Chris Drayton
10 May 2012

Unconscionability conduct limited to lessor and lessee

Chris Drayton


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The Administrative Decisions Tribunal of NSW (Tribunal), recently confirmed that in relation to a claim by a party for unconscionable conduct under the Retail Leases Act 1994 (NSW) (Act), the prohibited unconscionable conduct is limited to dealings between lessees and lessors and former lessees and lessors.

The relevant case involved a claim by a former lessee of shop premises against the present lessee of the premises.

The allegation was the present lessee had converted the equipment, fixtures and fittings of the former lessee to their own use. The unconscionable conduct claim asserted was that the present lessee engaged in unconscionable conduct by:

  1. failing to make reasonable or any enquiries regarding the former lessee’s interest in the items and by electing to use the items in a manner inconsistent with that interest; and
  2. failing to communicate with the former lessee thus enabling the present lessee to use the premises without fitting out the premises themselves; and
  3. refusing the former lessee’s access to the premises to remove the equipment, fixtures and fittings.

The tribunal found that the unconscionable conduct provisions in Sections 62A and 62B of the Act were intended to prohibit unconscionable conduct in dealings between lessors and lessees and former lessees and lessors. They were not designed to provide a right of action between strangers whose connection with each other is that they were at different points in time lessees of the same premises. The point being that the unconscionable conduct prohibited by Section 62 is conduct in connection with a retail shop lease not in connection with retail shop premises per se.


The decision makes clear for potential claimants under Section 62 of the Act that the unconscionable conduct alleged must be between lessors and lessees and former lessees and lessors.

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