Arthur Perlidis v Barclay MIS Protect and Collect Pty Ltd
[2014] NSWCATCD 127
•30 January 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: Arthur Perlidis v Barclay MIS Protect and Collect Pty Ltd [2014] NSWCATCD 127 Hearing dates: 28 November 2013 Decision date: 30 January 2014 Before: M Mulock, General Member Decision: The application is dismissed
Category: Principal judgment Parties: Arthur Perlidis (Applicant) File Number(s): GEN 13/48757
reasons for decision
This matter came before the Tribunal for hearing on 28 November, 2013. Both parties appeared by telephone and Mr Wilson, solicitor, also by telephone, appeared on behalf of the applicant, Mr Perlidis. Mr Lauchland appeared for the respondent in his capacity as an officer of the Company, although, with apparent legal qualifications.
Both parties, pursuant to directions of the Tribunal, had provided a significant quantity of documents and submissions.
The applicant's documents (Exhibit A) which were contained in a yellow folder with an index numbered 1 - 159. The respondent's documents (Exhibit 1) were also contained in a yellow folder with an index and page numbered 1 - 80. Both Exhibits were tendered and received into evidence without objection.
At the commencement of the proceedings, an oath was administered to both Mr Perlidis and Mr Lauchland. Both witnesses attested to their belief that their respective exhibited material was true and correct. Both witnesses were cross-examined by the other party. After cross-examination, each maintained their position as presented in Exhibit A and Exhibit 1 respectively.
BACKGROUND
The applicant is and was at all material times the owner of premises known as 189 George Street, Bathurst. At all relevant times, those premises were tenanted by way of commercial lease to Emma Mason, (Tenant) a solicitor, who operated her legal practice from the ground floor of the premises and her family lived on the upper storeys of the premises.
The lease between the applicant and the tenant commenced on 15 January 2010, and terminated on 14 January 2012.
The property was a multi storey terrace in central Bathurst, built it appears in approximately 1880. During the period of the tenancy there was an ongoing dispute between the applicant and the tenant regarding significant issues in which the applicant claimed the tenant breached the lease and the tenant maintained that she had not breached the lease but that the applicant had breached his obligations under the lease.
The involvement of the respondent arose in about 2007 when the Applicant stated that he saw an advertisement for the respondent's services in a real estate office. That brochure appears at page 120 of Exhibit A ("The Brochure").
The respondent, through the Brochure, offered its services to landlords to take recovery action for monies due or owing by a tenant in respect of commercial premises.
The applicant says that he accepted the offer of the respondent and paid an annual fee of $165.00 for the respondent's services. The annual fee was renewed for the four subsequent years.
When the relationship between the applicant and the tenant deteriorated, the applicant called upon the respondent to assist him in advice as to how to deal with those matters which he believed constituted a breach of the lease by the tenant. The advice of the respondent included drafting letters for the applicant to send to the tenant, general advice as to whether the alleged breaches of the lease by the Tenant which included, repairs to the premises, wear and tear on carpets within the premises and structural repairs. As part of Exhibit A, there is correspondence between the applicant and solicitors for the tenant, who on behalf of the tenant, clearly reject any breach of the lease by the tenant as alleged by the applicant.
Nearing the conclusion of the lease in late 2011, the applicant and the tenant attempted to negotiate a new lease but agreement could not be reached in respect of rent and the tenant subsequently vacated on or about 14 January 2012.
In the course of the hearing, it was also alleged that apart from the tenant being responsible for significant repairs to the property, she had also refused to allow the applicant's agent to advertise the premise and show potential alternate tenants the premises prior to her vacating the premises.
The tenant in her statement (pages 10 - 19 of Exhibit 1) specifically denies either removing the re-leasing signs or failing to allow access to the premises for the purpose of re-leasing.
After the tenant vacated, the applicant called upon the respondent to issue legal proceedings for the alleged breach of lease by the tenant including the filing of a claim in the appropriate jurisdiction. The applicant maintained that the Contract between the parties required the respondent in the circumstances in which the applicant found himself to issue those proceedings at its own cost and continue with the proceedings to their natural conclusion. The respondent refused to do so and as a result the applicant issued proceedings in this Tribunal for breach of the agreement between the parties.
The applicant has subsequently not issued any proceedings against the tenant for the alleged breaches of the lease but seeks damages from the respondent for breach of the agreement.
The matters for determination by the Tribunal can be considered pursuant to the following questions:
(1) What were the expressed terms of the agreement between the parties?
(2) Were there any implied terms of the agreement?
(3) What were the obligations of the respondent under the agreement?
(4) Did the refusal of the respondent to take proceedings against the tenant amount to a breach of the agreement?
(5) If so, what damages is the applicant entitled for the breach of the agreement?
What Were The Expressed Terms Of The Agreement?
The applicant says that the terms and conditions of the agreement were contained within the Brochure. The respondent maintains that in addition to the Brochure, the terms and conditions of the agreement were contained in the document headed "Terms of Commercial Agreement" ("Commercial Agreement") (Document 3 - Exhibit 1).
The applicant says he was not provided with the Commercial Agreement, only the Brochure, nor was he directed to the respondent's website where the respondent indicated the Commercial Agreement appeared. The applicant submitted that the agreement between the parties should be limited to those items contained in the Brochure.
The respondent concedes that the Commercial Agreement was never provided by it to the applicant. It also concedes that the Brochure does not direct a potential client to the website to review the Commercial Agreement, however the respondent says it is reasonable that the terms of the Commercial Agreement should form part of the Agreement. I do not agree. It is for the provider of a service to ensure clarity as to the nature of the services to be provided. The respondent seeks to rely upon the commercial agreement in circumstances where it has never provided or drawn to the attention of the existence of the commercial agreement to the respondent.
The Tribunal finds the commercial agreement does not form part of the agreement between the parties fo the following reasons:
(1) The applicant was never given or advised of its existence by the respondent.
(2) I accept the evidence of the applicant he was unaware of the existence of the Commercial Agreement until after the agreement between the parties was terminated.
Subject to the findings hereafter, I find that the scope of the agreement between the parties limited to that material contained in the Brochure.
Are There Any Implied Terms Of The Agreement?
During the hearing, Mr Wilson on behalf of the applicant conceded that if the Agreement between the parties was limited to the Brochure and the terms of the Commercial Agreement were excluded then it would not be unreasonable to imply a term that the respondent would only proceed to litigation on behalf of the applicant where in the reasonable opinion of the respondent, the prospects of success against a tenant or the recovery of sums from that tenant were likely to be successful. The respondent asserted that the Tribunal should find that such an implied term would form part of the Agreement between the parties if the terms of the Commercial Agreement were excluded.
The Tribunal finds that there was an implied term as stated above. It would make no commercial sense for the respondent to pursue a tenant who is either impecunious or in circumstances where it was more probable that any action against the tenant would fail. That term would be an objective test rather than a subjective test.
What Were The Obligations Of The Respondent Under The Agreement?
The terms of the Brochure are at best ambiguous. The applicant says the Brochure clearly places an obligation upon the respondent to take legal proceedings for breaches by tenants including the raising of a Summons, serving of the Summons, obtaining a Judgment, raising of an Oral Examination Summons at no legal fees to the tenant. The applicant further says that the respondent contracted to provide a full legal service at no cost to the applicant. The respondent says that the Brochure requires the respondent to act on behalf of the applicant only when a debt has been obtained and it has no obligation to pursue a tenant on behalf of a landlord to obtain judgment. Its' role is limited to advice and enforcement of a debt. The respondent asserts that the annual fee payable by the applicant reflects the limited role of the respondent.
I do not agree with the respondent's position. The Brochure clearly sets out that the offer made by the respondent to a potential landlord is for "a full legal service". It includes advice, the issuing of proceedings, the obtaining of Judgment and enforcing that Judgment. It does not specify its role is limited to legal proceedings after a debt has been obtained in Court or a Tribunal. The Tribunal finds that in the circumstances, the respondent had an obligation to issue proceedings against the tenant subject to the implied term.
Was There A Breach Of The Agreement By The Respondent ?
After the lease was terminated and the property vacated, a request was made by the applicant to the respondent on a number of occasions to take action against the tenant for the alleged damages arising out of the lease agreement between the parties. The applicant relied upon the agreement with the respondent and called on the respondent to act in accordance with that Agreement.
On 19 July, 2012, the respondent sent a letter to the applicant (Document 6 - Exhibit 1). At the hearing and in submissions, the respondent urged the Tribunal to infer that letter and the prior telephone call between a representative of the respondent and clearly indicated to the applicant that the respondent was not prepared to take any proceedings against the tenant on behalf of the applicant because it perceived the applicant's position was weak. The respondent gave evidence and submitted that it had advised the applicant as to the weaknesses of the applicant's position on numerous prior occasions in addition to the letter of 19 July 2012. It had advised the applicant during the period of the dispute and drafted letters on the applicant's behalf.
The respondent's representative gave evidence that he had spoken directly with the tenant regarding the tenancy issues and noting that she was a solicitor, indicated that he was acutely aware from those conversations that any claim would be strenuously defended. Mr Lauchland indicated that the material provided by the tenant (Document 7 - Exhibit 1) had been conveyed to him by the tenant prior to July 2012 in conversations with her. His evidence was not challenged by the applicant on this point.
The applicant relies upon a letter from solicitors, Chaney & Wilson dated 5 April, 2013, which purports to set out breaches by the tenant (page 3 of Exhibit A) and the report of Brad Inwood Architects of 15 November 2012 (page 32 - 56 of Exhibit A) ("the Report").
Both the Report and the letter from Chaney & Wilson came into existence after 19 July, 2012. It appears to me that each of the items contained in the letter from Chaney & Wilson and the Report were either fully answered or responded to in the tenant's letter of 13 November 2013. The tenant was not required by the applicant for cross-examination. The respondent's representative says that he was aware before the 19 July 2012 of the position of the tenant and that was the main reason for he refusing to undertake any proceedings on behalf of the applicant.
FINDINGS
The Tribunal finds that at all relevant times there was an agreement between the parties the terms of which were primarily set out in the Brochure. It finds it was an implied term of the agreement that the respondent would not undertake any work required under the agreement on behalf of the applicant, if in the circumstances it was reasonable to refuse to do so.
The Tribunal finds that the respondent as at 12 July 2012, held a reasonable belief that any proceedings against the tenant would be strenuously defended and the chances of success minimal. It is noted in that regard that the applicant has never brought proceedings against the tenant for the purported breaches by the tenant of the commercial lease.
The Tribunal finds that the belief of the respondent's potential success of litigation against the tenant was reasonable in the circumstances.
In those circumstances the Tribunal finds that there has been no breach of the Agreement by the respondent.
As the respondent has not breached the Agreement, the question of damages does not arise.
The application is dismissed.
M Mulock
General Member
Civil and Administrative Tribunal of New South Wales
30 January 2014
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Registrar
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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
Decision last updated: 11 September 2014
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