Cecil Bros Pty Ltd v Leach

[2003] WADC 77

CECIL BROS PTY LTD -v- LEACH [2003] WADC 77

Last Update:  15/04/2003

CECIL BROS PTY LTD -v- LEACH [2003] WADC 77
Jurisdiction:	DISTRICT COURT OF WESTERN AUSTRALIA	Citation No:	[2003] WADC 77
Case No:	CIV:974/2002	Heard:	20 MARCH 2003
Coram:	COMMISSIONER GREAVES	Delivered:	01/04/2003
Location:	PERTH	Supplementary Decision:
No of Pages:	6	Judgment Part:	1 of 1
Result:	Appeal allowed
[Click here for Judgment in Adobe Acrobat Format ]

Parties:	CECIL BROS PTY LTD (ACN 008 675 929) JEFFERY JOHN LEACH
Catchwords:	Procedure Summary judgment Triable issue Appeal from Deputy Registrar Appeal allowed Leave to defendant granted Turns on its own facts
Legislation:	Nil
Case References:	Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87 General Credits (Finance) Pty Ltd v Shipton Holdings Pty Ltd, unreported; SCt of WA; Library No 2054; 19 May 1977 Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 13,467 Nil

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION : PERTH CITATION : CECIL BROS PTY LTD -v- LEACH [2003] WADC 77 CORAM : COMMISSIONER GREAVES HEARD : 20 MARCH 2003 DELIVERED : 1 APRIL 2003 FILE NO/S : CIV 974 of 2002 BETWEEN : CECIL BROS PTY LTD (ACN 008 675 929)

Plaintiff

AND

JEFFERY JOHN LEACH
Defendant

Catchwords:

Procedure - Summary judgment - Triable issue - Appeal from Deputy Registrar - Appeal allowed - Leave to defendant granted - Turns on its own facts

Legislation:

Nil

Result:

Appeal allowed


(Page 2)

Representation:

Counsel:

Plaintiff : Mr A Atkinson
Defendant : Mr M L Bennett

Solicitors:

Plaintiff : Solomon Brothers
Defendant : Bennett & Co

Case(s) referred to in judgment(s):

Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87
General Credits (Finance) Pty Ltd v Shipton Holdings Pty Ltd, unreported; SCt of WA; Library No 2054; 19 May 1977
Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 13,467

Case(s) also cited:

Nil

(Page 3)

1 COMMISSIONER GREAVES: This is an appeal from the decision of the learned Deputy Registrar whereby he entered summary judgment for the plaintiff in this action. The learned Deputy Registrar correctly identified the issue for his decision whether the affidavit evidence discloses an arguable defence and whether the defendant was entitled to terminate the sub-lease. He considered the evidence did not disclose an arguable defence. He decided it is not arguable the conduct of the plaintiff constituted a repudiation of the lease. Whether that conduct constituted a repudiation of the lease is a question of fact to be judged on the totality of the conduct of the parties: see Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 13,467. On 18 December 2000, the plaintiff wrote to the agents of the head lessor in the following terms (Folio 77 of the affidavit of Jeffery John Leach):

"Reports from our contractor, Trane Air Conditioning, indicate that the system is at or nearing it's (sic) useful life. It is obvious that the amount of regular repairs necessitate further action, and as per the lease, replacement of capital equipment is borne by the lessor.

The system must be replaced to provide adequate air quality within the building and with the summer season upon us it is extremely important that this issue is met expeditiously."

2 On 15 February 2001, the plaintiff wrote to the defendant inter alia (Folio 60 of the affidavit of Jeffrey John Leach):

"You … have the responsibility to maintain and repair the air conditioning. We have always, and continue, to service and repair the equipment. It is old and requires replacement, that is a fact, however the responsibility lies with the lessor to replace it. In December 00 I requested them to replace the unit however they are still conducting investigations. I can do no further, and if we were to replace it the cost would be charged to you as tenants."

3 On 23 July 2001, the plaintiff wrote to the defendant inter alia (Folio 76 of the affidavit of Jeffery John Leach):

"In response to your comments about the air conditioning system, we are in agreeance (sic) that the system is not as effective as it could be. In fact, Pieter Haverhoek has had negotiations with the owners of the property to bring this to their attention. He had them conduct an inspection by

(Page 4)

independent technicians and they have decided not to upgrade the equipment. You were forwarded a copy of this letter however I have attached it again for your information.

We can do no more in this situation, as it is the owners responsibility to replace the system. Cecil Bros, on behalf of the sub-tenants, maintain the equipment and if you wish we can conduct investigations to replace the equipment at sub-lessees cost."

4 Mr Leach refers to the correspondence in his affidavit and at par 35 et seq states:

"35. As at 8 August 2001:
35.1 the goods lift for the Premises was still boarded up and was not operational;

35.2 the airconditioning of the Premises was and continued to be defective;

35.3 from my perusal of the correspondence, I verily believed that:

35.3.1 the Plaintiff acknowledged that both the goods lift and airconditioner should be replaced;

35.3.2 the Plaintiff believed that it was the responsibility of the Head Lessor or Sunbay Enterprises Pty Ltd or the owner, to remedy the goods lift and airconditioner;

35.3.3 the Plaintiff was not going to take any steps to remedy the goods lift or the airconditioner

36. On 8 August 2001, I wrote to Ms Parks of the Plaintiff informing her that I intended to vacate the Premises as at the end of August 2001. Now produced and shown to me and annexed hereto marked with the letters 'JJL24' is a true copy of this letter.

(Page 5)

37. As stated in this letter, I terminated the sub-lease because of the Plaintiff's failure to remedy the problems with the goods lift and the airconditioner.

38. I verily believe that:

38.1 the temperatures within the Premises constantly fluctuated during the day making working conditions difficult for my staff and the storage of heat-sensitive medicines difficult;

38.2 because the Premises were extremely cold in winter and very hot in summer, it was an unpleasant environment for both staff, customers and potential customers;

38.3 despite spending $55,000 on the Premises to improve the visibility and functionality of the entry to the Premises and on new signage and the Friendlies group spending $250,000 per annum on advertising, the business at the Premises was not profitable.

38.4 the unprofitability of the business was attributable to the problems with the airconditioning at the Premises;

38.5 the temperatures regularly exceeded 25ºC, being the maximum recommended temperature to store heat-sensitive medications. The excessive temperatures have exacerbated the destruction of stock in trade;

38.6 the electricity bills over the tenancy have been higher than would be expected because it takes 8 hours for the airconditioning to reach its required temperature.

38.7 my sub-sublessee vacated the Premises because of the problems with the airconditioner;

38.8 one of my employees submitted a claim for workers' compensation in April 1999. The claim

(Page 6)

form stated that the injury was sustained from carrying boxes up the stairs at the Premises."

5 The facts and opinions verified by Mr Leach are sufficient to give rise to a triable issue whether the airconditioner required replacement, and the conduct of the plaintiff since 1998 in failing to take steps to perform its obligations under the lease or in failing to require the owner to take such steps were such that given the nature of the tenancy and the pharmacy business carried on by the defendant in the premises, the defendant was deprived of the benefit of the sub-lease.

6 The defendant also relied upon the further affidavit of Rodney William Isard filed since the decision of the learned Deputy Registrar but I do not find it necessary to refer to his evidence.

7 The alleged breach by the plaintiff goes to the root of the contract and the question whether the conduct of the plaintiff manifested an inability or unwillingness to perform the contract in circumstances amounting to a repudiation of it.

8 The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. If it is not possible to say without doubt on the whole of the material that there is no question to be tried, there should be leave to defend: see Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87 at 99. In my view the defendant has shown there are circumstances of the claim which ought to be the subject of close investigation at trial so that the court should grant leave to defend: see General Credits (Finance) Pty Ltd v Shipton Holdings Pty Ltd, unreported; SCt of WA; Library No 2054; 19 May 1977.

9 The reasons of the learned Deputy Registrar also reflect the triable issue and arguable defence I have identified. The defendant has shown there should be close investigation of that issue and accordingly there should be leave to defend.

10 The appeal will be allowed, the decision of the learned Deputy Registrar quashed and leave to defend granted. I will hear counsel on the orders to be made.

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