Ajaimi v Giswick Pty Ltd (No 2) - [2022] VSC 275

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2021 01055

HABIB AJAIMI	Applicant
v
GISWICK PTY LTD (ACN 098 613 837)	Respondent

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers, following receipt of submissions dated 3 May 2022
DATE OF RULING:	27 May 2022
CASE MAY BE CITED AS:	Ajaimi v Giswick Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 275

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PRACTICE AND PROCEDURE – Costs – Mixed success on appeal – Costs below determined on appeal – Whether conduct at hearing before VCAT is vexatious for the purposes of s 92(2)(b) of the Retail Leases Act 2003 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr M Dean	JAG Lawyers
For the Respondent	Mr D Carlile	Peter Lustig

HIS HONOUR:

In my first judgment in this matter,[1] I upheld an appeal from orders of Senior Member Her Honour Judge Jenkins in the Victorian Civil and Administrative Tribunal (‘VCAT’).
[1]Ajaimi v Giswick Pty Ltd [2022] VSC 131.

The costs of the appeal and the costs of the VCAT proceeding now fall to be determined.

Background

The applicant, Habib Ajaimi (‘the landlord’), is the proprietor of 348 Glenhuntly Road, Elsternwick (‘the property’). Since 27 June 2012, he has leased the ground floor of the property (‘the premises’) to Giswick Pty Ltd (‘the tenant’). The tenant operates a newsagency from the premises.

There are defects in the property. From time to time, they have caused water and sewage to ingress into the premises. These ingress events disrupted the tenant’s newsagency business and damaged stock.

On 18 March 2019, the tenant brought proceedings in VCAT alleging breaches by the landlord of the lease agreement, of statutory terms in the Retail Leases Act 2003 (Vic) (‘the RLA’), and of the Australian Consumer Law (‘the ACL’).

The findings of tribunal and the findings on appeal - liability

The Senior Member found that, in failing to remedy the defects or in failing to disclose their existence to the tenant at the time of its entry into the lease, the landlord had breached:

(a) a covenant and/or a statutory term providing for the tenant’s quiet enjoyment of the premises (collectively, ‘the Quiet Enjoyment Term’);

(b) a covenant and/or a statutory term requiring the landlord to maintain the premises (collectively, ‘the Maintenance Term’);

(c) a statutory term prohibiting interference by the landlord with the tenant’s lease (‘the s 54 Term’); and

(d) s 18 of the ACL.

By contrast, on appeal I upheld that:

(a) there was no breach of the Maintenance Term; and

(b) there was no breach of s 18 of the ACL.

I otherwise did not disturb Her Honour’s findings on liability.

The findings of tribunal and the findings on appeal - quantum

Her Honour awarded damages to the tenant of $399,405.68, comprising:

(a) $290,732.97 in abatement of rent and outgoings, namely:

(i) $262,543.88 in abatement of rent for loss of use of 54.23% of the whole…

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] VSC 275
Decision Date: 27 May 2022

CaseChat Overview and Summary

The appellant sought a review of the decision of the respondent as the first respondent and an appeal against the decision of the second respondent in respect of an application for costs pursuant to section 92 of the Retail Leases Act 2003 (Vic). The appeal arose from the appellant's unsuccessful application for relief in relation to a retail lease. The appellant, as the lessor, brought an application under section 92 of the Act seeking relief in relation to a retail lease that had been terminated. The application was heard by the Victorian Civil and Administrative Tribunal. The Tribunal found the application was frivolous and vexatious and awarded costs against the appellant pursuant to section 92(2)(b) of the Act. The appellant's application for review was dismissed and the appeal against the costs order was allowed. The appeal was dismissed as to the costs order made by the Tribunal and the appeal against that order was allowed. The appeal against the decision to dismiss the application for review was dismissed. The Tribunal's conduct in dismissing the application for review was not Wednesbury unreasonable. The Tribunal did not act in a way that was not authorised by the Act, nor was the decision so unreasonable as to be unjust. The Tribunal did not act outside of its jurisdiction or fail to take into account relevant considerations, and there was no error of law on the face of the record. The appeal against the costs order was allowed. The Tribunal's finding that the application was frivolous and vexatious was not Wednesbury unreasonable. However, the Tribunal failed to consider whether the appellant's conduct at the hearing before it was vexatious. The Tribunal did not make an error of law in failing to consider the issue of vexatious conduct at the hearing before it, but its failure to consider this issue was an error of law because the Tribunal was required to consider it. The appeal against the costs order was allowed and the matter was remitted to the Tribunal to determine whether the appellant's conduct at the hearing before it was vexatious and, if so, to determine the appropriate amount of costs.

Orders