711 Hogben Pty Ltd v Anthony Tadros - [2022] NSWSC 1259

Supreme Court

New South Wales

Medium Neutral Citation: 711 Hogben Pty Ltd v Anthony Tadros [2022] NSWSC 1259
Hearing dates: 29, 30, 31 August and 1 September 2022
Decision date: 19 September 2022
Jurisdiction: Equity - Commercial List
Before: Hammerschlag CJ in Eq
Decision:
Verdict for damages for $730,000.

Catchwords:
LANDLORD AND TENANT – breach by landlord of lease by failing to carry out landlord’s works to render the premises fit for use as a childcare centre – DAMAGES – assessment of value of commercial opportunity to trade which opportunity the tenants lost as a consequence of the landlord’s breach

Legislation Cited:
Children (Education and Services) National Law 2010 (NSW)
Education and Care Services National Regulations 2011 (NSW)
Environmental Planning and Assessment Act 1979 (NSW)
Environmental Planning and Assessment Regulation 2021 (NSW)

Cases Cited:
711 Hogben Pty Ltd v Tadros [2016] NSWSC 697
711 Hogben Pty Ltd v Tadros [2016] NSWCA 244
711 Hogben Pty Ltd v Tadros [2016] NSWSC 1238
711 Hogben Pty Ltd v Tadros [2016] NSWSC 1683
711 Hogben Pty Ltd v Anthony Tadros [2018] NSWSC 628
711 Hogben Pty Ltd v Anthony Tadros [2021] NSWSC 1463
711 Hogben Pty Ltd v Tadros [2022] NSWSC 1085
Badenach v Calvert (2016) 257 CLR 440
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Daniels v Anderson (1995) 37 NSWLR 438
Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Sellars v Adelaide Petroleum NL & Ors (1994) 179 CLR 332
Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357
Tabet v Gett (2010) 240 CLR 537
Wenham v Ella (1972) 127 CLR 454

Category: Principal judgment
Parties: Anthony Tadros - First Defendant/Second Cross Claimant
Sharon Tadros - Second Defendant/Third Cross Claimant
George Tadros - Third Defendant/First Cross Claimant
711 Hogben Pty Ltd ACN 157911745 - Plaintiff/ Third Cross Defendant
Representation:
Counsel:
M W Young SC - Defendants/Cross Claimants
J E Lazarus SC, M Sheldon - Plaintiff/Third Cross Defendant
Solicitors:
Finn Roache Lawyers - Defendants/Cross Claimants
One Group Legal - Plaintiff/Third Cross Defendant

File Number(s): 2015/330101

JUDGMENT

HIS HONOUR: This is yet another chapter, regrettably probably not the last, in this long running dispute between a landlord and its tenants. The lengthy history of the proceedings is attributable largely to the obdurate default of the landlord, who does not dispute that it was in continuous breach of the lease from 2015 to 8 October 2020.
This is the hearing of the tenants’ claim for damages for that breach. Only quantum is in issue.
The proceedings have spawned no less than seven judgments of the Court, all of which have been adverse to the landlord: see 711 Hogben Pty Ltd v Tadros [2016] NSWSC 697 (Stevenson J); 711 Hogben Pty Ltd v Tadros [2016] NSWCA 244 (Meagher and Leeming JJA);

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 1259
Decision Date: 19 September 2022

CaseChat Overview and Summary

The case involved a dispute between 711 Hogben Pty Ltd, the landlord, and Anthony Tadros, the tenant, over a breach of the lease agreement. The property in question was to be used as a childcare centre. The tenant alleged that the landlord failed to complete necessary works to make the premises suitable for its intended use, which led to a loss of commercial opportunity for the tenant. The matter was heard in the Supreme Court of Victoria.

The central legal issues revolved around the assessment of damages for the tenant’s lost commercial opportunity due to the landlord’s breach. Specifically, the court had to determine the value of the opportunity lost by the tenant as a result of the landlord's failure to perform the required works. The court needed to consider the evidence provided regarding the lost profits and the value of the business opportunity the tenant would have had if the premises had been fit for use.

The court assessed the evidence and found that the tenant had lost a significant commercial opportunity due to the landlord’s failure to render the premises fit for use. The court calculated the value of this lost opportunity and awarded damages to the tenant accordingly. The court took into account the lost profits, potential income, and other relevant factors in determining the appropriate amount of compensation. The court emphasised the importance of the landlord fulfilling their obligations under the lease to ensure the premises are suitable for the tenant's intended use.

The final orders included an award of damages to the tenant, representing the value of the lost commercial opportunity. The court also provided detailed reasons for the assessment of damages, ensuring clarity and transparency in its decision-making process. This ruling serves as an important reminder of the importance of landlords adhering to their obligations under a lease agreement and the potential financial consequences of failing to do so.

Orders