Aussie Bananas Pty Limited v Garage 88 Sydney Pty Limited; Garage 88 Sydney Pty Limited v Aussie Bananas Pty Limited

[2022] NSWDC 510

District Court

New South Wales

Medium Neutral Citation:

Aussie Bananas Pty Limited v Garage 88 Sydney Pty Limited; Garage 88 Sydney Pty Limited v Aussie Bananas Pty Limited [2022] NSWDC 510

Hearing dates:

24 March 2022

Date of orders:

24 March 2022

Decision date:

24 March 2022

Jurisdiction:

Civil

Before:

P Taylor SC DCJ

Decision:

(1)   Judgment for the plaintiff against the first and second defendants in the sum of $108,130.76.

(2)   Defendants to pay the plaintiff's costs of the proceedings, including the costs of the cross-claim, on an indemnity basis.

(3)   Cross-claim dismissed.

(4)   Order 3 hereof not to be entered for 2 weeks.

(5)   Direct the plaintiff to inform the defendants of today's orders by sending, by 5pm tomorrow, a letter with a copy of the orders [by email and post to the defendants].

Catchwords:

LEASES AND TENANCIES — rent and outgoings — recovery of rent and interest – damages for cleaning and painting

CIVIL PROCEDURE – judgment when defendant is absent – dismissal when plaintiff is absent

Legislation Cited:

Uniform Civil Procedure Rules 2005, r 9.1, r 29.7

Category:

Principal judgment

Parties:

Aussie Bananas Pty Limited (plaintiff/cross-defendant)
Garage 88 Sydney Pty Limited (first defendant/first cross-claimant)
Sophie May (second defendant/second cross-claimant)

Representation:

Counsel:
Mr S Cominos (plaintiff/cross-defendant)

Solicitors:
Le Page Lawyers (plaintiff/cross-defendant)

File Number(s):

2020/00351353

Publication restriction:

None

Judgment

1. The plaintiff, Aussie Bananas Pty Limited, is the lessor of premises on Peter Brock Drive, Eastern Creek. By the conclusion of this hearing Aussie Bananas sued for an amount of $108,130.76, comprising $101,482.76 for unpaid rent and interest less a security bond, and an amount of $6,648 for cleaning and painting.

2. The first defendant lessee, Garage 88 Sydney Pty Limited, and the second defendant guarantor, Sophie May, terminated the retainer of their solicitors shortly before trial, and did not appear. Their former solicitor appeared out of courtesy. The plaintiff assured the Court that repeated unsuccessful attempts to contact the defendants had taken place, and the defendants’ former solicitor also informed the Court that the defendants were aware of today's trial date. 

3. In these circumstances, the former solicitor was excused from the proceedings and I determined to adopt, with the consent of the plaintiff, the procedure contemplated in r 29.7(3) of Uniform Civil Procedure Rules 2005 wherever it was available.

4. Rule 29.7(3) provides:

“29.7Procedure to be followed if party is absent

…

(3)  If, in relation to a liquidated claim, the plaintiff appears, but a defendant does not appear, the court may, without proceeding to trial, give judgment against that defendant on evidence of—

(a)  the amount then due to the plaintiff in respect of the cause of action for which the proceedings were commenced, and

(b)  any payments made or credits accrued since the commencement of the proceedings in reduction of the amount of the plaintiff’s claim or costs.”

5. Aussie Bananas read the affidavits of Katie Blake of 1 September 2021 and Robert Broadbent of 8 September 2021, together with the exhibits to those affidavits, and also tendered a letter of 27 September 2021 and an accompanying schedule found at pp 305 to 307 of the Court Book. On the basis of that material there is evidence, for the purposes of r 29.7, of the unpaid rent claimed, and the entitlement to the interest claimed, as well as the amount of the security deposit to be set-off against the rental and interest debt.

6. As to the claim for painting, cl 31 of the lease and Item 22 in the Reference Schedule oblige the lessee to paint the leased premises by the end of the lease, but provided that "The Lessee shall not paint the external walls".

7. The lessee asserted in a defence that it did paint the leased premises. There was no express evidence of it. There was evidence that the lessee did not paint the walls, or any part of the premises save the floor.  Clause 31(4) of the lease provided:

"(4)  Lessee’s failure to paint

(c) If the Lessee fails to paint the Leased Premises in accordance with this clause; the Lessor may give notice to the Lessee requiring it to commence to paint within thirty (30) days, and if the Lessee fails to commence to paint in accordance with that notice, the Lessor may paint the Leased Premises and recover from the Lessee the reasonable cost of the painting."

8. Aussie Bananas was not able to prove the notice required by this provision in this clause, and instead relied on the obligation for the tenant to leave the premises in “good repair and working condition", specified in cll 30 and 31 of the lease. It did prove, with evidence in the material earlier referred to, staining marks on internal and external walls.

9. Once a claim for painting falls outside cl 31 because of non-compliance with the notice provision in cl 31(4), the plaintiff no longer has an entitlement to recover the cost of the painting as a debt. That part of the claim requires proof of damages. It thus falls outside the procedure contemplated by r 29.7(3) of the Uniform Civil Procedure Rules as it is no longer a liquidated claim. Any judgment for the painting claim requires a trial on that issue.

10. The same is true of the cleaning expense. However, I am satisfied that the claimed amount of $495, proved by a cleaner's invoice, represents the damages to the plaintiff of the lessee failing to have left the premises in clean condition in breach of cl 24 of the lease.

11. As to the painting, the damages calculation is a little more complicated.  The plaintiff's evidence comprised two invoices, both of approximately the same date, 7 and 9 August, covering painting of the same leased premises by two distinct, but possibly related, entities.

12. The second larger invoice claimed painting of the exterior walls and the showroom floor, both of which are problematic to the plaintiff's claim given the term of the lease that the lessee is not to paint the exterior walls, and the plaintiff's evidence that the lessee had painted the floor.  No such problems arose in respect of the earlier smaller invoice. During the hearing, the plaintiff abandoned the claim for the amount in the second invoice. 

13. I accept that the first invoice represents the damages from the proved absence of painting, and I allow the amount of $6,153 as damages for that breach of the lease. With the $495 for cleaning, and the net unpaid rent and interest, the plaintiff is entitled to judgment for $108,130.76 against the lessee, Garage 88.

14. As to the guarantor, Ms May, there is evidence for the purposes of r 29.7 of the second defendant's obligations as a guarantor to indemnify the first defendant for the amount owing by the first defendant of $108,130.76. It follows that judgment can be given against her also under the rule.

15. As to the question of costs, under cl 38.1(a) and 38.2(a) of the lease, the plaintiff is entitled to an indemnity for costs incurred arising from a breach of the lease by the lessee, including "legal and other costs incurred by the Lessor".  In that event, the plaintiff is entitled to costs against both defendants on an indemnity basis by reason of the contractual provision.

16. There was also a cross-claim against the plaintiff filed by the defendants. 

17. Rule 29.7(4) of the Uniform Civil Procedure Rules provides: “If, in relation to any proceedings, the defendant appears, but the plaintiff does not appear, the court may dismiss the proceedings”. This rule also applies to cross-claims in the same way as it applies to the primary claim, in accordance with r 9.1(3). As the cross-claimants have not appeared, r 29.7(4) permits the Court to dismiss the proceedings.

18. The cross-claim raised an interesting question about the construction of cl 51(2)(b)(iii) and Item 27 of the Reference Schedule to the lease, but any entitlement under those provisions, if it existed, would depend upon proof of matters by the first cross-claimant lessee.  No evidence was put on in the proceedings by the lessee and so there could be no proof in this hearing.

19. In the result, I am persuaded that I should dismiss the cross-claim proceedings under r 29.7(4), but not enter the order for dismissal for two weeks on terms that the plaintiff inform the defendants of the orders made today by 5pm tomorrow, by sending emails and letters to the defendants at the addresses they have used in the proceedings.

20. The orders of the Court are thus:

1. Judgment for the plaintiff against the first and second defendants in the sum of $108,130.76.

2. Defendants to pay the plaintiff's costs of the proceedings, including the costs of the cross-claim, on an indemnity basis.

3. Cross-claim dismissed.

4. Order 3 hereof not to be entered for 2 weeks.

5. Direct the plaintiff to inform the defendants of today's orders by sending, by 5pm tomorrow, a letter with a copy of the orders [by email and post to the defendants].

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Decision last updated: 26 October 2022