Barsoum v Glebe Administration Board
[2002] NSWADTAP 28
•08/21/2002
Appeal Panel
CITATION: Barsoum -v- Glebe Administration Board [2002] NSWADTAP 28 PARTIES: APPELLANT
Samy Barsoum
RESPONDENT
Glebe Administration BoardFILE NUMBER: 029008 HEARING DATES: 16/07/02 SUBMISSIONS CLOSED: 08/21/2002 DATE OF DECISION:
08/21/2002DECISION UNDER APPEAL:
Barsoum -v- Glebe Administration Board [2002] NSW ADT 19BEFORE: O'Connor K - DCJ (President); Donald B - Judicial Member; O'Neill A - Member CATCHWORDS: equity and good conscience MATTER FOR DECISION: Principal matter FILE NUMBER UNDER APPEAL: 015041 DATE OF DECISION UNDER APPEAL: 02/18/2002 LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994
Anti-Discrimination Act 1977CASES CITED: Barsoum v Glebe Administration Board [2002] NSWADT 19
Qantas Airways Limited v Gubbins (1992) 28 NSWLR 26
In the Matter of a Stated Case by the Commercial Tribunal (1993) 60 SASR 393
Russito Pty Ltd v Russo ((1993) LSJS 14
Trittenheim Pty Ltd v H & H Gill Nominees Pty Ltd (1994) 63 SASR 443
Woodside & anor v Director General, Department of Community Services [2000] NSWADTAP 8
Soulemizis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Mifsud v Campbell (1991) 21 NSWLR 725 (Court of Appeal)
Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473
State Rail Authority of New South Wales v Earthline Constructions (1999) 73 ALJR 306
Citadin (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31REPRESENTATION: APPELLANT
In person
RESPONDENT
D Flaherty, barristerORDERS: 1. Appeal dismissed. ; 2. Liberty to apply within 42 days as to costs.
1 This is an appeal by the lessee against a decision of the Retail Leases Division (the Tribunal) in Barsoum v Glebe Administration Board [2002] NSWADT 19 dismissing his application made under the Retail Leases Act 1994 (the Act) for damages following re-entry into his premises by the lessor.
2 The respondent agreed on 17 September 1999 to lease to the appellant a shop in the Town Hall Arcade complex in the Sydney CBD, Shop 43B, for the purpose of carrying on a retail jewellery business. A formal lease was executed on 16 December 1999, and the appellant opened his shop ‘Cleopatra Jewellery’ on 20 December 1999. The appellant opened his shop at a time when a substantial refurbishment of the centre was nearing completion. The refurbished centre was officially opened on 2 February 2000. He was locked out of the premises on 10 May 2000, being in arrears in payment of rent in the sum of $9582.34.
3 The appellant contended that the refurbishment works had a substantial deleterious effect on his ability to trade. He alleged that various works that occurred before and after 2 February 2000 had had a negative effect on customer flow in the vicinity of his shop. The work about which the appellant was most concerned was that which he said occurred after 2 February 2000. As a consequence he had not been able to trade as well as he had expected.
4 He also alleged that there had been pre-lease representations that the works were to conclude by September/October 1999.
Material Findings of Fact
5 The Tribunal made the following material findings of fact, which are set out below in chronological order rather than the order in which they appear in the reasons for decision:
- The respondent’s disclosure statement did notify the appellant that the premises were in a state of renovation and refurbishment. (para [22])
Traffic movements were in fact higher than the level said to have been the estimated by the representative of the respondent with whom the appellant dealt when considering whether to take up a lease. (para [24])
Any representation made to the appellant in relation to when the food court would open for business was, if made, of little real significance given that it was definitely open by mid-January 2000, and the disclosure statement had referred to there being works in progress. (para [26])
As to tiling works in the vicinity of the shop: about 20 per cent of the work had not been completed as at 19 January 2000, and it was all completed by 2 February 2000. (para [23])
As far as the appellant’s situation was concerned, the respondent’s works were ‘substantially completed’ by 2 February 2000. (para [19])
The appellant failed to give the respondent the notice required by s 34 of the Act which is a pre-condition to a claim for compensation for disturbance due to refurbishment works. In particular his tenancy report of January 2000 did not constitute such a notice. (para [21])
Only ‘extremely minor works’ that were necessary for the completion of the refurbishment were undertaken near the shop after 2 February 2000. (paras [40] and [41])
The appellant failed to pay the rent due on 1 April and 1 May. (para [29]).
6 So far as the appellant’s contentions as to law the Tribunal concluded:
- (1) The misrepresentations said to have been made, if made, could not amount in the circumstances to material misrepresentations
(2) there was no breach of the terms of the lease
(3) there was no breach of the statutory requirements of the Act
(4) there was no derogation from the grant
(5) there was no legal principle of ‘unfairness’ upon which a claim could be founded.
- Removal and Re-use of Fit Out
7 There was a further dispute as to the respondent’s conduct after reoccupying the premises. The appellant made a claim for compensation in respect of the alleged re-use by the respondent of his fixtures and fittings. He had spent $72,145 in fit out costs and various other expenses (see para [43]).
8 The Tribunal recited the history of the notices given to the appellant to remove fittings and fixtures, steps taken by the respondent to store them when that did not occur, and referred to claims made by the appellant in a solicitor’s letter dated 9 June 2000 as items said to be missing. See para [49] for the list. The Tribunal was satisfied that the appellant had failed to collect his fittings and fixtures within the time period prescribed by the lease (within seven days, i.e. by 17 May 2000).
9 The case raised the issue of what the tenant’s rights are in respect of the removal of tenant’s fixtures when the agreed period for removal has expired. The Tribunal referred to case-law. The Tribunal concluded that as a matter of law the fixtures pass to the landlord. Accordingly the appellant was not entitled to any relief in respect of any fittings and fixtures which he had failed to collect, and which had remained part of the premises as leased to the next tenant.
Appeal
10 The appellant’s grounds of appeal are set out in a document filed 18 April 2002. The appellant who appeared in person is currently studying law. The grounds and supporting submissions consist of 36 single-spaced typed pages, accompanied by several attachments. They make copious references to case- and statute-law. They are divided into the following headings: Tribunal’s compliance with current legal standards; exclusion of liability clauses; Retail Leases Act 1994; Fairness of the decision; Retention of the benefit and unfair enrichment; conduct causing substantial loss or damage; restrictions on the applicant’s rights to his goods, fittings and fixtures; estoppel and the rights of the applicant under a new agreement; unfulfilled promises or predictions; dispute resolution mechanism; loss of trade; applicant’s loss of the bargain and the fairness of termination; certainty of commencement, continuance and conclusion; statutory authority; representation and the failure to provide crucial information and explanations; prohibited conduct, whether a contract is entered into or not; covenant for quiet enjoyment; landlord’s covenant not to derogate from grant; waiver; the plea of set-off; loss of income; management practices; errors of fact; errors on the fact of the record.
11 It will be seen from the list of headings that the submissions move between issues as to law, and issues as to findings of fact.
12 The appeal right conferred by the Administrative Decisions Tribunal Act 1997 (the Tribunal Act), s 113 is a circumscribed one. An appellant has a right to appeal on a ‘question of law’. The appellant may apply to the Appeal Panel for leave to have the appeal extend to the ‘merits’. Appeal Panels have routinely followed the practice of deferring any application for extension of the appeal to the merits until an error of law of sufficient significance has been identified to warrant setting aside or varying the Tribunal’s decision.
13 The respondent’s submissions sought to identify from the appellant’s submissions what were the Tribunal’s alleged errors of law, organising them as follows: (a) unfairness/unconscion- ability; (b) misrepresentation; (c) estoppel; (d) the disclosure statement; (e) evidence wrongly excluded; (f) misinterpretation of law; (g) law of fixtures; and (h) breach of quiet enjoyment and derogation from grant.
14 The appellant in reply provided a detailed index to the transcript of the proceedings before the Tribunal and the evidence organised by reference to his objections.
15 In his oral submissions at hearing the appellant conceded that while his original application had alleged unconscionable conduct, it was not open to press such a claim in the Tribunal as the relevant jurisdiction only commenced on 12 October 2001 in connection with conduct occurring on or after that date (see generally, the Act s 71A, 72AA; Govt Gazette, No. 156, 12/10/2001, p. 8501).
16 While conceding that an unconscionable claim under the Act cannot be mounted, the appellant submitted that there was an overarching doctrine of ‘fairness’ to which the Tribunal could have regard in making a determination as to the conduct of the appellant. He referred to the objects of the Tribunal Act (s 3) and, more particularly, to s 73(3) of the Tribunal Act. Section 73(3) is a clause commonly found in statutes setting up tribunals and statutes conferring power on administrators to make administrative decisions. Section 73(3) provides:
- ‘ (3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.’
This sub-section appears in a provision headed ‘Procedure of the Tribunal generally’ which is the first section in a part headed ‘Other Procedural Matters’.
18 There is nothing as we see it in the circumstances as found by the Tribunal to take this matter outside the realm of those cases to which ordinary legal principles should be applied. The appellant took up a shop in a centre undergoing refurbishment. He entered into a lease of a usual kind. He traded below his expectations. Ultimately he was unable to pay the rent. He was locked out. The respondent purported to act in accordance with his rights under the lease. The position in relation to the removal of the applicant’s fixtures is a little more complicated, and we turn to that issue later in the reasons.
Grievances
19 At the appeal hearing it was apparent that the appellant’s main concern related to what he says are errors in the fact-finding of the Tribunal relating to the extent of renovations that occurred after 2 February 2000; and secondly, the disposition of the fixtures and fittings following the termination of the lease. These two events are the key to the ultimate determination of all claims, whether formulated in terms of breach of the terms of the lease, unfairness generally or derogation from the grant by the lessor.
Refurbishment works
20 As noted earlier, the Tribunal found that there were no works undertaken after 2 February 2000 that had any significant effect on the appellant’s business. The appellant vigorously disputed this finding.
21 A finding in relation to a factual matter can only amount to an error of law if the finding is not logically probative. It is sufficient that a finding of fact is based on any logically probative evidence. As the Appeal Panel noted in Woodside & anor v Director General, Department of Community Services [2000] NSWADTAP 8 at [44]:
- ‘The fact finding process necessarily involves a process of selection between inconsistent and conflicting assertions as to fact by a process involving the assessment and weighing of evidence. A submission that the trier of fact's findings are against the weight of the evidence does not raise a question of law.’
- ‘It is not open to an appellate court, and similarly an Appeal Panel of this Tribunal to disturb a finding of fact merely because it might, on a review of the reasons for decision, any transcript or notes of the earlier proceedings and after hearing submissions, have been inclined to adopt a different view.
… The Appeal Panel does not have the advantage that the trier of fact has in being able to observe the witnesses give their evidence. See generally Soulemizis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278 and 281 per McHugh J.’
- ‘it is an error to ignore evidence which is critical to an issue in the case: Mifsud v Campbell (1991) 21 NSWLR 725 (Court of Appeal); Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 at 513 (Court of Appeal); or to make an adverse finding without addressing significant uncontroverted evidence to the contrary: State RailAuthority of New South Wales v Earthline Constructions (1999) 73 ALJR 306.’
25 First, the Panel was shown certain photographs which revealed substantial barricades and works in the vicinity of Shop 43B and the adjacent escalators which the appellant said were taken after 2 February 1999; if such barricades had been present during March and April they would obviously have inhibited access in the area of Shop 43B. Secondly, he referred to cross-examination of the Site Manager which referred to some defective works having to be redone after that date, creating substantial dust and noise. Thirdly, he referred to evidence of a neighbouring shop owner as to certain ceiling works in the Food Court taking place in March or April. Fourthly, he referred to further evidence of the Site Manager as to the taking up and re-laying of tiles. Fifth, he pointed to the evidence that the traffic count for the renovated Centre did not begin until April 2000 and sixth, he referred to further evidence of the Site Manager that certain stone tiles continued to be delivered through May 2000.
26 In its response the respondent pointed the Appeal Panel to the specific tested evidence of both the Site Manager and the Project Director that all tiling works in the vicinity of Shop 43B and around the escalators, being the area immediately adjacent to the area where the Opening Ceremony was held, had been completed before that date. That evidence included a specific examination of the photographs tendered by the appellant, which the Site Manager stated were taken prior to 2 February 2000. The respondent also pointed to evidence that the delivery of subsequent tiles related to another area of the Town Hall Arcade and submitted that the date of commencement of the traffic count and the installation of a ceiling projector did not of themselves support the key factual contention that there was a significant continuing disturbance interfering with access to Shop 43B after 2 February 2000.
27 Having regard to both this analysis and the fact that the Tribunal at first instance heard the totality of the evidence and expressed its conclusion in clear terms, we are satisfied that there is no basis in law for disturbing its findings of fact at paras [23] and [40], i.e. that no significant works occurred in the vicinity of Shop 43B after 2 February 2000.
28 It was also conceded by the appellant during the appeal that he had accepted a rent reduction for the December-January period which removes any continuing claim in respect of any interruption to his trading during that time.
29 These decisions on the facts remove the underpinning from the claims in respect of the inhibition of access and dirt and noise impact, however formulated by the appellant across the wide range of propositions he put on appeal. In any event, we have determined that this matter is to be resolved according to the applicable ordinary legal principles.
30 Nonetheless we will briefly refer to the requirements of s 34 of the Act. Section 34 provides:
- ‘ 34. Lessee to be compensated for disturbance
(1) A retail shop lease is taken to provide that if the lessor:
- (a) inhibits access of the lessee to the shop in any substantial manner, or
(b) takes any action that would inhibit or alter, to a substantial extent, the flow of customers to the shop, or
(c) unreasonably takes any action that causes significant disruption of, or has a significant adverse effect on, trading of the lessee in the shop, or
(d) fails to take all reasonable steps to prevent or put a stop to anything that causes significant disruption of, or which has a significant adverse effect on, trading of the lessee in the shop and that is attributable to causes within the lessor's control, or
(e) fails to rectify any breakdown of plant or equipment under the lessor's care or maintenance, or
(f) in the case of a shop within a retail shopping centre, fails to adequately clean, maintain or repair the retail shopping centre (including common areas),
- and the lessor does not rectify the matter as soon as reasonably practicable after being requested in writing by the lessee to do so, the lessor is liable to pay the lessee reasonable compensation for any loss or damage (other than nominal damage) suffered by the lessee as a consequence.
- (2) In determining whether a lessor has acted unreasonably for the purposes of subsection (1)(c), due consideration is to be given to whether the lessor has acted in accordance with recognised shopping centre management practices.
(3) A retail shop lease may include a provision preventing or limiting a claim for compensation under the provisions implied by this section in respect of any particular occurrence if the likelihood of the occurrence was specifically drawn to the attention of the lessee in writing before the lease was entered into.
Note.
- A disclosure statement is an appropriate means of specifically drawing the attention of the lessee to the likelihood of an occurrence.
(4) The provisions implied by this section do not apply to any action taken by the lessor:
- (a) as a reasonable response to an emergency situation, or
(b) in compliance with any duty imposed by or under an Act or resulting from a requirement imposed by a public or local authority acting under the authority of an Act.’
- ‘8 In addition, there was a document titled "Details as to Agreements or Representations". Relevantly paragraph No. 2 provided that the Respondent drew to the Applicant's attention "the likelihood of the following occurrences during the Lease ....
a) The Lessee's access to the shop and the flow of customers to the shop may be inhibited or altered while the Arcade or the Lessor's plant and fixtures are being maintained, repaired or repaired (sic) or repainted or there are alterations or additions being made to the Arcade;
d) Some plant and equipment in the Arcade which is under the Lessor's control may periodically break down and require repair, maintenance or replacement. This repair, maintenance or replacement may take some time, during which the Lessee may be inconvenienced and may suffer some loss in trading;
e) Refurbishment of the other tenancies which may create noise, dust and disruption to pedestrian flow."’
33 However, this error is immaterial, as s 34 did not come into play in this case. The appellant presented to the Tribunal the document which he said amounted to a notice for the purpose of s 34(1) - the January monthly tenancy report (required to be lodged not later than the 10th of the next month), a brief document which had a short handwritten note on it (Ex 6 in original proceedings) ‘noise and construction dust affecting sales!’. We have no difficulty with the Tribunal’s finding of fact that this communication did not amount to a notice for the purpose of s 34.
34 The appellant also referred to the meeting of tenants that occurred on 22 March 2000, and to the minutes of that meeting. He saw this material as providing evidence in support of his claims as to the state of the works still going on in the shopping centre and affecting him at that time. He also contended that the material constituted a form of notice for the purposes of s 34. We are satisfied that the Tribunal adequately considered this material in making its findings. There is, in our view, no reasonable basis for construing the minutes as a form of notice under s 34.
Fixtures and fittings
35 The appellant next challenges the decision of the Tribunal that his claim for the reimbursement of the cost of his fixtures and fittings has no basis in law.
36 At common law the position is a clear one – the tenant must remove any tenant’s fixtures during the term, except in the case of forfeiture or surrender where a reasonable time is allowed; otherwise they remain the property of the landlord: see generally Megarry & Wade, The Law of Real Property (6th ed. Harpum, 2000), [14-317]. In this case the lease contained provisions dealing with the issue, and they are summarised in the Tribunal’s reasons at [44] and [45].
37 We will set out again the key provision, cl 14(3) of the lease:
- ‘14.3 Failure by Tenant to remove Tenant’s Fittings
If the Tenant fails to remove the Tenant’s Fittings as required by Clause 14.1 [fittings to be removed within seven days of termination], or in the event of determination under Clause 13.3 [forfeiture and re-entry]:
(a) the Landlord may cause the Tenant’s Fittings to be removed and stored in the manner the Landlord in its absolute discretion thinks fit at the risk and at the Cost of the Tenant;
(b) the property in the Tenant’s Fittings vests in the Landlord and the Landlord may deal with them as the Landlord thinks fit without being liable in any way to account to the Tenant.’
39 A later letter (26 May 2000) advised that that the appellant could remove ‘stock, fittings and fixtures’ in return for a fee of $800. The fee was paid on 31 May 2000. By letter dated 9 June 2000 the appellant claimed that various items were missing from the stock, fittings and fixtures removed – see [49] of reasons for decision for list. The Tribunal found that the following items remained as part of the premises and continue to be there: alarm system, security system, camera monitoring system, glass shop front and glass door, signage, light fittings, timber flooring (‘the seven items’). The Tribunal asked which of these items might remain the personal property of the appellant, as distinct from having become fixtures by virtue of the degree of annexation to the land. The Tribunal only saw as likely to be arguable that two items remained personal property – light fittings and signage – but it observed that it had little evidence before it on the degree of annexation.
40 The Tribunal did not refer to the assertion by the lawyers for the respondent by letter of 26 May 2000 to the lessee’s lawyer that ‘apart from your client’s safe, all of his stock fixtures and fittings have been removed from Shop 43B and stored’ (see p 24 of Ex 3 in the original proceedings; emphasis added). The respondent sought to justify its position in relation to the statement of 26 May 2000 by contending that the statement had been in respect of the removal of the appellant’s ‘goods’ only. Two later items of correspondence support that contention: the letter of 29 May 2000 from the respondent’s lawyers – it forwards invoices relating to the cost of removal of the appellant’s ‘goods and storage of those goods’, and the appellant’s solicitor of 31 May 2000 forwarding payment and referring to the items to be removed as his client’s ‘goods’.
41 The lawyers for the appellant complained by fax dated 9 June 2000 that upon attendance to remove his goods, their client found the seven items missing. That statement tends to support a conclusion that the appellant saw the arrangement as having covered the whole of his stock, fittings and fixtures, in line with the text of the letter of 26 May 2000.
42 In their reply letter of 15 June 2000, the respondent’s lawyers acknowledged that the seven items ‘remain intact and in Shop 43B’.
43 While it is not entirely clear, it would appear that at this point the respondent was continuing to hold out the possibility that the appellant could return to the shop and remove those items, i.e. the respondent had given the applicant an extension of time to remove the fittings and fixtures.
44 While the Tribunal did not examine the implications of the statement made in the letter of 26 May 2000, we are satisfied that ultimately no legal error arises. On 2 June 2000 after making the payment of $800 the applicant attended the shopping centre. He went back to his old shop, and removed personal items from the safe. He made arrangements for a tradesman to come on 5 June to remove the safe. It would have been apparent to him that there were some items of fittings still fixed to the walls and floor of the shop, and that the letter of 26 May 2000 was in error to the extent to that it suggested that ‘all’ items had been removed. The respondent as at 15 June 2000 was still leaving it open to the applicant to remove these items (at his cost).
45 The problem both at first instance and for the Appeal Panel is that it was not explained why the appellant and his lawyers did not then pursue within a reasonable time thereafter the obvious retention by the respondent of important fixtures and fittings.
46 In these circumstances at law the respondent is entitled to retain all fittings that were fixtures.
47 For the above reasons, the appeal should be dismissed.
48 But we recommend to the respondent that it give consideration to reimbursing to the applicant the value of the fittings retained at their written down value as at 15 June 2000. The respondent has ended up with something of a windfall especially in relation to those items that would have retained some real value to an incoming tenant such as the alarm system, security system, camera monitoring system, glass shop front and glass door. The respondent acknowledged in the appeal that some items continued to be used by the new tenant.
49 The issue of costs remains. The Tribunal reserved the question, and has not resolved it pending the appeal. This is a question that it would be more convenient for the Appeal Panel to dispose of. Our provisional view is that are no special circumstances (see Tribunal Act s 88(1); Retail Leases Act s 77A) sufficient to warrant a costs order at first instance. As to the appeal the Appeal Panel has expressed the view that in retail leases matters, the costs sanction should be more readily applied to failed appeals: Citadin (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31. We will not deal with the issue of costs finally at this point, but make these observations in the hope that it will assist in the overall settlement of those matters without the case having to be brought back to the Appeal Panel.
ORDERS
- 1. Appeal dismissed.
2. Liberty to apply within 42 days as to costs.
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