Lu v Miao [2011] NSWADT 309

Lu v Miao [2011] NSWADT 309

The Tribunal preferred the Applicants' evidence and found that the practical operation of the arrangement showed that they carried on the business for themselves as occupiers under a retail shop lease, not as managers carrying on the Respondent's business. The weekly payments to the Respondent were supported by real consideration in the lease of plant, fixtures, fittings and goodwill and were not key money. Because the arrangement had no fixed term, the Respondent was required to give reasonable notice; locking the Applicants out without such notice breached the agreement and, being illegal, grossly unreasonable, in bad faith and involving unfair tactics, was unconscionable conduct....

Jurisdiction
Australia
Judgment Date
30 December 2011
Procedural Posture
Retail Lease Application Claiming Damages for Unconscionable Conduct and Repayment of Alleged Key Money / Principal Judgment After Hearing
Outcome
Application allowed in part; declarations made that the Applicants occupied under a retail shop lease and that the Respondent engaged in unconscionable conduct; key money claim rejected; damages awarded to the Applicants.
Legal Topics
['retail Shop Lease' 'sublease or Management Agreement' 'key Money' 'termination and Lockout' 'damages']
['retail Leases' 'contract Law' 'unconscionable Conduct'] ['retail Shop Lease' 'sublease or Management Agreement' 'key Money' 'termination and Lockout' 'damages']

Case Brief

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Procedural Posture

Retail Lease Application Claiming Damages for Unconscionable Conduct and Repayment of Alleged Key Money / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether s. 5(b) of the Retail Leases Act applied because the shop was used wholly or predominantly for carrying on a business by the lessee on behalf of the lessor.' "Whether the arrangement between the parties was an informal sub-lease or a management agreement affecting the Tribunal's jurisdiction." 'Whether payments made by the Applicants to the Respondent constituted key money.' 'Whether the Respondent engaged in unconscionable conduct by locking the Applicants out of the premises.' 'What damages should be awarded for breach of contract and unconscionable conduct.']

Ratio Decidendi

The Tribunal preferred the Applicants' evidence and found that the practical operation of the arrangement showed that they carried on the business for themselves as occupiers under a retail shop lease, not as managers carrying on the Respondent's business. The weekly payments to the Respondent were supported by real consideration in the lease of plant, fixtures, fittings and goodwill and were not key money. Because the arrangement had no fixed term, the Respondent was required to give reasonable notice; locking the Applicants out without such notice breached the agreement and, being illegal, grossly unreasonable, in bad faith and involving unfair tactics, was unconscionable conduct....

Court Disposition

Application allowed in part; declarations made that the Applicants occupied under a retail shop lease and that the Respondent engaged in unconscionable conduct; key money claim rejected; damages awarded to the Applicants.

Orders

  • ['I declare that on or about 15 June 2005 the Applicants entered the premises as occupiers under a retail shop lease.' 'I declare that that Respondent was guilty of unconscionable conduct when she locked the Applicants out of the premises on 14 February 2010.' 'I declare that no monies paid by the Applicants to the...