New South Wales Supreme Court CITATION : Pascoe v Holyoake [2006] NSWSC 64 HEARING DATE(S) : 9 February 2006 JUDGMENT DATE : 17 February 2006 JUDGMENT OF : Rein AJ DECISION : Summons dismissed. CATCHWORDS : JURISDICTION - Application to transfer proceedings from Administrative Decisions Tribunal to Supreme Court - retail lease - alleged breach of covenant for quiet enjoyment - retail tenancy claim lodged with Administrative Decisions Tribunal - potential third party claims - risk of inconsistent findings if aspects of matter dealt with separately in court and Tribunal - risk of additional cost to party if proceedings not transferred - inherent power of Supreme Court - interpretation of s 76 Retail Leases Act 1994 - whether Supreme Court has jurisdiction to hear proceedings if transferred Administrative Decisions Tribunal Act 1997, s 37 LEGISLATION CITED : Interpretation Act 1987, s 35 Retail Leases Act 1994, ss 63, 70, 71, 75, 76 and 76A Supreme Court Act 1970, s 23 Attorney General of NSW v World Best Holdings Ltd [2005] NSWCA 261 Bencross Pty Ltd v Teasdale [2003] NSWSC 54 Buzera Pty Ltd v Mezan Enterprises Pty Ltd (1998) NSW ConvR 55-851 CASES CITED : Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662 GPT Management Ltd v Spa Heaven Pty Ltd [2005] NSWSC 1043 Oriental Carpet Department Store Pty Ltd v Supacenta Pty Ltd (2003) 11 BPR 21,235 World Best Holdings Ltd v Sarker [2004] NSWSC 1164 Scott Darren Pascoe as administrator of the estate of the late Kut Sze Tu (Applicant) PARTIES : Paula Ann Holyoake (First Respondent) Jarpen Holdings Pty Ltd (Second Respondent) Margaret Sze Tu (Third Respondent) FILE NUMBER(S) : SC 4893/2005 COUNSEL : Mr S Golledge (Applicant) Mr J E Lazarus (Second Respondent) The Argyle Partnership (Applicant) SOLICITORS : Paul Ward-Harvey & Co (First Respondent) John S Zouroudis & Co (Second Respondent) Derham Houston Lawyers (Third Respondent) - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION REIN AJ Friday 17 February 2006 4893/2005 SCOTT DARREN PASCOE AS ADMINISTRATOR OF THE ESTATE OF THE LATE KUT SZE TU v PAULA ANN HOLYOAKE AND 2 ORS JUDGMENT 1 HIS HONOUR: The Applicant in these proceedings seeks the transfer to this court of proceedings currently on foot before the Administrative Decisions Tribunal (proceedings no 045150) ("the Tribunal proceedings"). 2 The proceedings in the Administrative Decisions Tribunal ("the Tribunal") have been brought by Ms Paula Ann Holyoake ("Ms Holyoake"), the First Respondent to this motion, in relation to a retail lease entered into by Ms Holyoake with Margaret Sze Tu (the Third Respondent) and three other members of the Sze Tu family. The lease was of premises which Ms Holyoake used as a book shop at 229-231 Maroubra Rd, Maroubra Junction ("the premises"). Ms Holyoake claims that the stock of her business, and her business, were badly damaged as a result of water ingress into the premises. Her claim is quantified at approximately $265,000. She claims that she had notified the managing agent of the premises, Jarpen Pty Ltd t/a Raine and Horne Maroubra ("Jarpen"), on a number of occasions of prior leakages, without resolution of the problem. 3 On 22 November 2002 the Applicant, Mr Pascoe, was appointed as administrator of the estate of Kut Sze Tu ("Mr Sze Tu"). The late Mr Sze Tu, together with Margaret Sze Tu ("Margaret Sze Tu"), was a joint proprietor of the land on which the premises are located (it would appear as tenants in common). The lease was entered into on 8 September 1999, after Mr Sze Tu had died but before an administrator had been appointed (the deceased left no will). 4 Ms Holyoake commenced proceedings against Jarpen and Margaret Sze Tu but subsequently, by an Amended Application, abandoned her claim against Jarpen and joined Mr Pascoe. The Amended Application is found at pages 19-35 of the Exhibit to Mr Petrucco's affidavit of 8 September 2005. Ms Holyoake alleges that by the lease, the lessors covenanted for quiet enjoyment, and subsequently breached this covenant. 5 Mr Pascoe seeks to have the Tribunal proceedings transferred to the Supreme Court. His position is that the estate is not bound by the lease because the lease was executed by only one of the registered proprietors of the property and was executed by others who had no right or title to act on behalf of the estate, but that if the estate is liable it has claims against both Jarpen for its failure to deal with the leaks, and those who were responsible for execution of the lease. 6 Mr Golledge of counsel, who appears for Mr Pascoe, does not dispute that Ms Holyoake's claim is one that does fall within the jurisdiction of the Tribunal. Relying on ss 63, 70 and 71 of the Retail Leases Act 1994 and also s 37 of the Administrative Decisions Tribunal Act 1997, he argues that his client is precluded from bringing any claim in the Tribunal against Jarpen and/or the other persons by virtue of the definitions found in the Retail Leases Act. I think that there is considerable force in this argument but for reasons I shall elucidate I do not need to determine that issue, and I will assume in his client's favour that that is the position. If the claims against Margaret Sze Tu and Jarpen are not heard at the same time as the claim against the estate, the estate risks having a judgment against it which it will have to meet whilst its claim against Jarpen and the others remains undetermined. There is also a risk of inconsistent findings because, for example, the Tribunal may find that the premises were affected by water ingress, but this Court (or the District Court) might determine that they were not. 7 I think that the risk of inconsistent findings and additional cost might well give rise to issues pertaining to the administration of justice, although there would also be countervailing aspects, such as whether it would be fair to embroil the tenant in claims between the landlord and third parties that are extraneous to the lease and its execution, and with which the tenant need have no concern. Again I do not think it is necessary to determine these aspects of the matter. 8 Mr Golledge submits that the court has power pursuant to s 23 of the Supreme Court Act 1970 (being a section reflective of the inherent power of the Supreme Court as a superior court of record) to order transfer of the Tribunal proceedings – and having the power, in the exercise of its discretion, ought to order the transfer. Mr Muir, who appears for Margaret Sze Tu, supports the application for transfer. Section 23 provides: 23 Jurisdiction generally The Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales. 9 Mr Lazarus of counsel, who appears for Jarpen, resists the application (as does Mr Ward-Harvey who appears for Ms Holyoake). Mr Lazarus argues that: (1) the court has no power to transfer the Tribunal proceedings, for reasons I will elucidate below; (2) that even if it had the power, the court should not exercise that power because it is not necessary to do so in the interests of justice. A further discretionary point to which he draws attention is the fact that no draft claim against Jarpen or the alleged executors de son tort has been provided to the court. 10 I was informed by counsel that there have been no decisions on s 76 or s 76A of the Retail Leases Act. I set out below the relevant portions of ss 63, 71, 75, 76 and 76A: 63 Interpretation (1) In this Part: " court " means a court, tribunal or other body or person authorised by law, or by consent or agreement of parties, to decide or resolve any issue that is in dispute between parties, and includes an arbitrator. " party " or " former party " to a retail shop lease or former retail shop lease includes a person who is a guarantor or covenantor under a lease or former lease. " retail tenancy dispute " means any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates, and (without limiting the generality of the foregoing) includes a dispute about a security bond. … 70 Definitions In this Division: " 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, (iii) a claim for the doing of specified work or the provision of specified services, (iv) a claim for the surrender of possession of specified premises, (v) a claim for assignment of rights under a lease or for a declaration that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee, (vi) a claim for relief against forfeiture, (vii) a claim regarding the rectification of the lease, (viii) a claim regarding the invalidity of a lease for inconsistency with this Act or the regulations, (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, (xi) without limiting the generality of any other subparagraph, a claim with respect to the entitlement of a party or former party under a lease to receive payment of the whole or a part of a security bond, … 71 Lodging of retail tenancy claims with Tribunal (1) A party or former party to a retail shop lease or former retail shop lease may lodge a retail tenancy claim in respect of the lease with the Tribunal for determination of the claim. … 75 Removal of court proceedings to the Tribunal (1) If civil proceedings pending in a court involve a retail tenancy dispute, the court must on the application of any party to the proceedings transfer the proceedings (or so much of the proceedings as involve such a dispute) to the Tribunal to be dealt with as a claim under this Division, but only if the court is satisfied that: (a) the dispute is such as may effectively be dealt with as a claim under this Division and that it is appropriate that the dispute be dealt with by the Tribunal, and (b) the interests of justice do not require that the matter be dealt with by the court. (2) In determining whether or not it is appropriate that a matter be dealt with by the Tribunal, a court is to have regard to the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court. (3) Proceedings are taken to involve a retail tenancy dispute if any issue in dispute in the proceedings involves a liability or obligation with which a retail tenancy dispute is concerned. (4) This section does not prevent a court from granting urgent relief of an interlocutory nature where it is in the interests of justice to do so. (5) This section does not apply to proceedings by way of an appeal. (6) A court may make such ancillary orders as it considers necessary for the purpose of enabling an order under this section for the transfer of proceedings to the Tribunal to have full effect. 76 Jurisdictional overlap (1) If a retail tenancy claim or an unconscionable conduct claim has been lodged with the Tribunal under this Part and at the time it was lodged no issue arising under the claim was the subject of a dispute in civil proceedings pending before a court, a court has no jurisdiction to hear or determine such an issue in civil proceedings, unless: (a) the claim lodged with the Tribunal, or the part of that claim to which the issue relates, is withdrawn or is dismissed for want of jurisdiction, or (b) a court of record has, on a judicial review, quashed or declared invalid an order, determination or ruling of the Tribunal made in respect of the claim on the ground that the Tribunal had no jurisdiction to hear and determine the issue. [my emphasis] (2) If a retail tenancy claim or an unconscionable conduct claim has been lodged with the Tribunal under this Part and at the time it was lodged an issue arising under the claim was the subject of a dispute in civil proceedings pending before a court, the Tribunal, on becoming aware of those proceedings, ceases to have jurisdiction to hear or determine the issue, unless: (a) those proceedings, or the part of the proceedings relating to the issue, are or is transferred to the Tribunal by the court concerned, or (b) those proceedings, or the part of the proceedings relating to the issue, are or is withdrawn or dismissed by the court, or by another court on appeal in those proceedings, for want of jurisdiction or without deciding the issue on its merits, or (c) a court of record has, on a judicial review, quashed or declared invalid those proceedings or that part of those proceedings or any order, judgment or decision made in those proceedings in relation to the issue, on the ground that the first-mentioned court had no jurisdiction to hear and determine the issue. 76A Removal of proceedings to Supreme Court (1) A party to proceedings before the Tribunal for an unconscionable conduct claim, or partly for an unconscionable conduct claim and partly for a retail tenancy claim, may apply to the Tribunal to have the proceedings transferred to the Supreme Court. (2) The Tribunal must transfer the proceedings if the Tribunal is satisfied that: (a) the nature of the claim is such that it may be more effectively and appropriately dealt with by the Supreme Court, and (b) the interests of justice do not require the matter to be continued to be dealt with by the Tribunal. (3) The Supreme Court has jurisdiction to hear and determine proceedings transferred to it under this section and may make any orders and do anything that the Tribunal may do in determining an unconscionable conduct claim or retail tenancy claim, as the case requires. (4) The Supreme Court may exercise all the functions that are conferred or imposed by or under this or any other Act on the Tribunal to determine the unconscionable conduct claim. 11 The fundamental issue is what is meant by s 76. If it ousts the jurisdiction of all courts other than the Tribunal, then this Court has no jurisdiction to hear the matter and the issue of the true scope of s 23 of the Supreme Court Act becomes irrelevant, since it cannot have been intended that the Court would order the transfer to itself of matters for which it has no jurisdiction. 12 Mr Lazarus submits that s 76 admits of no ambiguity and expressly ousts jurisdiction. He says that s 76A aids in that view, because it provides for the specific circumstances where proceedings involving a retail tenancy claim can be transferred. 13 For s 76 to apply (and leaving aside the category of unconscionable conduct claims as that has no present relevance) the following criteria must be satisfied: (1) a retail tenancy claim has been lodged with the Tribunal; (2) at the time of lodgement no issue arising under the claim was the subject of a dispute in civil proceedings pending before a court; (3) the claim lodged with the Tribunal (or the part of the claim to which the issue relates) has not been withdrawn or dismissed; or (4) no court of record on judicial review has quashed or declared invalid an order, determination or ruling of the Tribunal on the ground that the Tribunal had no jurisdiction to hear and determine the issue. 14 If those four criteria are satisfied the legislation provides that "a court has no jurisdiction to hear or determine such an issue in civil proceedings": s 76(1). Mr Lazarus submits that each of the four criteria are met so it follows that the Court has no jurisdiction. Mr Golledge did not dispute that the four criteria had been satisfied. 15 Mr Golledge, in an aide memoire labelled "A", set out his submission as to how s 76 should be read: If, at the time of the claim [the Holyoake claim] was lodged and no issue arising under the claim was already the subject of existing civil [court] proceedings then you cannot start such court proceedings afresh if they will raise a claim which arises under the Holyoake claim. 16 Mr Golledge also referred to the heading to s 76 ("Jurisdictional overlap"), but as Mr Lazarus pointed out s 35 of the Interpretation Act 1987 provides that headings of provisions are not be taken as part of the Act except in limited circumstances. Mr Golledge did not assert that any exceptions were relevant. 17 In Attorney General of NSW v World Best Holdings Ltd [2005] NSWCA 261, Spigelman CJ, in dealing with the overall legislative context of the Tribunal and retail tenancy claims, and discussing the different way that the Act deals with retail tenancy claims and unconscionable conduct claims, said at [14]: "Section 76 of [the Retail Leases Act ] purports to remove from a court the jurisdiction to hear or determine retail tenancy claims or unconscionable conduct claims, where such claims have been lodged with a Tribunal." Neither that case nor World Best Holdings Ltd v Sarker [2004] NSWSC 1164 or Oriental Carpet Department Store Pty Ltd v Supacenta Pty Ltd (2003) 11 BPR 21,235 (which were the only other cases of this Court found by my Associate in which s 76 and/or s 76A were mentioned) otherwise deal directly with s 76 and its impact. 18 Sections 75, 76 and 76A deal with a number of different scenarios including unconscionable conduct claims and claims that are partly unconscionable conduct claims and partly retail tenancy claims (or involve such issues). So far as retail tenancy claims or disputes are concerned, ss 75 and 76 deal with three different scenarios: (1) a retail tenancy dispute arises in court and subsequently a claim is lodged with the Tribunal: s 76(2); (2) a retail tenancy claim is lodged with the Tribunal and subsequently an issue relevant to that dispute arises in a court: s 76(1); (3) a retail tenancy dispute forms part of proceedings in a court and one of the parties to those proceedings applies for transfer to the Tribunal of the proceedings (or that part relevant to the retail tenancy dispute): s 75. Each scenario is dealt with differently – the Tribunal's jurisdiction is removed in scenario (1), and the court's jurisdiction is removed in scenario (2). 19 If one of the parties applies for transfer (scenario (3)), the court must transfer the retail tenancy dispute to the Tribunal if satisfied of the matters set out in s 75(1)(a) and (b), and in determining the appropriateness of a transfer the court is to have regard to "the general principle that retail tenancy disputes should be dealt with by the Tribunal rather than by a court": s 75(2) and see GPT Management Ltd v Spa Heaven Pty Ltd [2005] NSWSC 1043 at [29]. 20 The combined effect of these provisions is to evince an intention that the Tribunal is a specialist forum in which retail tenancy disputes should be heard, unless both parties to the dispute are content to have their dispute heard in another forum, or proceedings have first been commenced in a court and the interests of justice or other matters make it inappropriate for the Tribunal to hear the dispute. 21 What is set out in Mr Golledge's aide memoire is not a construction of s 76(1) but an attempt to rewrite it, and I do not think that the extensive new words upon which Mr Golledge relies, or the thrust of them, can be imported into the section by some form of expansive judicial interpretation. 22 The wording used in s 76(1) is explicit and unambiguous and denies this Court (and all other courts) jurisdiction except in limited circumstances which are not presently relevant. 23 Even if the heading to s 76 were relevant in construing the section, it would not assist the Applicant because the section does deal with jurisdiction in both the Tribunal and the courts, so the heading is not obviously inconsistent with the literal construction of the words used in the section, nor could it, in any event, overcome the clear effect of those words. 24 It follows in my view that s 23, even if otherwise available as a general source of power for transfer of proceedings to the Supreme Court (see Buzera Pty Ltd v Mezan Enterprises Pty Ltd (1998) NSW ConvR 55-851 and Bencross Pty Ltd v Teasdale [2003] NSWSC 54, in which the question is discussed, and see also Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662 at 674), and as to which I express no opinion, cannot be relied upon in this case. 25 The applicant's summons should be dismissed. 26 I will hear the parties on the issue of costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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