Diehm v Peninsula Development Group (Tannum Sands) Pty Ltd [2006] RSLT 16

[2006] RSLT 16 THE RETAIL SHOP LEASES ACT In the matter of Dispute No 2005/0116 JUSTIN DIEHM -Claimant - and - PENINSULA DEVELOPMENT GROUP (TANNUM SANDS) PTY LTD -Respondent Coram: A Forbes (CHAIRMAN) Neil Judge Rosalind Hourigan AMENDED DECISION Given in Brisbane on Wednesday 5 July 2006 -- 1 of 19 -- 2 -- 2 of 19 -- 3 In February 2004 the Respondent had almost completed a new shopping centre in the township of Tannum Sands, to accommodate 18 tenants. Michelle Moss, the Respondent’s leasing manager, based in Melbourne, visited Tannum Sands regularly in search of tenants. She invited the Claimant and several other small traders in the township to move to her principal’s new premises. One such trader was Kelly Wildman, who ran the only other surf-wear shop in the area. Another was Gena Hitzke, proprietor of a fish and chip shop. Of those three traders, only the Claimant actually moved to the Respondent’s premises. The Claimant signed an offer to lease on 4 June 2004. Paragraph 18 of that document states: “We have not, nor will we, agree that yours will be the only business of its type in the centre.” The same document proceeds: “(c) The Permitted usage does not imply any form of exclusivity.” On 16 August 2004, the Claimant took a three year lease of Shop 13 with a three year option at an annual rent of $39,900 ($300 per square metre). Clause 5.2 of the lease provides: “The Landlord may allow other tenants in the Centre to carry on the same or similar uses to the Tenant’s Permitted Use.” And Clause 5.22 reads as follows: “ The Landlord may lease or license any part of the Centre for any purpose which the Landlord considers appropriate (including any purpose for which the Tenant is permitted to use the Leased Premises): and …the Tenant acquires no exclusive right to conduct any business within the Centre.” The Claimant says that he entered this transaction relying on a promise by the Respondent‘s then agent, Michelle Moss, that his surf wear shop would be the only one of its kind in the centre. He seeks compensation under section 43(2)(a) of the Retail Shop Leases Act 1994 (“the Act”), and relief for unconscionable conduct. On receipt of the Tenant’s Notice of Dispute, the Respondent applied to join the Claimant’s former solicitor as third party, on the basis that he failed to give the Claimant proper advice about the “no exclusivity” provision before signing a statutory legal-advice certificate. That application was dismissed, counsel for the Respondent conceding at the hearing that it was inappropriate. However, the Respondent sought access to the solicitor’s files relating to the subject lease. -- 3 of 19 -- 4 The Tribunal dismissed that application for reasons of relevance that are recorded in the transcript. Initially limited to the issue of liability, the hearing occupied two days, one in Gladstone and the other in Brisbane. The Claimant prepared his own material and appeared in person. The Respondent was represented by counsel and solicitor. Three witnesses gave evidence by telephone for reasons of health and distance. Each party filed written submissions. Claimant’s Allegations In particulars accompanying the Notice of Dispute the following allegations appear: “The letting manager [Moss] indicated to the [Claimant] that if he were to move his business to the Tannum Central centre it would be the only surf shop to be offered a tenancy therein. … “Specifically the lessee was assured that no other surf retailing business would be offered a tenancy in the centre and the offer of exclusivity was a part of the offer to have the [Claimant] re- locate.” And further: “When the lessee requested that the lessor provide the exclusive surf shop tenancy in writing he was told by the lessor that it would not give the guarantee in writing but a further assurance was given that the lessee would be the only surf wear store in the centre.” The notice proceeds to allege misrepresentation inducing the making of the contract, and unconscionable conduct within the meaning of s 46A of the Act. The Tribunal, in the course of the hearing, raised a question of promissory estoppel, and sought written submissions on that point. Claimant’s Evidence The statement of the Claimant, filed on 21 February 2006 was treated without objection as evidence in chief. According to that document, the Respondent’s letting agent, Michelle Moss, approached him at his old shop in March 2004, introduced herself, and invited him to move to Tannum Central. Moss, so he says, then assured him for the first time “that there would only be one surf shop” in the new centre. -- 4 of 19 -- 5 In May 2004, the Claimant learned that other traders were also assured by Moss that, if they took leases in Tannum Central, theirs would be the only businesses of their particular type in that centre. The Claimant says that he telephoned Moss on 1 June 2004, when she again assured him that, if he took a lease, his would be the only surf-wear shop in the centre, because it was too small for two shops of that kind. Subsequently he signed the subject lease, and opened his new shop in September 2004. In October 2004 Moss warned him that a major retailer of surf wear, Rush Lifestyle, was interested in coming to the centre, and asked how he felt about that prospect. When the Claimant expressed concern, Moss assured him that she would only accept Rush as a tenant if it bought the Claimant out, as there was “no room” for both it and the Claimant in Tannum Central. In October 2004 Moss left the employ of the Respondent, to be replaced by Steven Minniken. On 30 January 2005 the Claimant telephoned Minniken, who told him that Rush Lifestyle would probably be coming to the centre. The Claimant, according to his statement filed on 21 February 2006, then “reminded” Minniken that Moss had promised him that the centre would not accept a second surf-wear shop. There is corroboration in Minniken’s statement of 6 April 2006. “I recall [the Claimant’s] saying: `In my previous negotiations I was verbally assured that I would be the only surf shop’ or words to that effect.” Minniken replied that the “centre needed to be filled”, and that there was nothing he could do. By August 2005 the Claimant’s business was in decline, a process that continued in September and October. 1 He contacted Moss, now employed by the Lend Lease Corporation, and told her of his predicament. She said that she was sorry, that she “felt bad”, and that when she handed over her agency to Minniken, she told him not to give Rush Lifestyle a tenancy. In October 2005, says the Claimant, he again reminded Minniken of the assurances given to him by Moss, but Minniken said that he did not know what Moss had told him. The Claimant put his family home on the market in an endeavour to pay his debts, and closed his business on 17 December 2005. 1 Statement of Claimant, filed 21 February 2006 page 5. -- 5 of 19 -- 6 Claimant’s Oral Evidence The Claimant made no attempt to deny that, at all material times, he knew that his lease provided that “the Landlord may lease or license any part of the Centre for any purpose which the Landlord considers appropriate (including any purpose for which the Tenant is permitted to use the leased premises); and under this lease, the Tenant acquires no exclusive right to conduct any business within the Centre”.2 Indeed, his evidence would have been incredible if he had not made that admission: “We’re not arguing that point, Mr Shah”.3 His case, such as it is, depends on acceptance of his version of oral communications between himself and the Respondent’s former agent, Michelle Moss. In cross-examination of the Claimant it was properly put to him that, in fact, Moss never promised that his surf-wear shop would be the only one in the centre. He rejected that suggestion, denying that Moss merely said that his was “the only surf shop at that time”. He insisted that she told him he “would be the only surf shop at Tannum Central, not that [he was] at the moment the only one, [he] would be the only one”.4 She first gave that assurance (he said) when she canvassed his business in March 2004, and at “some time between [9 June 2004] and the time I signed for the lease”. 5 “If I had of known [sic] or if she had disclosed that [the Respondent would] bring in another surf shop, or possibly bring in another surf shop, I would never have signed.”6 In response to a question from the Chair, the Claimant did not pretend to remember the precise words used by Moss on any occasion when, according to him, the question of a second surf wear shop in the centre arose: “I can’t put words into her mouth apart from that it come across that we would be the only surf wear store in that centre. I can’t tell you that she said: `Justin, you’re going to be the only surf wear store in that centre’, or whether it was a case of: `Don’t worry about it. Once you’re, there’s no room for another surf wear store in the centre.’ … [W]hat she said to me was: “If you come over or you sign the lease, you will be the only surf wear store in that centre”, which I believed.”7 The Claimant testified that throughout negotiations with Moss he made it plain that, if he moved to Tannum Central, he would be staking his and his family’s financial security on the venture: “I laid everything out on the table … to say: “This is our last throw. If we go there and something was to happen, then we’ve 2 Lease, Clause 5.22. 3 Transcript of evidence (from now on referred to as “T”) 83. 4 T 70. 5 Statement filed 21 February 2006, page 1. 6 T 70. 7 T 112. -- 6 of 19 -- 7 gone out the back door so to speak”. Or as he told the Tribunal: “For us to move was going to take all our resources, so there was a big choice for us to make.” Moss substantially agrees with this evidence. At all material times the Claimant believed that Moss had the authority to do, and would do as she promised: “[S]he was the leasing agent, she did have the whole sway on who did come in and who didn’t come in and so I did believe her at that time.” Indeed, he was sure that “if Mrs Moss was still there to this day, I’d still be the only surf wear store in that centre.” “Up to the day [she left] she kept her promise”, so that Rush Lifestyle was “denied access into the centre until after Michelle had actually left the employ of Peninsula Development Group”. At or about the time when the Claimant signed a preliminary “offer to lease” he met Moss at the Tannum Sands Hotel, and soon afterwards, so he says, he made a rough note as follows: “9/6 Pub M Moss -- 1 + 4 not enough commitment. Explain Michelle our position last roll of dice. Told only surf shop but not clothing shop … agreed to sign.” The Claimant was fairly questioned about his failure to make more effective use of this note, and about the precision of the date that it bears, but it was not put to him that it was a fabrication, either in its claim of an assurance of de facto exclusivity, or in its approximate contemporaneity with the event recorded. However, the Claimant recognised that exclusivity had its limits, and that there would inevitably be some overlapping of goods or services provided by various tenants of the centre . Special surf wear items were to be distinguished from more common items of clothing: “Michelle had already said to me if we were to be coming over, we would be the only surf shop in that centre. She said she couldn’t give me exclusivity. However, she would guarantee me that I would be the only surf shop there; not the only clothing store but definitely the only surf store.”8 “She told me that I could not have exclusivity written into the lease because that would affect possibly other stores coming into the centre.”9 8 T 47. 9 T 50. -- 7 of 19 -- 8 And later in answer to the Chairman: “If I was to [have] exclusivity as a surf wear store or as a clothing store in the centre, it would possibly hinder another ladies wear store like “Pure Ladies Store” or a men’s wear store coming into the centre which, at that time, I had no problem with because it would probably benefit and enhance my business, but to have another surf wear store come in and virtually be selling exactly what we were selling in the size of the town it was, it just wasn’t going to work, but it was explained me that I would be the only surf store but not necessarily the only clothing store.”10 The Claimant says that he asked for the assurance in writing, and, in hindsight, admits that he was naïve to rely on Moss’s word alone, but he trusted her “even up to the time that she left”.11 After all, her assurances seemed unremarkable, and only “logical”, 12 given the small size of the centre, and the relatively small population of the town. Steven Minniken, who replaced Moss as the Respondent’s leasing agent, denied any knowledge of her promises to the Claimant, but the latter asserts: “Steve knew and I told him on a number of occasions what Michelle had said.” 13 The Claimant tendered similar fact evidence by Kelly Wildman and Gena Hitzke. No objection was taken to its admissibility. In 2004 Wildman was the proprietor of the only other surf wear store in Tannum Sands. She says that in March 2004, Moss invited her to move to the new centre, but she did not do so. If she had done so, she would not have agreed to face direct competition there: “As we spoke, I had asked her if I had signed, would they allow another surf shop into the centre as there were already two of us ... Michelle had told me that there was going to be just the one surf shop in the centre and said that the centre had acknowledged that the town was too small for a third … Yes, we would be the only one over there.”14 10 T 110. 11 T 79. 12 T 112. 13 T 73, and see Minniken’s admission that he was told of the promise in January 2005, below. 14 T 158, 160. -- 8 of 19 -- 9 There was no suggestion that Wildman had any interest in supporting the Claimant’s case. She was a business rival, who didn’t “even know his last name” before she was asked to testify in this case. 15 The final witness for the Claimant was Gena Hitzke, proprietor of a fish and chip shop. She, too, was invited to move to the new centre, but was not prepared to face direct competition there. She recalled that two representatives of the Respondent assured her that, if she agreed to move, they would not put “competitive stores in” and that “we would be the only fish and chip shop going in”, although there might be other food outlets in a more general sense.16 Hitzke, like the Claimant, understood that exclusivity did not mean that there would be no “overlapping” of goods offered by various tenants: “It was never indicated there would [not] be other food outlets, but it was indicated that we would be the only fish and chip shop.” 17 And in re-examination: MR DIEHM: So Michelle did say to you in your initial discussions that if you were to move your store down from where you were, that you would be the only fish and chip shop in the centre? A: That’s correct.18 The Respondent’s Case Principal witness for the Respondent was its former letting agent, Michelle Moss. She made a statement in writing on 5 April 2006 and gave oral evidence by telephone. Moss agreed that her first approach to the Claimant was in March 2004, but according to her, there was no discussion of how many surf shops would be admitted to the centre at that time. Between the initial contact and signing of the offer to lease, she spoke to the Claimant a “few times” by telephone, 19 and met him on four or five occasions. 20 He was naturally interested to know who else was coming to the new centre, and from time to time she “updated” him on the current “tenancy mix”. But (so she 15 T 155. 16 Statement 11 November 2005, T 166. 17 T 166. 18 T 169. 19 Statement 5 April 2006 para 7. 20 Ibid para 8. -- 9 of 19 -- 10 says) the question of exclusivity was “never discussed”, 21 although she “can recall that, at at least one of these meetings … I mentioned that [he] was, at that point in time, the only surf store going into Tannum Central.”22 Just before the Claimant signed the offer to lease, Moss met him in a builders’ shed at the part-completed centre, and took him through the terms of the offer “word by word”.23 She does not recall what she said about the exclusivity clause in particular – that clause was always the same but her normal practice was to tell prospective tenants that there was “no guarantee as to the final tenancy mix”. The Claimant did not seek any amendments to the standard form. (Later, in response to the Chairman, Moss said that she did not “think” any change was requested.) 24 Shortly after the Claimant signed the offer to lease, Moss met him at the Tannum Sands Hotel. On that occasion she “may well have said you are the only surf store at this time in Tannum Central.”25 Moss recalls another conversation with the Claimant in October 2004, after he began trading in the centre, when she told him that a surf wear chain, Rush Lifestyle, was interested in opening there. However, she told him that “it was [her] opinion that the centre could not support another surf shop, and [that she] would be unlikely to offer [Rush] a tenancy”. 26 She had also told him that she had informed Wade James (for Rush) that “the only opportunity to secure a tenancy in the centre was to buy [the Claimant] out, or words to that effect”. 27 According to Moss the Claimant was “absolutely” keen to sell out at that time. 28 The Claimant denies that. In answer to the Chairman, Moss admitted that she did not ask the Claimant whether he was willing to sell before making that suggestion to James.29 Almost a year later – in September 2005, when his business was failing badly – the Claimant telephoned Moss again. She said she was “sorry”, and that “putting a second surf store [in] is not what [she] would have done”. According to Moss the Claimant replied: “It’s not your fault because you and I never discussed the issue of the second surf shop opening. It was my lack of experience that I … didn’t ask for exclusivity,” and she replied that she would not have granted it. 30 We note that the alleged reference to “no discussion” is 21 Ibid para 11. 22 Ibid para 12. 23 Ibid para 18. 24 T 137. 25 Statement 5 April 2006 para 20. 26 Ibid para 24. 27 Ibid para 25. 28 Ibid. 29 T 138. 30 Statement 5 April 2006 para 29. -- 10 of 19 -- 11 at odds with other evidence of Moss, as well as the evidence of the Claimant. In her oral evidence, given by telephone, Moss denied promising the Claimant that he would have the only surf wear shop in the centre. However, she spoke in terms of what she would have done, rather than what she did in fact do: “What I would have said was: `At this point in time, [you] are the only surf store that [has] signed a lease at Tannum Central’. I can’t make representations about the tenancy mix in the future. Professionally, that is a breach of our code of ethics and code of conduct and I wouldn’t have said it in that way. I would have said to Mr Diehm again that, at that point in time, he was the only surf wear store and that would have been explained when we went through the exclusivity clause in the letter of offer.”31 Cross-examined by the Claimant, Moss agreed that, when she invited him to move to the centre, he told her such a move “would be our last roll of the dice … it would take all our financial resources”.32 Asked why she told Wade James (of Rush Lifestyle) that he should buy out the Claimant if he wanted a lease, Moss explained that she “didn’t think it was appropriate” to admit Rush “at that point in time” because she “thought that having [the Claimant’s shop] at Tannum Central was adequate at that time, in terms of surf wear stores”.33 Speaking to the Claimant in October 2004, she was even more definite on this point, assuring him “that [she] would not be doing a deal, a lease deal, with Rush”. 34 When she was leaving the Respondent’s employ, she told the new agent, Minniken, that it would not be “appropriate to close a lease deal with Wade James [Rush] at that time”. 35 In October 2004 she did not believe that the Claimant’s business would survive if another, similar business were admitted, and she probably thought the same months earlier, when the offer to lease was signed. 36 Moss was asked about her dealings with Hitzke (the fish shop owner) and Wildman (the surf wear vendor. She did invite Hitzke to move to Tannum Central, but they had no discussion about surf shops. Given the nature of Hitzke’s business, that is hardly surprising. 31 T 141. 32 T 134. 33 T 135. 34 T 139. 35 T 141. 36 T 140. -- 11 of 19 -- 12 Moss agreed that she approached Wildman also. But in sharp contrast to the evidence of Wildman, Moss claimed that their only conversation about Tannum Central lasted one minute, at most.37 Minniken’s Evidence Steven Minniken became the Respondent’s leasing manager in place of Moss in October 2004. He says that he and Moss never discussed the question of two surf wear shops in the centre. However, the Claimant told him in late January 2005: “In my previous negotiations I was verbally assured that I would be the only surf shop”. 38 Minniken’s oral evidence was given in the presence of his superior, Simon Morris. Asked if he had felt any sense of responsibility towards the Claimant, this witness’s responses displayed more circumlocution than a disposition to assist the Tribunal. “In the course of forming, I guess, clearly in my own mind, I ran through demographics of Tannum, etc, looked in terms of the lifestyle and situation there. I looked in terms of impact on competition, both with the now centre and other centres as well. I also, most importantly, had a need to also look at existing leasing documentation that was in place as well to check the very obvious thing in terms of exclusivities that may or may not have been granted prior to my engagement in leasing.”39 Did he consider that the introduction of two surf shops into a centre of 18 shops would be likely to send the smaller one to the wall? “No, not necessarily … It would be fair to say that I certainly gave it some consideration. I also took on board the coastal lifestyle of Tannum Sands per se. I also took on board the fact that it was said to me quite matter of factly [sic] by Wade James that he was very keen, he and his business, in establish a point of presence in the Tannum Sands area and that it wasn’t a threat but it was just the hurly burly of lease negotiations whereby if we were to fail to come to some type of commercial term, he would give serious consideration to taking up a lease at the competitive centre that we had at Boyne Plaza. He also mentioned to me that there may have been one or two, I guess you’d call them, strip centres as well within the Tannum Sands 37 T 133. 38 Statement 6 April 2006 para 5. 39 T 120. -- 12 of 19 -- 13 area that he’d also look at as well.”40 The final witness for the Respondent was its chief executive officer, Simon Morris, who was present when the evidence of other witnesses was given. Morris had no personal dealings with the Clamant: Moss was in charge of those. He instructed Moss never to “tell any tenant that it had a right of exclusivity in respect of its permitted use.” Moss told him that she at no time represented to the Claimant that he would enjoy exclusivity, “nor did she guarantee the tenancy mix” of the centre. 41 Overview of the Evidence The relevant provisions of the lease and associated documents are not, and never have been in dispute. The question is whether the Respondent, by its agent Moss, promised the Claimant that the Respondent would not exercise its rights in relation to the “tenancy mix” in his particular case. The answer to this question requires the resolution of a conflict of evidence on that essential point. It is common ground that the Claimant told Moss, at the outset, that a move to the new and more expensive centre, so far as he was concerned, was the “last throw of the dice”. 42 In other words, he faced financial ruin if his business did not prosper there. Both he and Moss knew that the centre was a relatively small one, in a township of fewer than 10,000 souls – 9000 according to the Claimant, 5000 on Moss’s estimate. The Claimant already had one competitor, namely Kelly Wildman’s “Run Coastline Clothing”. It was his firm belief – a belief shared by Moss – that his business would not survive if a competitor were installed in Tannum Central. Moss admits that the Claimant displayed a keen interest in the list of actual and potential tenancies as it developed. 43 It would not have been credible to suggest otherwise. According to Moss, she never went beyond telling the Claimant, in effect: “Yours is the only surf shop so far”. But we think it highly improbable that the Claimant, in his state of financial anxiety, would have been content to proceed on that basis, without any assurance that a competitor might be installed at any moment. It is unlikely that the Respondent, or its in-house lawyer, would have been prepared to set a precedent, or risk embarrassment vis a vis other tenants, by altering the terms of its standard-form contract – a type of document that holds an almost iconic significance for some businessmen, and even some lawyers. However, the Claimant has repeatedly sworn that Moss promised him that his would be the only surf-wear shop in the centre, and it is clear from her evidence that he was anxious, if not desperate, to be in that position. He produced an 40 T 123, 125. 41 Statement, undated, filed 7 April 2006. 42 T 134. 43 Statement 5 April 2006 para 27, T 136. -- 13 of 19 -- 14 alleged note of one such promise, and in the absence of any evidence to the contrary, we accept it as a more or less contemporary note of what he understood Moss to say in early June 2004. And according to him, she made the same promise in March. On Moss’s own account, she and the Claimant communicated on some eight or nine occasions before and after he signed his lease. With so much at stake, it is improbable that he would have been content with the placebo: “You’re the only one so far.” Naïve he may have been, in failing to take more care to reinforce the agent’s verbal assurances, but we do not think that he was so naïve as to be satisfied with the limited assurances that Moss says she gave him. Faced with a conflict in oral evidence one naturally looks for some independent support for one version or the other. A contemporary note or prior consistent statement is not in itself corroboration. 44 More significant is the undisputed fact that, when Rush Lifestyle sought entry to the centre, Moss did not merely warn the Claimant of its interest, but also decided to refuse Rush a lease, unless it bought the Claimant out. At the same time (according to the Claimant) she asked him how he felt about the prospect of a competitor. 45 We accept that evidence, which is more compatible with a request for permission than the assertion of a right. Furthermore, when Moss was leaving the Respondent’s employ, she did what she could to dissuade her successor Minniken from giving Rush a lease. (On that point we accept Moss’s evidence and reject Minniken’s.) These actions are consistent with an awareness, on Moss’s part, that she promised the Claimant rather more than progress reports on tenancy applications. Moss says that the Claimant told her in September 2005: “It’s not your fault because you and I never discussed the issue of the second surf shop opening. It was my lack of experience that I … didn’t ask for exclusivity”.46 But it is manifest from the evidence of Moss herself that they discussed the “issue” of a second surf wear shop in the centre on several occasions. It appears to us that Moss, in making that statement, was embroidering, not to say inventing, a damaging admission by the Claimant. It was one thing for her to deny making a promise of exclusivity; it was quite another for her to depict the Claimant as saying that “the issue of the second surf shop” was “never discussed”. This aspect of Moss’ evidence does not enhance her credit. Much was made of a letter to the Claimant from his former solicitor, dated 7 December 2005, which asserts that, at some earlier stage, the solicitor gave the Claimant prudential advice not to proceed with a lease containing a no-exclusivity clause – an assertion denied by the Claimant. This letter does not specify earlier written advice to that effect was given, and we note that it was written when an application to make the solicitor himself a third party was pending. It does not 44 Herrman v Nurses Board (SA) (1993) 61 SASR 325. 45 T 114, 135, 138. 46 Statement 5 April 2006 para 29. -- 14 of 19 -- 15 reveal whether the Claimant told the solicitor of Moss’s promise. If he did, it may be that the solicitor, as a cautious adviser, told his client that it would be unwise to rely on mere verbal assurances. No doubt that would have been sound advice, but, as cases cited below clearly indicate, verbal assurances are quite capable of giving rise to equities overriding powers in a written agreement. In our view, the solicitor’s letter cannot be allowed to determine the result of this inquiry. When Minniken gave oral evidence in the presence of Morris, he showed no disposition to assist the Claimant’s case. But in his statement of 6 April 2006 he conceded: “I recall [the Claimant’s] saying: `In my previous negotiations I was verbally assured that I would be the only surf shop’ or words to that effect.”47 In his written submissions, counsel for the Respondent criticised the Claimant as follows: “It is submitted that Mr Diehm, by this proceeding, is seeking to shift the blame for his own actions onto the respondent, and for the respondent to bear his loss.” But according to Minniken, the Claimant, in January 2005, was already asserting an explicit promise of de facto exclusivity. Rush Lifestyle did not come to the centre until May 2005, and according to the Claimant’s statement filed on 21 February 2006 - not challenged on this point - he did not begin to feel the ill- effects of Rush’s competition until mid-2005: “July 05 – end of financial year figures come back, we have turned over 290k in 9 months, which is double the previous year at 150k in the old location.” The Claimant had no obvious reason to “play the blame game” when he told Minniken of Moss’s promise in January 2005. The imputation of recent invention is misconceived. The evidence of Hitzke and Wildman also supports the Claimant’s case. For some reason that is not apparent, Moss was anxious to minimise the time she spent talking to Wildman. 48 However, we think it highly improbable that an experienced leasing agent, charged with the task of filling a new shopping centre, would spend a mere 30-60 seconds on a visit to a prospective lessee. Wildman recalls a much longer conversation, 49 and on that point we accept her evidence, and reject that of Moss. 47 Statement 6 April 2006. 48 T 133. 49 T 157. -- 15 of 19 -- 16 More important, however, is the evidence of both Wildman and Hitzke that Moss told them that they would have no direct competition in the centre, if they moved there. The evidence of Wildman is more significant, perhaps, because she was in the surf wear business. There is not the slightest suggestion that Hitzke and Wildman were not independent witnesses. Indeed Wildman, who was in competition with the Claimant, little if any contact with him before he asked her for a statement. It was put to Wildman that her statement was made some eighteen months after the event, 50 but the statements of Moss and Minniken were made considerably later, on 5 and 6 April 2006 respectively. We accept the evidence of Hitzke and Wildman. No objection to its admissibility was made. Whether or not it would be admissible in a court of law51 it is admissible in a tribunal that is not bound by the rules of evidence. 52 It has a rational tendency to prove that Moss did give the Claimant a sufficiently clear undertaking that the Respondent’s non-exclusivity clause would not be used to the Claimant’s detriment. The Claimant appeared in person, and was subjected to lengthy cross- examination on oath. Understandably distressed by his experience at Tannum Central, and with no experience of forensic procedure, he was at times excitable, and without a firm sense of relevance. Obviously he was unable to present his case, and to defend it, as a competent, professional advocate would have done. However, at no stage did he resile from his claim of a promise of de facto immunity from direct competition. He did not succumb to occasional temptations to embroider his story, or to claim that he take every step to secure his position that he could prudently take. He simply said that he trusted Moss, and he believed that, had she remained the Respondent’s agent, he would have remained the only specialist retailer of surf wear in the Tannum Central centre. We accept him as an honest witness, who endeavoured to tell the truth as he recalled it. As Michelle Moss gave her oral evidence by telephone the Tribunal had little opportunity to assess her demeanour. She had the benefit of examination in chief by counsel, and was only briefly and benignly cross-examined by the Claimant. By no means was she subjected to the lengthy, professional cross- examination that the Claimant encountered. 50 T 157. 51 Comparable similar facts evidence was received in Gates v CML Insurance Society Ltd (1982) 43 ALR 313. 52 Purnell v Medical Board of Queensland [1999] 1 Qd R 362; Gamble v Tune [1993] EOC 92-493. -- 16 of 19 -- 17 While it is true that Moss was no longer employed by the Respondent when she made her statement and gave her evidence, she was still doing similar work with a major developer. She may well have been conscious of a professional reputation to be defended. Indeed, in her statement of April 2006 she refers proudly and prominently to her “vast experience as a leasing executive for 15 years”.53 While on her own account she was prepared to fend off potential rivals of the Claimant while she was in sole charge of finding and selecting tenants, she may feel some embarrassment, in hindsight, about granting any concession that was not discussed with her principal or its in-house lawyer. Accordingly, on the central issues in this case we accept the evidence of the Claimant, and reject the evidence of Moss. On the balance of probabilities, we find that Moss, on several occasions, assured the Claimant that, while he continued to trade as a surf wear supplier in Tannum Central, no other business of that kind would be admitted to the centre. We find, further, that the Claimant reasonably relied on that assurance as an assurance on behalf of the Respondent, and that his reliance was fortified by Moss’s efforts to keep Rush Lifestyle away. The Respondent, at least so far as the Claimant was aware, held out Moss as wholly and solely in charge of negotiations with potential lessees, so much so that she could claim the power to decide who were acceptable tenants, and who were not. The ostensible authority of an agent is not affected by limitations or contrary instructions to which only the agent and principal are privy, and of which the third party is unaware.54 Indeed, the only evidence that Moss’s actual authority did not extend to an arrangement of the kind in question is a terse ex post facto statement by Mr Morris on 7 April 2006. In the circumstances of this case, there is nothing far-fetched or fanciful in a notion that Moss’s ostensible (if not actual) authority was sufficiently wide and flexible to extend to the promise alleged. She professes the competence and confidence of many years’ experience as a “leasing executive”. It is unlikely that the commercial discretion of such a person would be so closely controlled by her principal as she and Morris now ask us to believe. This was not a case of a casual vacancy or two. Moss had a brand new centre to fill, working within the commercial realities and limitations of a small centre in a small town. Both the Claimant and Moss believed, and had reason to believe, that the centre could support just one surf-wear shop. Certainly the standard form lease gave the Respondent the right or power to admit other shops of that kind, and the agent was unwilling to tinker with the writing, for fear of difficulties with other clients, and perhaps because of an overweening respect for lawyers’ printed forms. But the mere fact that a legal right exists does not mean that it must, or will be exercised, and in certain circumstances, it may be unconscionable to exercise it. A clause copied from a document suitable for big towns and vast shopping 53 Statement 5 April 2006 para 3. 54 Bowstead on Agency 13 th ed Article 86. -- 17 of 19 -- 18 centres may be impractical, or unfair, in a small town. In principle, it is always open to a party, who holds a certain power, to promise that it will not be used fully, or at all. We find it more probable than not that the Respondent, by its agent, did precisely that in the present case. What are the consequences of that finding? Subject to its Act, the Tribunal must apply the general law that relates to matters before it. 55 In Xin v Zakos56 it was accepted that a tribunal of the present kind may entertain a point of promissory estoppel, although the plea failed on the facts of that case. The tenant was more successful in Bischof v Werncog Pty Ltd57, where an oral promise to relax a “no exclusivity” clause prevailed over the instrument in writing. While a pre-contractual or post-contractual promise cannot vary the terms of a wholly written transaction, it may raise a promissory estoppel, preventing the maker of the promise from asserting an otherwise clear legal right contrary to the promise. At the conclusion of the hearing, the Chairman explicitly asked the parties to address the question of estoppel. The submissions of the Respondent’s counsel do not specifically deal with equitable estoppel, although they deal with unconscionable conduct. Authorities on equitable (or promissory) estoppel are set out and examined, with admirable clarity, in the judgment of Bollen J in Stevens v Standard Chartered Bank of Australia Ltd.58 His Honour refers, inter alia, to a close relationship between the modern concept of unconscionability and equitable estoppel. The judge-made law of estoppel co-exists with sections 46A and 43(2)(a) of the Act. In Stevens the defendant bank held securities which, on their face, clearly covered present and future advances, including advances to a delinquent partner of the plaintiff. However, Bollen J accepted evidence of conversations between the plaintiff and a bank employee, who, when told not to make advances to the partner, simply “did not demur”. In that respect this case is stronger than Stevens; as we have found, the Respondent’s agent affirmatively assured the Claimant, at the outset, and later, that the Respondent’s power to decide the “tenancy mix” would not be used to his detriment. Notwithstanding the provisions of the lease and associated documents, we hold that the Respondent was estopped from installing another surf wear retailer in the Tannum Central shopping centre while the Claimant traded there. 55 See Johnson Tiles Pty Ltd v Chard Roberts Constructions Pty Ltd (1993) 15 Qld Lawyer Reps 93 at 100, and the authorities on this point at 97. 56 Unreported, Administrative Decisions Tribunal NSW 30 June 2003. 57 [2005] NSWADT 241; [2005] NSW Conv R 56-108. 58 (1988) 53 SASR 323. -- 18 of 19 -- 19 Considering his financial straits, and consequent lack of professional advice, the Claimant has not slept upon his rights. It also follows from our findings of fact that, despite the written transactions, the Respondent, by its agent, made a misrepresentation to the Claimant, which induced the latter to enter into the lease, namely, that the Respondent would not admit second surf wear shop in competition with the Claimant. It follows, further that, subject to proof of actual loss or damage, the claimant is entitled to compensation under section 43(2)(a) of the Act. Interim Orders Of course the onus of proving and quantifying any compensable loss falls upon the Claimant. We note the Respondent’s counterclaim for unpaid rent, which also remains to be determined. In that respect, of course, the onus is upon the Respondent. There will be a directions hearing at a date to be fixed, to determine future proceedings in this case. A F Forbes Chairman -- 19 of 19 --