Government stimulus initiatives will play a very important role. It is important that businesses affected by the COVID-19 situation also harness all support they can from these initiatives… Given the depth and duration of this cycle is currently unknown, and on the face of the information we have from you to date, we think it is too early to consider any variation to your lease conditions as you have suggested. … Any future consideration to defer payment or part payment of rent until the COVID-19 cycle abates, will require formal application by the tenant, a detailed proposal, details of which of the above support measures has been obtained, and accompanied by a current audited P & L and audited sales information. FYI the owners are only considering rent relief request on a case-by-case, month-to-month basis. [Our emphasis] It is our desire to work together to get through the current scenario. We think we can achieve this if we are collaborative, focus on equitable outcomes for both parties and take a long-term view…" 1. The Tribunal referred to this email (at [29], [93] and [105]) and concluded that, despite what was said in the email, the Lessor did not work collaboratively with the Lessee, but the Tribunal made no reference to the sales information that the Lessor sought, but which was never supplied by the Lessee. 2. On 1 April 2020, the Lessee's husband sent an email to Ms Chuck, which was not referred to by the Tribunal. It stated: "Following our conversation, we confirm that we will definitely need rental assistance for the next 6 months followed by an additional 6 months. We had good trade for the first 3 weeks of March but that has dropped off now significantly as it would appear that all that people were doing was forward purchases. Under the circumstances, 6 months rent free from April and further reduction for the following 6 months will be required." 1. This request for a lengthy rent free period from April 2020 was a material part of the context in which the Lessor's subsequent communications with the Lessee needed to be assessed. 2. On 7 April 2020, Ms Chuck sent an email to the Lessee's husband, in response to the 1 April 2020 email, (referred to by the Tribunal in general terms at [94]) in terms: "In response to your email dated 1st April 2020, the landlord is reviewing as a case-by-case. We are advising tenants that they need to seek Government assistance where possible in the first instance and require additional information to make an informed decision on any request for abatements We ask that you please forward the following • Last two years profit and loss, including what was reported to the ATO from the tenants accountant • Company-Assets and Liabilities-signed off by the accountant and/or bank • A business plan for the future. I have also attached a letter for your reference and the opportunities for a small business to seek government assistance. If you are unable to provide the above the landlord may be unable to assess your business and effect the ability to provide an abatement in due course. Once we have the above information we can they (sic) proceed to a formal Owners review and consideration. In the meantime, it's important that you pay your rent until an agreement is reached, at which point we can look to backdate the period of any rental abatement if one is provided." 1. An email from Ms Chuck sent to the Lessee on 23 April 2020 (set out in large part by the Tribunal at [30]) stated: "Good Morning Sanj & Halimah, I haven't received your payment advice yet, please disregard this email if you've or ready paid; In accordance with your lease, your rent is in arrears and you are currently in breach. I have made efforts to work with you during this time of disruption due to Covid-19, as mandated by the Government Code of Conduct. Allowances have been made for late payment due to supply disruption, however please be aware that your rent is due in full for April 20 and payment is required within seven days, 30/04/20. Should this deadline not be met, the current abatement you are receiving of 40% (sic) will be withdrawn from April 20 onwards. In regards to your request for Covid-19 relief, the Requirements are as follows; - A proven successful jobkeeper application - 30% drop in audited sales, Given that the current lease is on an abated rent the landlord will not be applying a further 30% discount to the already abated rent. Please confirm your payment, to avoid further action being taken." 1. On 7 May 2020, the Lessee applied to the ATO for JobKeeper payments. She succeeded in receiving such payments until the March quarter of 2021(see [43] of the Tribunal reasons). However, this was based upon the combined turnover figures for the Lessor's two pharmacies and did not contain any comparison with turnover figures in 2019. The documents concerning these payments were supplied to the Lessor by an email sent on 19 August 2020. 2. In an email from Ms Chuck sent on 6 May 2020 (not referred to by the Tribunal) the Lessee's husband was informed: … "Details of your Jobkeeper application and your sales for April will be needed due to the requirement to prove the loss. Documentation for both will be required in order to submit to the landlord." 1. On 14 May 2020, Ms Chuck sent another email to the Lessee concerning rental arrears (not referred to by the Tribunal). It said that the arrears scenario was becoming quite serious and that the total amount owing was $26,730.64. The email continued: "… You have mentioned Job Keeper however we haven't received any supporting documentation. Your current abatement negotiated with the landlord was on the understanding rent would be paid on time. The only explanation for this not happening so far, is - Supply issues and a drop in sales. No documentation has been supplied. - You have mentioned you are unhappy in trading in Thornleigh Your sentiments aside, your shop continues to trade in the shopping centre without meeting your obligations. There will be a lot of changes within the shopping centre this year, please advise how you would like to continue with your tenancy, with the rent situation escalating-do you need to discuss a payment plan, or is rent likely to be paid, or if neither then the option will be for removal of the abatement." [Our emphasis] 1. A rental arrears breach notice in respect of an outstanding amount of $26,730.64 was sent to the Lessee by Colliers on 22 May 2020 (not referred to by the Tribunal). The notice stated that the Lessee did not comply with the COVID-19 code of conduct. In the covering email it was noted that the April sales figures had not been received. The email went on to state: "As you can appreciate we are trying to review and apply the code to each tenant who is eligible and happy to work with each tenant. The landlord to date has been accommodating providing you with an abatement on your current rent however this is in jeopardy if we are unable to resolve the current arrears. We therefore require as per our lease agreement payment as per the April and May invoices within 7 days." 1. The Lessor ceased to apply the rent rebate as from 1 July 2020. The Lessee objected to this step and requested that the Lessor reinstate the 30% rent rebate. 2. It was common ground that the Lessee never supplied the Lessor with any sales figures for the pharmacy at the Thornleigh shopping centre for any of the months from March 2020 onwards until December 2020. 3. In an email from Ms Chuck, sent to the Lessee on 24 July 2020, (not referred to by the Tribunal) it was stated, in respect of a proposed zoom meeting: "… Documents will be required if any consideration is to be given for abatement due to Covid or otherwise. - BAS Statements. - Sales Information. - Jobkeeper application …" 1. In a letter from Ms Chuck to the Lessee, dated 30 September 2020 (not referred to by the Tribunal), it was stated: "We note that to date we have not received any documentation to confirm your eligibility for rent relief under the Federal Code of Conduct, and as enabled by State Legislation. As we have yet to receive the required documentation (BAS Statements) the landlord is entitled to pursue the arrears and may consider its legal rights by pursuing application to the Small Business Commissioner for mediation. The landlord has been working with the Tenants at Thornleigh Marketplace during these unprecedented times, it is required by the Code to act in good faith and to date we have yet to receive documents to assess your Covid Rent Relief. …" 1. On 6 and 7 August 2020, the Lessee supplied Colliers with BAS statements concerning the Thornleigh pharmacy for the period from April to June 2020 and JobKeeper documents (referred to by the Tribunal at [33] and [34], but without reference to the contents of these documents). However, these documents did not contain any comparative figures for the relevant periods in 2019. As already mentioned, the JobKeeper documents did not contain figures for the Thornleigh pharmacy alone. 2. The JobKeeper documents (also supplied to Colliers in January and February 2021; see the Tribunal reasons at [39] and [41]) showed that eligibility for JobKeeper payments had been accepted by the ATO of the purpose of making JobKeeper payments, but, as is apparent from the provisions we have referred to above, this did not establish that the Lessee met the required decline in sales condition so as to be an "impacted lessee". 3. In December 2020, a mediation took place between the parties. The Tribunal's findings concerning this mediation are challenged on the appeal. We address that issue, separately, below. 4. In a letter from the Lessee's accountant to the Lessor, dated 17 December 2020 (not, specifically, referred to by the Tribunal), the following percentage difference in trading in 2019 and 2020 for the pharmacy at Thornleigh was provided in respect of the months from April to September (we assume this was about sales, although the letter does not specify this): Apr-20 -11.4% May-20 -29.5% Jun-20 7.0% Jul-20 -3.0% Aug-20 2.2% Sep-20 -5.1% 1. This appears to demonstrate that it was only in May 2020 that the pharmacy at Thornleigh came near the requisite 30% decline so as to be an "impacted lessee". 2. In a letter from Ms Chuck to the Lessee, dated 28 April 2021 (not referred to by the Tribunal), it was stated that the Lessee was in breach of the lease for failing to pay the claimed outstanding amount of $108,483.54. The letter included: "We've noted over the last 5 months you have been paying your rent less a 30% amount. The rent invoiced is agreed as per lease and there has been no rebate given. The amount being paid is $12,756.35 whilst the amount due is $18,233.35. … You do not comply with the Covid-19 code of conduct, to date there is no acceptance of the Lessor's offer of a variation of the lease in order to comply with its obligations under the Retail and Other Commercial Leases (COVID-19) Regulation 2020. Negotiation attempts have not been successful due to non-submission of documents." 1. On 20 May 2021, the Lessor retook possession of the pharmacy premises for breach of the lease. This followed the issue of a notice of termination, dated 19 May 2021, which stated that the lease had been terminated for non-payment of rent. 2. On 2 August 2021, the Lessor issued rent credits before August, September and 2 October 2021 at 30% of the rent (Tribunal's reasons at [53]). 3. On 4 August 2021, Lessee received payment under the COVID-19 Jobsaver scheme (Tribunal's reasons at [55]). 4. Although the Tribunal made an order for the rent rebate to apply until the publication of the orders in October 2022, there were no findings about any relevant events subsequent to 4 August 2021. Consideration Questions of law 1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13], the Appeal Panel said that the following errors by the Tribunal raise questions of law: "… (3) whether it applied a wrong principle of law; … (5) whether the Tribunal failed to take into account a relevant (that is, a mandatory) consideration; … (7) whether there was no evidence to support a finding of fact;" Unconscionable conduct 1. On appeal, neither party raised any issue as to the principles concerning unconscionable conduct in s 62B of the RLA that were expressed by the Tribunal. 2. As to this, the Lessor pointed out that the Tribunal had adopted its submissions in respect of the principles to be applied. Those submissions made reference to the decision of the High Court in Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 267 CLR 1 (Kobelt) and the decisions of the Appeal Panel in Forbes v Wan [2020] NSWCATAP 129 and Norsk Dor Pty Limited v Tuxfund Pty Limited [2020] NSWCATAP 183 (Norsk). 3. The Tribunal set out the relevant principles that were summarised by the Appeal Panel in Norsk as follows: "66. The principles can be relevantly summarised as follows: 1. Determination of unconscionability involves a multi-factorial evaluative judgment as to whether conduct contravenes the statutory norm of conscience. Mere unfairness is insufficient. (Kobelt, per Kiefel CJ and Bell J at [47]; Keane J at [120]; Nettle and Gordon JJ at [234]). 2. There must be some real and substantial ground based on conscience for preventing a person from relying on what are, in terms of the general law, that person's legal rights (Kobelt per Gaegler J at [88]). 3. The values that inform the standard of conscience include certainty in commercial transactions; the absence of trickery and sharp practice; fairness in dealing with customers; the faithful performance of bargains and promises freely made and the protection of persons at a special disadvantage from being victimised or exploited (Kobelt per Kiefel CJ and Bell J at [14]); 4. For there to be unconscionable conduct it is essential that one party is at special disadvantage or position of vulnerability to the other party, and the other party unconscientiously takes advantage of that special disadvantage or vulnerability (Kobelt per Kiefel CJ and Bell J at [15]; Gageler J at [111]; Keane J at [118]; Nettle and Gordon JJ at [147]); 5. It is not possible to conclusively define what factors constitute a special disadvantage or vulnerability, but they must sufficiently affect the weaker party's ability to protect its own interests and extend beyond mere inequality of bargaining power (Kobelt per Nettle and Gordon JJ at [147]); 6. The taking advantage of the special disadvantage or vulnerability requires conduct of such a degree that it can be characterised as victimisation, exploitation, predatory, or conduct so outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience (Kobelt per Kiefel CJ and Bell J at [14]; Gaegler J at [92]; Keane J at [118]). 7. Conduct which is merely outside the norms of acceptable commercial behaviour is insufficient, without the further elements of unconscionable conduct (Forbes at [60])." 1. The Tribunal also set out an analysis by Colvin J of the principles to be applied in Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (No 2) [2020] FCA 802, which was referred to in Norsk. 2. None of these principles were challenged on the appeal. 3. However, as will be seen below when dealing with Ground 3 of the appeal, the Lessor submitted that, whilst the Tribunal had correctly identified the law, it had, nevertheless, failed to apply the statutory test or otherwise erred by failing to consider "all the circumstances". Grounds 1 and 2 (no probative evidence for finding that rent default was manipulated) 1. The Tribunal's conclusion that the Lessee's rent default was "manipulated" (at [106]) appears to have been an important element of its ultimate conclusion that the Lessor did not act in good faith towards the Lessee and, hence, acted unconscionably (at [109]). 2. It appears as though a significant element of the finding about manipulation was the Tribunal's view that the Lessor had withdrawn the rebate in order to achieve a default by the Lessee in the payment of rent (see the language of "so that" in [97] and "to default" in [105]). 3. In this regard, we do not accept the Lessee's submission that, read in context, what the Tribunal found was that the default relied upon by the Lessor for re-entry, being the non-payment of rent, arose by reason of the unconscionable withdrawal of the rental rebate. 4. Much of the Tribunal's reasoning on this subject, strongly, suggests that the Tribunal's conclusion about the intention or motive of the Lessor in withdrawing the rebate was founded upon a mistaken understanding that in withdrawing the rent rebate the Lessor also reversed past credits given to the Lessee in applying the rebate. 5. As was accepted by the Lessee, no such reversal occurred. However, the Lessee submitted that, despite some of the Tribunal's language, it was sufficiently clear that the references to reversing the credits was, in substance, a reference to the rental credit being removed in the future, which was factually correct. 6. We do not agree. It seems to us impossible to overcome the references to a reversal of credits as an additional step taken in conjunction with the withdrawal of the rebate (at [32], [97] and [105]). This interpretation is reinforced by the conclusion as to what followed, namely that the Lessee "was" in arrears of rent (at [97]). In other words, the result achieved was that the Lessee was now in default of payment of rent, in contrast to a future default that could or would result from a withdrawal of the rebate. 7. Accordingly, we consider that the Tribunal erred in law with respect to this finding about reversing credits. 8. If we are correct in our interpretation of the reasons concerning the reversal of credits, then it follows that there was no probative evidence for the conclusion about manipulation, all the more so when it regard is had to the undisputed fact that at all material times before the withdrawal of the rebate the Lessee was already in arears of rent. 9. Even if we are wrong about this interpretation, we consider that there was no probative evidence for the conclusion about rent default being manipulated (we note that such contention does not appear in the Lessee's written submissions to the Tribunal at first instance). 10. As we have already said, at all material times before the withdrawal of the rent rebate the Lessee was in arrears of rent. Furthermore, the evidentiary material before the Tribunal indicated that the Lessee had been given a considerable period of time in order to comply with the terms of the rent rebate benefit but she had not complied. This provided an apparent commercial justification for withdrawal of the rebate that had nothing to do with achieving a default in the payment of rent. Nor did the Lessor's subsequent conduct suggest that it set out to achieve a rent default. A long period elapsed before the Lessor acted upon the non-payment of rent. In the meantime, on a number of occasions, the Lessor invited the Lessee to supply it with information for the purpose of a negotiation about the rental situation. 11. We uphold Grounds 1 and 2 of the appeal. Ground 3 (failure to have regard to all the circumstances) 1. The Lessee submitted that the Tribunal did apply the correct test and its conclusion about unconscionability raised only a question of fact. It was submitted that the Appeal Panel should apply appropriate restraint and not intervene simply because it would have arrived at a different conclusion. 2. It was submitted that it was for the Tribunal to determine what were the relevant considerations provided it applied the correct legal test, as, so it was submitted, it had done. The Lessee submitted that the reference to "in all the circumstances" in s 62B was intended to provide flexibility rather than a mandatory requirement. 3. As to the COVID-19 Regulation and the question whether the Lessee was an "impacted lessee", it was submitted by the Lessee that the Tribunal was entitled to proceed on the basis that this was irrelevant because the question was whether there was unconscionable conduct and not whether the COVID-19 Regulation had been breached. As to the alleged relevance of the failure by the Lessee to supply documents concerning a decline in sales due to the COVID-19 pandemic, it was submitted that there was no evidence to support the proposition that the withdrawal of the rent rebate was in any way related to the lack of provision of these documents. 4. As to the circumstances in which the rebate was withdrawn, it was submitted by the Lessee that the Tribunal had taken account of the Lessor's legal right to withdraw the rebate, but, correctly, it had proceeded on the basis that the question remained whether it was unconscionable for the Lessor to exercise that legal right. 5. We disagree with the Lessee's submission that the reference to "in all the circumstances" in the section is not a mandatory aspect of the statutory test. 6. The mandatory nature and importance of the need to closely examine the totality of the circumstances, and to take account of the specified considerations where they are present, is emphasised in a number of the judgements in Kobelt concerning the like provisions in s 12CB and s 12CC of the ASIC Act (see Gageler J at [87]; Keane J at [115]; Nettle & Gordon JJ at [150] & [217]). 7. As to this, Gageler J said: "87. The correct perspective, in my opinion, is that unambiguously adopted by the Full Court of the Federal Court in relation to materially identical provisions in Australian Competition and Consumer Commission v Lux Distributors Pty Ltd.. The correct perspective is that s 12CB operates to prescribe a normative standard of conduct which the section itself marks out and makes applicable in connection with the supply or possible supply of financial services. The function of a court exercising jurisdiction in a matter arising under the section is to recognise and administer that normative standard of conduct. The court needs to administer that standard in the totality of the circumstances taking account of each of the considerations identified in s 12CC if and to the extent that those considerations are applicable in the circumstances." [Our emphasis] 1. Keane J said: "115. In my respectful opinion, the appeal should be dismissed for the reason that it has not been established that, upon "a scrutiny of the exact relations established between the parties".., the respondent engaged in conduct which can properly be characterised as unconscionable. In particular, the appellant's case did not establish that the respondent exploited his customers' socio‑economic vulnerability in order to extract financial advantage from them." [Our emphasis] 1. Nettle and Gordon JJ said: "150. As this Court has recognised and restated a number of times, invocation of equitable doctrines, including unconscionable conduct: 'calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [weaker party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. ... ["]A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case".' [Our emphasis] … 217. The plurality were right to do so. As was explained in Thorne v Kennedy, where a transaction is sought to be impugned by the operation of vitiating factors such as, relevantly, unconscionable conduct, it is necessary for a primary judge to conduct a close consideration of the facts; and it is equally necessary for an appellate court to assess any challenge to the primary judge's conclusions in light of the advantages enjoyed by that judge. That is because an assessment of whether unconscionable conduct has been established calls for a precise examination of the particular facts, and the exact relations established between the parties.. The advantage of a primary judge in seeing the parties and estimating their characters and capacities is 'immeasurable'."... 1. In Stubbings v Jams 2 Pty Ltd [2022] HCA 6; 96 ALJR 271, Gordon J said (at [56]-[57]) in relation to the like provision in s 12CB of the ASIC Act: "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'." [Emphasis added] 1. Although, the statutory test was correctly stated by the Tribunal, the question whether it was correctly applied raises a question of law, as does the question whether the Tribunal failed to consider relevant (mandatory) considerations. 2. There was no dispute that the Tribunal had failed to consider the circumstances concerning the COVID-19 Regulation, including the failure by the Lessee to provide relevant information to the Lessor about a decline in sales. 3. In addition to the Code, the COVID-19 Regulation was a source of relevant community standards, not unlike an industry code referred to in s 62B(3)(g). It gave definition to the requirement to negotiate with lessees suffering from the financial effects of the pandemic and for good faith dealings between the parties in this context, including the need for transparency. 4. The provisions in the COVID-19 Regulation concerning an "impacted lessee" and the non-provision of documents to the Lessor showing a relevant decline in sales were, in our opinion, plainly material to an assessment of both important elements of unconscionable conduct, namely, any special disadvantage of the lessee and any exploitation of, or any unacceptable dealing with, that advantage by the Lessor, as well as to an assessment of the good faith consideration referred to in s 62B(3)(k). 5. When dealing with unconscionability, the Tribunal did consider that the Lessor had the right to withdraw the rebate. However, it did not bring to account broader factors (outlined in our account of the dealings between the parties) that provided a case that there were reasonable grounds for withdrawing the rebate based upon the historical failure of the Lessee to comply with the terms upon which the rebate had been granted. 6. As to this, the Tribunal addressed unconscionability on the basis of, amongst other considerations, the Tribunal's view that in "normal circumstances" the rebate could be expected to continue until turnover conditions improved and a contention by the Lessor that it had the right to withdraw the rebate whether or not the Lessee complied with the terms upon which it was granted (at [99] and [106]). 7. By contrast, when dealing, subsequently, with the Lessee's misleading and deceptive conduct claim (which it dismissed) (at [115]), the Tribunal said: "The [Lessor] always had the right to withdraw the rebate based on the terms it was granted. The conditions were not met and the rent rebate was withdrawn. But this is not misleading the applicant." 1. When examining unconscionability the Tribunal needed to evaluate the reasons for the Lessee's vulnerable position with respect to withdrawal of the rebate, including the nature of the terms concerning the rebate that were not complied with, in determining whether it was unconscientious for the Lessor to take advantage of that vulnerability. These were part of "all the circumstances". It did not do so. 2. We uphold Ground 3 of the appeal. Ground 4 (no probative evidence for conclusion that due to the pandemic the Lessee could not regain its 2017/8 trading performance) 1. It was uncontroversial that the sales performance of the pharmacy at Thornleigh had declined in 2018 and 2019, well before the COVID-19 pandemic, due to a range of factors, including a fall in foot traffic due to competition from other shopping centres. 2. There was no evidence before the Tribunal that these factors would or could have been overcome but for the COVID-19 pandemic. 3. Accordingly, the Tribunal's conclusion to the contrary, at [100] of the reasons, was an error of law. 4. We uphold Ground 4 of the appeal. Ground 5 (no probative evidence for finding that Lessee provided the Lessor with evidence of a drop in turnover) 1. In the context in which the finding the subject of Ground 5 was made (at [97]), which was concerned with the withdrawal of the rebate and failure to negotiate for the provision COVID rent relief, it does seem that Tribunal's finding "[t]he applicant provided evidence of JobKeeper status and a drop in turnover, albeit for one month only" was a finding that the Lessee provided such evidence to the Lessor and did so at a material time in 2020. 2. As outlined above when examining the dealings between the parties, the JobKeeper status documents and BAS statements did not reveal any drop in turnover at the Thornleigh pharmacy during the COVID-19 pandemic. 3. It was not until well past the time when the Lessor had been requesting sales information from the Lessee, namely by a letter from the Lessee's accountant, dated 17 December 2020 (referred to above), that the Lessee provided some evidence of a drop in turnover at the Thornleigh pharmacy during the COVID-19 pandemic. However, this letter could not have been the basis for the Tribunal's finding in [97], which appears to be concerned with the dealings between the parties at a much earlier time in 2020, and also because the 17 December 2020 letter showed declines in April, May, July and September 2020 (as well as increases in sales in June and August 2020). 4. On appeal, the Lessor argued that the Tribunal should take judicial notice that the pharmacy suffered a material decline in sales due to the COVID-19 pandemic. However, we do not consider this is a satisfactory basis upon which to proceed in this context. First, it was within the Lessee's power to have supplied specific proof of sales to the Lessor and to the Tribunal. Secondly, such material as was provided to the Tribunal showed a fluctuating position between declines and increases. Thirdly, it was well known that chemists were sources of essential goods and services during the pandemic. 5. Accordingly, we consider that the Lessor has made out Ground 5 of the appeal and that there was no probative evidence for the finding in [97]. This was an error of law. 6. The Lessee submitted that the finding was not significant in the overall reasoning. However, given the significance that the Tribunal placed upon the COVID-19 pandemic in its assessment of unconscionable conduct, we do not accept that was immaterial. It seems to us to have been material to the Tribunal's view that the Lessee was suffering from a relevant disadvantage and that the Lessor was informed of that disadvantage for the purpose of its conclusion about unconscionability. 7. We uphold Ground 5 of the appeal. Ground 6 (no probative evidence that mediation did not occur) 1. The documentary evidence before the Tribunal about the relevant steps to mediate reveals the following: 1. The Lessor applied for a mediation through the Office of the Small Business Commissioner (Tribunal's reasons at [36]). 2. A mediation session attended by representatives of the parties took place on Friday, 11 December 2020. At the end of that session, a without prejudice proposal was put by the Lessee to a representative of the Lessor, which became the subject of an email from the mediator sent to the parties in the evening of 11 December 2020. The mediation was adjourned to the afternoon of Monday, 14 December 2020. 3. A second mediation session attended by representatives of the parties took place in the afternoon of 14 December 2020. In an email sent to the parties by the mediator after the mediation session that day, a zoom invitation for a further mediation session to take place at 8am on Friday, 18 December 2020 was sent to the parties. 4. In the evening of Wednesday, 16 December 2020, the mediator sent an email to the parties which stated that the husband of the Lessee had foreshadowed that the Lessee may need to move the time for the next mediation session to either a later time on Friday, 18 December 2020 or, possibly, a date early the following week. It was said in the email that this was related to the Lessee seeking some legal advice. 5. On 17 December 2020, the Lessor decided it would not accept the proposed delay to a further mediation session and that the mediation should be terminated. This was referred to in an email from the mediator to the parties sent in the evening of 17 December 2020. In that email the mediator said it was clear to him that the Lessor believed that a further mediation session would not resolve the issues. Accordingly, the mediation was terminated. He also said that if either party wished to seek a certificate that the mediation had been conducted and that a resolution was not achieved they should contact the person referred to and she would arrange for that certificate to be issued. 1. A less than complete account of these circumstances was given in the Tribunal's reasons. 2. This material establishes that there was no evidentiary support for the Tribunal's findings that mediation did not really occur because the Lessor withdrew (at [97]). This was an error of law. 3. Whilst, also, submitting that this was an error of fact only, the Lessee submitted that, at its highest, this was a minor factual error with little impact on the overall reasoning. 4. We agree. The error in Ground 6 of the appeal was not material to the outcome. Ground 7 (notices of termination based upon failure to provide replacement bank guarantee) 1. The Lessor also relied upon breach by the Lessee in failing to supply a replacement guarantee to justify the termination of the lease by exercising a right of re-entry. 2. As we have mentioned, the Tribunal rejected this contention on the basis that the breach had not been the subject of a notice as required by s 129 of the Conveyancing Act 1919 (NSW). 3. That section, relevantly, provides: 129 Restrictions on and relief against forfeiture of lease (1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, condition, or agreement (express or implied) in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice— (a) specifying the particular breach complained of, and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and (c) in case the lessor claims compensation in money for the breach, requiring the lessee to pay the same, and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and where compensation in money is required to pay reasonable compensation to the satisfaction of the lessor for the breach. … (9) The notice mentioned in this section shall be in the form set out in the Sixth Schedule or to a similar effect. 1. The Sixth Schedule is in the following terms: Schedule 6 (Section 129(9)) Notice of breach of covenant To The lessee of [here describe premises with reasonable certainty, as for instance, "No. 369, George-street, Sydney.] With reference to the lease of the abovementioned premises, dated the day of 1 , from A.B. to C.D., and the covenant by the lessee therein contained [here state concisely the nature of the covenant or covenants breach of which is complained of, as for instance, "to repair,"] and the breach by you of that covenant I hereby give you notice and require you to remedy that breach by [here set out the remedy as, for instance, "by putting the said premises in repair by doing and executing the repairs in and upon the said premises which are specified in the Schedule hereto annexed." Add if compensation is claimed.] And I further require you to pay to me the sum of , as compensation for the breach already committed. Dated this day of 19 . Lessor. Note— The lessor will be entitled to re-enter or forfeit the lease in the event of the lessee failing to comply with this notice within a reasonable time—see section 129 of the Conveyancing Act 1919. 1. Clause 9 (c) of the lease provided that the Lessee "must promptly replace the bank guarantee if it is presented." Under cl 9(a)(ii), the terms of the guarantee to be provided by the Lessee on or before the commencement of the lease included that the guarantee contains no expiry date. 2. It was uncontroversial that the Lessee had failed to meet these requirements in the period after the original bank guarantee was called upon in December 2020 and before termination of the lease in May 2021. 3. Under clause 19.2(a)(i) of the lease, if the Lessee breached the lease the Lessor was entitled to re-enter and take possession of the premises. This step was subject to the Lessee failing to comply with any notice that the Lessor was required by law to give the Lessee allowing the Lessee a reasonable time to remedy the breach (if it was capable of remedy): clause 19.2(b). 4. The Lessor relied upon three notices each of which was said to meet the requirements of s 129 of the Conveyancing Act. These were notices dated 11 December 2019, 20 December 2019 and 14 May 2019. 5. We are prepared to accept that the alleged error by the Tribunal in this context raises a question of law. 6. The failure to provide a replacement guarantee was mentioned in (but was not the main subject of) each of these notices. However, in our opinion, none of these notices complied with s 129 because they did not specify that the Lessee was required to remedy the breach, nor that she was required to do so within a specified time. Furthermore, these notices did not include the notation in the Sixth Schedule stating that the Lessor would be entitled to re-enter if the breach was not remedied. 7. Accordingly, we reject Ground 7 of the appeal. Ground 8 (error of fact, leave to appeal) 1. We have upheld Grounds 1,2 ,3 ,4 and 5 of the appeal on the basis that in these respects the Tribunal made errors of law. 2. The leave to appeal sought by the Lessor was an alternative contention that the same or like matters raised errors of fact, only. 3. Accordingly, it is unnecessary for us to determine whether leave to appeal should be granted to consider these matters. Nevertheless, if we had been of the opinion that the errors the subject of Grounds 1,2,3,4 and 5, in truth, raised questions of fact, only, then we would have granted leave to appeal in respect of these grounds. 4. For reasons which we have explained, the errors, individually and in combination, are material to the assessment whether the Lessor had engaged in unconscionable conduct. They affected both the assessment as to whether the Lessee suffered from a relevant disadvantage and whether the Lessor unconscientiously took advantage of such disadvantage. 5. We consider that the errors were plain and readily apparent and concerned matters that were central to the Tribunal's conclusion. Accordingly, we consider that resulted in a decision that was not a fair and equitable one, that a substantial miscarriage of justice may have occurred and that it would be unjust to allow the decision to stand. Outcome 1. Earlier in these reasons, we explained the nature of the claims the subject of these proceedings and the matters the subject of appeal. 2. The consequence of the scope of the appeal and our conclusions is that the following three claims, only, be remitted: 1. The Lessee's claim for relief for an alleged contravention of s 62B (1) of the RLA; 2. The Lessee's claim for relief against forfeiture; 3. The Lessor's cross-application for arrears of rent. 1. The Lessee's claim for relief under Order 2 of the orders sought by the Lessee in the amended application as an alleged "impacted lessee" within the meaning of the COVID-19 Regulation and the successor regulation must be dismissed because the Lessee failed to establish that she was such a lessee in the proceedings at first instance. We note that in her written submissions the Lessee did not submit that this claim should be remitted in the event that the Lessor's appeal was allowed. 2. Given the Lessor's success on appeal the costs order made by the Tribunal for the Lessor to pay the Lessee's costs at first instance on the ordinary basis must be set aside. The question as to what costs order, if any, should be made in respect of these costs should be remitted for re-determination. 3. The Lessor seeks the costs of the appeal. We will make directions for written submissions to be provided about such costs. 4. We consider that the remitter should be to a differently constituted Tribunal. Such an order is in the interests of justice in this case, including its appearance, in accordance with the approach to be taken to the making of such an order as set out by the Appeal Panel in Chapman v Nicolosi (No 2) [2023] NSWCATAP 73 at [16]-[24]. As to this, the Tribunal has made a finding of fact on the central question to be determined at the new hearing and has expressed a fully formed and firm view about the merits of the respondent's case of unconscionable conduct, which is adverse to the appellants. 5. After these reasons were prepared we noticed that the paragraph numbering in the decision at first instance published on Caselaw was, for the most part, one number less than the reasons used in the submissions on appeal and at the hearing of the appeal. We have not changed the paragraph numbers to accord with the reasons published on caselaw. Orders 1. For the above reasons, we make the following orders: 1. The appeal is allowed. 2. Orders 1, 2. 3, 4 and 5 made by the Tribunal on 12 October 2022 are set aside. 3. The following claims in proceedings COM 21/23200 and COM 21/25982 are remitted to a differently constituted Tribunal for re-determination: 1. The respondent's claim for relief for an alleged contravention of s 62B (1) of the Retail Leases Act 1994 (NSW); 2. The respondent's claim for relief against forfeiture; 3. The appellant's cross-application for arrears of rent. 1. Such re-determination is to be on the basis that the appellant did not give the required notice under s 129 of the Conveyancing Act 1919 (NSW) in respect of any breach of the lease concerning the provision of a replacement bank guarantee before the action taken by it to retake possession of the leased premises on 20 May 2021. 2. The respondent's claims for relief as an alleged "impacted lessee", for compensation pursuant to s 34 of the Retail Leases Act 1994 (NSW) and for relief in respect of the alleged misleading and deceptive conduct by the appellant, the subjects of the Orders 2, 4 and 5 , respectively, sought by the respondent in the amended application are dismissed. 3. The question as to what costs order, if any, should be made in respect of proceedings at first instance in COM 21/23200 and COM 21/25982 is also remitted to the differently constituted Tribunal for re-determination. 4. As to the costs of the appeal, the parties are to lodge with the Appeal Registry and serve written submissions concerning such costs, including whether a decision about such costs should be made on the papers, commencing with the appellant's submissions within 7 days from the date of the publication of this decision, followed by the respondent's submissions 7 days after service of the appellant's submissions, followed by any written submissions of the appellant in reply within 7 days after service of the respondent's submissions. 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 Amendments 25 May 2023 - Date of publication changed to reflect the correct publication date: 12 May 2023 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: 25 May 2023