CITATION: Seguin & Anor v Anglican Church Property Trust Diocese of Sydney (No 2) [2004] NSWADT 147 [2004] NSWADT 147 DIVISION: Retail Leases Division APPLICANTS PARTIES: Margaret Seguin and Jean Paul Seguin RESPONDENT Anglican Church Property Trust Diocese of Sydney FILE NUMBER: 045020 HEARING DATES: 06/07/2004 SUBMISSIONS CLOSED: 07/06/2004 DATE OF DECISION: 07/21/2004 BEFORE: Chesterman M - ADCJ (Deputy President); Fairweather R - Non Judicial Member; Tyler T - Non Judicial Member APPLICATION: Interim order MATTER FOR DECISION: Preliminary matter LEGISLATION CITED : Retail Leases Act 1994 CASES CITED: Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 Seguin & Anor v Anglican Church Property Trust Diocese of Sydney (No.1) [2004] NSWADT 146 APPLICANTS REPRESENTATION: M Fitzgerald, solicitor RESPONDENT G Moore, barrister ORDERS: Orders made 6 July 2004: 1. Until the termination of these proceedings or until further order, the Applicants in the proceedings are to grant to the Churchwardens of St Aidans Church, Annandale, access to the area of the Church Hall between the dividing brick wall within the Hall and the line of the previous stud wall, between midnight and 12 noon each Sunday, for the purpose of conducting a Sunday School; 2. By the close of business on Friday, 9 July 2004, the Applicants are to provide duplicate keys and the alarm code for the Church Hall to the Churchwardens; 3.(a) Before the commencement of Sunday School each Sunday, the Respondent must erect temporary partitions, to be supplied by it, so as to separate the area defined in Clause 1 of these orders from any equipment or stock belonging to the Respondents or their customers that has been stored by the Respondents at the rear of the Church Hall; 3.(b) At the conclusion of Sunday School each Sunday, the Respondent must take down and remove these temporary partitions; 4. The Respondent must provide adequate supervision by adults of children attending Sunday School in the area defined in Clause 1; 5. The Respondent is not to rely on Clause 11 of the Licence Agreement between the parties with respect to any matter arising from the grant of access under these orders; 6. The costs of this Application by the Respondent are reserved. REASONS FOR DECISION Introduction 1 In this judgment, we set out our reasons for making an interim order on 6 July 2004 on the application of the Respondent in the proceedings. The terms of this order are set out at the conclusion of the judgment. 2 In these proceedings, the Applicants, Margaret and Jean Paul Seguin, claim various forms of relief pursuant to the Retail Leases Act 1994 against the Respondent, the Anglican Church Property Trust Diocese of Sydney. They rely on an undated document (with an accompanying Schedule) headed 'Licence Agreement for the use of an Anglican Hall or Rooms (Excluding Church Building)' (hereafter 'the Licence Agreement'). This document bears their signatures as the designated 'Licensee' and the signatures of two individuals designated as the Churchwardens of St Aidans Anglican Church, Annandale (hereafter 'the Churchwardens'). 3 The Licence Agreement stated in clause 2(1) that the Churchwardens granted to the Licensee, and the Licensee accepted from the Churchwardens, a 'licence to enter and use' premises described as St Aidans Annandale Church Hall, Johnston Street, Annandale ('the Hall') during the period between 1 November 2001 and 31 October 2003. The Agreement stipulated that the Licensee could only use the Hall for a permitted use, described as 'sale of antiques'. The annual licence fee payable was $20,000. 4 Under clause 2(1) of the Agreement and Item 6 of the Schedule to it, the times within which the Licensee could enter and use the Hall were expressed to be limited as follows: 'any hour Monday to Saturday inclusive but not outside the hours of 12 noon to 6.00 p.m. on any Sunday'. 5 Clause 9(c) of the Agreement was as follows:- 9(c) The Licensee will remove from the Hall any property belonging to the Licensee leaving the Hall clear and available for use by other persons on days or times when the Hall is not permitted to be used by the Licensee;… 6 Under clause 11 of the Agreement, the Applicants released both the Respondent and the Churchwardens from all claims and demands in respect of 'any accident, damage, theft, injury or death' occurring in the Hall (including 'damage, theft, loss or destruction' of any stored property), for which the Respondent or the Churchwardens were or could become liable. They also indemnified the Respondent and the Churchwardens from all demands, claims, costs and expenses arising from the use of the Hall by the Applicants or their employees or visitors. 7 Between 15 May 1998 and 14 May 2000, the Applicants had conducted their antique shop in the Hall under a lease from the then churchwardens of St Aidans Church. They had not exercised an option to renew the lease, but had remained in possession of the Hall and had sought a new lease. The Licence Agreement was offered to and accepted by them in lieu of a new lease. After it had been signed, various matters of dispute arose between the parties, prompting the Respondent to decline to grant any further licence or lease to the Applicants upon the expiry of the Licence Agreement. 8 On 26 February 2004, the Applicants instituted the present proceedings in the Tribunal. The forms of relief that they sought, as set out in an Amended Application filed on 16 April 2004, included orders pursuant to s 72(1)(f) of the Retail Leases Act that 'the Licence Agreement commencing 1 November 2001 be declared to be a retail shop lease' and that the expiry date of this retail shop lease be declared to be 31 October 2006. 9 The ground on which the Applicants maintain that the retail shop lease created by the Licence Agreement has a term of five years is that, irrespective of the terms of the Agreement (see s 7 of the Retail Leases Act), a retail shop lease has a minimum term of five years under s 16(1) of this Act, unless a certificate has been given under s 16(3). It is common ground that no such certificate was given. 10 On 15 June 2004, we heard an application by the Respondent for the proceedings to be dismissed for want of jurisdiction. The basis of this application was the Respondent's contention that the Licence Agreement did not in fact create a retail shop lease between it and the Applicants. It was common ground that if no retail shop lease at all was created, the Tribunal would lack jurisdiction to grant any of the relief sought by the Applicants. 11 We reserved our decision on that application. We have since concluded that it should be dismissed. Our decision to this effect (Seguin & Anor v Anglican Church Property Trust Diocese of Sydney (No 1) [2004] NSWADT 146) is being published simultaneously with the present reasons. 12 The application by the Respondent to which these reasons relate was for urgent interim relief. It sought orders requiring that the Applicants should cease to prevent the Respondent using any part of the Hall during the periods on Sundays within which the Applicants were bound under the Licence Agreement to make the Hall available. We granted the relief sought at the conclusion of the hearing on 6 July 2004. This judgment sets our reasons for so doing. Outline of recent events 13 The following outline of recent events, most of which were undisputed, will suffice for present purposes. 14 Between November 2001, when the Licence Agreement was executed, and a date in January 2004, the Respondent did not require the Applicants to give up possession of any part of the Hall for any period of time on Sundays. In or before January 2004, however, it indicated that it required the use of part of the Hall to conduct Sunday School. The Applicants and representatives of the Respondent worked out an arrangement whereby before midnight on Saturdays the Applicants would remove the goods and equipment relating to their business from a section of the rear half of the Hall, rendering it useable by the Respondent during Sunday. 15 This section of the Hall (hereafter the 'Sunday School area') was separated by a brick wall from the front part of the Hall ('the shop'), where the Applicants displayed their stock, together with goods belonging to clients, for the purpose of sale. It was separated from a section further to the rear ('the storage area'), in which the Applicants stored goods and equipment, by a stud wall that had been erected by the Applicants. 16 Photographs tendered by the Applicants showed that the shop contained a substantial quantity of antiques and other stock on display, occupying all or most of the available space. 17 Following an inspection of the Hall during April 2004, the local authority, Leichhardt Council, served a notice dated 8 June 2004 on the Applicants, specifying certain orders that the Council was proposing to make. One of these was as follows: 'Remove all erected stud wall divisions and reinstate the premises to the original room configuration'. 18 On 17 June 2004, Mr Michael Fitzgerald, solicitor for the Applicants, stated in a letter to W B Scott & Tong, solicitors for the Respondent, that this inspection occurred, according to the Council, on account of a complaint that the Hall was being used for the manufacture of furniture. A copy of the Council's Notice of Proposed Order accompanied the letter, which went on to say that the Applicants had never manufactured furniture in the Hall and to suggest, by implication, that the Respondent may have been responsible for the complaint. 19 The letter stated further that the Applicants intended to remove the stud wall on 19 June (a Saturday). This meant, it said, that the Applicants, for occupational health and safety reasons, could no longer permit the Respondent to have access to the Hall to conduct its Sunday School. The letter claimed that permitting young children to be near the valuable, and in some instances fragile, antique stock kept in the Hall by the Applicants posed risks of injury to both the children and the stock. It referred to the liability that the Respondent would face if any of the stock was damaged or marked or went missing. It suggested that the Respondent should use other premises, such as St Aidans Church itself, for the Sunday School and warned of the consequences if representatives of the Respondent tried to force their way into the Hall. 20 In a reply dated 18 June, W B Scott & Tong asserted that the Applicants were required by the Licence Agreement to 'totally clear out' the Hall during the specified periods on Sundays and that there was no basis on which they could exclude the Sunday School from the Hall. The letter pointed out that, on account of the dividing brick wall, the shop would remain 'secure and intact' after the stud wall was removed. It concluded by saying that if a workshop had been established behind the stud wall, the equipment in it must be removed on Sundays, so that 'this area at least' (meaning the Sunday School area and the storage area) would be available for use by the Respondent 'in partial conformity with' the Licence Agreement. 21 In a further letter, dated 24 June, to Mr Fitzgerald, W B Scott & Tong indicated that because of a residential camp the preceding Sunday (20 June) the Respondent had not wished to use the Hall, but that it would 'require the use of the rear of the hall for Sunday School for this coming Sunday and successive Sundays'. 22 A letter of reply dated 25 June, written in Mr Fitzgerald's absence by his secretary, reaffirmed the position set out in Mr Fitzgerald's letter of 17 June. 23 On Sunday 27 June, when the Minister at St Aidans and one of the churchwardens arrived at the Hall to hold Sunday School, they discovered that the padlock on the door and the code for the alarm had been changed. Using bolt-cutters, they obtained access to the Hall. Sunday School was conducted with the alarm sounding. 24 Photographs tendered by the Respondent in its case in reply showed that while this was occurring the portion of the Hall that we have called the Sunday School area was surrounded by temporary partitions. These belonged to the Respondent and were set up in by those conducting the Sunday School. Together with the dividing brick wall, they separated the children attending from surrounding areas of the Hall. 25 These photographs also provided some support for a claim by Mr Moore, counsel for the Respondent, that normally about 20 children attended the Sunday School and six adults supervised them. 26 In a letter dated 28 June to Mr Fitzgerald, W B Scott & Tong asked that the Applicants provide to the churchwardens a key to the new padlock and the code for the alarm by 5 p.m. 29 June. The letter indicated, 'without conceding that the limited use of the hall satisfies the requirement in the licence agreement for the whole of the hall', that this was in order that representatives of the Respondent could continue to use the rear of the Hall for Sunday School. 27 In a reply dated 30 June, Mr Fitzgerald reaffirmed the Applicants' claim that it was now 'impractical' for the Respondent to use the Sunday School area. The letter alleged that the Minister and the churchwarden the previous Sunday had, amongst other things, damaged goods belonging to the Applicant and left them in a disordered state. It argued that the claim by W B Scott & Tong on behalf of the Respondent that the Applicants were bound to clean out the Hall each Sunday was 'unconscionable', that it amounted to 'nothing more than a naked attempt to force my client from the premises' and that it was 'inconsistent with the permitted use of the premises under the lease as an antique shop'. For these reasons, it stated, the Applicants, 'quite reasonably', would not allow access to the premises on Sundays. 28 Further correspondence between the parties' solicitors failed to resolve their differences. The matters relied on by the Respondent 29 The present application by the Respondent, made by letter dated 30 June 2004 to the Registry, sought urgent interim orders as follows:- 1. That the applicant (the Seguins) provide to the local church authorities access on Sundays pending final determination of the matters before the Tribunal. 2. That the applicant provide to the local church authorities duplicate keys to the rear of the hall and the code for the alarm. 30 In essence, the argument put by Mr Moore for the Respondent was that the two well-established conditions for the grant of interlocutory relief were clearly satisfied in this case. 31 The first of these was that there was a 'serious question to be tried'. Mr Moore relied here on the express stipulations in clauses 2(1) (coupled with Item 6 of the Schedule) and 9(c) of the Licence Agreement to the effect that (a) the Applicants should permit the Hall to be used by representatives of the Respondent during the relevant periods of time on Sundays; and (b) that they should remove their property from the Hall so as to leave it clear and available for use by other persons during those periods. He argued that there was clear evidence of conduct by the Applicants infringing these stipulations and of their intention to continue with such conduct. 32 The second condition was that the balance of convenience favoured the granting of relief. With regard to this issue, Mr Moore pointed out that the Respondent merely sought a restoration of the arrangement that had operated between January and mid-June 2004, allowing it to use the Sunday School area only. It was not seeking to enforce the right that it had under the Licence Agreement to require that the whole Hall be cleared out. 33 In response to the claim by Mr Fitzgerald in correspondence that, with the stud wall removed, there was a significant risk of injury both to the children attending Sunday School and to goods (including items belonging to clients) and equipment situated in the storage area, Mr Moore argued that any such risk could be minimised by steps such as were taken at the Sunday School on 27 June 2004. He relied on the tendered photographs to show that the temporary partitions brought into the Hall on that day provided adequate protection from such injury and that there were sufficient adults present to supervise the children. 34 We mention below some further points made by Mr Moore in reply to the case advanced on behalf of the Applicants. The matters relied on by the Applicants 35 Mr Fitzgerald, who appeared for the Applicants, submitted first that in this application the Respondent maintained an argument that wholly contradicted the stance that it had taken in its earlier application, referred to at [10 – 11] above, for the proceedings to be dismissed for want of jurisdiction. In the present application, it invoked the Tribunal's jurisdiction under the Retail Leases Act, whereas in its earlier application it denied that the Tribunal had such jurisdiction. 36 Based on this claim, Mr Fitzgerald contended that the Respondent was estopped from bringing the present application. He argued further, citing Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198, that its conduct in making this application, which involved relitigating issues that would be resolved in the earlier application, amounted to an abuse of process. 37 Mr Moore's response was that, according to accepted principles governing applications for interim relief, it was quite in order for a party to advance a proposition that in other parts of the proceedings it would or might wish to deny. This was because the purpose of such proceedings was primarily to preserve the status quo without resolving finally any issue between the parties. Mr Moore also suggested that it was in fact contradictory for the Applicants to deny the applicability of the Retail Leases Act, given that in resisting the Respondent's earlier application they had argued to the contrary. 38 Mr Fitzgerald submitted also that the Respondent's insistence that the Sunday School area be vacated each Sunday amounted to a breach of its covenant for quiet enjoyment and of its associated obligation not to derogate from its grant. This followed, he said, from the fact that the Applicants' business, which they conducted pursuant to the permitted use in the Licence Agreement, was a substantial one. This was evident from the tendered photographs of the shop. The business would suffer substantial disruption, threatening its successful continuance, if each week the Applicants had to clear out both the Sunday School area and, by virtue of the removal of the stud wall, the adjoining storage area. 39 Mr Moore's reply was that this line of argument was unavailable to the Applicants because of the clear statement in the Licence Agreement that their use of the Hall was subject to weekly interruption. He also pointed out that, because the Respondent only required access to the Sunday School area, there was no disruption of the Applicants' activities in the shop, which was the area of primary importance for their business. 40 A further submission by Mr Fitzgerald was that because the Respondent had not insisted on observance of this requirement between November 2001 and January 2004 it had in fact waived the requirement. After such a long period of time, it could not legitimately require now that the requirement be observed. 41 In reply, Mr Moore submitted that waiver could not be implied merely from the Respondent's decision not to insist upon its strict rights. In any event, he said, any waiver would cease to be effective once reasonable notice had been given of an intention to enforce these rights. 42 With regard to the risk of injury to the children attending Sunday School and to the property of the Applicants and their customers situated in the storage area, Mr Fitzgerald argued that, even if temporary partitions were erected and a significant number of adults were present to supervise the children, this risk was nonetheless a significant one. It was well recognised, he said, that young children were capable of evading supervision and might not be sufficiently restricted by temporary partitions. 43 He added that if the children using the Hall under supervision arranged by the Respondent were injured or caused damage to the property of the Applicants or their customers, clause 11 of the Licence Agreement would, to an unfair degree, expose the Applicants to liability under the indemnity granted by them and deny them the right to recover for any such damage. 44 In response to these arguments, Mr Moore indicated that the Respondent would not oppose the inclusion, in any order made by the Tribunal, of three conditions relating to its use of the Hall. These were (a) that before Sunday School it should erect temporary partitions separating the Sunday School area from the storage area, and should remove these when Sunday School had finished; (b) that it should provide adequate supervision of the children attending Sunday School; and (c) that it should not be permitted to rely on clause 11 in respect of any injury or damage arising on account of its being granted access to the Hall under the order. Our conclusions 45 In our judgment, nothing submitted by Mr Fitzgerald significantly impairs Mr Moore's submission that the two established pre-requisites for interim relief have been fulfilled. 46 In our judgment, this application by the Respondent did not in any sense 'relitigate' any of the issues raised in its earlier application for dismissal of the proceedings for lack of jurisdiction. The Respondent simply asserted that, if the earlier application was unsuccessful, it had grounds for interim relief. It acknowledged that, if we ruled in its favour in the earlier application, this would bring to an end any interim order made on the present application. There is in these circumstances no basis for claiming that it should be estopped from making this application, let alone for a ruling that in so doing it had engaged in abuse of process. 47 The contentions by the Applicants that the Respondent had breached the covenant for quiet enjoyment and the covenant not to derogate from its grant carry insufficient weight to defeat the Respondent's submission that, on account of an express provision in the Licence Agreement, it is entitled, at least prima facie, to have access to the Hall on Sundays. 48 The same must be said of the Applicants' claim that the Respondent had waived the benefit of this provision, having regard particularly to their participation in an arrangement for it to have access to a section of the Hall every Sunday between January and June 2004. 49 The measures adopted by the Respondent on 27 June 2004 for protecting both the children and the stored property from injury sufficiently show that any practical problems arising from the removal of the stud wall can be satisfactorily resolved pending the final disposition of these proceedings. For this reason in particular, the prejudice suffered by the Respondent through being denied access to the Hall outweighs any prejudice that the Applicants may suffer through being required to clear out the Sunday School area each Saturday. 50 At the conclusion of the hearing on 6 July 2004, after consulting with the parties' representatives as to the precise terms to be included, we ordered as follows:- 1. Until the termination of these proceedings or until further order, the Applicants in the proceedings are to grant to the Churchwardens of St Aidans Church, Annandale, access to the area of the Church Hall between the dividing brick wall within the Hall and the line of the previous stud wall, between midnight and 12 noon each Sunday, for the purpose of conducting a Sunday School. 2. By the close of business on Friday, 9 July 2004, the Applicants are to provide duplicate keys and the alarm code for the Church Hall to the Churchwardens. 3. (a) Before the commencement of Sunday School each Sunday, the Respondent must erect temporary partitions, to be supplied by it, so as to separate the area defined in Clause 1 of these orders from any equipment or stock belonging to the Respondents or their customers that has been stored by the Respondents at the rear of the Church Hall. (b) At the conclusion of Sunday School each Sunday, the Respondent must take down and remove these temporary partitions. 4. The Respondent must provide adequate supervision by adults of children attending Sunday School in the area defined in Clause 1. 5. The Respondent is not to rely on Clause 11 of the Licence Agreement between the parties with respect to any matter arising from the grant of access under these orders. 6. The costs of this Application by the Respondent are reserved. 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.