Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Georges Spice Pty Ltd v Southern Highlands Rentals Pty Ltd [2015] NSWCATAP 191 Hearing dates: 3 August 2015 Date of orders: 09 September 2015 Decision date: 09 September 2015 Jurisdiction: Appeal Panel Before: A P Coleman SC, Senior Member S Thode, Senior Member Decision: 1. Appeal allowed. 2. Orders 1 and 2 of the Tribunal made 27 March 2015 are set aside. 3. Remit the matter to the Tribunal as previously constituted to determine the matters set out in [55] of these reasons. Catchwords: APPEAL: errors of law. RETAIL LEASES: implied term of fitness of premises for intended use, whether implied term breached, whether lessee entitled to compensation. Legislation Cited: Retail Leases Act (NSW) 1994 Cases Cited: Advanced Fitness Corporation Pty Ltd v Bondi Diggers Memorial Sporting Club Ltd [1999] NSWSC 264 Fallon Street Properties Pty Ltd v Steel & Stuff Pty Ltd [2006] NSWCA 296 Harrem Pty Ltd v Toyo Tyre Rubber Australia Ltd [2008] NSWSC 776 Toll (FGCT) Pty Ltd v Alphapharm [2004] HCA 52, (2004) 219 CLR 165 Category: Principal judgment Parties: Georges Spice Pty Ltd – Appellant Southern Highlands Rentals Pty Ltd - Respondent Representation: Counsel: Mr Knackstradt – Appellant Mr Beverage - Respondent Solicitors: Mooney & Kennedy, Solicitors – Appellant Our Lawyers, Mittagong - Respondent File Number(s): AP 15/29951 Publication restriction: NIL Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer & Commercial Division Date of Decision: 27 March 2015 Before: K Rickards, Member File Number(s): COM 14/27626; COM 14/39748 REASONS FOR DECISION Overview 1. This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal. The appellant was the lessee of restaurant premises in Mittagong in the Southern Highlands of New South Wales. It entered into a lease with the respondent commencing 7 November 2013. It intended to operate an Indian restaurant. The restaurant commenced trading on 13 December 2013. However, the restaurant failed and closed its doors in February 2014. The appellant alleges that the restaurant failed because of a strong odour at the premises that affected its business to the extent that patrons refused to come to the restaurant. There were also issues with the freezer and refrigerated cool room at the premises which the appellant alleged caused it to lose stock it had purchased for the restaurant business. 2. The appellant alleged, and the Tribunal found, that prior to entry into the lease the respondent undertook to take steps to fix the odour at the premises. The Tribunal also found that the respondent undertook to fix the freezer and cool room prior to the business commencing. 3. The appellant commenced proceedings in the Tribunal seeking compensation for the loss of stock, other costs and loss of business, including loss of profits, allegedly were caused by the unsatisfactory condition of the premises. The lessor also commenced proceedings seeking compensation for lost rent and outgoings under the lease agreement. The two proceedings were heard together. 4. The Tribunal dismissed the appellant's claims. The Tribunal allowed the respondent's claim for some of the lost rent and outgoings in the sum of $31,463.49. 5. The appellant challenges the decision of the Tribunal on several bases that are explored in more detail below. 6. In the circumstances, for the reasons below, we would allow the appeal and remit the matter to the Tribunal for a re-hearing on limited questions including whether the implied term was breached, whether the bad odour caused the restaurant to fail, whether the appellant suffered loss by reason of the problems with the refrigeration equipment, whether the respondent was in breach of s 34 of the Act and what compensation, if any, the appellant is entitled to. It will also be necessary for the Tribunal to determine whether, in light of any findings it may make the respondent's claim for rent should be rejected or reduced. The hearing and findings below 1. The Tribunal had the benefit of substantial affidavit evidence from each party. Many of the witnesses were cross-examined. The Appeal Panel had before it the affidavits and other material, however, there was not a full transcript or audio recording of the hearing available. The Tribunal made certain findings that are challenged on appeal. We will set out the arguments put forward and the relevant findings. The pre-lease representations 1. At the hearing below, the appellant contended that the respondent was in breach of the terms of the lease and that it was entitled to compensation pursuant to ss 10(1) and 62D of the Retail Leases Act 1994 (the Act). These sections respectively deal with compensation payable for pre-lease misrepresentations and misleading and deceptive conduct in connection with retail leases. The allegations made by the appellant were that the respondent, through a Mr Pikkat, gave unqualified undertakings to remove a smell which was present at the premises when it was first inspected, that he would ensure all equipment and fixtures, including the cool room freezer and air conditioner were in and would remain in good working order, that a qualified tradesperson would inspect and ensure that this would be so before handing over the keys, that a tank at the rear of the premises would be prepared and that the liquor licence would be transferred. The appellant claimed that it had entered into the lease based upon these representations. 2. There was some dispute on the evidence before the Tribunal as to whether all of the representations were made. The Tribunal resolved the dispute in favour of the respondent landlord. It found that Mr Pikkat had told Mr Khan, a director of the appellant, that he would ensure that the walk in freezer, the cool room and the air conditioning were in working order prior to the commencement of the business and that he (Mr Pikkat) would "take steps to remove the smell emanating from the drainage" (see [29] of the reasons below). The Tribunal found that none of the other representations alleged by the appellant had been made. The findings made by the Tribunal in [29] of its reasons are not challenged by either party on appeal. 3. The Tribunal dismissed the appellant's claims for compensation pursuant to ss 10(1) and 62D of the Act. The appellant does not challenge those findings. That is, the appellant accepts it has no claim arising from any misrepresentation alleged to have been made by the respondent prior to entry into the lease. It is not, therefore, necessary to consider the reasons of the Tribunal for reaching its conclusion on these claims. It will be necessary, however, to later refer to the unchallenged findings of the Tribunal in [29] of its reasons with respect to the pre-lease representations made by the respondent. Implied terms 1. The appellant also alleged that there were implied into the lease terms that the lessor would work with the lessee in good faith and that the premises would be fit for purpose. The Tribunal found that there were no such implied terms in the lease. 2. The appellant does not challenge the Tribunal's rejection of the implied term that the lessor would work with the lessee in good faith. It does, however, challenge the rejection of the implied term that the premises would be fit for purpose. On appeal, it phrases the implied term slightly differently, namely that there was implied into the lease a term that the premises would be fit for the permitted use from the date of entry into the lease and for its duration. We do not think there is any material difference in this implied term to the "fitness for purpose" phraseology used at the hearing. 3. The Tribunal rejected the implication of such a term in paragraphs [38]-[40] of its reasons. We set out the Tribunal's reasons in full: [38] The Retail Leases Act 1994 codifies the respective rights and obligations of lessors and lessees. The lessee claims rights and remedies which are said to arise from implied terms of the lease and which require the lessor to act in good faith and for the premises to be fit for purpose; however, the rights and remedies of a party to a retail lease must be found either within the terms of the actual lease agreement, or within the provisions of the Act. [39] The lessee's contention of implied rights under the lease agreement must fail. The contract between the parties was comprised within the terms of the subject lease, subject to any statutory modification under the provisions of the Act, 7 This Act overrides leases This Act operates despite the provisions of a lease. A provision of a lease is void to the extent that the provision is inconsistent with a provision of this Act. A provision of any agreement between parties to a lease is void to the extent that the provision would be void if it were in a lease. [40] Interpretation of the terms of the lease, subject to the overarching effect of the Act, must be approached on the basis that the lessor and lessee are commercial entities engaging I a normal commercial activity; see the unanimous decision of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52…(quotation omitted) 1. As we have observed, the respondent does not now challenge the implication of a term that the premises would be fit for the permitted use from the time of commencement and for the duration of the lease. The respondent does not accept, however, that the implied term was breached or, if it was, the appellant suffered the loss it alleges. Section 34 claim 1. The appellant also alleged that the respondent was in breach of s 34 of the Act. That section relevantly provides that a retail shop lease is taken to provide that if the lessor fails to take all reasonable steps to prevent or put a stop to anything that causes significant disruption of, or which has a significant adverse effect on, trading of the lessee in the shop that is attributable to causes within the lessor's control and the lessor does not rectify the matter as soon as reasonably practicable after being requested in writing by the lessee, is liable to pay to the lessee reasonable compensation for any loss or damage suffered by the lessee as a consequence. 2. The Tribunal, at [33] of its reasons, rejected the appellant's claim under this head. It found that as there had been no written notification given by the lessee to the lessor or its agent of difficulties with the freezer or cool room, or of the smell emanating from the drains, the appellant's claim under s 34 of the Act could not succeed. 3. This finding was challenged by the appellant. In its written submissions and at the hearing of the appeal, the respondent accepted that the Tribunal had erred in making this finding. The respondent does not accept, however, that the appellant is otherwise entitled to succeed on its s 34 claim. Other relevant findings 1. It is necessary to refer to several other findings and statements made by the Tribunal in its reasons. 2. At [28] the Tribunal found that none of the representations made by the lessor, through Mr Pikkat, were set out in the Lessee's Disclosure Statement or recited in the terms of the lease [1] . Further, it referred to the express terms of the lease in Items 22 and 23 of Annexure A to the lease. Those items were: Item 22: the lessee is responsible for the maintenance and running costs of the cool room, stoves, dishwasher and all permanent fixtures and fittings within the building/ Item 23: the lessee is responsible for the servicing of the grease trap, drainage and plumbing at the property. 1. At [30] the Tribunal found that the lessor's agent had arranged to fix the malfunctioning freezer on 15 November 2013 and 10 December 2013. This is in the context of the lease commencing on 7 November 2013 and the restaurant opening night being on 13 December 2013. As the Tribunal noted, the "grand opening" had been advertised to be on 13 December and food had been purchased on 7 December to be stored in the cool room and freezer, despite the problems the appellant was experiencing with those appliances. 2. Next, at [31]-[32], the Tribunal found that the existence of the bad smell at the premises was acknowledged by Mr Pikkat of the respondent in early November when inspecting the premises. The Tribunal said that although Mr Pikkat's evidence was that he considered he had resolved the problem himself by flushing out a section of the drains, Mittagong Plumbing was called to the site subsequently by the respondent's agents to inspect the drains and undertake work. This work was undertaken by a Mr Mountford who attended the premises on 15 January 2014. He was then still able to detect a "bad smell in the drains". He proceeded to clean out and fully flush the floor waste in various locations which removed the smell. The Tribunal accepted the evidence of Mr Mountford that the bad smell had "persisted through until 15 January 2014 and that it was then effectively removed by him". 3. Each of the appellant and respondent accept these findings. That is, each accepts that there was a bad smell at the premises until the works were undertaken by Mittagong Plumbing on behalf of the respondent on 15 January 2014. 4. It was common ground that there was a rent-free period under the lease up to 7 January 2015 (an additional week had been added by agreement of the parties to the period stipulated in the lease: reasons at [34]). It was also common ground that the restaurant closed on 14 February 2014. Despite a proposal that it re-open on 4 April 2014, it never did (reasons at [35]). 5. Next, in respect to the cause of the closure of the restaurant, the Tribunal found at [42] that the breakdown of the refrigeration equipment was not the proximate cause of the lessee's decision to close the restaurant and not to re-open. This finding is not challenged by the appellant. The Tribunal said that it did not consider that it should depart from the express terms of the lease which stated that maintenance of the refrigeration equipment, cool room and freezer was the responsibility of the appellant. It therefore held that any failure or defect in the refrigeration did not create a liability on the respondent for any loss thereby caused. 6. In respect to the smell and the appellant's claims for loss, at [43]-[45] the Tribunal said: [43] The evidence establishes that the problem with the smell at the restaurant was something which persisted through from the time of the first inspection in early November 2013 until 15 January 2014 when Mr Mountford from Mittagong Plumbing attended and finally removed the cause of the problem. By then, the restaurant had been operating for a month, affected to a degree by an unpleasant odour. [44] I hold some real concern as to the extent to which I can rely upon the "customer compliant" (sic) documents supplied by the lessee as a reliable record of customer reactions to any smell which existed at meal times. The origin of these documents and the manner in which they were brought into existence is open to question On the other hand, it was frankly and understandably conceded by all relevant witnesses who gave evidence that the existence of a bad odour would be fatal to the successful operation of the lessee's restaurant business. [45] The above conclusion, however, does not mean that the lessee should not remain bound under the terms of the lease agreement to pay rent at least as and from 15 January 2014, nor does it justify the lessee closing it restaurant business or its claim for loss of profits and compensation for losses said to arise from the claimed breach by the lessor. [46] The Court of Appeal in Taylor v Dexta Corporation Lt [2006] NSWCA 310 (see in particular paragraphs 29 to 35) emphasised. And recited earlier authority for, the proposition that commercial contracts must be construed or interpreted so as to be given a "sensible commercial operation" or so as to be "commercially sensible and in accord with commercial reality". It is clear from the express terms of the lease agreement made between the commercial parties in the present proceedings, considered within the context of customary commercial practice, that the lessee bore responsibility for refrigeration, drains and other items, in its role as operator of the restaurant business at the premises as and from the commencement of the term of the lease. [47] If the lessee's claims of breaches by the lessor of their agreement were sustained, there is in any event no evidence to indicate why the lessee took no steps itself to deal with any drainage or refrigeration problems prior to or after the time that the restaurant business had commenced, so as to optimise the prospect of successful presentation of food in a comfortable atmosphere. In failing to take such steps during the period of operation of the business, and in then electing to close the restaurant without notice, the lessee acted unreasonably such that it could not succeed in its claim for damages in the event that breach by the lessor was established. Further, even if these barriers had been overcome, there is no satisfactory evidence to support the lessee's claimed losses. The evidence of the lessee's accountant is unsatisfactory in that his underlying assumptions and method of calculation of loss of future profit and goodwill have not been adequately explained; accordingly the conclusions reached by him as to the lessee's losses and damage appear to be at best speculative. The lessor's claim 1. The respondent claimed that it was owed $37,133.70 comprising rent arrears, outgoings and interest covering the period until 7 November 2014 when a new lease of the premises commenced. The Tribunal allowed the respondent's claim for rent, outgoings and interest. However, importantly, it only allowed the claim from 15 January 2014 when the smell at the premises was removed until 27 October 2014 when the premises was re-let. That is, having regard to the rent-free period being until 7 January 2014, the Tribunal allowed an abatement of rent for 8 days because of the smell at the restaurant premises. 2. The total allowed for the respondent's claim was $31,463.49. Consideration and Determination of the Grounds of Appeal 1. Many of the original grounds of appeal as set out in the Notice of Appeal and, indeed, those in the amended schedule to the Notice of Appeal have been abandoned. There remain, however, several grounds of appeal. Some can be dealt with in short order as a result of the concessions made by the respondent. We will deal with each ground in turn. The ground numbers are by reference to the grounds of appeal as set out in the Appellant's Amended Schedule to Notice of Appeal dated 18 June 2015. Grounds of appeal not referred to have been abandoned. Ground 2 1. This ground alleges that the Tribunal erred in law in finding that: 1. Section 7 of the Retail Leases Act, to the extent that it had any effect as regards the issues in dispute in this matter, had the effect of excluding the implied terms otherwise binding upon each party to the lease agreement; and 2. The High Court decision in Toll (FGCT) Pty Ltd v Alphapharm [2004] HCA 52, to the extent that it had any effect as regards the issues in dispute in this matter, had the effect of excluding implied terms otherwise binding upon each part to the lease agreement. 1. The respondent now accepts that implied into the lease was a term that the premises would be fit for the permitted use from the commencement of the lease and for its duration. That concession is enough to dispose of this ground. That is because the respondent accepts that in the particular factual circumstances, the lease contract contains that term. 2. The Appeal Panel stresses, however, that whether such a term would be implied into a retail lease (or any lease at all) will depend on the factual circumstances of each case. The authorities indicate that Courts are hesitant to imply terms into leases. Ordinarily, there is no implied covenant that leased premises will be fit for any particular use, even if the lease contemplates use of the demised premises for a particular purpose: Advanced Fitness Corporation Pty Ltd v Bondi Diggers Memorial Sporting Club Ltd [1999] NSWSC 264 at [93]. 3. We were referred by the counsel for the appellant to Fallon Street Properties Pty Ltd v Steel & Stuff Pty Ltd [2006] NSWCA 296. Basten JA, with whom Santow JA and Hunt AJA agreed on this point, considered the issue of the implied term at [12]-[35]. In that case the Court of Appeal held that there was implied into the lease in question a term that the landlord would within a reasonable time carry out construction work identified in the interim occupation certificate. There had been pre-lease negotiations with respect to the suitability of the premises for the desired use once construction had been completed. 4. A fulsome discussion of implication of terms into leases can be found in Harrem Pty Ltd v Toyo Tyre Rubber Australia Ltd [2008] NSWSC 776. In that case Hall J considered, amongst other issues, whether there was implied into a lease of premises which could "be used only as warehousing, storage and distribution" a tem that the premises would be reasonably fit for that use at the time of entry into the lease. His Honour, from [481]- [493] considered the law with respect to implied terms in leases. In the factual circumstances of that case and based on the evidence before the Court, his Honour held that such a term was implied into that lease. 5. Had the concession not been made by the respondent in this matter and it was necessary for us to decide the issue, we would have held that in these particular factual circumstances, the term was implied. We are of the opinion that, having regard to the matters below, it is so obvious and goes without saying that implied into this lease was a term that the premises would be fit for its permitted use as a restaurant from the commencement of the lease. Such a term in this case gives business efficacy to the lease: Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 346-347. 6. The implication of the term is supported by the representations made by Mr Pikkat to Mr Khan that the respondent would ensure that the walk-in freezer, the cool room and the air conditioning were in working order prior to the commencement of the business and that steps would be taken to remove the smell emanating from the drainage. 7. The fact that Mr Pikkat gave the undertakings he did support an inference that he accepted the cool room and refrigeration equipment needed to be in working order and the smell needed to be eliminated before the restaurant opened. Although the undertaking with respect to taking steps to eliminate the smell was not expressed in terms that those steps would be taken before the restaurant opened, we infer that it must have been the case that those steps would be undertaken before the restaurant opened. It must have been the case that Mr Pikkat accepted the smell was not conducive to the running of a restaurant; otherwise, why would he have undertaken to take the steps to eradicate it? We infer that the lease was based upon the assumption that the cool room and refrigeration equipment would be in working order and steps would be taken to eliminate the smell. If that assumption is so, then the express terms referred to do not cover the state of the refrigeration equipment and drainage at the time of entry into the lease such as to prohibit the implication of the term. 8. We do not think that the express terms of the lease referred to by the Tribunal at [28] of the reasons is inconsistent with the implied term such that the term cannot be implied. Those express terms deal with maintenance and servicing of, inter alia, the cool room and drainage as being the lessee's responsibility after the lease is entered into. However, they do not prevent the implication of a term that the premises, including the cool room and drainage, would be in working order such that the premises was fit for the purpose of the lease from its commencement: namely running a restaurant. We note that Clause 6 of the lease and Item 17 of the schedule provide that the permitted use of the premises was a restaurant. No other use was permitted. As such, the implied term is not inconsistent with the express provisions of the lease. There is nothing in the content of the implied term which would engage the operation of s 7 of the Act. 9. The Tribunal erred in its conclusions on the implied term. Ground 2 is upheld. Ground 5 1. This ground asserts that the Tribunal erred in law in finding that the appellant had not given the necessary written notice to the respondent regarding the problems with the freezer, cool room or smell, to support a claim under s34 of the Act. 2. The respondent accepts that such written notice was given and that the Tribunal erred in finding otherwise. 3. Ground 5 is upheld. Ground 7 1. This ground alleges that the Tribunal erred in failing to give adequate reasons for its decision. In its written submissions, the appellant expanded on this ground and submitted that in respect to its findings with respect to the implied term by reference to s 7 of the Act and Toll, supra, the Tribunal failed to give adequate reasons. In light of the findings above in respect to Ground 2, it is not strictly necessary to deal with this ground. If it were, we would not uphold it. Although we have held that it erred, in our opinion, the reasons given by the Tribunal for rejecting the implied term were adequate. Ground 8 1. Under the heading "Other Errors" the appellant submits that the Tribunal made errors of fact, or of mixed fact and law, for which leave to appeal was sought. In so far as leave is required, we apply the principles set out in Collins v Urban [2014] NSWCATAP 17 at [65] – [84]. 2. The first error is identified as ground 8(a), namely the finding at [47] of the reasons that there was "no evidence to indicate why the lessee took no steps itself to deal with any drainage or refrigeration problems prior to or after the time that the restaurant business had commenced" was against the weight of the evidence. In support of this ground, counsel for the appellant took the Appeal Panel to a schedule of extracts from the appellant's affidavit evidence that was before the Tribunal. That schedule indicates that there was ample evidence before the Tribunal that the appellant did take steps to try to deal with the drainage problems before the restaurant commenced business. We accept the appellant's submissions that the Tribunal's finding to the contrary is against the weight of the evidence. In respect to the refrigeration, there was no reason for the appellant to take any significant steps except chase the respondent to ensure the work was done (which it did) as it had been promised that the equipment would be in working order before the restaurant opened. We accept a finding that the appellant should have taken additional steps did not take proper account of that matter. As a result, the finding that the appellant acted unreasonably so as to preclude it from recovering any loss (if it has suffered loss) cannot stand. We would grant leave for this ground 8(a) and uphold it. 3. Ground 8(f) is that the finding of the Tribunal at [33] that the appellant could not rely on s 34 of the Act as it had not given written notice to the respondent. As referred to above, the respondent has accepted this finding was an error. 4. Ground 8(g) challenges that the finding at [42]-[45] that the breakdown of the equipment and the bad smell were not the cause of the appellant's decision to close the restaurant. The appellant now accepts the finding of the Tribunal that the problems with the cool room, freezer and refrigeration equipment was not the proximate cause of the failure of the business. In respect to the smell, as we discuss further below, there are difficulties with the Tribunal's reasoning and the findings, to the extent that they were made, as to the causal impact of the smell on the appellant's business. To the extent discussed below, we uphold this ground. 5. Ground 8(h) is that the finding that the bad smell affected the premises from at least the time of the appellant's entry into the lease on 7 November 2013 until 15 January 2015, and the Tribunal's acceptance that such a bad smell would be "fatal" to the appellant's business, but his failure thereafter to take the "fatal" bad smell into account when assessing the appellant's claim for damages and the respondent's claim for rent. We accept there are difficulties and inconsistencies with the Tribunal's findings as to the effect of the smell on the appellant's business. On the one hand, at [44] the Tribunal accepts the evidence that the existence of a bad odour would be fatal to the successful operation of the appellant's business. Additionally, the Tribunal allowed an abatement of rent from the end of the rent-free period on 7 January 2014 until the smell was eradicated on 15 January 2014. To make such an allowance, necessarily means that the lessor was in breach of the terms of the lease whilst the bad smell was present at the premises. On the other hand, at [45] the Tribunal held that such a conclusion does not mean that the lessee should not remain bound under the terms of the lease on and from 15 January 2014, nor did it justify the lessee closing its restaurant business and claiming loss of profits and compensation. 6. With respect, the Tribunal did not provide adequate reasons for reaching what can be seen to be inconsistent conclusions. We are prepared to read the Tribunal's reasons as meaning that as and from 15 January 2014 when the smell was eradicated that the respondent was no longer in breach of the lease. So much may be correct but such a conclusion begs the question as to the effect of the bad smell on the business from the date it opened and whether, as the appellant contends, the smell was indeed fatal to the business and the damage was done in the month that it had been operating with the smell. The Tribunal has not made any finding in this regard. That may be because it rejected the implied term and did not therefore think it necessary to decide. The respondent maintains that there is no evidence to support a finding that the smell did have the affect on the business. That may or may not be so, however, we do think that the inconsistency referred to above and the failure to make any specific finding on the impact of the smell on the business infect the Tribunal's findings. We would allow this ground. 7. Grounds 9 and 10 are that leave ought be granted to appeal from any errors of mixed fact or law and in consequence of the errors identified by the appellant, the decision is "infected with error and should not stand". We have dealt with the individual grounds above. We accept that the majority of them have been made out. The result is that we agree that the appeal should be allowed. 8. At ground 11 the appellant submits that the appropriate finding is that rent should be abated until the date of termination of the lease, due to the "numerous defects and problems with the property" such that no rent is currently due and payable. We do not agree that such a finding could or should be made by us. Disposition of the Appeal 1. It seems to us that the appropriate course is for the matter be remitted to the Tribunal, as previously constituted, to determine certain limited questions. As it has now been conceded, and we have found, that there is an implied term that the premises being fit for the intended use from the commencement of the lease. The Tribunal should be asked to determine whether, on the evidence before it and the undisputed factual findings referred to above, the term was breached and if so, what loss was suffered by the appellant. Further, in light of the error in respect to the s 34 claim, the Tribunal should also be required to determine whether on the evidence before it, the appellant is entitled to succeed on that claim. Finally, the Tribunal should then consider the respondent's claim for rent in light of any findings it makes on these other matters. 2. The appellant originally submitted that the effect of the errors it identified was that the orders should be set aside, the respondent's claim for rent be dismissed and its claim be remitted to the Tribunal for a hearing as to the quantum of its loss. We note that the appellant now accepts that the problems with the refrigeration equipment were not the proximate cause of the failure of the business. It maintains, however, that it is entitled to the cost of stock ruined by reason of the defects with the equipment. We also note that the appellant has abandoned any claim for loss of profits. It should not be permitted to re-agitate that claim. 3. We have considered the findings of the Tribunal at [47] of its reasons in so far as those findings deal with the appellant's evidence of loss. The Tribunal found that even if the appellant had proved the alleged breaches by the respondent, there was no satisfactory evidence to support the claimed losses. The Tribunal then dealt with the evidence of the appellant's accountant going to the claimed loss of profits and good will. It held that this evidence was unsatisfactory. The appellant does not now press the loss of profits or loss of good will claim. It does press the claim for loss of stock and the like. The Tribunal did not deal with the evidence going to these matters. If the conclusions of the Tribunal to which we have referred were intended to deal with the evidence going to those claims, there were no sufficient reasons given as to why that evidence did not support those claims. 4. At the hearing of the appeal, counsel for the appellant submitted that there should be no remitter but that the Appeal Panel should determine quantum if it was satisfied that the appellant was otherwise entitled to the relief it sought. For the reasons identified above, we agree that the orders made by the Tribunal should be set aside. However, we do not think it is appropriate for us to make the orders sought by the appellant. We did not have the benefit of hearing the witnesses or hearing the sound audio. The Tribunal had this benefit. Further, there are findings that are required to be made – including whether the implied term was breached and, if so, whether the appellant suffered loss as a result – which are best made by the Tribunal having considered all of the evidence and heard the witnesses. Conclusion 1. For the above reasons we make the following orders: 1. In so far as leave to appeal is required such leave is granted 2. The Appeal is allowed. 3. Set aside orders 1 and 2 made by the Tribunal on 27 March 2015 4. Remit the matter to the Tribunal as previously constituted to determine the following questions: 1. Did the respondent breach the implied term that the premises would be fit for its permitted use as a restaurant from the commencement of the lease? 2. Did the appellant suffer any loss by reason of any breach by the respondent of the implied term and, if so, what was the quantum of that loss? 3. Is the appellant entitled to succeed on it's claim under s 34 of the Retail Leases Act? 4. What is the effect of any findings on questions (a)-(c) above on the respondent's claim for rent and outgoings? Endnote 1. The material before the Appeal Panel included a Lessor's Disclosure Statement but no Lessee's Disclosure Statement. It is accepted by both parties that there was no Lessee's Disclosure Statement as required by the Act. However, relevantly, the representations did not appear in the Lessor's Disclosure Statement so nothing turns on this apparent factual error by the Tribunal. 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 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: 09 September 2015