Macquarie Publications Pty Ltd v Coles Supermarkets Australia Pty Ltd

1. [1]

   The plaintiff, Macquarie Publications Pty Ltd (“Macquarie Publications”), is the owner of commercial premises (“the Premises”) in Five Dock within the “Five Dock Square Shopping Centre” from which the defendant, Coles Supermarkets Australia Pty Ltd (“Coles”), conducts a supermarket business.

2. [2]

   Coles occupies the Premises pursuant to a lease made on 1 June 2016 (“the Lease”) between it and the developer of Five Dock Square, Dosto Pty Limited. The Lease is for 20 years to 1 June 2036 with four ten-year options thereafter; thus, potentially to 1 June 2066.

3. [3]

   Under the Lease, Coles pays a “Base Rent” of $1.25 million per year and a “Percentage Rent” of 2.5% of gross sales at Five Dock Square above $48 million, less historic increases in rent up to that time. Mr Conde, who appeared for Coles, said that the effect of this is that, speaking approximately, for every $1 million of gross sales over $48 million achieved by Coles at Five Dock Square, Macquarie Publications receives a little under $25,000 extra rent.

4. [4]

   Macquarie Publications also owns a 165-space basement level car park in the building to which the public, including prospective Coles’ customers, has access (“the Car Park”).

5. [5]

   Macquarie Publications purchased the Premises and the Car Park from Dosto by a contract made on 9 March 2017, which settled on 11 April 2017. Macquarie Publications then assumed Dosto’s rights and obligations under the Lease.

6. [6]

   The Five Dock Square development also includes a community library on the first floor, now owned by Canada Bay Council, and 102 privately owned residential apartments in the top five floors on the building, with associated car parking elsewhere in the basement levels. These proceedings do not concern those aspects of the development.

7. [7]

   Coles does not lease the Car Park. However, the Lease provides for certain rights and obligations in relation to the Car Park.

8. [8]

   Those provisions relate to how long Macquarie Publications must provide free parking to Car Park users.

9. [9]

   Thus, cl 13 of the Lease provides:

10. [10]

    It is common ground that the effect of cl 13(b) of the Lease is that Macquarie Publications must provide free parking for Coles’ customers, or indeed anyone, for the first hour of parking.

11. [11]

    Clause 13(c) records the parties’ agreement that the purpose of any management agreement Macquarie Publications might enter in relation to the Car Park, is to ensure regular turnover of car parking for Coles’ customers. This reflects the fact that, by reason of the Lease provision for Percentage Rent, it is in the commercial interests of both Macquarie Publications and Coles that as many customers as possible use the Car Park to shop at Coles.

12. [12]

    The matter that divides the parties is whether Macquarie Publications may impose a charge for Car Park stays between 60 minutes and two hours. That is, whether customers and others should have free parking for two hours and not merely the one hour mandated by cl 13(b).

13. [13]

    Macquarie Publications contends that:

14. [14]

    Coles contends that:

15. [15]

    There is no longer any dispute that Macquarie Publications may impose a charge for Car Park stays beyond two hours, nor as to the charges Macquarie Publications proposes to make for stays beyond two hours.

16. [16]

    The parties have been in negotiation about what charge Macquarie Publications may make for the second hour of parking since Macquarie Publications became the owner of the Car Park in April 2017. I set out the details of those negotiations below.

17. [17]

    As the parties have been unable to reach agreement, Macquarie Publications, since becoming owner of the Car Park in April 2017, has not charged car park users for car parking.

18. [18]

    In these proceedings, Macquarie Publications seeks declaratory relief to the effect that its proposed Car Park charges are “reasonable” for the purposes of cl 13(b) and seeks compensatory damages for Coles’ alleged breach of the Lease.

Decision

1. [19]

   I am not persuaded that Macquarie Publications has established that Coles has acted in breach of cl 13(b) of the Lease.

2. [20]

   The proceedings must be dismissed.

The charges made for the Second Hour prior to Macquarie Publications’ acquisition of the Premises and Car Park

1. [21]

   The Five Dock Square development was completed in around 2004. [4]

2. [22]

   Prior to 1 June 2016, the Premises were occupied by Supabarn Supermarkets Pty Limited, a company associated with Dosto.

3. [23]

   Coles occupied the Premises from on or about 1 June 2016.

4. [24]

   At that date, Dosto imposed no car parking charge for the first hour of car parking and imposed a charge of $4 for the second hour (the “Initial Parking Rates”).

5. [25]

   Shortly thereafter, on 4 July 2016, Dosto and Coles came to an arrangement, agreed to be without prejudice to Dosto’s “right to enforce the parking terms and conditions as [they] currently [exist] in the [Lease]” (the “Ad Hoc Arrangement”). Pursuant to this agreement, in exchange for Coles making an annual payment to Dosto of $31,200, Dosto agreed to impose no charge for the first two hours of Car Park use.

The negotiations between Macquarie Publications and Coles

1. [26]

   Thus, when Macquarie Publications became registered proprietor of the Premises and the Car Park in April 2017, parking was free for the first two hours.

2. [27]

   The rates for the first two hours of parking were described on the rate board outside the Car Park as:

3. [28]

   A meeting took place between Macquarie Publications and Coles in April 2017. Evidently, during that meeting a suggestion was made that Coles might agree to reduce free parking from two hours to an hour and a half.

4. [29]

   Thus, on 26 April 2017, Coles wrote to Macquarie Publications:

5. [30]

   On 15 May 2017, Macquarie Publications wrote to Coles:

6. [31]

   It is common ground that Macquarie Publications’ reference in the last paragraph to “rent” was a reference to the “additional payment” in the second paragraph. Thus, Macquarie Publications’ proposal was to maintain two hours’ free parking for customers but to increase the annual sum payable by Coles from the $31,200 negotiated with Dosto to $56,200.

7. [32]

   On 6 July 2017, Coles wrote to Macquarie Publications agreeing to the “car park fee as proposed” but saying that Coles did not agree that free parking be reduced from two hours to an hour and a half. Coles stated:

8. [33]

   In a letter to Coles dated 30 April 2018, Macquarie Publications described the improvements it proposed to introduce to the Car Park. These included a “Parking Guidance System” and a “Licence Plate Recognition” car parking system. A Parking Guidance System identifies vacant parking spaces with a green light overhead and occupied parking spaces with a red light. A Licence Plate Recognition System takes a photograph of the licence plate of the car on entry to and exit from the car park and records the time the vehicle was in the car park.

9. [34]

   Macquarie Publications continued:

10. [35]

    Macquarie Publications then proposed two options.

11. [36]

    The first option was free parking for up to an hour, $2 for a stay of up to an hour and a half and $4 for a stay of up to two hours.

12. [37]

    The second option was free parking for two hours but on the basis that Coles made an annual payment to Macquarie Publications of $148,500 plus GST.

13. [38]

    On 18 June 2018, Macquarie Publications wrote to Coles terminating “the current informal arrangements” for two hours’ free parking; that is, the Ad Hoc Arrangement originally made between Coles and Dosto, and that had continued after Macquarie Publications became owner of the premises and the Car Park.

14. [39]

    Macquarie Publications proposed that it would install a Licence Plate Recognition System and change the signage outside the Car Park to “reflect the lease requirement of one hour of free parking at the site”.

15. [40]

    On 18 July 2018, Coles wrote to Macquarie Publications rejecting Macquarie Publications’ proposal for a car parking fee applying after one hour. Instead, Coles proposed two hours of free parking on the basis of Coles making an annual payment to Macquarie Publications of $40,000.

16. [41]

    Coles stated:

17. [42]

    On 27 July 2018, Coles wrote to Macquarie Publications stating that the offer at [40] would be withdrawn unless accepted within seven days. Coles’ offer was not accepted and was thus withdrawn, with effect on or about 3 August 2018.

18. [43]

    In the meantime, on 9 July 2018, Macquarie Publications entered a “Management Agreement” with Secure Parking Pty Limited, an experienced car park manager.

19. [44]

    On 1 August 2018, Macquarie Publications instructed Secure Parking to change the signage of the Car Park to read “1 Hour Free Parking”.

20. [45]

    A sign was erected over the Car Park entrance:

21. [46]

    Another sign said:

22. [47]

    Macquarie Publications contends that these arrangements provide a “proxy” for what would have been the position had it been able to impose a charge or fee for the second hour of Car Park stays. I return to this below. [5]

23. [48]

    On 7 August 2018, Macquarie Publications wrote to Coles:

24. [49]

    Macquarie Publications continued by repeating the 30 April 2018 Proposal so far as it concerned the first two hours of car park stays: that is, free parking for the first hour, $2 for stays between an hour and an hour and a half and $4 for stays between an hour and a half and two hours. The August 2018 Proposal also proposed charges or fees for parking beyond two hours.

25. [50]

    Coles replied on 22 August 2018:

26. [51]

    The following day, Macquarie Publications wrote to Coles, noting that Coles had withdrawn the offer referred to at [40] but contending that that offer was:

27. [52]

    Macquarie Publications continued:

28. [53]

    Coles responded on 4 September 2018. That letter included:

29. [54]

    The debate continued in correspondence, including an email from Macquarie Publications to Coles, on 20 September 2018, which included:

30. [55]

    On 21 March 2019, a director of Macquarie Publications, Ms Elizabeth Poate, made a note of a meeting she had that day with Mr Gordon Smith, Coles’ State Property Manager for NSW/ACT.

31. [56]

    Ms Poate’s note read:

32. [57]

    On 11 April 2019, Mr Smith sent an email to Ms Poate, stating:

33. [58]

    Mr Smith’s statement that “charges above this are accepted” was directed to that part of the August 2018 Proposal that concerned Car Park stays over two hours.

34. [59]

    On 31 October 2019, Macquarie Publications commenced these proceedings.

35. [60]

    In June 2020, Macquarie Publications served a report by an expert parking and traffic consultant, Ms Cristina Lynn, who opined that a reasonable charge for car park stays in the second hour was $4 (the Lynn Proposal).

36. [61]

    Coles’ position throughout these negotiations was that no car parking charge was reasonable for stays up to two hours, but that instead it was prepared to pay an annual fee to Macquarie Publications.

37. [62]

    Coles’ position was summarised by Mr Conde as:

38. [63]

    I will return to this, but a summary of the negotiations concerning an annual amount payable by Coles to Macquarie Publications in exchange for two hours’ free parking is:

Secure Parking Pty Limited

1. [64]

   During the course of these negotiations, Macquarie Publications consulted with Secure Parking about car parking rates.

2. [65]

   On 6 June 2017, Secure Parking provided Macquarie Publications with a “tariff recommendation” said to be made “after a market analysis of the area and providing an analysis of our current retail and mixed use portfolio”. Secure Parking’s recommendations were a charge or fee of $2 for parking up to one and a half hours and $5 for parking between one and a half and three hours (the “Secure Parking 2017 Recommended Rates”).

3. [66]

   In the 9 July 2018 Management Agreement to which I have referred, [10] “Initial Car Parking Fees” were stated to be “$0” for up to one hour of car parking, $2 for car parking from between one and one and a half hours, and $4 for car parking between one and a half and two hours.

The various proposed rates

1. [67]

   A table summarising the various rates in the proposals outlined above is annexed to these reasons. Table - Various Proposed Rates (181528, pdf)

The proper construction of Clause 13(b) of the Lease

1. [68]

   Clause 13(b) provides that Macquarie Publications “may’ impose “a” reasonable charge or fee for car park stays of more than 60 minutes.

2. [69]

   The clause does not speak of “the” reasonable charge, thus reflecting the parties’ contemplation that more than one “reasonable” charge or fee may be available.

3. [70]

   As Mr Weinberger and Mr Jordon, who appeared for Macquarie Publications [11] submitted:

4. [71]

   The clause does not speak of a “market” charge or fee. Mr Weinberger submitted that the concept of a “reasonable” charge or fee was broader than that of “market value”. He described Coles’ reference in negotiations to “comparable retail centres” [13] as “misconceived” and “misplaced”. However, as I set out below, Macquarie Publications expert, Ms Lynn, expressed her opinion as to a “reasonable charge” or fee by reference to “comparable shopping centre car parks”. [14]

5. [72]

   Clause 13(b) makes specific provision for what must be established in order that Macquarie Publications make a charge for Car Park stays beyond an hour.

6. [73]

   First, Macquarie Publications “may impose a reasonable charge or car parking fee” for such stays.

7. [74]

   Second, such charge must be “in an amount previously agreed” with Coles, “both parties acting reasonably”.

8. [75]

   I see both of these requirements as being essential.

9. [76]

   That is, in order that Macquarie Publications be able to make a charge for parking beyond one hour, the charge it seeks to impose must be:

10. [77]

    I do not accept Mr Weinberger’s submission that the second requirement is subservient to the first, or that clause 13(b) can be read as providing no more than that Macquarie Publications’ proposed charge for parking beyond one hour, in fact, be “reasonable”.

11. [78]

    Mr Weinberger drew attention to the description by Lord Diplock in Sudbrook Trading Estate Ltd v Eggleton [15] of a provision in an option to purchase land that the price be agreed by two experts as being a “convenient and sensible machinery for ascertaining what is a fair and reasonable price”. [16]

12. [79]

    Mr Weinberger submitted that, by analogy, the parenthetical words “in an amount previously agreed between [Macquarie Publications] and [Coles], both parties acting reasonably” was “merely a convenient and sensible means for ascertaining what a ‘reasonable’ car parking fee” was.

13. [80]

    I do not agree.

14. [81]

    The words used by the parties in cl 13(b) show that they intended that the parenthetical words do more than this. Their effect is that Macquarie Publications can only impose a charge for car park stays beyond one hour if Coles has “previously agreed”. The qualifier to that requirement is that Coles must act reasonably. That is additional to the qualifier in the first requirement of the clause, namely, that the proposed charge itself be reasonable.

15. [82]

    Further, Mr Weinberger’s submissions would give the parenthetical words no work to do. If the clause means no more than that the proposed charge or fee be reasonable, the parenthetical words could be excised. Where possible, effect should be given to every part of a document and no part treated as being redundant, inoperative or surplus. [17] I do not see the parenthetical words as having been inserted merely out of an abundance of caution or because of poor drafting [18] and see no reason why clause 13(b) should be read as if those words were not present.

16. [83]

    I think Mr Conde was correct to submit that cl 13(b) does not require Coles to agree to any “reasonable charge or car parking fee for car park stays of more than 60 minutes in duration”; it requires Coles to act reasonably in working to agree to such charges or fees.

17. [84]

    I also agree with Mr Conde that, on the proper construction of cl 13(b), Coles could only be in breach of the clause if it acted unreasonably and that it is possible, on the text of the clause, and in particular circumstances, for a fee to be reasonable and for Coles to act reasonably in refusing to agree to it.

18. [85]

    An example of that circumstance might be if Macquarie proposed “a” reasonable charge or fee but that Coles itself proposed another charge fee that was also reasonable. As Mr Weinberger submitted, there will be a range of fees that will be reasonable. [19] That circumstance would or might create a deadlock. It might result in the necessity of Macquarie Publications proposing a different but reasonable charge or fee and for Coles to act reasonably in relation to that alternative proposal. I received no submissions about that possibility. For example, Mr Weinberger did not submit that the parties are unlikely to have intended such a result.

19. [86]

    In any event, this is the result of the words the parties have used. As Coles is the only significant commercial tenant of the development, and for whose customers the Car Park is primarily intended, [20] this result undoubtedly reflects Coles’ particular interest in the charge or fee imposed by Macquarie Publications for use of the Car Park.

20. [87]

    On the other hand, if, as Coles contends, Macquarie Publications’ proposed charge or fee for the second hour of parking is unreasonable, it would be hard to conclude that Coles acted unreasonably in opposing it.

What charge or fee is reasonable for the second hour?

1. [88]

   Macquarie Publications’ primary case is that the reasonable charge or fee for car parking stays for between one and two hours is $4 (the Lynn Proposal), or alternatively, $2 for car park stays of between an hour and an hour and a half and $4 for car park stays between one and a half and two hours (the August 2018 Proposal).

2. [89]

   Coles’ case is that neither of these Proposals are reasonable and that the only reasonable charge is $0.

3. [90]

   There is no suggestion that any other charge or fee is available. As Mr Conde submitted, the effect of the parties’ submissions is that there is a binary choice between the parties’ contentions. The reasonable fee is either the number of dollars for which Macquarie Publications contends, or $0.

4. [91]

   I do not propose to accept the invitation implicit in Mr Weinberger’s submission that:

5. [92]

   Macquarie Publications seeks declarations as to whether specified charges or fees are reasonable for the purpose of cl 13(b) and as to whether Coles, or it, is in breach of the Lease by failing to agree to or imposing such specified charges or fees. My task is to decide whether to grant those declarations. I am not conducting a roving enquiry as to what fees should be agreed to or imposed.

6. [93]

   Clause 13(b) provides that Macquarie Publications “may impose” a reasonable charge or fee for parking beyond one hour.

7. [94]

   Mr Weinberger submitted that the clause thus presupposes that Macquarie Publications may impose a charge or fee “of some substance” and “something greater than $0”.

8. [95]

   Mr Weinberger submitted:

9. [96]

   In my opinion, this submission begs the question of what the clause means. In any event, on no view of Coles’ position is it suggesting that Macquarie Publications “fully fund” the operation of the Car Park.

10. [97]

    Implicit in Mr Weinberger’s submission is the proposition that “$0” is incapable of being a charge or a fee. But I can see no reason why, as a matter of language, it could not be said that the “charge” or “fee” for something is “zero” or “nothing” or “$0”.

11. [98]

    Another way of expressing the same idea might be to say that there is “no charge” or “no fee” or that the thing in question is “free”.

12. [99]

    But it does not follow that “$0” is incapable of being a “charge” or “fee”.

13. [100]

    Indeed, in its Management Agreement with Secure Parking, Macquarie Publications, in terms, agreed that the “Tariff Charge” for “0-1 Hours” of parking should be “$0”. [21]

14. [101]

    “0” or “zero” is, after all, a number.

15. [102]

    In Federal Commissioner of Taxation v Ryan, [22] the High Court was invited to consider whether there could be a “nil assessment” for income tax purposes. The majority [23] considered that framing the issue for consideration in that case around whether zero was a number distracted from the real issue. [24]

16. [103]

    However, whilst agreeing with the majority in the result, Callinan J observed: [25]

17. [104]

    Further, Kirby J [26] said: [27]

18. [105]

    That case was cited with approval in Vodafone Pacific Ltd v Mobile Innovations Ltd, [28] where Giles JA stated: [29]

19. [106]

    It must follow that a “charge” or “fee” also can be “zero”, “nil” or “$0”.

20. [107]

    Here, the parties have agreed that any charge or fee be “reasonable”. It must follow, in my opinion, that it cannot be said that “$0” is incapable of being a reasonable charge or fee.

21. [108]

    Ms Lynn’s expert report is dated 15 June 2020.

22. [109]

    Ms Lynn expressed the opinion, assuming the accuracy of data gathered by Macquarie Publications using the Licence Plate Recognition System to which I have referred, [30] that a “reasonable charge” for a stay of between one and two hours in the Car Park is $4.

23. [110]

    Ms Lynn based her opinion on parking rates at 16 “[c]omparable shopping centre car parks” which she said she used “as a benchmark to assess a reasonable parking fee for stays over 60 minutes”.

24. [111]

    Ms Lynn said that she did not take into account three other shopping centre car parks which provide two hours’ free parking and that she agreed were proximate and in which there is a Coles supermarket, [31] because their “[s]ize and diversity of retail component[s] is not comparable”. I infer from this that Ms Lynn accepts that the 16 car parks do have comparable “size and diversity of retail component[s]” as exist at Five Dock Square.

25. [112]

    Of those 16 shopping centre car parks:

26. [113]

    Not one of Ms Lynn’s comparable car parks has free parking for only one hour.

27. [114]

    Ms Lynn’s reasons for her conclusion that $4 was a reasonable charge for Car Park stays of between one and two hours were that:

28. [115]

    Ms Lynn did not explain in her report how she reconciled the free parking at the 16 other sites with her conclusion that a reasonable fee for a second hour of parking at Five Dock Square was $4; nor with the implicit conclusion that it was reasonable for there to be no free parking at Five Dock during that second hour.

29. [116]

    This is especially hard to understand in circumstances where, inconsistently with Mr Weinberger’s submissions set out above, [32] Ms Lynn said she used comparable car parks as her “benchmark” to assess a “reasonable” [33] parking fee, and yet did not identify one car park that imposed a fee during the second hour. All Ms Lynn’s 16 comparable car parks allowed free parking for at least one and a half hours, nine for two hours and three for three hours.

30. [117]

    As to Ms Lynn’s reference to imposing a charge to “ensure turnover” in the Car Park, the parties agreed in clause 13(c) of the Lease that it was the entry by Macquarie Publications into a car park management agreement, such as the agreement Macquarie Publications entered with Secure Parking on 9 July 2018, [34] that was to secure this result. [35]

31. [118]

    Further, in relation to Ms Lynn’s last stated reason, that a $4 charge was the mid-range for stays of between one and two hours at four of the comparable car parks, those four car parks had free parking for one and a half hours. Ms Lynn’s reasoning here does not compare like with like as the rates to which Ms Lynn compares $4 for the second hour of parking are for either a parking period between an hour and a half and two hours or, in one case, a parking period between one and a half and two and a half hours. [36]

32. [119]

    Mr Weinberger submitted that some car parks in the Inner West area should not be seen as comparable to that of Five Dock Square because they allowed free parking either as a result of terms negotiated in the relevant lease, or because of a condition imposed by the local council on development approval.

33. [120]

    However, Ms Lynn stated that five of the shopping centre car parks she regarded as being comparable provided free parking by reason of a “condition of the major tenant’s lease”.

34. [121]

    In these circumstances, and although Ms Lynn’s evidence is the only expert evidence on this topic, I am not persuaded that a reasonable charge for the second hour of parking is $4. Indeed, Ms Lynn’s evidence as to the amount of free parking at the 16 shopping centres she states as being comparable suggests that it is not.

35. [122]

    These matters also suggest that the August 2018 Proposal is not reasonable as, like the Lynn Proposal, it proposes only one hour free parking and a charge or fee of $2 for parking between one and one and a half hours and $4 between one and a half and two hours. This is a little less than the Lynn Proposal but is more than what was charged for 12 out of 16 of Ms Lynn’s comparable shopping centre car parks.

36. [123]

    Further, there is evidence:

    1. (1)

       of Coles’ customers expressing dissatisfaction that only one hour of free parking is provided at Five Dock Square. This appears in a number of articles in the Inner West Courier of 5 July 2016 and 28 August 2018, and in customer comments recorded by Coles; and

    2. (2)

       of a negative reaction from Canada Bay Council whose officers have complained both to:

37. [124]

    Those matters also point against the reasonableness of the fees Macquarie Publications proposes.

38. [125]

    Mr Weinberger relied on a number of other matters.

39. [126]

    First, Mr Weinberger placed emphasis on the Initial Parking Rates and submitted that:

40. [127]

    Mr Weinberger also submitted that “nothing less than those rates can be unreasonable”.

41. [128]

    Macquarie Publications seeks a declaration that Coles is and remains in breach of cl 13 of the Lease in that it has failed to agree to the rates in the August 2018 Proposal, or alternatively in the Lynn Proposal. Therefore, the question must be determined by reference to the circumstances in existence at the time of those two proposals; that is 7 August 2018 and 15 June 2020 respectively.

42. [129]

    Further, the Initial Parking Rates formed no part of the reasoning in forming either the August 2018 Proposal, nor the Lynn Proposal.

43. [130]

    Mr Weinberger also pointed to the fact that the only express requirement in the Lease is for the provision of one hour of free parking. That is true, but that begs the question of what a reasonable charge or fee for the second hour of parking might be.

44. [131]

    Mr Weinberger’s submissions pointed to the capital expenditure that Macquarie Publications has undertaken to install control management facilities within the Car Park. He argued that Macquarie Publications’ reasonable expectation to recoup that capital expenditure was a factor relevant to consideration of a reasonable fee for the second hour of parking. This factor was emphasised in Macquarie Publications’ letter of 7 August 2018 in which it made the August 2018 Proposal. However, it played no role in Ms Lynn’s analysis.

45. [132]

    Overall, I am not persuaded that Macquarie Publications has established that its proposed parking rates for the second hour of parking in the Car Park are reasonable.

Did Coles act unreasonably?

1. [133]

   It is for Macquarie Publications to establish that Coles did not act reasonably in failing to agree to its proposed charge.

2. [134]

   As I have concluded that Macquarie Publications has not established that the charges or fees it proposes are reasonable, I do not see on what basis I could conclude that Coles did not act reasonably in failing to agree with them.

3. [135]

   In any event, even if Macquarie Publications’ proposed charges were reasonable, they can only impose “a” reasonable charge and the question arises as to whether the charge for which Coles contends, “$0”, was also reasonable.

4. [136]

   The car parking fees charged at the 16 comparable car parks Ms Lyn identified suggest that $0 is a reasonable charge, as 12 out of those 16 car parks provide free (ie “$0”) parking for the second hour.

5. [137]

   Further, I think Mr Conde was correct to submit that the reasonableness of Coles’ conduct falls also to be considered in light of the fact that Coles had earlier agreed, and remains willing, to pay a monthly or annual charge to Macquarie Publications, in lieu of customers paying a charge for using the Car Park for between one and two hours.

6. [138]

   On 15 May 2017, Macquarie Publications proposed that Coles pay it an annual amount of $56,200 (being a $25,000 increase on the amount that Coles had earlier agreed to pay Dosto), on the basis that Macquarie Publications would install a new car park management system and that there be one and a half hours of free parking in the Car Park with validation. [38]

7. [139]

   On 6 July 2017, Coles has said that it agreed to that proposed “car park fee” but on the basis that free parking for the first two hours be maintained. [39]

8. [140]

   From 30 April 2018, Macquarie Publications’ position was that if there were to be two hours of free parking, Coles should pay it an annual amount of $148,500. This was almost a threefold increase on the amount that Macquarie Publications had proposed, and Coles conditionally accepted, in the previous year. It was also some 50% above the revenue ($80,000 to $100,000) that Macquarie Publications then calculated it would be foregoing by not being able to charge for the second hour of parking. [40]

9. [141]

   Macquarie Publications sought this much larger charge because, according to Ms Poate, Macquarie Publications should be able to recoup through that charge amounts on account of matters such as capital and maintenance costs, as well as profit. [41]

10. [142]

    However, as Mr Conde submitted, matters such as recoupment of capital costs and seeking a profit are not apposite matters to be taken into account to calculate a charge such as that contemplated. That is because the charge was intended to be compensatory for loss of revenue from the Car Park and nothing more.

11. [143]

    Coles’ response to Macquarie Publications’ offer of $148,500 was to make its 18 July 2018 offer to exchange “two hours’ free parking at an annual fee of $40,000”. [42]

12. [144]

    The question of whether Macquarie Publications has shown that Coles acted unreasonably in relation to the charges and fees proposed by Macquarie Publications must be seen in this wider context. The fact that Coles was prepared to engage in the process, while at the same time contending for a car parking charge that was, at least arguably, reasonable, leads me to conclude that Macquarie Publications has not established that Coles’ failure to agree to its proposed charges was unreasonable.

Conclusion

1. [145]

   It follows Macquarie Publications has not established that the charges it seeks to impose for the first hour of car parking is reasonable, nor that Coles acted unreasonably in not agreeing to those charges.

2. [146]

   It follows that Macquarie Publications is not entitled to the declarations it seeks nor to damages and that the proceedings must be dismissed.

3. [147]

   It is therefore not necessary for me to consider the question of damages, nor whether Macquarie has established the truth of the car parking patterns purportedly recorded by the Licence Plate Recognition System.

4. [148]

   Nonetheless, I shall consider some aspects of these matters.

The Licence Plate Recognition System data

1. [149]

   As I have said, [43] Ms Lynn’s opinions assume the correctness of information as to car parking patterns said to have been derived from Macquarie Publications’ Licence Plate Recognition System.

2. [150]

   That evidence was derived from screen shots and Microsoft Excel spreadsheets prepared by Mr Eam Chiew Lim, the National Operations Manager at Ybern Pty Ltd (“Ybern”), a company specialising in the supply and installation of ticketless parking systems for commercial parking stations.

3. [151]

   Mr Lim described the Licence Plate Recognition System as follows:

4. [152]

   In fact, as I understand the evidence, there is currently no “payment system installed at the exit”.

5. [153]

   One such system could be a boom gate which would only open if the exiting vehicle is identified as entitled to free parking or if any required payment is made. No such boom gate appears in the photographs in Ms Lynn’s report. Mr Weinberger informed me that no such boom gate is installed. I will return to this below.

6. [154]

   Mr Lim explained that:

7. [155]

   Mr Lim said that he was able to view the data so stored, and to export it into Microsoft Excel spreadsheets.

8. [156]

   He produced:

9. [157]

   At the outset of the hearing I admitted these documents as evidence only of the fact that the Ampyx web interface produced the screenshots in question and that Mr Lim had performed the task of preparing the Excel spreadsheets.

10. [158]

    Mr Conde submitted the evidence should not otherwise be allowed because:

11. [159]

    However, I am persuaded that, by reason of s 146 of the Evidence Act 1995, that material should be received as evidence of the fact of the car parking patterns purportedly revealed by the steps taken by Mr Lim.

12. [160]

    Section 146 of the Evidence Act provides:

13. [161]

    The question is, is it is “reasonably open” to find that the “process” described by Mr Lim, [44] properly used, ordinarily produces the “outcome” of showing usage of the Car Park as set out in Mr Lim’s spreadsheets.

14. [162]

    The test of whether it is “reasonably open” to find that a device or process ordinarily produces the outcome in question has been described as “not a demanding one”. [45]

15. [163]

    In order to conclude that something is “reasonably open” it is not necessary to make a concluded finding about the matter or make a finding on the balance of probabilities. [46]

16. [164]

    It has been said that the phrase “reasonable open” is “virtually equivalent to a ‘prima facie case’”. [47]

17. [165]

    In North Sydney Leagues’ Club v Synergy Protection Agency, [48] Beazley JA [49] stated: [50]

18. [166]

    The “process”, as Mr Lim has described, is one whereby a back end database management system (ie “data stored in a computer” per North Sydney Leagues’ Club) is accessed by front end software to produce the “material generated”.

19. [167]

    Here:

20. [168]

    I think that it is “reasonably open”, in these circumstances, to conclude that the process Mr Lim has described ordinarily produces the outcome summarised by Mr Lim in his Microsoft Excel spreadsheets and that it should therefore be presumed that the process did produce that outcome.

21. [169]

    Thus, the material should be received as evidence of the fact of the reported car parking patterns.

22. [170]

    Macquarie Publications claims damages for the loss it has suffered assuming Coles acted in breach of cl 13(b) by failing to act reasonably in rejecting the August 2018 Proposal and/or the Lynn Proposal, those damages being the car parking fees it would have received had it been able to impose a charge for car park stays between one and two hours.

23. [171]

    I will return below to Macquarie Publications’ position in relation to car parking fees for stays beyond two hours.

24. [172]

    Macquarie Publications accepts that it cannot produce precise evidence of its loss because there are no means by which it can establish the exact pattern of car parking use that would have occurred had car park users been obliged to pay car parking fees for the second hour of parking.

25. [173]

    Mr Weinberger accepted that assessing how car park users would have responded to the imposition of the August 2018 Proposal and/or the Lynn Proposal at the relevant time, and the continuing car parking demand, “is entirely hypothetical and cannot be estimated with any precision”.

26. [174]

    Mr Weinberger drew attention to the observations of Hayne J [51] in Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [52] that where a plaintiff cannot adduce evidence of what has been lost “it may be that estimation, if not guesswork, may be necessary is assessing the damages to be allowed”. [53]

27. [175]

    On the other hand, there must be some basis in the evidence to reach the relevant conclusion. What cannot be done is to take a stab in the dark or pluck a figure out of the air. [54]

28. [176]

    In those circumstances, Mr Weinberger submitted that car park data for September 2018 could be used “as a reasonably accurate proxy for the pattern of car parking use that would have occurred had car park users been obliged to pay for stays over 60 minutes in duration”.

29. [177]

    As I have set out above, [55] from 1 August 2018 there were signs over the Car Park entry saying “1 Hour Free Parking” and warning of “Random Patrols” to “Ensure Compliance with Car Park Conditions” and of the possible issue of a “Non-Compliance Breach Notice” in the case of non-compliance with “Car Park Terms & Conditions”.

30. [178]

    There is evidence that these steps generated publicity in the Five Dock area. Thus, on 28 August 2018, the InnerWest Courier reported that:

31. [179]

    Coles has recorded “Store Element Comments” immediately after 1 August 2019 such as:

32. [180]

    There was also another comment made immediately before 1 August 2019:

33. [181]

    This evidence is, of course, anecdotal in nature but does suggest that, immediately after 1 August 2019, car park users are likely to have understood that there would be a charge for the second hour of parking.

34. [182]

    That suggests that parking patterns at this time will give some indication of what parking patterns would have occurred had Coles agreed that there be a charge for the second hour of parking.

35. [183]

    Mr Conde did not cavil with this proposition in his submissions in reply.

36. [184]

    The data collected from Macquarie Publications’ Licence Plate Recognition System shows that between 10 September 2018 and 9 October 2018, the car park pattern was:

37. [185]

    Thus, assuming that the car parking pattern during this period can be taken as a guide to the car parking pattern which would occur, were Macquarie Publications able to impose a charge or fee for the second hour of parking, the revenue earned during that period would be, adopting the Lynn Proposal, $4 x 2,971 = $11,164 per month.

38. [186]

    This does not take into account the revenue that, on these assumptions, has been lost for car park stays over two hours.

39. [187]

    A further question arises as to the extent to which Macquarie Publications would recover charges or fees from parkers staying between one and two hours.

40. [188]

    As I have said, there is no boom gate or other payment collection system at the Car Park exit. [56]

41. [189]

    The evidence did not disclose, and Mr Weinberger did not explain, by what means and with what degree of success Macquarie Publications would in these circumstances recover fees from parkers staying beyond an hour.

42. [190]

    On 11 April 2019, Coles told Macquarie Publications that it accepted the charges Macquarie Publications proposed to make for car parking stays over two hours. [57]

43. [191]

    Nonetheless, on the pleadings, there was still an issue about this as Coles’ List Response, filed on 15 October 2020, contested the reasonableness of all the fees in the August 2018 Proposal and the Lynn Proposal.

44. [192]

    However, from the outset of the hearing before me, Coles’ position has been that it does not contest these matters.

45. [193]

    Accordingly, were it necessary for me to assess damages, they would not include any loss of parking revenue from now on so far as concerns fees for car parking in excess of two hours.

Conclusion

1. [194]

   The proceedings must be dismissed.

2. [195]

   If there is any argument as to costs, the parties should confer and agree on a timetable for short written submissions.