Kriletich v Dee Why Projects Pty Limited [2011] NSWADT 109 (19 May 2011)

Last Updated: 1 June 2011

Administrative Decisions Tribunal New South Wales

Case Title:	Kriletich v Dee Why Projects Pty Limited
Medium Neutral Citation:	[2011] NSWADT 109
Hearing Date(s):	11 April 2011
Decision Date:	19 May 2011
Jurisdiction:	Retail Leases Division
Before:	S Higgins, Deputy President B Harrison, Non Judicial Member
Decision:	1.The applicant's retail tenancy and unconscionable conduct claim is dismissed. 2.Any party wishing to make an application for costs is to file and serve short written submissions (including the amount of costs sought) with 14 days of the publication of these reasons for decision. 3. In the event a party files submissions in regard to costs, within 14 days of receipt of these submissions, the other party is to file and serve short written submissions in reply. 4. In that event the application for costs is listed for a short hearing at 2pm on 19 July 2011.
Catchwords:	Retail lease - leased premises in a newly developed retail shopping centre - alleged pre-lease misrepresentations, misleading conduct and unconscionable conduct - lessor's tenancy fit-out manual stated that exhaust ducts to food tenancies
Legislation Cited:	Competition and Consumer Act 2010 (Cth) Fair Trading Act 1987 Retail Leases Act 1994 Trade Practices Act 1974 (Cth)
Cases Cited:	Attorney General of New South Wales v World Best Holdings [2005] NSWCA 261; (2005) NSWLR 557 Golden Harvest (Aust) Pty Limited v Paing Pty Limited [2004] NSWCA 85 Golden Harvest (Australia) Pty Ltd v Paing Pty Ltd & Ors (RLD) [2002] NSWADTAP 40 Nicolaou v GPT Re Ltd [2010] NSWADT 151
Texts Cited:
Category:	Principal judgment
Parties:	Nick Kriletich (Applicant) Dee Why Projects Pty Limited (Respondent)
Representation
- Counsel:	DH Mitchell (Respondent)
- Solicitors:	B Gelenosi (Applicant) Mallesons Stephen Jaques Solicitors (Respondent)
File number(s):	105108
Publication Restriction:

Reasons for Decision

1. On 16 July 2010, the applicant, Mr Kriletich, lodged an application with the Tribunal seeking orders, under the Retail Leases Act 1994 (RLA), against the respondent, Dee Why Projects Pty Limited for conduct that it alleged was unconscionable.

2. Dee Why Projects Pty Limited was the owner and developer of the Dee Why Grand Plaza at 834 Pittwater Road, Dee Why. In June 2009, the applicant approached the agent for the respondent and expressed an interest in leasing a shop in the Plaza. On 28 September 2009, the respondent sent an offer to lease shop 32 of the Plaza to the applicant. Subsequently, on 8 December 2009, the applicant and the respondent entered into an agreement to lease shop 32A of the Plaza. Shop 32A was formerly part of shop 32 of the Plaza. Under the agreement to lease, the lease was for a period of five years and the permitted use of shop 32A was 'Sale of Coffee, Gelato, Juice, pre packaged beverages, foccacias, and the provision of short order caf menu' (see clause 11 and item 11 of the schedule of the agreement to lease).

3. On 29 July 2010, the applicant commenced trading from shop 32A, after the fit-out of the shop 32A had been completed. It was during the preparation for the fit-out of shop 32A that the current dispute arose between the applicant and the respondent. The dispute centred on the respondent's alleged failure to provide a mechanical exhaust system for shop 32A. The applicant contended that the ' Tenancy Fit-out Manual ', prepared by the respondent in accordance with section 13A of the RLA, had represented that a mechanical exhaust system would be provided to food shops, which included shop 32A, and the respondent's failure to provide this system had effectively frustrated any benefit he could derive from the lease and caused him loss and damage.

4. On 31 August 2010, the respondent sold the Plaza to Dee Why Grand Shopping Centre, who remain the owners of the Plaza as of today. The applicant is also in dispute with the new owner of the Plaza, who locked him out of shop 32A in January this year. That dispute is the subject of other proceedings before the tribunal.

5. The applicant's application was heard on 11 April 2011.

6. At the commencement of the hearing, the solicitor for the applicant informed the Tribunal that his client's retail tenancy claim was based on alleged pre-lease misrepresentations contrary to section 10 of the RLA and misleading representations contrary to section 62D of the RLA. I made orders giving the applicant leave to amend his application accordingly as the respondent did not object to this course if the matter was heard that day on the material that had been filed by both parties.

7. It was also noted by the Tribunal that the applicant had failed to file any evidence in regard to his claim for damages. With the agreement of the respondent, through its counsel, the Tribunal proceeded to hear the evidence and submissions in regard to the issue of liability. It was agreed that I determine this issue and if liability were to be found against the respondent the application would proceed on the issue of damages after each party had filed its evidence on this issue.

8. For the reasons set out below, I have found that the applicant has failed to establish his retail leases and unconscionable conduct claim.

The evidence

9. In support of his claims, the applicant tendered into evidence an affidavit he swore on 6 July 2010 and a further affidavit dated 22 December 2010. The latter affidavit was not filed until 11 April 2011.

10. The respondent tendered into evidence an affidavit of Elese Jane Gabauer, sworn on 15 February 2011. Ms Gabauer is an interior designer and at the relevant time the company for whom she works was contracted to perform the role of retail design manager and tenancy co-ordinator for the respondent at the Plaza. In addition to Ms Gabauer's affidavit, the respondent tendered into evidence a bundle of documents and the Dee Why Grand Plaza ' Tenancy Fit-out Manual ', dated October 2008, which was provided to the applicant prior to entering into the agreement to lease.

11. The applicant and Ms Gabauer both gave oral evidence during the course of the hearing and were also extensively cross-examined.

12. Set out below is a summary of the evidence as it relates to the claims made by the applicant against the respondent.

13. The applicant first approached Mr Robin Brenchley, of Raine and Horne Commercial, the company contracted by the respondent to be its retail-leasing manager, in June 2009 (see exhibit to the affidavit of Ms Gabauer at tab 1). On 25 June 2009, the applicant, using his trading name 'Scoop N Grind', sent an email to Mr Brenchley attaching a plan for a gelato bar at the Plaza. The plan was for a small rectangular shop and it was not specified to be for any particular building or shopping centre. The plan, dated 30 April 2009, states it was prepared by Sydney Commercial Kitchens. On the following day, 26 June 2009, Mr Brenchley forwarded the plan to Ms Gabauer. Ms Gabauer responded on 30 June. In her response to Mr Brenchley she made comments about the finishes that were to be used and the quality of the fit-out generally.

14. On 12 August 2009, the applicant's solicitor wrote to Mr Brenchley, seeking clarification on a number of issues in regard to the lease of shop 32. This letter made reference to the lessor's work and included a request for the lessor to undertake some additional work (see respondent's bundle of documents at tab 2). Mr Brenchley replied to the letter of the applicant's solicitor, by email, on 17 August 2009. In response to the question as to the amount that the applicant would need to pay towards the lessor's works, Mr Brenchley responded as follows:

'9. Lessor's works that are payable does depend upon the plan submitted by your client. As you are aware, the slab is not yet laid, therefore the core holes, drainage, etc. can be laid to your client's specifications, provided the plans are received prior to this date. Costs will depend upon this design. Reconfiguration of services shall depend upon your client's design. This is detailed in the Fit out Guide, a document that Nick is in possession of. I have attached a copy for your records.'

15. It is noted that the applicant's solicitor was emailed a copy of the respondent's ' Tenancy Fit-out Manual ', by Mr Brenchley, on 25 August 2009.

16. On 28 September 2009, the applicant received a letter of offer to lease shop 32 of the Plaza from Mr Brenchley (see exhibit to the affidavit of Ms Gabauer at tab 3). The letter of offer contained details of the applicant's trading name and also the permitted use for the premises. Included in the letter of offer were the lessor's works which were identified as follows:

'Smooth concrete floor, float finish

Sprinklers to open plan

Air-conditioning to open plan

Block work walls

Two X Cat 5 cable

Three saves 99 per amp saves power to a point

One cold water pipe capped to a point

One waste pipe capped to a point

Any Lessor's works that are to be paid for by the Lessee are disclosed in the tenant's fit-out manual. Such costs to be capped at $4000.'

17. As mentioned above, on 8 December 2009, the applicant and the respondent entered into an agreement for lease for shop 32A of the Plaza. It is unclear from the material provided when shop 32 was in fact divided into two tenancies. There is a copy of a plan for the lower ground of the Plaza in which shop 32A is identified as a separate tenancy (see exhibit to the affidavit of Ms Gabauer at tab 3 page 8). This plan is dated 6 October 2009. The plan of shop 32A is nevertheless consistent with the size of the plan the applicant had originally provided to Mr Brenchley.

18. As mentioned above, on 8 December 2009, the applicant entered into an agreement to lease shop 32A at the Plaza. Page 2 of the agreement identified the landlord's works as follows:

' Landlord's work

Installation of the following:

smooth concrete floor, float finish

sprinklers to open plan

air-conditioning to open plan

block work of walls

two X Cat 5 cable

single phase 6 to 3amp power cables to a point

one cold water pipe capped to a point

one waste pipe capped to a point

Any Lessor's works that are to be paid for by the Lessee are disclosed in the tenant's fit-out manual. This work is to be capped at $4000 plus GST.'

19. The agreement to lease provided that the lease would commence on the date of the fit-out period. The fit-out period was stated to be one month from the handover date, which was stated to be the date on which the respondent gave the applicant access to the premises as provided by the lease (see clause 10.1 of the agreement to lease).

20. At the same time as being provided with the agreement to lease, the applicant was provided with the respondent's disclosure statement (see respondent's bundle of documents at tab 6). On page 2 of that document there was a list of the 'finishes, fixtures, fittings, equipment and services to be provided by the lessor.' This list was in the same terms as the list on page 2 of the agreement to lease (see paragraph 18 above).

21. It was not until early 2010 that the applicant provided Ms Gabauer with a concept design for shop 32A. On advice from Mr Brenchley, the applicant had engaged Archizone Pty Limited (Archizone) to prepare these designs and fit-out drawings on his behalf. On 27 January 2010, Ms Amanda Lee of Archizone forwarded, by email, to Ms Gabauer concept design and fit-out drawings for the applicant's shop. After several amendments and adjustments to the designs and drawings by Archizone, on or about 7 April 2010, Ms Gabauer, gave her final approval for the submitted drawings for the fit-out of shop 32A (see exhibit to the affidavit of Ms Gabauer at tab 15 page 254).

22. On or about 18 April 2010, Ms A Sanjoto, of Archizone, lodged a development application, on behalf of the applicant, with the Warringah Council (see the respondent's tender bundle at tab 7). The application contained a quote from the applicant's builder in regard to the equipment and shop fittings and joinery that was to be installed in the shop. The quote included the supply of a '4-burner with oven under'. This was consistent with the drawings that had been provided to Ms Gabauer. It is noted that the builder's quote provided to Council made no mention of supplying an exhaust canopy. The applicant's development application was approved on 17 May 2010.

23. On 4 May 2010, at the request of Ms Gabauer, Ms Lee from Archizone emailed to her a completed pro-forma ' Services Checklist ' for shop 32A (see exhibit to the affidavit of Ms Gabauer at tab 18). The purpose of the list was to inform the respondent of a tenant's proposed electrical, plumbing, mechanical and other services to be installed and used in their tenancy. Page 4 of the list related to ' Mechanical Services '. Against the heading ' Heat Generating Equipment ', Ms Lee had inserted the words: ' GRIDDLE & BURNER X 4 ' indicating that this was to be installed by the applicant. This was consistent with what had been included in the applicant's designs and drawings for shop 32A. Against the heading ' Exhaust supply ventilation ', Ms Lee had inserted the following information:

'Equipment exhaust hood dimension 148 X 150mn

Exhaust air volume 1000 LT/SMC

Supply air volume 800 LT/SMC'

24. On the same day, Ms Gabauer forwarded, by email, the applicant's completed ' Services Checklist ' to Mr Matt Fisk, the senior project manager for the development of the Plaza (see exhibit to the affidavit of Ms Gabauer at tab 20). On the following day, 5 May 2010, Mr Fisk sent an email in which he said 'they have asked for 1000 L/S. La Pettite has also asked for exhaust. Can the riser in this area accommodate those shops?' It was the evidence of Ms Gabauer that on seeing this email from Mr Fisk, this was the first time she became aware that the applicant had sought access to the respondent's exhaust ducting. It was her evidence that she subsequently had a conversation with the Plaza project manager who informed her it was not possible to extend the exhaust ducting to shop 32A. He also informed her that if the applicant's equipment was under 8kW he did not require exhaust ducting.

25. On 17 May 2010, Ms Gabauer met with the applicant's shop fitter at shop 32A for the purpose of doing a handover inspection. It was Ms Gabauer's evidence that the applicant's shop fitter did not raise any issues about exhaust ducting. The only issue that was raised was the supply of gas and the need to check the bi-fold doors. These, Ms Gabauer noted on the pro-forma ' Tenancy Handover - Inspection Record ' as being work the respondent was required to undertake (see exhibit to the affidavit of Ms Gabauer at tab 22 page 382-3). On the same day Ms Gabauer emailed a copy of her completed ' Tenancy Handover - Inspection Record ' to the applicant. The applicant acknowledged receipt of Ms Gabauer's email on 18 May 2010. On 21 May 2010 he sent another email to Ms Gabauer. In that email he said the following:

"I was advised by my builder today that there is still no knowledge as to where and when the exhaust deducting is going to be installed. Also can you advise on the handover of the water. The plumber has been needing to attach the pipes below since Monday 17 May. But I am told this does not happen till change over. Please advise."

26. Ms Gabauer responded to the applicant by email on 24 May 2010. In that email she said the following:

"It was my understanding that we were waiting to hear back from you as to how many kilowatts your oven is. If your oven is less than 8 kilowatts then you don't require extraction. There is no extraction in your tenancy and there is no way that extraction can be put in. This is because there were no requirements for extraction noted in your lease agreement.

..."

27. On 27 May 2010, Ms Gabauer sent a further email to the applicant in which she gave him details of exhaust hoods that were available for equipment under 8kW and which did not require exhaust ducting. In her email she made specific reference to the fact that she was not suggesting that this was the equipment that he should use. She said she only provided the information to show that there was cooking equipment available, which did not require exhaust ducting. Subsequently, on 28 May 2010, Ms Gabauer sent a further email to the applicant indicating that the equipment she had identified was not suitable for use without exhaust ducting.

28. It would appear that the applicant did make his own enquiries about exhaust hoods. On 29 September 2009, he wrote to the Centre Manager of the Plaza to inform him that his exhaust system complied with Council's requirements and the relevant Australian Standards in regard to the cooking equipment he was using (see the respondent's bundle of document at tab 17). In his oral evidence, the applicant explained that he had sent this letter as the new owners of the Plaza had tried to prevent him form doing any cooking.

29. In giving oral evidence the applicant acknowledged that he had seen the drawings prepared by Archizone on his behalf. This included drafts that had been prepared. In regard to the list of works to be provided by the respondent in the agreement to lease and the disclosure document, he said he understood these to be items that were in addition to that contained in the ' Tenancy Fit-out Manual. ' The applicant acknowledged that the 'griddle & burner x 4' in the ' Services Checklist ' prepared on his behalf was equipment that required a gas connection, which the respondent was to provide. He also acknowledged that this was not included in the list of work the respondent was to undertake as provided in the offer to lease, the respondent's disclosure document or the agreement to lease. In his oral evidence he also said that he at all times wanted to have a counter top deep fryer so that he could sell chips as part of his short order caf menu. At the same time he acknowledged that the design and final drawings did not include any reference to such equipment.

The applicant's retail lease claim

30. As mentioned above the applicant alleges that the respondent has breached sections 10 and 62D of the RLA. It is not disputed that the onus is on the applicant to prove his claim and that the standard of proof is on the balance of probabilities.

31. Section 10 of the RL Act relevantly provides as follows:

' 10. Right to compensation for pre-lease misrepresentation

(1) A party to a retail shop lease is liable to pay another party to the lease ("the injured party") reasonable compensation for damage suffered by the injured party's entry into a lease as a result of a false or misleading statement or representation made by the party, or any person acting under the party's authority, with knowledge that it was false or misleading.
(2) ..."

32. Section 62D of the RLA provides:

' 62D Misleading or deceptive conduct in connection with retail leases

A party to a retail shop lease must not, in connection with the lease, be engaged in conduct that is misleading or deceptive to another party to the lease or that it is likely to mislead or deceive another party to the lease.'

33. It is well accepted that 'conduct' for the purposes of section 62D includes conduct that is in the form of a representation.

34. The representation, which the applicant alleges to have been false or misleading is the statement contained in the respondent's ' Tenancy Fit-out Manual ', dated October 2008 (see Exhibit R4) (the Manual). As mentioned above, this document was provided to the applicant some time between June and 17 August 2009. The statement, which the applicant alleges to be a false or misleading representation is contained on page 29 of the Manual. The statement is in the following terms:

Exhaust ducts to food tenancies - the Lessor has provided the mechanical system for the exhaust system to food tenancies: this will be in the form of a duct within the tenancy for the retailer to connect to.

35. It is not disputed that the respondent did not provide exhaust ducting to shop 32A. It was however, provided to shop 32. The Tribunal notes that page 29 of the Manual also contained a statement about exhaust systems in non-food tenancies. In such cases the Manual said that installation of an exhaust system to these tenancies would be carried out by the Lessor, but at the cost of the retailer. It is my understanding that these exhaust systems, if needed, differed to that for food tenancies.

36. It is the respondent's contention that the statement in the Manual was not in fact a representation, when read in light of the introductory words of the Manual. These included the following paragraphs:

'Note this document is a guide only and should be read in conjunction with the Agreement to Lease and the Lease which contains provisions relating to a Retailer's legal rights and obligations as a Retailer. In the event of any inconsistency between the provisions of the Lease and this document, the provisions of the lease shall apply.

Delivery of this document does not give any estate or interest in any part of the complex or any contractual rights nor is it to be regarded as a warranty or representation in any way.'

37. I am not persuaded by this argument. As pointed out by the solicitor for the applicant, the respondent prepared the Manual in accordance with its statutory duty as provided in section 13A of the RLA, which provides that a lessee is not required to carry out any fit-out that is of a kind that is not referred to in the tenancy fit-out guide. The manual prepared by the respondent was detailed and lengthy and included what work fell within the responsibility of the Lessor and the retailer. In this regard, the pro-forma ' Service Checklist ', at page 41 of the Manual, noted that the checklist was not an opportunity 'to vary the Lessor Works provisions documented' within the Manual.

38. Accordingly, I find, on the material before the Tribunal that the respondent represented to the applicant, some time between June and 17 August 2009, to the effect that it will provide exhaust ducts to all food tenancies, including his tenancy. There does not appear to be a dispute that the applicant's shop was a food tenancy and on this basis given the events that followed, the statement or representation was ultimately misleading or false.

39. This however, does not mean that the applicant has proven his claim against the respondent. As pointed out by the respondent's counsel the applicant must also prove (a) that at the time the respondent made the statement or representation it had no reasonable basis to make it, and (b) that he relied on the statement or representation when entering the agreement to lease (see Nicolaou v GPT Re Ltd [2010] NSWADT 151 at [29]). For the reasons set out below, I find that the applicant has failed to prove either of these matters to the required standard of proof.

40. As mentioned above, the representation was made to the applicant some time prior to 17 August 2009. At that time the construction of the Plaza was incomplete and on the material before the Tribunal, shop 32A had not at that time been sectioned off from shop 32. Accordingly, the representation was as to a future matter.

41. In Golden Harvest (Aust) Pty Limited v Paing Pty Limited [2004] NSWCA 85 at [38], the Court of Appeal (per Bryson JA (with whom Beasley and Ipp JJA agreed)) said the following about alleged false and misleading statements or representations as to future matters under section 10 the RL Act:

'38 In my opinion, without attempting an exhausted exposition of the workings of s. 10, a statement or representation to the effect that the representator was to do something in the future is not in my opinion false or misleading if the representor actually intended to act in the way represented, but is misleading if the representor did not have a reasonable basis for stating that it would so act in the future. In this way the representation has the effect of a statement of the representor's present intention. Proving knowledge that the statement was false or misleading is an additional requirement; although lack of knowledge would often be proved by much the same material as absent of reasonable basis.'

42. The same principles apply to section 62D of the RLA in regard to representations as to a future matter.

43. This means that the applicant is required to prove, on the balance of probabilities, that when the respondent made its representation to him, the respondent did not have a reasonable basis to represent that the food tenancy in which he was interested would be provided with exhaust ducting: see also Golden Harvest (Australia) Pty Ltd v Paing Pty Ltd & Ors (RLD) [2002] NSWADTAP 40 at [32], which was cited with approval by the Court of Appeal at (45) and [46]. Had the RLA contained provisions along the lines of section 51A of the Trade Practises Act 1974 (Cth) (now clause 4 of Schedule 2 of the Competition and Consumer Act 2010) or section 41 of the Fair Trading Act 1987 (NSW), the onus of proof would have been on the respondent. It is difficult to understand why a provision to the similar effect has not been inserted in the RLA.

44. In my view, there is insufficient evidence before the Tribunal, which proves that at the time the representation was made, the respondent had no reasonable basis to represent that the tenancy in which he was interested would be provided with exhaust ducting. The inference to be drawn from the evidence is that, at the time the representation was made, the development plans did make provision for exhaust ducting to food tenancies. Ms Gabauer said that these tenancies included shop 32. There is no evidence to indicate that at the time the representation was made that it was made in the context of a tenancy for a yet to be identified shop, shop 32A. A plan for this shop appears not to have been made until October 2009. In this regard I note that the respondent's letter of offer for lease sent to the applicant on 28 September 2009 stated it was for shop 32 (see paragraph 16 above) and not shop 32A. As the onus is on the applicant I find that he has not proven that at the time the representation was made, the respondent had no reasonable basis to make it.

45. In regard to reliance, in his affidavit of 6 July 2010, the applicant did not say that at the time he entered the agreement to lease that he relied on the representation that the respondent would provide exhaust ducting to his tenancy. Nor does he give evidence of this fact in his affidavit of 22 December 2010. What he does say at paragraph 17 of this affidavit is the following:

'17. ... My understanding was that I would be provided with the required facilities as both shown in my drawings and represent by the TFG. ...'

46. This evidence was given in response to the affidavit evidence of Ms Gabauer about the differences in the designs and agreement to lease between shop 32A and shop 32. The difference being that the design for shop 32 made specific reference to the need for connection to the exhaust ducting. The list of Lessor's work in the agreement to lease for that shop also included 'Gas to a point' and 'Extraction (per the Tenancy Fitout Manual)'. Neither of these items were contained in the offer to lease, disclosure statement, or agreement to lease that were provided to the applicant in regard to his proposed tenancy. However, in all other respects the items on the list of Lessor's work in the documents provided to the applicant for shop 32A was the same as that contained in the agreement to lease for shop 32.

47. In my view, the affidavit evidence of the applicant is not evidence of reliance on the representation as at the time he entered the lease agreement. Had he relied on the representation one would have expected that he would have raised his concerns after he had been provided with the respondent's offer of lease, the respondent's disclosure statement, or the agreement to lease. The list of Lessor's work was the same in each document and included items that were contained in the Manual. On this basis it is difficult to accept the applicant's evidence that he thought the list in the offer, disclosure statement and agreement only included matters that were in addition to that contained in the Manual.

48. In regard to the drawings, I agree with the submissions of the respondent that these do not on their face evidence the applicant's reliance on the representation that the respondent would provide exhaust ducting to shop 32A. Nor do they suggest that the applicant would require connection to the gas mains of the lessor. It was not until 4 May 2010, when the applicant's designer provided Ms Gabauer with the applicant's ' Service Checklist ' for the shop, that it became apparent that the applicant's fit-out required connection to the exhaust ducting and the gas mains. The applicant did not file any evidence by his designer. Accordingly, there is an inference that his designer may not have given evidence, which would assist in regard to the issue of reliance by the applicant.

49. In his oral evidence the applicant explained that while he had worked in the industry, he had not previously owned, or run a retail shop. Accordingly, he was relevantly inexperienced. If I am correct in this assumption, the most likely explanation of events is that it was not until some time after he executed the agreement to lease that he, or someone on his behalf, proceeded on the assumption that his shop would be provided with access to the respondent's exhaust ducting and the gas mains because it was a food shop. When, in May 2010, it became apparent to the respondent that the applicant required these, connection to the gas main was provided but connection to the exhaust ducting was not provided. In all likelihood, it was at this time that the applicant examined more carefully the terms of the Manual. If this is correct then it cannot be said the applicant relied on the representation at the time he entered the agreement to lease.

The applicant's unconscionable conduct claim

50. Subsection 62B(1) of the RLA provides that a 'lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable.' Subsection 62B(3) sets out some of the matters which the Tribunal may have regard to for the purpose of determining whether a lessor has contravened subsection 62B(1) in connection with a retail shop lease. It is unnecessary to repeat these, other than to state that they identify circumstances where the lessor is in a stronger or more influential position than the lessee.

51. Again, the onus is on the applicant to prove his claim.

52. In Attorney General of New South Wales v World Best Holdings [2005] NSWCA 261; (2005) 63 NSWLR 557 at [119]- [121] Spiegleman CJ said the following:

'120 Unconscionability is a well-established but narrow principle in equitable doctrine. It has been applied over the centuries with considerable restraint and in a manner which is consistent with the maintenance of the basic principles of freedom of conduct. It is not a principle of what 'fairness' or 'justice' or 'good conscience' requires in the particular circumstances of the case. ...

121 Even if the concept of unconscionability in s 62B of the Retail Leases Act is not confined by equitable doctrine, as the decisions under s 51AC of the Trade Practices Act suggest, restraint in decision-making remains appropriate. Unconscionability is a concept which requires a high level of moral obloquy. If it were to be applied as it were equivalent to what is 'fair' or 'just', it could transform commercial relationships ...'

53. For the purpose of this claim, the applicant relies on the representations of the respondent in the Manual and its conduct more generally in regard to the issue of the respondent providing his tenancy with exhaust ducting.

54. In his affidavit of 6 July 2010, at paragraph 12, the applicant stated that it was industry standard for 'exhaust hoods' to be fitted to food tenancies and the respondent acknowledged this in the Manual. In his subsequent affidavit, the applicant asserted, at paragraph 24, that the respondent failed to provide the exhaust ducting to shop 32A because of the cost for doing so.

55. In my view, I cannot take these assertions any further.

56. The applicant did not provide any evidence as to the industry standard for retail premises used for the purposes described in his lease agreement. The respondent did however, tender into evidence page 45 of AS 1668.2-2002 concerning ' Mechanical Ventilation ' requirements for heated air produced by cooking equipment in the preparation of food for commercial purposes. The standard provides that microwave cookers and low powered cooking equipment used for commercial purposes are exempt from the requirements in the standard if they are used infrequently or solely for the purpose of reheating food (see respondent's bundle of documents at tab 20). As mentioned above, the applicant, on his own initiative, found that there were exhaust systems that he could use in his premises. For the purpose of this claim, I have given very little weight to the applicant's oral evidence that part of his plan was to use a counter top deep fryer. Such equipment was never identified in his designs or drawings. Nor was it included in his ' Service Checklist .'

57. There is also no evidence to support his assertion that the respondent did not extend the exhaust ducting to shop 32A because of the costs involved. As mentioned above, the evidence of Ms Gabauer was that, in her conversation with the then project manager for the Plaza, he said that 'Exhaust ducting cannot be provided in this tenancy because of limitations to the Centre's system' (see affidavit of Ms Gabauer at paragraph 45). The applicant did not produce any evidence that casts doubt on or contradicts this evidence.

58. The applicant was critical of Ms Gabauer in that she failed to pick up from his design and drawings that exhaust ducting was needed, especially as the drawings expressly included an oven and four burners. Ms Gabauer in her oral evidence said this was not her role. She said she only had regard to the list of Lessor's work as contained in the disclosure document and the agreement to lease of each tenancy. During her cross-examination, Ms Gabauer did not depart from this evidence. Even if it were accepted that Ms Gabauer had not been as observant as she could have been, in my view, at no time was her conduct of a high level of moral obloquy. Nor has the applicant produced any evidence of conduct by any other person acting on behalf of the respondent, which would fall within this category. For example, there is no evidence that indicates the respondent deliberately acted so as to prevent the applicant being provided with exhaust ducting to shop 32A.

59. As I have mentioned, the applicant has had an ongoing issue about an exhaust system in shop 32A. Whether the respondent has been involved in this ongoing dispute is unclear. In any event, from 30 August 2010 the respondent in this application ceased being the owner of the Plaza as it had been sold to new owners. As I have mentioned above, the applicant has also lodged a further application seeking orders against the new owners. That application is yet to be heard.

60. For the reasons I have stated above, I find that the applicant has failed to prove his claim of unconscionable conduct by the respondent.

Conclusion

61. On the basis of my findings the appropriate order is that the applicant's retail tenancy and unconscionable conduct claim be dismissed.
62. As the respondent has indicated that it will seek an order as to costs, it is also appropriate to make orders for the filing and serving of written submission and written submissions in reply. The matter should then be listed for a short hearing on costs, in the event an application for costs is in fact made.

I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal.


Registrar