Hutchin v Camden Haven Surf Life Saving Club Inc [2013] NSWADT 244

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Hutchin v Camden Haven Surf Life Saving Club Inc [2013] NSWADT 244 Hearing dates: On the papers Decision date: 31 October 2013 Jurisdiction: Retail Leases Division Before: PR Callaghan SC, Deputy President Decision: 1) The application that these proceedings be dismissed for want of prosecution is dismissed. 2) The Tribunal is satisfied that mediation under Part 8 of the Retail Leases Act 1994 at this stage is unlikely to resolve the disputes in these proceedings. 3) These proceedings are to be the subject of a further directions hearing on 14 November 2013 at 10.00am. Catchwords: Retail tenancy and unconscionable conduct claims - application for dismissal for want of prosecution - mediation of retail tenancy dispute Legislation Cited: Administrative Decisions Tribunal Act 997 Retail Leases Act 1994 Texts Cited: Ritchie's Uniform Civil Procedure NSW Category: Interlocutory applications Parties: Sue Hutchin & Amy Hutchin trading as Amy's Beachside Café (Applicant) Camden Haven Surf Life Saving Club Inc. (Respondent) Representation: S Hutchin and A Hutchin (Applicants, in person) Higgins & Dix, Laurieton (Respondent) File Number(s): 135084

reasons for decision 1The Applicants are Ms Sue Hutchin and Ms Amy Hutchin, who are mother and daughter. They claim that, trading as Amy's Beachside Café, they took a retail shop lease ("the alleged lease") in about December 2010 and January 2011 from the Respondent, Camden Haven Surf Lifesaving Club Inc., in respect of a section ("the café") of the Respondent's clubhouse at North Haven ("the clubhouse"). On 19 July 2013, through Mr Jim McIntyre of HBL Business and Property Lawyers of Port Macquarie, the Applicants filed with the tribunal Applications for Original Decision and for Urgent Interim Order ("interim application" will be used for the latter Application) in respect of the alleged lease. The allegations made in the Applications include that the Respondent unconscionably purported to terminate the alleged lease on or about 12 July 2013 and barred the Applicants from access to the café. 2The Application for Original Decision seeks the following orders: 1) A declaration that the Respondent and the Applicant entered into a Retail Shop Lease when the Respondent granted possession of the café section of the Camden Haven Surf Life Saving Club building to the Applicant on or about 31 January 2011 ("the Retail Shop Lease"). 2) A declaration that the Respondent unconscionably purported to terminate the Retail Shop Lease by barring the Applicant's access to the premises on or about 12 July 2013. 3) A declaration in the alternative to 2., that the Respondent in breach of the Retail Shop Lease purported to terminate the Retail Shop Lease by barring the Applicant's access to the premises on or about 12 July 2013. 4) A declaration that The Retail Shop Lease granted was for a five (5) year term pursuant to Section 16 of the Retail Leases Act. 5) A declaration that the Respondent has in connection with the Retail Shop Lease engaged in conduct that is in all the circumstances unconscionable. 6) Damages for loss of stock, profits and goodwill arising from the Applicant being barred by the Respondent from the Retail Shop Lease premises on 12 July 2013. 7) Damages for loss and damage suffered as a result of the Respondent's unconscionable conduct. 8) Costs. 3The interim application sought orders that the Respondent allow the Applicants back into the café. The interim application was made returnable on 25 July 2013. The alleged lease was described thus in the interim application: "The Respondent granted the Applicant the right to operate a café from defined premises within its clubhouse by a verbal agreement on 20 December 2010. Trading commenced on 31 January 2011. Terms of the agreement were: a. One hundred and fifty dollars ($150.00) rent per week; b. Electricity costs to be waived until the café's electricity usage could be determined; c. The Respondent would arrange for Council to 'split the box' enabling separate electricity accounts, within the first few months of operation of the café." 4On 25 July 2013 the hearing of the interim application was adjourned to 30 July 2013. On 30 July 2013 at a hearing where Mr McIntyre appeared for the Applicants and Mr A. Cornish of Counsel appeared for the Respondent, the interim application was dismissed. There is no transcript record presently available of that hearing. 5Material placed before that hearing included a Deed of Lease dated 23 December 1996 between Hastings Council as Manager of Northhaven Holiday and Leisure Reserve (R80643) Trust ("the Trust") and the Respondent, granting a lease to the Respondent of the clubhouse for a period of 10 years commencing on 9 June 1994, at a rent commencing in the first year of the term of $70.00 per annum with CPI adjustments thereafter. The Deed contains a holding over provision providing for the lease to be determined by one month's notice in writing expiring on any day. The material also included an unexecuted form of Temporary Licence bearing date 20 December 2010 between the Trust and the Respondent for a licence period of one year in respect of the club house. 6There were also produced two unexecuted forms of Deed between the Respondent as licensor and the Applicants as licensees in respect of the café. One of those forms has the year 2010 in the space for the date ("the 2010 draft licence Deed") and the other has the year 2013 there ("the 2013 draft licence Deed"). The first three clauses of the operative provisions of the 2010 draft licence Deed are: "1. On the understanding that the Club has no specific permission from the Council to grant a sublicence of the Club premises or any part thereof, the Club grants a licence to the Licencees to operate a café style business from that part of the premises cross hatched in black set out in the plan annexed and marked "A" for a period expiring as follows: (a)If a direction is received from the Council to cease the sublicencing of the café premises, immediately on the expiration of any notice or directive to cease such sublicence; (b)Immediately upon the Licencee failing to comply with any valid notice issued under the terms of this Licence Agreement; or (c)On the 18th day of December 2011. 2. The Licencee must pay a licence fee to the Club of $150.00 per week payable weekly in advance with the first payment to be made on the day of 20 3. The Licencee shall pay, in addition to the weekly licence fee, electricity supplied to the Club premises being the electricity consumption charge billed to the Club by the electricity supply authority for the current billing period (adjusted for part periods) minus the sum of $500.00 per billing period. ..." The first two clauses of the operative provisions of the 2013 draft licence Deed provide as follows: "1. On the understanding that the Club may withdraw this licence at any time if Council requires it, the Club grants a licence to the Licensees to operate a café style business from that part of the premises cross hatched in black, set out in the plan annexed and marked "A" for a period expiring on the earliest of the following: a) If a direction is received from the Council to cease the sublicencing of the café premises, immediately on the expiration of any notice or directive to cease such sublicence; b) Immediately upon the Licensee failing to comply with any valid notice issued under the terms of this Licence Agreement; or c) On 31 August 2013. 2. The Licensee must pay a licence fee to the Club of $490.00 per week payable weekly in advance with the first payment to be made on 15 March 2013, made up as follows: d) $150 licence fee per week; e) $240 per week in repayment of a total debt of $5,000 owed to the Club in respect of past licence fee defaults; and f) $100 per week in respect of electricity consumption." 7Affidavits placed before the Tribunal on 30 July 2013 included assertions by the Applicants to the effect that: a) On 20 December 2010 there was an oral agreement made between the parties for the Applicants to operate their business in the café at a rent of $150.00 per week with outgoings, being electricity costs, "to be determined once the café's usage could be isolated from the rest of the building". b) On 21 September 2011 the Respondent gave the Applicants electricity bills totalling $2,478.58 which the Applicants paid on 23 September 2011. c) The Respondent produced to the Applicants the 2010 draft licence Deed in October 2011. d) There were ongoing discussions, including disputes, between the parties from September 2011 about the Applicants' contributions towards the electricity costs for the clubhouse. 8The Respondent's affidavits included assertions to the effect that: (a) The original agreement between the parties required the Applicants to pay electricity bills to the extent that they exceeded $500 for any quarter. (b) The 2010 draft licence Deed was given to the Applicants shortly after they moved into the café. (c) Relationships between the Applicants and officials of the Respondent deteriorated in 2013 to the extent that Police had become involved. (d) Higgins & Dix Lawyers, of Laurieton, on behalf of the Respondent, by letter dated 25 June 2013, required the Applicants to deliver up vacant possession of the café by 12 July 2013 and put the Applicants on notice of their continuing indebtedness to the Respondent in respect of electricity. (d) The alleged indebtedness of the Applicants to the Respondent is $3,582.19. 9Written submissions by Counsel for the Respondent were given to the Tribunal on 30 July 2013. Those submissions included a contention that Section 16(5) of the Retail Leases Act 1994 operates to exclude the application of Section 16(1) and Section 16(2) to any lease granted to the Applicants by the Respondent because the extension of the term to five years would be relevantly inconsistent with the terms of the Respondent's head lease. Those subsections provide as follows: "(1) The term for which a retail shop lease is entered into, together with any further term or terms provided for by any agreement or option for the acquisition by the lessee of a further term as an extension or renewal of the lease, must not be less than 5 years. An agreement or option is not taken into account if it was entered into or conferred after the lease was entered into. (2) If a lease is entered into in contravention of this section, the validity of the lease is not thereby affected but the term of the lease is extended by such period as may be necessary to prevent the lease contravening this section. ... (5) This section does not apply to a lease to the extent that its application would be inconsistent with the terms of any head lease under which the lessor holds the retail shop." The submissions also put contentions to the effect that any lease that the Applicants had, had been a periodic one which had been terminated by the Respondent, that particularly on account of the breakdown in relationships between the Applicants and the Respondent, the balance of convenience was also against the granting of any interim relief to the Applicants, and that in any event, damages would be an adequate remedy for the Applicants. 10The proceedings came before the Tribunal next on 26 September 2013 when solicitors for the parties participated by telephone: Mr McIntyre for the Applicants and Ms Georgia Flynn from Higgins & Dix, Lawyers of Laurieton, for the Respondent. An affidavit by Ms Flynn that has since been filed says among other things that at the directions hearing Mr McIntyre advised that he was unable to obtain instructions from the Applicants and foreshadowed that he would be ceasing to act for them. A direction was made that the Respondent file and serve all evidence in relation to an application, evidently then made on behalf of the Respondent, for dismissal of these proceedings for want of prosecution, by 3 October 2013. The Applicants were directed to file and serve any material in reply by 11 October 2013. The proceedings were adjourned for hearing on the papers after 11 October 2013. 11As I have mentioned, there has been filed an affidavit by Ms Flynn on behalf of the Respondent. There has also been filed a letter from Mr McIntyre and a notice by the Applicants, both advising that Mr McIntyre no longer acts for the Applicants and that they now represent themselves. An affidavit by Ms Sue Hutchin has been filed. In addition to seeking dismissal of the proceedings, the Respondent seeks an order that the Applicants pay the Respondent's costs. The Applicants resist the dismissal of the proceedings and seek a mediation in respect of the proceedings. The matters relied on by the parties respectively can be sufficiently presented by setting out paragraphs from the two affidavits. Ms Flynn's affidavit includes the following paragraphs: "...4. The respondent has a claim against the applicants for electricity arrears outstanding in the sum of $3,582.19. This claim has not been brought in the tribunal, given that it is the respondent's position that the tenancy dispute does not come within the jurisdiction of the Retail Leases Act 1994 (NSW). ... 7. On 1 August 2013 I also obtained instructions from our client in order to arrange for the tenants to have access to the Club in order to collect their belongings. I communicated this to the tenant's solicitor. On 4 August 2013, the tenants removed their belongings from the premises. Mr McIntyre would have contacted the tenants to provide the date and time for the tenants to access the premises. ... 13. The tenants have had since 30 July 2013 to consider their position. This is more than two months. In the meantime, the respondent has been left waiting for a resolution. They have been unable to secure a tenant for the café given these outstanding proceedings. This has cost the club in relation to loss of rent. 14. The applicant has not provided the Tribunal with any indication of its position. If the applicant did not intent to prosecute its claim, it could simply have withdrawn its application. The applicant has given no indication of what if anything it is claiming. The applicant has chosen to do nothing. 15. The applicant's failure to prosecute its claim has also been costly in relation to the respondent's solicitor's professional fees. The applicant's failure to respond has required me to repeatedly attempt to obtain a response from the tenants' solicitor, I have prepared for the directions hearing, I have attended at that hearing and now I have been required to prepare this application to have the tenants' claim struck out. ... 23. The respondent is a voluntary association which is run by people volunteering their own time towards its existence and productivity." Ms Sue Hutchin's affidavit includes the following paragraphs: "3. After the Directions Hearing on 30 July 2013 when Judicial Member Maloney made orders that the application for urgent interim relief be refused I discussed with our then legal representative, Mr Jim McIntyre from Hastings Business Lawyers in Port Macquarie, and my business partner/daughter Amy Hutchin what our next moves should be. 4. Mr McIntyre advised me that no further action was needed till closer to the Directions Hearing date. Due to my emotional state on hearing that we could no longer operate our business at this time, I did not take note of the date for the Directions Hearing assuming Mr McIntyre would contact me with ample time to discuss our forward direction. 5. As my source of income, as well as my daughter's, had ceased so abruptly I spent the next seven weeks dealing with issues associated with the closure of the café, for example removing and returning the leased café equipment; assisting my daughter in gaining employment and sorting out my own financial situation. I took on full-time responsibility for two primary school aged boys under the care of the Department of Community Services and proceeded to settle my foster children into my home, family and a new school environment. 6. On the evening of 24 September I saw that I had a message on my mobile phone from earlier that day. It was from Mr McIntyre asking me to contact him, I assumed this was to meet and discuss options for the upcoming hearing. This is the only communication I had had with Mr McIntyre since 1 August 2013 regarding removal of equipment/stock from the café premises. 7. I was unable to get back to him the next day (25 September 2013) an when we communicated on 26 September he advised me that the hearing had already occurred. I was very annoyed that Mr McIntyre had not seen fit for give me more notice prior to the Directions Hearing and also that he did not try harder to contact me. On 27 September 2013 I told Mr McIntyre that we no longer required him to represent us in this matter. 8. My intent was never to prolong the proceedings or to treat this tenancy dispute with contempt or disregard. 9. When I was advised that we were to respond to the respondent's Application stating why this matter should be dismissed, my daughter and I met and looked again at the evidence heard at the Tribunal Hearing on 30 July 2013. 10. I noted that in Mr Glen O'Brien's affidavit he stated that Mr Scott McDonald, the then committee President, had received a letter from Port Macquarie Hasting Council stating the Council had approved a licence for a term of 1 year for the CHSLSC to sublease the kiosk. The period stated was from 20.12.2010 to 20.12.2011. (Attachment A). This commencement date coincides with the initial meeting my daughter and I had with the CHSLSC committee. Mr McDonald advised me at this meeting that this was the duration of the lease that would be provided to us. 11. Further, according to Mr Brett Anderson's affidavit provided to the same hearing, I was handed a lease for signature by Mr Scott McDonald "soon thereafter" commencing trade on 30 January 2011. The date this lease was to expire was 19.12.2011. A copy of this lease is attached to Mr McDonald's affidavit. 12. I believe this shows the intent from the CHSLSC committee to offer a lease to my daughter and myself to operate our business, Amy's Beachside Café, for longer than a period of 6 months. Therefore I believe this tenancy dispute comes with the jurisdiction of the Retail Leases Act 1994 (NSW). ... 19. As mediation is the appropriate and required next step in this dispute I feel a positive outcome for all parties could be achieved. 20. As I and my business partner/daughter have been severely disadvantaged due to loss of livelihood from incompetence and unprofessionalism of past and present members of the CHSLSC committee and have suffered unnecessary stress and defamation of character in affidavits signed by Ms Flynn and Mr Anderson, the 'orders sought' and 'grounds stated' in the Application for Original Decisions dated 17 July 2013 are still relevant and therefore stands as a further reason not to have this application struck out. ..." 12Section 73 of the Administrative Decisions Tribunal Act 1997 deals with procedure of the Tribunal generally. Section 73(5)(a) requires the Tribunal to act as quickly as practicable and s73(5)(g)(iv) empowers the Tribunal to dismiss proceedings if the Tribunal considers that there has been a want of prosecution of the proceedings. Other relevant parts of s73 are s73(3) directing the Tribunal is to act with as little formality as the circumstances of the case permit and s73(4)(c) requiring the Tribunal to take such measures as are reasonably practicable to ensure that the parties have the fullest opportunity practicable to be heard or otherwise have their submissions considered in the proceedings. The general approach to the exercise of Courts' powers for dismissal of proceedings for want of prosecution is canvassed, with reference to authorities, in Ritchie's Uniform Civil Procedure NSW at [12.7.5] and it is there noted that: "The essential criterion for the exercise of the power is whether or not, in all the circumstances, justice requires that the proceedings should be dismissed ... That criterion commonly involves striking a balance between the Plaintiff and the Defendant." Such an approach is appropriate here. 13The affidavit of Ms Sue Hutchin detailed above seeks to explain the events surrounding the lack of contact between her and Mr McIntyre prior to the 26 September 2001 directions hearing. That explanation shows, in my opinion, a measure of inattention by her to the Applicant's responsibilities as moving parties in proceedings in this Tribunal, but it also does include matters which amount to some excuse for her inattention. At the same time, I appreciate the difficulties also faced by the Respondent by reason of these proceedings, bearing in mind in particular that the Respondent's members are volunteers who work in the public interest. Other dominant considerations are that these proceedings have been on foot for only three months and there seem to be issues involved which warrant further consideration by the Tribunal, as I will detail below. In all the circumstances, I am not persuaded that the Respondent has made out at this stage a sufficient case for the Applicants' proceedings to be dismissed for want of prosecution. 14Ms Sue Hutchin on behalf of the Applicants seeks mediation in the proceedings and Ms Flynn on behalf of the Respondent has addressed that issue in her affidavit. Section 68 of the Retail Leases Act requires a retail tenancy dispute initially to be the subject of a mediation through the Retail Tenancy Unit. This requirement does not apply to proceedings for an order in the nature of an injunction and accordingly did not apply to the interim application in these proceedings. Nevertheless, the proceedings themselves have not been the subject of any such mediation. The position taken on behalf of the Respondent clearly enough is to the effect that mediation is not appropriate on account of the extent of an apparent breakdown in relationships between the Applicants and the officials of the Respondent. Such a breakdown is suggested by numerous allegations of misconduct in the various affidavits filed with the Tribunal. Those allegations, having not yet been appropriately substantiated, are not appropriate to be detailed here but I do note that they involve assertions of threats against persons and interference with property. In particular, in her affidavit Ms Flynn indicates recent allegations of that sort (which I think are not necessary to be repeated here) and expresses the opinion is that "it would be unlikely that the matter could be mediated given the level of animosity between the parties". Under s68(1) the proceedings may continue without mediation if the Tribunal is "otherwise satisfied that mediation under this Part is unlikely to resolve the dispute or matter." Benefits of the mediation process do include the facility for seeking to moderate or change parties' set positions and attitudes. Nevertheless, what I have read in the material lodged with the Tribunal to date concerning those allegations indicates to me signs of a breakdown in relationships between the Applicants and officials of the Respondent of such an order that a mediation under Part 8 Dispute resolution of the Act at this stage would be unlikely to resolve matters in the proceedings and that it is not now appropriate to direct such a mediation. I think that an attempt now at mediation would not assist the efficient disposal of the proceedings. I add that there is an overarching requirement in s74 that the Tribunal itself use its best endeavours, by a process of conciliation, to bring the parties to a mutually acceptable settlement. 15While the issues in these proceedings are less than adequately specified at this stage, clearly enough those issues include: a) The jurisdiction of this Tribunal in relation to the Applicants' claims (which in any event still need to be clearly identified) and to any claim by the Respondent against the Applicants (including contribution to electricity costs); b) The nature and extent of the agreement or agreements made between the parties concerning the café; c) The nature and extent of any retail shop lease which arose between the parties; d) The nature and extent of the termination of the arrangement and any retail shop lease including whether there was any unconscionable conduct involved on the part of the Respondent; e) The nature and extent of any relief (including costs) appropriate to be ordered by the Tribunal. 16These proceedings will have to be taken towards determination by the Tribunal. They should now be the subject of a reasonably extensive directions hearing on 14 November 2013 at 10.00am. 17The Tribunal makes the following orders and directions: 1. The application that these proceedings be dismissed for want of prosecution is dismissed. 2. The Tribunal is satisfied that mediation under Part 8 of the Retail Leases Act 1994 at this stage is unlikely to resolve the disputes in these proceedings. 3. These proceedings are to be the subject of a further directions hearing on 14 November 2013 at 10.00am. I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal. Registrar