Insightbox Pty Ltd v Jones Lang LaSalle (NSW) Pty Ltd

1. [1]

   The plaintiff, (Insightbox) commenced these proceedings by statement of claim filed 13 August 2024.

2. [2]

   The hearing before me on 31 October 2024 dealt with three notices of motion:

3. [3]

   The third of these motions fell away in circumstances where the second defendant has been trying for some time to return Insightbox’s bond. At the commencement of the hearing, Insightbox confirmed the relevant bank account into which the bond should be paid.

4. [4]

   The second motion in effect seeks final relief which is not appropriate at this stage. This left the motion for summary dismissal.

5. [5]

   For the reasons set out below, I have determined that the statement of claim filed 13 August 2024 should be dismissed pursuant to r 13.4 of the UCPR.

6. [6]

   I set out below the relevant factual chronology. Given the nature of the application, I do not determine any factual disputes and take them at their highest in favour of Insightbox.

7. [7]

   Insightbox has a sole director (Mr Tutoveanu). At the commencement of the hearing on 31 October 2024, I gave leave, by consent, for Mr Tutoveanu to represent Insightbox at the hearing.

8. [8]

   Mr Tutoveanu was enrolled at the University of Technology in Sydney but was “excluded…for sleeping in the classroom”, which led Mr Tutoveanu to seek “a new workspace for his research and commercial product development”.

9. [9]

   On 10 August 2023, by way of email, Mr Tutoveanu contacted the reception of The Quantum Terminal (TQT), a co-working space based in Haymarket, Sydney NSW (the Premises), which is owned by the second defendant (TAHE). The day-to-day running of TQT is managed by the first defendant (JLL), an agent of TAHE. In his email, Mr Tutoveanu sought “access to this facility to have a workspace to do [his] research…in the quantum technology field”.

10. [10]

    It is unclear the basis upon which the third defendant (Transport for NSW) has been included as a defendant in the proceedings.

11. [11]

    A follow-up email was sent by Mr Tutoveanu on 14 August 2023. The email commenced “It is Anton from last week enquiring about renting a desk,” and noted that he had since obtained an ACN and ABN for his startup, that he had “$800 + $400” for the bond and the first months’ rent, and requested that an agreement be prepared to commence 17 August 2023.

12. [12]

    On 15 August 2023, the Centre Manager for TQT responded to Mr Tutoveanu by email, noting that the earliest that the space could be available was 21 August 2023.

13. [13]

    On 17 August 2023, Mr Tutoveanu entered into a licence agreement with TAHE for the licence of one dedicated workspace desk on Level 1 of TQT (Licence Agreement). I set out below the relevant provisions of the Licence Agreement.

14. [14]

    On 18 August 2023, Mr Tutoveanu paid a security deposit of $800 (equivalent to two months’ rent) and a $400 bond.

15. [15]

    On 21 August 2023, Insightbox was granted access to TQT. At this time, Mr Tutoveanu was sleeping in his car.

16. [16]

    On 23 August 2023, Mr Tutoveanu visited the TAHE NSW office and apparently had a conversation with the receptionist, who apparently advised him to “‘wing it’ and sleep at the office”.

17. [17]

    On 24 August 2023, after exploring the facility further, Mr Tutoveanu apparently found a “better, quieter, more isolated desk at the back of Level 2” which appeared to be “available, vacant and unoccupied”. Mr Tutoveanu wrote to Mr Tony Calarco, the Community Manager for TQT, requesting to relocate to Level 2, citing sensory sensitivities stemming from his autism diagnosis. Despite being told by Mr Calarco in an email dated 25 August 2023 that the Level 2 space was “not available”, Mr Tutoveanu remained working in this area.

18. [18]

    On 26 August 2023, a Saturday, Mr Tutoveanu moved the Insightbox sign to the new Level 2 area, and prepared the area by wiping the tables, buying partitions from IKEA, renting a carpet cleaner and deep cleaning the carpet. The partitions were apparently set up to mitigate disruption from the corridor and to “provide some privacy”.

19. [19]

    On 28 August 2023, Mr Tutoveanu was asked to move back to the allocated working area on Level 1 but refused to do so. A few days later, on 1 September 2023, the Centre Manager for TAHE revoked Mr Tutoveanu’s access to TQT by email.

20. [20]

    On 5 September 2023, Ms Leah Meek, a director of JLL, emailed Mr Tutoveanu to request a suitable time for Mr Tutoveanu to collect his belongings.

21. [21]

    On 25 September 2023, JLL, in its capacity as an agent for TAHE, issued to Insightbox a notice to terminate the Licence Agreement and vacate the TQT pursuant to cl 7(e) of the Licence Agreement.

22. [22]

    Since the notice to terminate was issued, TAHE, on several occasions, has contacted Mr Tutoveanu to organise the collection of his belongings and arrange for the return of the bond. His belongings have not been collected. As set out above, the bond will now be returned.

Terms of Licence Agreement

1. [23]

   Pursuant to cl 1(a)(i) of the Licence Agreement, TAHE was required to provide Insightbox with access to and the use of “Your Premises”. “Your Premises” was defined in Item 4 of the Schedule to the Licence Agreement as “1 Dedicated Desk 01-022”.

2. [24]

   By clause 1(f) of the Licence Agreement, Insightbox acknowledged that JLL is authorised to act as the agent for TAHE and on its behalf, and that JLL does not incur any liability and accepts no obligations under the Licence Agreement in its own capacity.

3. [25]

   The Licence Agreement also imposed various prohibitions on Insightbox, including, relevantly, prohibitions on:

4. [26]

   Pursuant to cl 9(c) of the Licence Agreement, Insightbox agreed to comply with “all material terms of the” Licence Agreement, and that, in the event that TAHE determines in its “absolute discretion (acting reasonably)” that Insightbox is in breach of a material term of the Licence Agreement, TAHE may terminate the Licence Agreement with “immediate effect” (cl 7(e)).

5. [27]

   TAHE was also entitled to terminate the Licence Agreement if Insightbox breached of “any term” of the Licence Agreement and failed to “remedy that breach within reasonable notice of being requested…to do so” by TAHE (cl 7(b)). In these circumstances, TAHE had the right to terminate the Licence Agreement without further notice and had a general lien on all of Insightbox’s property at TQT.

Overview of the proceedings and their history

1. [28]

   The proceedings were commenced by statement of claim filed 13 August 2024. The substantive allegations are quite short. Paragraphs 1 to 16 are as follows:

2. [29]

   The orders sought were as follows:

3. [30]

   As set out above, Insightbox also filed two notices of motion. The first motion, dated 14 October 2024, seeks, inter alia:

4. [31]

   The second motion, dated 24 October 2024, seeks the release of the bond paid under the Licence Agreement to Insightbox. There is now no issue in relation to this.

5. [32]

   On 15 October 2024, the second and third defendants filed a notice of motion seeking an order that the statement of claim be dismissed pursuant to r 13.4 UCPR on the basis that it is frivolous and vexatious and/or does not disclose a reasonable cause of action. In the alternative, the second and third defendants sought that each paragraph of the statement of claim be struck out pursuant to r 14.28 UCPR on the basis that it does not disclose a reasonable cause of action and/or has a tendency to cause embarrassment.

6. [33]

   The hearing on 31 October 2024 principally concerned the second and third defendants’ motion of 15 October 2024. At the hearing, counsel for the second and third defendants noted that she now also represented the first defendant, who joined in support of the motion for summary dismissal.

7. [34]

   Insightbox relied on the following evidence at the hearing of the motion:

8. [35]

   The defendants relied on the following evidence at the hearing of the motion:

9. [36]

   At the conclusion of the hearing on 31 October 2024, Mr Tutoveanu indicated he wished to rely on written submissions which were subsequently provided. The defendants indicated they did not wish to provide a response. Subsequently Mr Tutoveanu sent an email to my chambers on 13 November 2024 which appeared to indicate that he wished to file an amended notice of motion, an amended statement of claim and further written submissions. No draft of this further written material was attached. My chambers responded to Mr Tutoveanu to the effect that if he wished to pursue this, he should provide copies of the further documents he wished to rely upon to the defendants so that they could then understand whether they wished to oppose the application.

10. [37]

    On 18 November 2024, Mr Tutoveanu sent an email to my chambers stating:

11. [38]

    No documents were provided to my chambers.

12. [39]

    By email dated 20 November 2024, Mr Tutoveanu sent a further email which simply stated “eta” and attached a PDF document entitled “Timetable” which set out a timetable of procedural steps that have occurred and, in lighter font, a proposed timetable for further steps.

13. [40]

    In light of the fact that no proposed amended documents have been provided, I proceed to determine the defendants’ motion.

Overview of competing positions

1. [41]

   At the hearing before me, Mr Tutoveanu contended that there were several legal causes of action, namely:

2. [42]

   Written submissions were then received from Mr Tutoveanu on 7 November 2024, pursuant to orders I made at the hearing on 31 October 2024 after Mr Tutoveanu indicated, in reply, that he wanted to file further submissions.

3. [43]

   First, Mr Tutoveanu contended that the termination of the Licence Agreement and removal of Mr Tutoveanu from TQT constituted unconscionable conduct. Mr Tutoveanu submitted that this conduct lacked empathy, did not prevent harm to Mr Tutoveanu as it is harmful to not let employees sleep somewhere safe, and placed him at risk of contracting hypothermia. Mr Tutoveanu submitted that his primary use of the Premises was to support the Insightbox business, and that his secondary activity, sleeping on the Premises, should be allowed as it sustained the primary activity.

4. [44]

   In relation to the second claim, Mr Tutoveanu submits that the prohibition on sleeping on the Premises, contained in cl 2(g)(i) of the Licence Agreement, is void as it is an unfair contract term, contrary to s 23 of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth).

5. [45]

   Third, and related to the first two claims, Mr Tutoveanu contended that his inability to afford residential accommodation in Sydney enlivened the force majeure term in the Licence Agreement, and thus the termination of the Licence Agreement due to his sleeping on the Premises was unlawful.

6. [46]

   In relation to the discrimination claim, Mr Tutoveanu contended that he was entitled, under anti-discrimination legislation, “to be provided a reasonable adjustment to a workspace” so that he could “have an equal opportunity of utilising” the Premises.

7. [47]

   Finally, Mr Tutoveanu contended that a trust existed, in which Insightbox was a beneficiary under a trust, whereby TAHE held the title of the Premises and the mere fact that Mr Tutoveanu created a “quantum tech start-up company” created an equitable interest.

8. [48]

   Counsel for the defendants submitted that the statement of claim disclosed no reasonable cause of action and that the reasonable prospects of success were so low in this case that the dictates of s 56(2) of the Civil Procedure Act 2005 (NSW) (CPA) warrant summary dismissal.

9. [49]

   In support of the submission that the relief sought by Insightbox could be “readily dispatched”, the defendants contended that:

10. [50]

    Given the period since the licence was purportedly terminated, the defendants submitted that the only remaining relief that could reasonably be sought by Insightbox is a claim for damages as articulated in the statement of claim.

11. [51]

    However, against this, the defendants submit that the statement of claim does not clearly articulate the facts which give rise to the causes of action pursued, and therefore the pleadings are vexatious and have a tendency to cause embarrassment and delay.

12. [52]

    The defendants submit that there is no contractual relationship between Insightbox and JLL, as any contractual obligations were expressly excluded in the Licence Agreement in cl 1(f). JLL was only ever acting in its capacity as agent for TAHE.

13. [53]

    Further, the defendants contend that the claim against Transport for NSW should be summarily dismissed as it is not a proper party to the proceedings and there is no cause of action stated against it in the statement of claim.

14. [54]

    As to the causes of action against TAHE, the seemingly only proper party to these proceedings, the defendants contend that:

Applicable legal principles

1. [55]

   The Court has the power to dismiss proceedings generally if it appears to the Court that the proceedings are frivolous or vexatious or if no reasonable cause of action is disclosed (r 13.4 UCPR).

2. [56]

   The Court has a similar power under r 14.28 UCPR to strike out the whole or parts of a pleading if it does not disclose a reasonable cause of action or has a tendency to cause prejudice or embarrassment.

3. [57]

   The power to summarily dismiss proceedings where there is “no reasonable cause of action” must be exercised with caution and where there is a “high degree of certainty” as to the outcome: see Simmons v Protective Commissioner of NSW [2012] NSWSC 455 (Simmons) at [27] per Davies J.

4. [58]

   The power must be interpreted giving due weight to the inclusion of the term “reasonable” and as subject to the statutory duty imposed by s 56(2) of the CPA: Simmons at [58].

5. [59]

   Further, the Court will be justified in summarily dismissing proceedings to prevent the improper utilisation of Court resources by a plaintiff prosecuting proceedings “where a defendant demonstrates that those proceedings do not have reasonable prospects of success and all the plaintiff is able to do is demonstrate that the proceedings meet the bare threshold of not being certain to fail”: Simmons at [64], cited in McDonald v Grech [2012] NSWSC 717 at [32]-[33] by Ward J, as the learned President then was.

6. [60]

   Proceedings may be considered frivolous or vexatious where the proceedings have no real prospect of resulting in a substantial remedy and involve an unjustifiable expense or use of judicial resources: Jones v Sutton (No 2) [2005] NSWCA 203.

7. [61]

   Pleadings may be struck out on the basis of having the tendency to embarrass, pursuant to r 14.28 UCPR, if the pleading is unintelligible, ambiguous or so imprecise in its identification of material factual allegations so as to deprive the other party of proper notice of the real substance of the claim: McGuirk v University of New South Wales [2009] NSWSC 1424 at [30] per Johnson J.

Determination

1. [62]

   For the reasons set out below, I have determined that the defendants’ motion of 15 October 2024 is successful and the statement of claim should be dismissed.

2. [63]

   It must be acknowledged at the outset that this case is not about Mr Tutoveanu’s personal predicament – that position invites compassion. The relevant issue is a legal one – whether the statement of claim should be summarily dismissed consistent with well understood principles.

3. [64]

   As regards JLL, it is clearly stated in the Licence Agreement to be acting as agent for TAHE. There is nothing alleged that could arguably impose direct liability against JLL.

4. [65]

   As regards Transport for New South Wales, nothing is alleged to disclose any cause of action against Transport for New South Wales. It is not a party to the Licence Agreement.

5. [66]

   That leaves TAHE – the party to the Licence Agreement with Insightbox.

6. [67]

   There is no dispute as to Mr Tutoveanu’s conduct at the Premises. He moved to Level 2, to an area he was told he had no entitlement to occupy, erected partitions, moved belongings in and slept there. He refused to move when requested. In those circumstances, there can be no dispute that various provisions of the Licence Agreement were breached, including:

7. [68]

   A breach of any of these provisions entitled TAHE to terminate the Licence Agreement (clauses 7(e) and 9(c)). Only the prohibition on sleeping clause appears to be impugned.

8. [69]

   The contention that the prohibition on sleeping is unfair is, in my view, hopeless. No plausible submission was advanced in support of it by Mr Tutoveanu by reference to the relevant provision of the ACL. Far from being unfair, the clause is a readily understandable one where the Premises provide licensees access to a particular office desk to carry out commercial operations. In any event, there were several other breaches of the Licence Agreement.

9. [70]

   The contention that TAHE somehow engaged in unconscionable conduct is similarly unarguable. The provisions of the Licence Agreement are clear. TAHE has simply enforced these provisions. There is nothing harsh, unfair or capricious in TAHE so acting in the circumstances.

10. [71]

    Mr Tutoveanu did not articulate, in any real or clear way, what conduct was said to be unconscionable as between TAHE and Insightbox.

11. [72]

    The reliance by Mr Tutoveanu on the force majeure argument is misplaced. As I understood the argument, it was contended that Mr Tutoveanu’s homelessness constituted a force majeure event. Clause 12k of the Licence Agreement contains a force majeure clause relieving a party from performing under the Licence Agreement if it is unable to act due to Force Majeure, which is defined in the usual way by listing a number of causes outside the control of a party. On no conceivable view of the law could such a clause have operation to somehow legally justify Insightbox’s conduct.

12. [73]

    In relation to the alleged discrimination claim, Mr Tutoveanu was unable to point to any section in any anti-discrimination legislation, or draw from any case law, to support his contention. Mr Tutoveanu admitted that this was not the primary cause of action. I cannot conceive of an argument entitling the plaintiff to the relief sought based on some alleged discrimination of Mr Tutoveanu. Even if there was such an argument, other issues would likely arise, including proper forum: see, for example, Maytom v Laundy [2024] NSWSC 817 at [34]-[43] per Meek J.

13. [74]

    The contention that a trust existed where somehow Insightbox was a beneficiary and TAHE the trustee is similarly hopeless. No coherent submission was advanced in support it.

14. [75]

    In the circumstances, the statement of claim does not disclose a reasonable cause of action. I have considered whether I should simply strike out the statement of claim and permit Insightbox an opportunity to seek to replead. I have decided against this course in circumstances where the underlying facts are clear and no conceivable cause of action in favour of Insightbox exists on those facts.

15. [76]

    The proceedings also involve, at their highest, preventing Insightbox from accessing a desk to apparently carry out research work. Insightbox’s annual turnover was disclosed to be minimal. Insightbox only occupied the Premises for about two weeks and has not occupied the Premises for approximately 14 months. Insightbox’s real grievance appears to be that Mr Tutoveanu was not given a place to sleep. The Licence Agreement never provided for this. Pursuit of the proceedings in these circumstances is relevantly frivolous or vexatious.

16. [77]

    The statement of claim should therefore be dismissed.

17. [78]

    There is no reason why the plaintiff should not pay the defendants’ costs of the proceedings.

18. [79]

    The Court orders that:

    1. (1)

       The statement of claim be dismissed.

    2. (2)

       The plaintiff pay the defendants’ costs of the proceedings.