Sze Tu v Jam Studios Pty Ltd; Jam Studios Pty Ltd v Sze Tu [2018] NSWSC 868

Supreme Court New South Wales

Medium Neutral Citation: Sze Tu v Jam Studios Pty Ltd; Jam Studios Pty Ltd v Sze Tu [2018] NSWSC 868 Hearing dates: 16-18 and 24 October 2017 Date of orders: 12 June 2018 Decision date: 12 June 2018 Jurisdiction: Common Law Before: Walton J Decision: The Court makes the following directions:

(1) The plaintiffs shall file and serve draft orders reflecting this judgment within 14 days;

(2) Within the same time period, the plaintiffs shall file and serve proposed orders regarding claims for arrears of rent, mesne profits and costs. Those orders should be accompanied by a short submission in support of the orders sought by the plaintiffs;

(3) The second defendant shall file and serve submissions in reply within 14 days of service of the proposed orders and submissions in (2) above. Catchwords: POSSESSION OF LAND – Retail Leases Act 1994 – retail shop – lease advice sheet – no lease signed – evidence adduced – rulings on admissibility – commencement of fit out without consent – negotiation of terms of a draft lease – break down of lease negotiations – notices to vacate – whether a lease between the parties existed – definition of a lease pursuant to ss 3 and 6A of the Retail Leases Act 1994 – authority of real estate agent under agency agreement – whether the real estate agent had ostensible authority – whether the agreement was ratified by the plaintiffs – no clear case for offer and acceptance of an agreement – an agreement of the intention of the parties – correspondence between parties showing continued in negotiation – no agreement for or constituting a lease found – estoppel – principles from Walton Stores (Interstate) v Mahr – factual background – no clear articulation of an assumption – no encouragement for defendant to take possession and commence fit out – no unequivocal representation that a lease was granted – no encouragement that plaintiffs committed to a lease – renegotiating terms inconsistent with any reliance being placed on representations in lease advice sheet – any reliance was unreasonable – plaintiffs' conduct was not unconscionable – no estoppel established – implied tenancy at will found – s 127 of the Conveyancing Act 1919 – termination of implied tenancy at will – alternative case if lease found – terms of lease – s 85(d) of the Conveyancing Act 1919 – failure to pay rent – abatement of rent – recoupment of rent – right to set-off – no right to set-off found – whether consent to development application was a term of the alleged lease – no basis for finding consent to development application was a term in the alleged lease – special condition to provide air-conditioning unit – breach of term to install air-conditioning – whether causation and loss suffered as result of breach – evidentiary deficiencies in proving causation and loss – evidentiary deficiencies in relation to quantification of damages – case for damages not established – entitlement to possession – unconscionable conduct – plaintiffs entitled to possession, arrears for rent and mesne profits Legislation Cited: Civil Procedure Act 2005 (NSW) Conveyancing Act 1919 (NSW) Evidence Act 1995 (NSW) Interpretation Act 1987 (NSW) Retail Leases Act 1994 (NSW) Cases Cited: Aspromonte Pty Ltd v Zagari (1999) 9 BPR 17,247; [1999] NSWSC 831 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] 1 QB 137 Celermajer Holding Pty Ltd v Kopas (2011) 16 BPR 30,735; [2011] NSWSC 40 County Securities Pty Limited v Challenger Group Holdings Pty Limited [2008] NSWCA 193 Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd (2010) 15 BPR 29,021; [2010] NSWCA 374 Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 Gnych v Polish Club Ltd (2015) 255 CLR 414; [2015] HCA 23 Javad v Aqil [1991] 1 WLR 1007 Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis [2000] VSCA 1 Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd (2008) 35 WAR 520; [2008] WASCA 23 Lin v State Rail Authority of NSW [2006] FCAFC 42 Masters v Cameron (1954) 91 CLR 353 McKinnon v Portelli (1959) 60 SR (NSW) 343 Milling v Hardy [2014] NSWCA 163 Ozden v Commonwealth Bank of Australia [2014] VSCA 127 Pacific National (ACT) Ltd v Queensland Rail [2006] FCA 91 Petersen v Moloney (1951) 84 CLR 91 Piggott v Williams (1821) 6 Madd 95; 56 ER 1027 Priestley v Priestley [2016] NSWSC 1096 Priestley v Priestley [2017] NSWCA 155 Ramsden v Dyson (1866) LR 1 HR 129 Rawson v Samuel (1841) Cr & Ph 161; 41 ER 451 Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (receiver and manager appointed) (1997) 42 NSWLR 462 Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 Turner v York Motors (1951) 85 CLR 55; [1951] HCA 52 Walton Stores (Interstate) Ltd v Mahr (1988) 164 CLR 387; [1988] HCA 7 Texts Cited: B Edgeworth, Butt's Land Law (Law Book Co, 7th ed, 2017) G E Dal Pont, Law of Agency (LexisNexis Butterworths, 3rd ed, 2014) J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (Lexis Nexis Butterworths, 5th ed, 2015) M J Weir, 'A Tenant's Right of Set-off' (1994) 68 Australian Law Journal 857 Category: Principal judgment Parties: Margaret Sze Tu (First Plaintiff / First Cross-Defendant) Shiu How Sze Tu (Second Plaintiff / Second Cross-Defendant) Shiu Shing Sze Tu (Third Plaintiff / Third Cross-Defendant) Helen Sze Tu (Fourth Plaintiff / Fourth Cross-Defendant) C H Real Estate Pty Ltd (First Defendant) Jam Studios Pty Ltd (Second Defendant / Cross-Claimant) Representation: Counsel: R P V Carey (Plaintiffs / Cross-Defendants)