Business Law (PACC 6009) Assignment: Phoebe vs. Paula Sellers

This Business Law assignment addresses a problem question involving a lease agreement between Phoebe and Paula Sellers. The assignment uses the IRAC method (Issue, Rule, Application, Conclusion) to analyze the legal issues. It examines the enforceability of lease terms, particularly regarding exclusivity and potential damages. Key legal principles are discussed, drawing upon cases like Tramways Advertising Pty Ltd v Luna Park, Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, and Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited, along with relevant sections of the Retail Leases Act 1994. The application section applies these legal principles to the facts, evaluating Phoebe's potential legal claims, considering the lease terms, and the concept of deceptive conduct. The conclusion offers a final assessment of Phoebe's ability to claim damages based on the analysis.

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student
Name of the University
Author Note

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Issue
The issue in the given scenario is what legal action may be taken by Phoebe and whether
she would be successful in such legal action.
Rule
The case of Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd [1938] NSW 37 shall
be considered to be an important case in relation to the given scenario. In this case, it was said
that any particular party who was aggrieved, shall have the entitlement to terminate or dismiss
due to any violation of a specific term that may have been caused by the other party, irrespective
of the seriousness or penalties of the violation. The ‘appropriate test’ shall be considered to be
the test in connection to essentiality.
The case of Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961]
EWCA 7 shall be considered to be a relevant case in this regard. In this particular case, it was
stated that the party who is aggrieved, shall not have any kind of entitlement to terminate or
dismiss the agreement simply because of any violation by the other involved party regarding any
specific term. If the violation of a term does not give rise to the likelihood or probability that the
aggrieved party may be deprived in relation to the entire or portion of the benefit, which is
expected by the aggrieved party from the whole agreement.
The case of Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007]
HCA 61 must be regarded as a significant case concerning the provided scenario. In this case, it
was stated that the right of the aggrieved party to dismiss or terminate the agreement shall rest
upon the rigorousness relating to the violation and the consequence of the violation. The
importance and gravity in relation to the violation shall determine that whether the dismissal or

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the termination can be permitted or whether the aggrieved party shall be able to file a suit for
damages. If there is a probability that the violation give rise to serious consequences, then the
aggrieved party shall have the entitlement to terminate the agreement.
Section 62D as provided in the Retail Leases Act enforced in the year of 1994, shall be
regarded as a relevant legislation in relation to the given scenario. In this particular section, it had
been stated that any particular party who is involved in a lease regarding retail shop, should not,
in relation to the lease, be engaged in any kind of conduct or comportment that might be
deceptive or misleading to any other party who is involved in the lease.
The case of NB2 Pty Ltd v P.T. Ltd [2018] NSWCA 10 shall be considered to be a
significant case in this regard. In this case, a lease was negotiated between the landlord and the
tenant. When the negotiations were being conducted, the tenant made an attempt to acquire
individuality and exclusiveness with the purpose to retail fresh vegetables and fruits inside the
shopping center. After several discussions and deliberations over a period of several months, it
was agreed by the landlord that a specific clause would be included in the Lease, in relation to
the fact that the tenant shall be given with exceptionality and exclusiveness only in connection to
the ‘Fresh Food Precinct’ portion in the shopping center. The exclusivity shall be extended only
in favor of the tenant as the single 'independent' retailer concerning fresh vegetables and fruits.
However, the landlord allowed and leased a shop to another retailer in the same business, namely
Franklins Supermarket. The landlord leased the shop to Franklins in the portion of the ‘Fresh
Food Precinct’. It was held that no deceptive and misleading conduct existed from the landlord’s
side. The reason for such decision as per the court was that the first deliberation and the second
deliberation in relation to the lease agreement were not actually established by the landlord as the
landlord had all the time upheld that the degree or quantum relating to the exclusivity that it may

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provide was as mentioned in the lease. The third deliberation was established by landlord,
however, it never had the meaning as per the contentions of the tenant. Hence, it was held by the
Court of Appeal that no unconscionable conduct or comportment existed from the side of the
landlord as no promises had been forwarded by the landlord to the tenant in relation to the fact
that the tenant may enjoy complete exclusivity in relation to the sales regarding all the fresh
vegetables and fruits in the area of ‘Fresh Food Precinct’. This particular case highlights the
significance regarding retail lessees to review the projected lease and the deliberations of
landlord in a careful manner in order to ensure and confirm that the provisions, which have been
agreed upon, actually adheres to the expectations of the lessee and deliver suitable protection in
relation to the lessee.
Section 62E shall be considered to be an important legislation in relation to the provided
scenario. According to the section mentioned above, it may be said that any party or a previous
party who was involved in a lease regarding retail shop, and who suffered a damage or loss due
to the deceptive and misleading conduct or comportment of any other party who is involved in
the lease, shall be able to recuperate the amount or quantum in relation to damage or loss, by
filing a suit for claim against the party who committed such conduct. The party who is aggrieved
shall be able to file a claim as per the provisions provided in section 71 of the Act mentioned
above.
Application
In the given scenario, Phoebe signed a lease with Paula Sellers (Downtown Pty Ltd). Two
specific terms of the lease agreement stated that the involved parties shall not be obligated to
perform any actions, which are not mentioned in the lease agreement and Downtown shall not be
accountable in relation to any loss that may be suffered due to any alterations to Downtown. A

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separate statement was agreed upon by the parties, which stated that only a particular kind of
shop shall exist in all the shopping plazas, and the interests of the tenant shall be protected by
Paula Sellers.
Applying Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd [1938] NSW 37 in the
given scenario, it may be said that Phoebe shall have the entitlement to terminate or dismiss due
to any violation of a specific term that may have been caused by Paula, irrespective of the
seriousness or penalties of the violation.
Applying Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA
7, it may be said that Phoebe shall not have any kind of entitlement to terminate or dismiss the
agreement simply because of any violation by Paula regarding any specific term. It must be
proved by Phoebe that damages has been suffered by her due to the violation of Paula.
Applying Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007]
HCA 61, it may be said that the right of Phoebe to dismiss or terminate the agreement shall rest
upon the rigorousness relating to the violation and the consequence of the violation.
Applying section 62D as provided in the Retail Leases Act enforced in the year of 1994
in the given scenario, it may be stated that any particular party who is involved in a lease
regarding retail shop, should not, in relation to the lease, be engaged in any kind of conduct or
comportment that might be deceptive or misleading to any other party who is involved in the
lease.
The case of NB2 Pty Ltd v P.T. Ltd [2018] NSWCA 10 shall be applied in this regard. It
was held by the Court of Appeal that no unconscionable conduct or comportment existed from
the side of the landlord as no promises had been forwarded by the landlord to the tenant in

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relation to the fact that the tenant may enjoy complete exclusivity in relation to the sales
regarding all the fresh vegetables and fruits in the area of ‘Fresh Food Precinct’. This particular
case highlights the significance regarding retail lessees to review the projected lease and the
deliberations of landlord in a careful manner in order to ensure and confirm that the provisions,
which have been agreed upon, actually adheres to the expectations of the lessee and deliver
suitable protection in relation to the lessee. In the given scenario, even though the promise
relating to exclusivity was forwarded by Paula towards Phoebe, however, such promise was
separately declared, and it was agreed by both parties that this declaration would be kept
confidential. Moreover, a specific term of the lease agreement stated that the involved parties
shall not be obligated to perform any actions, which are not mentioned in the lease agreement.
Applying section 62E, it may be said that any party or a previous party who was involved
in a lease regarding retail shop, and who suffered a damage or loss due to the deceptive and
misleading conduct or comportment of any other party who is involved in the lease, shall be able
to recuperate the amount or quantum in relation to damage or loss, by filing a suit for claim
against the party who committed such conduct. However, in the given scenario, a specific term in
the lease agreement state that Downtown shall not be accountable in relation to any loss that may
be suffered due to any alterations to Downtown.
Conclusion
To conclude, it can be said that Phoebe shall be able to claim damages only if she is able
to prove the seriousness of her loss irrespective of the term in the lease agreement in this regard.

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References
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA 7.
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61.
NB2 Pty Ltd v P.T. Ltd [2018] NSWCA 10.
Retail Leases Act, 1994.
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd [1938] NSW 37.