Ant Projects Pty Ltd v Morgan Brooks Direct Pty Ltd - [2019] QDC 81

DISTRICT COURT OF QUEENSLAND

CITATION:

Ant Projects Pty Ltd v Morgan Brooks Direct Pty Ltd & Ors [2019] QDC 81

PARTIES:

ANT PROJECTS PTY LTD ACN 089 585 642 AS TRUSTEE FOR THE YEUNG INVESTMENTS TRUST
(Plaintiff)

v

MORGAN BROOKS DIRECT PTY LTD ACN 112 625 288
(First Defendant)

and

RICHARD WILLIAM AULSEBROOK
(Second Defendant)

and

MORGAN ASHLEIGH BROOKS
(Third Defendant)

FILE NO/S:

BD 767/17

DIVISION:

PROCEEDING:

Civil Trial

ORIGINATING COURT:

District Court of Queensland

DELIVERED ON:

27 May 2019

DELIVERED AT:

Brisbane

HEARING DATE:

19, 20 and 21 September, 29, 30 and 31 October 2018 and written submissions to 25 November 2018.

JUDGE:

Andrews SC DCJ

ORDER:

Judgment for the plaintiff against the defendants in the sum of $635,478.74.

The defendants’ counterclaims are dismissed.

CATCHWORDS:

LEASES – where a notice to remedy breach was served by email – whether the notice was not served

LEASES – where a notice to remedy breach – where breach remediable by payment of $18,353.64 – whether 11 and 14 days were reasonable times to remedy

LEASES – where a notice to remedy breach specified one amount claimed in respect of five covenants – where it failed to specify an amount claimed in respect of each covenant – whether it failed to comply with s 124(1) of the Property Law Act 1974

LEASES – where the lessor had access to the lessee’s security deposit – where the lessee was in arrears – whether there was no breach if the security deposit exceeded the arrears – whether the lessee was obliged to use the security deposit before providing a notice to remedy breach

LEASES – INTERPRETATION – where the lease referred to a plan attached – where the plan was marked “Cancelled” – whether the lease is interpreted by reference to the plan

LEASES – whether the lessee repudiated or the lessor

LEASES – quantum of damages for repudiation – whether the lessor mitigated its loss

Property Law Act 1974 sections 117, 118 and 124(1).

Residential Tenancies and Rooming Accommodation Act 2008 (Qld)

Residential Tenancies and Rooming Accommodation Regulation 2009 (Qld)

COUNSEL:

Hogg for the Plaintiff

First Defendant by its Director, the Second Defendant

Second Defendant for himself

Third Defendant for herself

SOLICITORS:

Anderssen Lawyers Pty Ltd for the Plaintiff

The claim and counterclaims

When there were about 32 months left in the term of a commercial lease for 5 years, the lessor alleges that its lessee repudiated the lease. The lessor purported to terminate and changed the lock. The lessor alleges that there were two months arrears owing when the lease was terminated and that since termination it has been unable to relet most of the space and will continue to be unable until the end of the term. It claims substantial damages arising from that. The lessee alleges that it did not repudiate but that the lessor did.

The plaintiff, as lessor, claims against the first defendant, as lessee pursuant to a lease (lease) which is registered and claims against the…

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: [2019] QDC 81
Decision Date: 27 May 2019

CaseChat Overview and Summary

The case of Ant Projects Pty Ltd v Morgan Brooks Direct Pty Ltd involved a dispute between the plaintiff, Ant Projects Pty Ltd, and the defendants, Morgan Brooks Direct Pty Ltd, over a commercial lease. The plaintiff sought damages for the defendant's alleged repudiation of the lease agreement, while the defendants counterclaimed for breach of the lease by the plaintiff. The case was heard in the Queensland Civil and Administrative Tribunal (QCAT), which was presided over by Commissioner J. M. Smith.

The primary legal issues that the court had to address were whether the plaintiff had effectively served a notice to remedy breach to the defendants, whether the times specified in the notice were reasonable, whether the notice complied with the relevant statutory requirements, whether the defendants had breached the lease by not using their security deposit to cover their arrears, and whether the lease should be interpreted in light of an attached plan that had been marked "Cancelled". Additionally, the court had to determine whether there was a repudiation by either party and, if so, the appropriate quantum of damages.

The court found that the notice to remedy breach was effectively served via email, despite the defendants' argument to the contrary. It also held that the times specified in the notice were reasonable, and that the notice substantially complied with the statutory requirements. The court rejected the defendants' argument that they had not breached the lease by not using their security deposit to cover their arrears, finding that the security deposit did not absolve them of their obligation to pay their rent. Regarding the interpretation of the lease, the court held that the lease should not be interpreted by reference to the cancelled plan. The court found that the defendants had repudiated the lease, and awarded damages to the plaintiff. It also found that the plaintiff had mitigated its loss, and thus reduced the quantum of damages awarded.

The court ordered judgment for the plaintiff against the defendants in the sum of $635,478.74, and dismissed the defendants' counterclaims. The court held that the plaintiff was entitled to damages for the defendants' repudiation of the lease, and that the defendants were liable for the full amount of the damages claimed, less any mitigation by the plaintiff.

Orders

Orders of the court

Judgment for the plaintiff against the defendants in the sum of $635,478.74.

The defendants’ counterclaims are dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Ant Projects Pty Ltd v Morgan Brooks Direct Pty Ltd & Ors [2019] QDC 81
PARTIES:	ANT PROJECTS PTY LTD ACN 089 585 642 AS TRUSTEE FOR THE YEUNG INVESTMENTS TRUST (Plaintiff) v MORGAN BROOKS DIRECT PTY LTD ACN 112 625 288 (First Defendant) and RICHARD WILLIAM AULSEBROOK (Second Defendant) and MORGAN ASHLEIGH BROOKS (Third Defendant)
FILE NO/S:	BD 767/17
DIVISION:
PROCEEDING:	Civil Trial
ORIGINATING COURT:	District Court of Queensland
DELIVERED ON:	27 May 2019
DELIVERED AT:	Brisbane
HEARING DATE:	19, 20 and 21 September, 29, 30 and 31 October 2018 and written submissions to 25 November 2018.
JUDGE:	Andrews SC DCJ
ORDER:	Judgment for the plaintiff against the defendants in the sum of $635,478.74. The defendants’ counterclaims are dismissed.
CATCHWORDS:	LEASES – where a notice to remedy breach was served by email – whether the notice was not served LEASES – where a notice to remedy breach – where breach remediable by payment of $18,353.64 – whether 11 and 14 days were reasonable times to remedy LEASES – where a notice to remedy breach specified one amount claimed in respect of five covenants – where it failed to specify an amount claimed in respect of each covenant – whether it failed to comply with s 124(1) of the Property Law Act 1974 LEASES – where the lessor had access to the lessee’s security deposit – where the lessee was in arrears – whether there was no breach if the security deposit exceeded the arrears – whether the lessee was obliged to use the security deposit before providing a notice to remedy breach LEASES – INTERPRETATION – where the lease referred to a plan attached – where the plan was marked “Cancelled” – whether the lease is interpreted by reference to the plan LEASES – whether the lessee repudiated or the lessor LEASES – quantum of damages for repudiation – whether the lessor mitigated its loss Property Law Act 1974 sections 117, 118 and 124(1). Residential Tenancies and Rooming Accommodation Act 2008 (Qld) Residential Tenancies and Rooming Accommodation Regulation 2009 (Qld)
COUNSEL:	Hogg for the Plaintiff First Defendant by its Director, the Second Defendant Second Defendant for himself Third Defendant for herself
SOLICITORS:	Anderssen Lawyers Pty Ltd for the Plaintiff