Nelmeer Ashfield Pty Ltd v Farah

These proceedings concern Norma Farah’s (the defendant’s) right to occupy an area within the Ashfield Hotel (the Premises) from which she runs a restaurant. The property on which the Ashfield Hotel is situated is owned by Meerlen Pty Ltd (Meerlen). It leases the Ashfield Hotel to the plaintiff, Nelmeer Ashfield Pty Ltd (Nelmeer Ashfield), pursuant to a monthly tenancy at a monthly rent of $120,000. Nelmeer Ashfield in turn contracted with Ms Farah to give her a right to occupy the Premises for her restaurant business.

In 2014 Nelmeer purported to terminate Ms Farah’s right of occupation. She commenced proceedings in the Civil and Administrative Tribunal (the Tribunal). On 1 August 2014 the Tribunal found that she was entitled to occupy the Premises pursuant to a retail shop lease for a term of five years from 19 October 2012 to 18 October 2017 (the Original Decision).

Nelmeer Ashfield’s appeal to the Tribunal’s Appeal Panel was dismissed on 30 November 2015 (the Appeal Decision).

By summons filed on 23 December 2015 Nelmeer Ashfield seeks leave to appeal and, if leave is granted, seeks to have the Appeal Decision set aside and the interim order dissolved. Ms Farah opposes the grant of leave and submits that, if leave is granted, the appeal ought be dismissed.

The plaintiff seeks leave to appeal on the following two grounds:

In s 3 of the Retail Leases Act 1994 (NSW), “retail shop” is relevantly defined as including premises that are used for the purposes of a restaurant. The term “retail shop lease” is defined in s 3 as follows:

Section 7 of the Retail Leases Act provides:

Section 16 of the Act relevantly provides:

Section 63 of the Retail Leases Act relevantly defines “retail tenancy dispute” as meaning:

Section 70 of the Retail Leases Act relevantly defines “retail tenancy claim” as meaning any of a list of matters, including:

Section 71(1) of the Retail Leases Act provides

Section 3 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act), lists its objects, which include:

Section 36 of the CAT Act provides in part:

Section 38 of the CAT Act relevantly provides:

Section 80 of the CAT Act relevantly provides:

An “internal appeal” includes an appeal from a decision made by the Tribunal in proceedings for a “general decision”: s 32(1)(a). A “general decision” includes a decision of the Tribunal concerning the liabilities or obligations of a party to a “retail shop lease”: s 29(1) and (4). A decision made by the Appeal Panel in an internal appeal is an “appealable decision” for the purposes of s 82(1).

This Court’s jurisdiction arises from s 83 of the CAT Act, which relevantly provides:

Because of the content of the parties’ submissions it is necessary to set out the factual background, including some detail about the proceedings in the Tribunal.

Nelmeer Ashfield operates the Ashfield Hotel. It is a member of the Nelson Meers Hotel Group which operates various licensed hotels in New South Wales. Robert Aldridge is the General Manager of the Nelson Meers Hotel Group. He is not an officer of Nelmeer Ashfield.

On 14 October 2011 Nelmeer Ashfield entered into an agreement with Ms Farah for the provision of catering services in the Premises for the period of a year from 18 October 2011 (the First Agreement). The First Agreement contained a clause which required Ms Farah to provide a certificate pursuant to s 16(3) of the Retail Leases Act to Nelmeer Ashfield. On 15 October 2011 Ms Farah’s solicitor, Mr Penhall, provided such a certificate. It is common ground that the effect of the certificate was that s 16 of the Act did not apply to extend the term of the First Agreement from one year (as provided for by the terms of the First Agreement) to five years (as otherwise required by s 16(1)).

On 19 October 2012 Nelmeer Ashfield and Ms Farah entered into an agreement in similar terms to the First Agreement which was expressed to commence on 19 October 2012 and run for a period of twelve months, subject to cl 7 (which provided for termination for breach) (the Second Agreement). The “licence fee” payable by Ms Farah was $1,200 per month excluding GST.

Clause 1 of the Second Agreement provided in part:

Clause 2 of the Second Agreement provided in part:

As with the First Agreement, the Second Agreement obliged Ms Farah to provide Nelmeer Ashfield with a certificate pursuant to s 16(3). Ms Farah did not provide any such certificate. She continued to operate her restaurant business from the Premises.

In early 2014, Nelmeer Ashfield, which believed that the Second Agreement had expired (as the year from 19 October 2012 to 18 October 2013 had passed), sought tenders for provision of restaurant services at the Ashfield Hotel. Ms Farah was not the successful tenderer. On 9 April 2014 Nelmeer Ashfield issued a notice of termination pursuant to cl 2(c) of the Second Agreement which required Ms Farah to vacate the Premises by 8 May 2014.

On 6 May 2014 Ms Farah commenced proceedings in the Tribunal by filing two applications. The first (COM 14/23465) was an application for a declaration that she had a retail lease of five years (on the basis of s 16(1) of the Retail Leases Act). The second (COM 14/23468) was an application for an interim order restraining Nelmeer Ashfield from evicting her from the Premises or otherwise interfering with the conduct of her business there.

On 8 May 2014 the Tribunal (Deputy President Westgarth) made orders and gave reasons as follows:

On 30 May 2014 the Tribunal notified the parties that the “issue of preliminary jurisdiction” would be decided on the papers. As Nelmeer Ashfield contended that the Tribunal lacked jurisdiction, the directions provided that Nelmeer Ashfield was to file its submissions first and that Ms Farah was to file submissions in response. There was no direction for Nelmeer Ashfield to file submissions in reply. Nelmeer Ashfield’s submissions made no mention of s 16(5) since s 16(5) was not germane to the jurisdictional point. However, when Ms Farah put on her submissions in response for the purposes of the jurisdictional point, she addressed s 16. Nelmeer Ashfield did not put on any submissions in reply.

In support of its argument on jurisdiction, Nelmeer Ashfield argued that the Tribunal did not have jurisdiction because Ms Farah’s claim was not a retail tenancy claim (within the meaning of s 70 of the Retail Leases Act) and did not give rise to a retail tenancy dispute (within the meaning of s 63 of the Retail Leases Act) because there was no retail shop lease (within the meaning of s 3 of the Retail Leases Act). Nelmeer Ashfield argued that Ms Farah, accordingly, had no right to lodge a claim under s 71 of the Retail Leases Act.

Although the application before the Tribunal at that stage was limited to the question whether the Tribunal had jurisdiction, and the parties submissions had been directed to that issue, the Tribunal purported to decide not only that it had jurisdiction (on the basis that the Second Agreement created a retail shop lease) but also to determine the whole matter. On 1 August 2014 Senior Member Meadows, who sat in the Consumer and Commercial Division of the Tribunal, found that Ms Farah occupied the Premises pursuant to a retail shop lease, within the meaning of s 3 of the Retail Leases Act, which had a term of five years from 19 October 2012 to 18 October 2017: Farah v Nelmeer Ashfield Pty Ltd [2014] NSWCATCD 144 (the Original Decision). The Tribunal also made an interim order restraining Nelmeer Ashfield from disturbing her possession of the Premises.

When the matter came back for directions before Senior Member Meadows on 26 August 2014, Nelmeer Ashfield’s solicitor sought to have the Tribunal withdraw the findings in the Original Decision that went beyond the jurisdictional question. The question arose whether that avenue was open to the Tribunal or whether the better (or only) course was for Nelmeer Ashfield to appeal to the Appeal Panel against the Original Decision. The Tribunal noted on its record of proceedings for that day:

On that day, 26 August 2014 the Tribunal directed Nelmeer Ashfield to advise Ms Farah and the Tribunal no later than 9 September 2014 whether an appeal in relation to the “preliminary decision” had been filed.

On 9 September 2014 Nelmeer Ashfield appealed to the Appeal Panel of the Tribunal against the Original Decision. The Appeal Panel was constituted by Mr Callaghan SC (Principal Member) and Mr Titterton (Senior Member).

On the first day of the appeal, 13 February 2015, Nelmeer Ashfield sought, and was granted, leave to rely on additional evidence and make submissions on the substantive questions: namely:

The Appeal Panel refused leave to Nelmeer Ashfield to argue the point that is raised by the second ground of the summons (concerning the effect of cl 2(b) of the Second Agreement). Its refusal is addressed in more detail below in the context of whether leave to appeal should be granted by this Court.

The proceedings before the Appeal Panel were heard over three separate days: 13 February 2015, 27 April 2015 and 3 June 2015. The additional evidence before the Appeal Panel included the following:

The invoices in annexure “D” to Mr Aldridge’s affidavit show that Meerlen rendered monthly invoices to Nelmeer Ashfield for “monthly rental” of $120,000 not including GST and that Nelmeer Ashfield paid those invoices.

Mr Angyal SC, who appeared on behalf of Nelmeer Ashfield, accepted that the approach taken by the Appeal Panel was sufficient to overcome any denial of natural justice relating to s 16 that had been occasioned by the Original Decision going beyond the determination of the preliminary question of jurisdiction. In any event the operative decision for the purposes of the application for leave to appeal to this Court is the Appeal Decision: Wishart v Fraser (1941) 64 CLR 470.

Mr Smark SC, who appeared on behalf of Ms Farah in this Court, contended that leave ought not be granted with respect to the s 16 point as Nelmeer Ashfield, by not putting on submissions in reply prior to the Original Decision, had chosen not to engage with the s 16 issue that had been raised by Ms Farah. As the Appeal Panel admitted evidence and heard full submissions on s 16(5), I do not consider that anything turns on whether it was raised in the submissions that were forwarded to the Senior Member before he made the Original Decision. Moreover, s 16 did not arise on Nelmeer Ashfield’s jurisdictional argument. This matter is relevant to Ms Farah’s notice of contention which is addressed at the conclusion of these reasons.

The Appeal Panel’s decision to dismiss the appeal was published on 30 November 2015: Nelmeer Ashfield Pty Ltd v Farah [2015] NSWCATAP 252 (the Appeal Decision).

Of present relevance, the Appeal Panel noted at [60] the respective arguments of the parties in the hearing before it which, in my view, indicate that Ms Farah accepted that Nelmeer Ashfield’s right to possession of the Ashfield Hotel derived from a monthly tenancy implied from the payment of rent by s 127(1) of the Conveyancing Act 1919 (NSW), of which Meerlen was the lessor and Nelmeer Ashfield was the lessee (the Head Lease).

Nelmeer Ashfield argued that the effect of the Head Lease was to engage s 16(5) of the Retail Leases Act and thereby render s 16 inapplicable to the retail shop lease pursuant to which Ms Farah occupied the Premises. It relied on the decision of the Court of Appeal in Conoid Pty Ltd v International Theme Park Pty Ltd [2000] NSWCA 189 (Conoid). Ms Farah argued that Conoid did not apply because the relationship between Meerlen (which owned the hotel) and Nelmeer Ashfield was not at arm’s length.

The Appeal Panel rejected Nelmeer Ashfield’s argument and distinguished Conoid (on the various bases considered in more detail below). It found that Ms Farah was entitled to the benefit of a five-year lease by reason of s 16 since there was no inconsistency for the purposes of s 16(5). Its analysis of Conoid appears from the following passage:

The Appeal Panel distinguished Conoid, on the basis set out in its reasons as follows:

I note that the Appeal Panel was also critical of Nelmeer Ashfield for not squarely raising the s 16(5) point before Senior Member Meadows. For the reasons given above, I am persuaded that the s 16(5) point was not germane to the jurisdiction point raised by Nelmeer Ashfield, which was the sole matter for decision by Senior Member Meadows. Indeed, for Nelmeer Ashfield to argue the s 16(5) point would have required it to concede that there was a retail shop lease and that the Tribunal had jurisdiction.

In these circumstances, no inference can be drawn against Nelmeer Ashfield, and no criticism levelled at it, for not raising it. It was properly raised before the Appeal Panel which admitted evidence and permitted submissions beyond those raised before the Tribunal as originally constituted by Senior Member Meadows, as it was entitled to do by reason of s 80(3) of the CAT Act.

Nelmeer Ashfield also argued that cl 2(b) of the Second Agreement was a condition precedent to the formation or existence of that agreement and that, since it was not fulfilled, the Second Agreement did not come into existence and therefore was not a binding agreement at all. It contended that this argument, if accepted, would have the following effect:

The Appeal Panel, in the exercise of its discretion, refused to entertain the argument based on cl 2(b) on the ground that it could have been, but was not, raised in the Tribunal below. However, it addressed the substantive argument (in case its discretion to refuse to deal with it was later found to have miscarried) and rejected it. In this Court, Mr Angyal accepted that this point could have been, but was not, raised before Senior Member Meadows since it formed part of Nelmeer Ashfield’s challenge to the Tribunal’s jurisdiction.

Nelmeer Ashfield has identified, in the course of its submissions, the following questions of law:

I am satisfied that both of these questions amount to questions of law. For the reasons given in more detail below I consider that leave ought be granted in respect of the first question, but not in respect of the second.

I note that the formulations of the questions set out above do not appear in terms in the summons for leave to appeal. Mr Smark was critical of Nelmeer Ashfield’s failure to formulate the grounds in its summons and referred to Osland v Secretary of the Department of Justice [2010] HCA 24; 241 CLR 320 at [21] where the High Court referred to the need for “better definition of the questions of law” upon an appeal to a superior court from the Victorian equivalent of the Tribunal. I consider that the questions of law set out above are apparent from the grounds. The parties’ written and oral submissions addressed the substance of the questions. In these circumstances I do not consider that any omission to specify questions in the summons ought prevent my considering them as formulated above: the matter is to be approached as one of substance not form. I respectfully adopt what was said and the authorities referred to in Luck v Secretary, Department of Human Services [2015] FCAFC 111; 233 FCR 494 at [45]-[47] per Collier, Griffiths and Mortimer JJ.

Mr Smark submitted that the subject matter of the dispute is a sub-lease which involves the payment of rent of about $300 per week and which has 15 months to run (to 18 October 2017). He referred to the hearing before the Appeal Panel which ran over three separate days as well as the total length of time (18 months) from the filing of the application on 6 May 2014 to the publication of the decision of the Appeal Panel on 30 November 2015. Mr Smark contended that, in these circumstances, having regard to the object in s 3(d) of the CAT Act, leave ought be declined.

Mr Angyal contended that the arrangement between the parties ought to have ended in May 2014 when the notice of termination expired. He submitted further that I could not draw inferences as to the amount at stake solely by reference to the rent Ms Farah paid under the Second Agreement, since it could not be assumed that it reflected the value of possession of the Premises to Nelmeer Ashfield. I accept the force of that submission and do not regard the amount of rent Ms Farah paid for possession of the Premises as a particularly strong factor against the grant of leave.

Mr Smark further contended that the several bases on which the Appeal Panel distinguished Conoid were factually specific to the present case and that the precise factual matrix was unlikely to recur. He submitted that, in these circumstances, the Appeal Panel’s decision would be unlikely to have any particular influence on other cases, or the resolution of other disputes that were likely to come before the Tribunal. Accordingly, he submitted that there was no relevant public importance in favour of a grant of leave.

For the reasons given below I consider that the Appeal Panel was wrong to distinguish Conoid and it thereby applied the incorrect test as a matter of law and misconstrued s 16(5). If leave were not granted, there would be a risk that a body of law would develop in the Tribunal (by reason of the respect generally paid by the Tribunal and Appeal Panel to its own decisions for reasons of comity and consistency) which is inconsistent with the law as established by the Court of Appeal in Conoid and by which the Tribunal (and this Court) is bound. In my view this issue is an important one of principle and warrants a grant of leave to appeal on that question.

The question whether leave ought be granted in respect of the condition precedent question is more difficult. As set out above, the Tribunal refused, as a matter of discretion, to permit Nelmeer Ashfield to raise it but then, after dealing with the submissions in detail, rejected the argument. In this sense there is a question anterior to the condition precedent question set out above, which relates to whether the Appeal Panel’s discretion miscarried. Whether a discretion relating to a matter of procedure miscarried would not usually warrant a grant of leave.

Mr Angyal accepted that, in substance, he was seeking leave to appeal against the exercise of a discretion but submitted that the condition precedent point was a matter of general importance because of the widespread disinclination by hotel owners or operators (who may be lessees) to have their arrangements with restaurant operators converted into five-year shop leases. He contended that it was a matter of public interest to have the legal effect of cl 2(b) determined by a superior court and that, as the Appeal Panel had dealt with the question, it was appropriate to grant leave. Furthermore, I understood Mr Angyal to contend that the Appeal Panel’s discretion miscarried because it ought to have taken into account the nature of its jurisdiction, which permitted it to hear further submissions beyond those that were put before the original Tribunal.

I am not satisfied that the Appeal Panel’s discretion miscarried or that Mr Angyal has formulated a question of law arising from the exercise of the discretion (as opposed to the subsequent, substantive condition precedent question set out in (2) above) which would warrant a grant of leave.

However, for completeness, and in deference to the arguments of counsel, I shall consider, on the leave question, the underlying arguments on the condition precedent point as well as the findings of the Appeal Panel (made in the event that its discretion were found to have miscarried).

Mr Angyal called in aid the following principles of construction:

He argued that, if cl 2(b) was construed as a condition precedent to the performance of the Second Agreement, as distinct from a condition precedent to the formation of the Second Agreement, it would be invalid by reason of s 7 of the Retail Leases Act and that, accordingly, it ought be construed as a condition precedent to formation. Mr Angyal argued, on this basis, that the Second Agreement was never formed.

I regard this argument as circular in the context of a provision such as s 7 of the Retail Leases Act. In my view, the proper approach is to start by construing the words of the statute. The evident purpose of s 7 is to ensure that the policy objectives of the Retail Leases Act are met. The Act contains terms which, in large measure, alter the common law relating to leases. For example, s 3 defines retail shop leases as including arrangements which would be disqualified from being regarded as leases at common law, including because no right to exclusive possession is conferred or because the duration is uncertain. Section 16(1) has the effect of imposing a five year term irrespective of the intention of the parties. Section 7 is designed to prevent parties from setting the statute at naught by contracting out of it. It is to be construed in order to promote this object: s 33 of the Interpretation Act 1987 (NSW).

Clause 2(b) is not worded in such a way as is apt to connote a condition precedent to formation of the contract. Rather it is expressed to be “an essential term and a condition of the agreement”. The words chosen indicate that the parties intended: first, that there be an agreement; secondly, that it be an essential term that a s 16(3) certificate be provided; and, thirdly, that Nelmeer Ashfield would be entitled to terminate for breach of that term (as it is an essential term). Moreover, cl 2(b) does not specify when the s 16(3) certificate is to be provided. On Nelmeer Ashfield’s argument, there is no enforceable promise to provide the certificate at all (since there is no contract), although, under the Retail Leases Act, a certificate that is provided within six months of the retail shop lease being entered into (in this case, within six months of 19 October 2012) is effective to make the extension to five years under s 16(1) inapplicable to the lease.

The relevant principles to be applied to the determination whether a clause is to be construed as a condition precedent to the formation of a contract or a condition which is precedent to the obligation of a party to perform its part of the contract were summarised by Mason J in Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 550 in the following terms:

On the basis of these principles, I am not persuaded that cl 2(b) ought properly be construed as a condition precedent to the formation of the Second Agreement. Mr Angyal accepted that if cl 2(b) were to be construed as a condition precedent in the second sense (to the performance of the contact), it would be invalid by reason of s 7. In my view, cl 2(b) is, accordingly, invalid.

Had I been persuaded that the Appeal Panel’s discretion miscarried, I would have granted leave to appeal on the condition precedent ground (because of the general importance of the question), but dismissed the appeal for the reasons given above.

I note for completeness that both parties adduced evidence as to disputes between them relating to the present operation of the Premises. I do not regard these matters as having a significant bearing on whether leave ought be granted in the present case.

As referred to above Nelmeer Ashfield contended (and Ms Farah accepted in the proceedings before the Appeal Panel and in this Court) that the Head Lease was a monthly tenancy implied by s 127(1) of the Conveyancing Act. It was also common ground in this Court that the Second Agreement constituted a retail shop lease.

The s 16(5) ground (and the associated question of law) turned on Conoid. In Conoid Giles JA (Sheller JA agreeing) identified the “key to the issue” in the appeal as being whether the power conferred on International Theme Park Ltd (who was the party relevantly equivalent to Nelmeer Ashfield in the present case) by s 127(1) of the Conveyancing Act to give one month’s notice of termination was properly to be regarded as a term of the tenancy: [41]. Once Giles JA found that it was, his Honour held that the effect of the sub-lease, because of the extension (to five years by reason of s 16(1)), was inconsistent with the effect of the term of the tenancy for the purposes of s 16(5).

The reason was that, if the head lessor (Hartfold Lane Pty Ltd in Conoid and Meerlen in the present case) terminated the head lease, the lessee under the head lease/ sub-lessor under the sub-lease (International Theme Park Ltd in Conoid and Nelson Ashfield in the present case) would be liable in damages to the sub-lessee (Conoid Pty Ltd in Conoid and Ms Farah in the present case) for breach of the sub-lease.

In Conoid it was not contended that the prospect of the head-lessor actually terminating the head lease was a relevant consideration. Nor is there any indication in the reasons of Giles JA to that effect. Justice Giles’s reasons for finding inconsistency within the meaning of s 16(5) turned solely on a comparison of legal rights, rather than the prospect of a factual conflict or inconsistency between the respective rights of the parties to the head lease or those of the sub-lease, if it were extended to a five year term.

Justice Meagher (Sheller JA agreeing) specifically rejected Conoid Pty Ltd’s argument that because the head lease and the sub-lease could co-exist, there was no relevant inconsistency for the purposes of s 16(5).

Justice Giles’s reasons are, in my view, inconsistent with the proposition that the prospect of a head lease being terminated is germane to the operation of s 16(5). The following passage from his Honour’s reasons makes it clear that the Court of Appeal regarded the potential for the head lease and sub-lease to co-exist as a matter of fact as irrelevant:

In the present case the Appeal Panel distinguished Conoid. It assessed the actual risk of termination of the Head Lease and considered whether the Head Lease and the Sub-Lease were likely to be able to continue together as a matter of practical reality. It decided that, because of the relationship between Meerlen and Nelmeer Ashfield, there was no real prospect that Meerlen would terminate the Head Lease while Ms Farah was in possession under the five year Sub-Lease and, accordingly, there was no relevant inconsistency for the purposes of s 16(5). The Appeal Panel adopted the approach for which Conoid Pty Ltd contended in Conoid, which was rejected by the Court of Appeal.

In these circumstances it is necessary to consider the bases on which the Appeal Panel distinguished Conoid which are listed in the extract of its reasons set out above.

There was no evidence that Mr Aldridge was an officer of either Nelmeer Ashfield or Meerlen; indeed the evidence was that he was not. The evidence did not establish whether Meerlen was a member of the Nelson Meers Hotel Group, of which Mr Aldridge was manager. It is common ground that Mr Aldridge signed the Second Agreement on behalf of Nelmeer Ashfield. Mr Smark withdrew an earlier submission that Mr Aldridge had authority on behalf of Meerlen (relevantly, as Head Lessor) to consent to the Second Agreement.

Mr Smark confirmed that he did not submit either that Nelmeer Ashfield had engaged in any fraud or that the Head Lease from Meerlen to Nelmeer Ashfield was a “device” or a sham. He did, however, submit that if leave were granted and the appeal allowed in the present case on the Conoid point, the incorporation of a separate entity as a head lessor to a lessee/ sublessor “could become a device” which would subvert the operation of s 16, through the application of s 16(5).

The answer to Mr Smark’s argument that a head lease could become a device for subverting the effect of s 16 is to be found in the judgment of Giles JA in Conoid at [42], where his Honour said (in answer to a similar argument put on appeal in that case):

For these reasons I do not regard the identity of the shareholders and directors of Meerlen and Nelmeer Ashfield as a matter which entitled the Appeal Panel to distinguish Conoid.

I do not regard this matter as raising any point additional to those addressed in the reasons above. It would be germane if the relevant approach were to assess the prospects of the Head Lease being terminated if the sub-lease were for a period of five years. For the reasons given above, this approach was rejected in Conoid. Accordingly, the fact of common management is immaterial, at least in the absence of an allegation of fraud or sham.

Although this is a difference, I do not understand any basis on which it could be said to be a relevant distinction. I am not persuaded that the provenance of the monthly tenancy is material to the approach sanctioned in Conoid.

Once again, this matter would be germane to the factual question of the prospects of the Head Lease being terminated if the Sub-Lease were for a term of five years. However, this factual question is irrelevant for the purposes of s 16(5) for the reasons given in Conoid.

Mr Smark noted that cl 1(b) of the Second Agreement (and the First Agreement) set out above appeared to proceed on the basis that Nelmeer Ashfield “owned” the Premises and observed that there was nothing in its provisions to alert Ms Farah to the possibility of there being a Head Lease. Mr Smark noted that the first Ms Farah heard of the Head Lease was when the matter was before the Appeal Panel.

In my view, the use of the word “owned” in the Second Agreement was descriptive, rather than promissory. It was not said to found any estoppel. As a matter of common usage the term is apt (depending on the context) to refer to the interest of a lessee, as well as to the interest of the lessor, or registered proprietor. There was no reason to disregard the separate corporate personalities of Meerlen and Nelson Ashfield. I do not consider this factor to constitute a relevant distinction from Conoid.

This matter would be germane to the factual question of the prospects of the Head Lease being terminated if the sub-lease were for a term of five years. However, this factual question is irrelevant for the reasons given in Conoid.

The effect of Conoid in the present case is that, because of the inconsistency between the terms of the Head Lease and a five-year retail shop lease to Ms Farah, s 16 does not apply.

The Appeal Panel was, accordingly, bound by Conoid to find that:

In these circumstances the Appeal Panel ought to have allowed the appeal against the Original Decision (and set aside the declaration) and dissolved the interim restraining orders. Accordingly, it is appropriate for this Court to set aside these orders pursuant to s 83(3)(a).

Ms Farah relied on a notice of contention in which she contended that: the Appeal Panel ought not have permitted Nelmeer Ashfield to raise the issue of s 16(5), as it did not raise the issue before Senior Member Meadows; and that the Appeal Panel failed to give adequate reasons for permitting Nelmeer Ashfield to raise it.

I have already addressed the procedural history of the matter. For the reasons given above, I am satisfied that the issue relating to s 16(5) of the Retail Leases Act did not arise before Senior Member Meadows, who was solely to determine a matter of preliminary jurisdiction. Indeed, it would have been inconsistent with Nelmeer Ashfield’s contention on jurisdiction for it to address it.

In these circumstances, it was open to Nelmeer Ashfield to raise the question before the Appeal Panel and open to the Appeal Panel to decide to deal with it. The Appeal Panel was bound to seek to give effect to the “guiding principle” set out in s 36 of the CAT Act, which required it to implement its practice and procedure so as to facilitate the resolution of the issues between the parties in such a way that the costs to the parties is proportionate to the importance and complexity of the subject matter: s 36(1) and (4). I discern no error in the Appeal Panel’s approach in deciding to determine the s 16(5) point itself, having regard to its powers under s 80(3)(a) and (b) of the CAT Act and the “guiding principle” referred to above. I consider its reasons to be sufficient to explain why it took that course.

I make the following orders: