Centrepoint Group Pty Ltd v Dewsbery
[2004] TASSC 64
•2 July 2004
[2004] TASSC 64
CITATION: Centrepoint Group Pty Ltd v Dewsbery [2004] TASSC 64
PARTIES: CENTREPOINT GROUP PTY LTD
(ACN 009 518 012)
v
DEWSBERY, Ken
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: LDR 190/2000
DELIVERED ON: 2 July 2004
DELIVERED AT: Launceston
HEARING DATE/S: 21, 22, 24 and 25 June 2004
JUDGMENT OF: Blow J
CATCHWORDS:
Torts – Trespass – Remedies – Injunction.
Reliance Finance Corporation Pty Ltd v Orwin [1964 - 1965] NSWR 970; Patel v W H Smith (Ezior) Ltd [1987] 2 All ER 569, referred to.
Aust Dig Torts [201]
REPRESENTATION:
Counsel:
Plaintiff: A Bain
Defendant: In person
Solicitors:
Plaintiff: Douglas & Collins
Defendant: In person
Judgment ID Number: [2004] TASSC 64
Number of paragraphs: 18
Serial No 64/2004
File No LDR 190/2000
CENTREPOINT GROUP PTY LTD (ACN 009 518 012) v KEN DEWSBERY
REASONS FOR JUDGMENT BLOW J
2 July 2004
This is an action for damages for trespass, and for associated declaratory and injunctive relief. The plaintiff carries on a storage business, and for the purpose of that business has rented part of the former Coats Patons factory site at West Launceston since June 1998. The defendant is occupying two parts of the rented premises, known as the East Dye House and the West Dye House. The plaintiff contends that he is a trespasser, but the defendant claims to be a sub-tenant under a sub-lease. The defendant owns certain property that is in a third area of the premises rented by the plaintiff, the basement of a building known as Warehouse No 1. The plaintiff contends that the presence of some of that property constitutes a trespass, but the defendant contends that it was put there with the plaintiff's permission, and that the plaintiff has since prevented him from removing it. The plaintiff company has two directors – a Mr Ferrall and his wife. The only witnesses at the trial were Mr Ferrall and the defendant. The defendant carried on a demolition and salvage business, and used the premises in question for the purposes of that business.
The plaintiff's case as presented through the evidence of Mr Ferrall, can essentially be summarised as follows:
(a)In late August 1998 the defendant had a discussion with Mr Ferrall about renting the West Dye House.
(b)Following that discussion, Mr Ferrall wrote the defendant a letter dated 26 August 1998 confirming the details of a proposal that they had discussed. That letter contained the following:
"I refer to the above and our recent discussions and confirm the details as follows.
LOCATION
West dyehouse as marked on the enclosed plan.
RENT
$3,900 PA.Payable in monthly payments in advance of $325.LEASE
One year on exchange of letters agreeing to the details. Option to rent for a further period of up to 5 years.
RENT REVIEW
The rent increases by CPI each year and reviewed and agreed each three years....
CONSENT
You do not require planning or zoning permission, but you will require the owners approval for this proposition.I trust this is satisfactory."
(c)The defendant did not reply to that letter, but commenced to rent the West Dye House. The rent paid by the defendant may have been $303.33 per month, rather than $325 per month, from the outset, as contended by the defendant.
(d)The defendant operated a demolition and salvage business. In the course of that business, he brought onto the plaintiff's rented premises more materials than could conveniently be accommodated in the West Dye House. With the permission of Mr Ferrall, he stored materials in and on various other parts of the premises, including the East Dye House and the basement under Warehouse No 1. There was no agreement for the payment of rent by the defendant except in relation to the West Dye House. However, the defendant promised to allow the plaintiff to use some of his building materials for further developing the improvements in the premises in consideration for his use of the East Dye House. There was no agreement as to how long that arrangement was to continue.
(e)On or about 27 January 2000 Mr Ferrall and the defendant orally agreed to terminate the arrangements that then existed for the rent-free use of spaces. The defendant agreed to remove all his property and vacate all unrented areas by 27 February 2000. Mr Ferrall wrote him a letter dated 27 January 2000 intended to confirm what had been agreed.
(f)On 16 February 2000 Mr Ferrall wrote to the defendant requiring him to vacate, or commence paying rent in respect of, each area used by him other than the West Dye House. The proposed rents for each area had previously been specified in a letter from Mr Ferrall to the defendant dated 10 February 2000.
(g)By 16 April 2000, the defendant had not vacated any area of the premises that he had been using. He was still paying rent in respect of the West Dye House. By letter of that date, Mr Ferrall required him to vacate all the areas occupied by him by various dates, which were specified. The specified date in respect of the area under Warehouse No 1 was 16 May 2000. The date specified for both the West Dye House and the East Dye House was 16 July 2000.
(h)Ever since then, the defendant has had some old cars under Warehouse No 1, and has continued to occupy both the West Dye House and the East Dye House.
(i)The plaintiff refused to accept a cheque dated 13 June 2000 that was tendered by the defendant by way of rent. It has not received any rent from the defendant since then.
The defendant's case in relation to the West Dye House, as presented through his evidence, can essentially be summarised as follows:
(a)Although the letter dated 26 August 1998 referred to a rent of $3,900 per annum, he and Mr Ferrall agreed by telephone at about that time that the rent would be the equivalent of $70 per week, payable in monthly instalments. That equates to $303.33 per month or $3,640 per annum. He entered into an oral agreement with Mr Ferrall, as the agent of the plaintiff, to rent the West Dye House for one year, with an option for renewal for a further term of five years, that was in the terms of the letter of 26 August 1998, apart from the monthly rent figure. Mr Ferrall told him that the owner of the property, Tasmanian Wool Co Pty Ltd, was agreeable to that, and that there was no need to reply in writing to the letter of 26 August 1998.
(b)Prior to the expiry of the 12-month lease term, the defendant exercised the 5-year option orally by saying to Mr Ferrall words to the effect that he would be staying in the long-term and exercising his right for the additional period of time, or that he would definitely be continuing on the long-term lease, or that he would go on with the option.
The essentials of the defendant's case in relation to the East Dye House, as presented through his evidence, can be summarised as follows:
(a)When he rented the West Dye House from the plaintiff, it was agreed that his access to it was to be through the East Dye House. He was concerned about what would happen if the East Dye House was rented by someone else. Therefore, not long after renting the West Dye House, he spoke to Mr Ferrall and asked whether it would be acceptable to pay $100 per week rent for both the dye houses. Mr Ferrall said he could not see a problem with that. The defendant said he would let him know within a month. That conversation took place shortly before the defendant received the letter dated 26 August 1998.
(b)Within a month, the defendant took possession of the West Dye House, went to see Mr Ferrall, and offered to start paying the additional $30 per week for the East Dye House. Mr Ferrall said, "Don't worry about it. We will offset that against the flat and against what you are doing." He was referring to the fact that the defendant had arranged to occupy another part of the premises rent-free as a flat, and to the fact that he was doing some unpaid security work, supervising the premises outside business hours.
(c)The result of these conversations was that the defendant occupied the East Dye House pursuant to an oral 12-month sub-lease with a 5-year option, upon the terms set out in the letter of 26 August 1998, save for the amount of the rent.
(d)The 5-year option was exercised orally by the defendant before the 12-month lease expired, just as the 5-year option relating to the West Dye House was.
The defendant's evidence and case in relation to the area under Warehouse No 1 can be summarised as follows:
(a)The defendant had a talk with Mr Ferrall in which he expressed an interest in using that area to store vehicles. Mr Ferrall said that that was okay; that he would work out what the rental should be; that he did not have time to do that at the moment; and that it was all right for the defendant to move three vehicles into that space. The defendant then moved three vehicles into it.
(b)The next morning, the defendant met a man named Rob who explained that he had just leased the space in question from Mr Ferrall. They went to see Mr Ferrall together. Mr Ferrall said that he had arranged for the new sub-tenant to put the defendant's vehicles over in the corner out of the way so that they would not be a problem.
(c)At a later stage the defendant obtained a key from Mr Ferrall so that he could remove the vehicles, but found that a masonite wall had been built around them, and that there was absolutely no access to the area where the vehicles were.
(d)The vehicles are still there. He has never been able to remove them because of the wall around them.
(e)The Launceston Church of Christ subsequently purchased the real estate and moved other property belonging to the defendant into the area under Warehouse No 1 with the consent of Mr Ferrall.
Mr Ferrall disputed practically every allegation I have referred to as to conversations with him. He denied that there were any conversations in which he granted a 12-month oral lease, in which he granted a 5-year option, or in which the defendant said anything about exercising such an option. He denied any recollection of a discussion as to the payment of an additional sum in respect of the East Dye House.
Before I deal with questions of credibility, I wish to refer to two matters that present great difficulty to the defendant. The first concerns a conversation that he had with Mr Ferrall in early 2000. Mr Ferrall gave evidence that, before writing the letter to the defendant dated 27 January 2000, he had a discussion with the defendant in his office. He said the defendant came into his office and discussed an arrangement whereby the defendant provided certain services and products in exchange for rent-free space to store goods and vehicles. He said they discussed that arrangement, and both agreed that it would terminate because it was not working. He said that the letter of 27 January was written to confirm their discussion. That letter contained the following:
"I refer to our existing arrangement whereby you provide certain services and product in exchange for rent free space to store your goods-vehicles etc.
I confirm that by mutual agreement both parties have agreed to terminate this arrangement as from 27/2/2000. We will need to reconcile goods and services exchanged by 1/2/00, so that both parties have a clear understanding of their position.
...
You will be required to remove all goods, possession, vehicles etc from the following areas by the vacation date and all keys are to be returned.
1 West dyehouse including store rooms
2 East dyehouse including upstairs offices.
...
11 Wrecked cars in basement Warehouse One."
It is common ground that the defendant was paying a monthly rent for the West Dye House at the time this letter was written. According to Mr Ferrall's oral evidence, nothing was said in the conversation that led to this letter about the termination of that tenancy. The defendant denies that there was any arrangement for the provision of "product" in exchange for rent-free space. As I understand it, he contends that any arrangements in relation to the storage of cars in the basement of Warehouse No 1 broke down within 24 hours of them being placed there. However, insofar as Mr Ferrall's evidence relates to the termination of the arrangements in relation to the East Dye House at the time of this letter, the defendant has not contradicted it. He represented himself at the trial, and made a long opening address, which he adopted as part of his evidence-in-chief. That is to say, he gave evidence that what he said in his opening address was true. During his opening address, he described an incident when a young man had been working on a stock car, the stock car had collapsed onto the man, and the defendant had obtained a jack, and jacked up the stock car to free the man. The defendant described a conversation with Mr Ferrall in relation to that incident in the following terms:
"... I said to him 'I think this is a very good example of the fact that we now need to deal with this issue'. Michael [Ferrall] said, his response was, 'If you don't like it you can get out at the end of the month.' I was so astonished by his comment that I didn't know what to say. From a legal perspective [sic] what I said was, 'Suits me' and I walked out."
I infer that the defendant was describing the same conversation as the one which, according to Mr Ferrall, gave rise to the letter dated 27 January 2000. I find that in that conversation Mr Ferrall, on behalf of the plaintiff, agreed with the defendant to terminate the arrangement whereby the defendant occupied the East Dye House rent-free. They agreed to terminate the arrangement as from either 27 February 2000 (the date in Mr Ferrall's letter) or the end of February 2000 ("the end of the month" according to the defendant) – I am not sure which. That agreement superseded any earlier agreement, whether in the nature of a lease or a licence, as to the East Dye House. It follows that, at least since 1 March 2000, the defendant has occupied the East Dye House as a trespasser.
The second significant difficulty for the defendant concerns the paragraph in the letter of 26 August 1998 concerning rent increases. It read, "The rent increases by CPI each year and reviewed and agreed each three years". Plainly it was the intention of the parties that, if a 12-month lease with a 5-year option was granted, there was to be a rent review clause whereby the rent for the fourth, fifth and sixth years was to be the subject of agreement. Nothing was said in the letter of 26 August 1998 as to how the rent for those years was to be determined if the parties failed to reach agreement. I have no evidence as to any conversation or correspondence in which a mechanism for determining the rent in such an eventuality was agreed upon. When an option provision in a lease agreement requires the parties to agree upon the rent, even for only part of the option term, and provides no mechanism for the rent to be determined if they fail to agree, the option is void: Randazzo v Goulding [1968] Qd R 433. Thus even if, as asserted by the defendant, the parties entered into an oral 12-month lease agreement, with a 5-year option, in the terms of the letter of 26 August 1998, the option was void. Since the defendant was paying his rent monthly, he had a monthly tenancy at best on 16 April 2000 when Mr Ferrall wrote to him on behalf of the plaintiff giving him three months' notice to vacate the two dye houses. It follows that, by remaining in occupation of those areas as from 16 July 2000, he has committed a trespass in relation to them.
I turn to the matter of credibility. Mr Ferrall gave his evidence in an impressive manner and, generally speaking, gave the impression of being a businesslike and reliable individual. However, I have a number of reasons to approach his evidence with caution. He confidently gave evidence as to letting the West Dye House to the defendant at a rent of $390 per month (the equivalent of $75 per week), but subsequently did not dispute the defendant's assertion that the rent was $303.33 per month (the equivalent of $70 per week) from the outset. He gave the impression of documenting every significant conversation by means of a confirmatory letter, but evidently did not follow that practice in relation to the rent of $303.33 per month. In relation to other points, he relied on a copy letter dated 5 October 1998, but the defendant contended that he did not receive such a letter, and that a reference in it to the storing of bricks referred to events that occurred some 12 months after the date of the letter. When pressed about the authenticity of that letter, Mr Ferrall suggested that the date on it might be wrong. Further, the inclusion by Mr Ferrall of a reference to the West Dye House in his letter of 27 January 2000, to which I have referred, was unwarranted if his oral evidence as to the conversation giving rise to that letter is correct. Further, after giving the defendant three months' notice to vacate the two dye houses by the letter dated 16 April 2000, Mr Ferrall locked him out of both during June 2000 without notice, solely as a reaction to the defendant taking delivery of some hydro poles. Mr Ferrall believed that the defendant should be removing his possessions, not adding to them. He had no right to lock him out of the West Dye House. The three months' notice had not expired, and the rent was up to date.
The defendant gave every appearance of honesty and sincerity, but I think he was an unimpressive witness. Assuming him to be honest, I think he had unrealistically optimistic perceptions in relation to important events and documents. For example, he confidently asserted that the letter of 26 August 1998 constituted confirmation that the owner of the property, Tasmanian Wool Co Pty Ltd, consented to the granting of a 12-month sub-lease with a 5-year option, whereas the letter expressly stated, "... you will require the owner's approval for this proposition." Further, although he wrote Mr Ferrall some long letters at times, he did not ever assert in writing that he had entered into a 12-month lease with a 5-year option and later exercised that option. I do not think he could have believed that that was the situation in 2000, though he may have later formed a belief that that was the situation.
Although I have reservations as to the credibility of Mr Ferrall, I am satisfied that his evidence in relation to the critical conversations concerning the premises is truthful and accurate. To the extent that his evidence as to critical conversations is inconsistent with that of the defendant, I reject that of the defendant. I therefore make the following findings. Mr Ferrall and the defendant did not orally agree upon a 12-month lease with a 5-year option for either of the dye houses. The defendant did not purport orally to exercise any 5-year option. There was no oral agreement or arrangement for the defendant to lease the East Dye House. As at 16 April 2000, the plaintiff was entitled to terminate the parties' oral lease agreement in respect of the West Dye House on three months' notice, to require the defendant to vacate the East Dye House on three months' notice, and to require the defendant to remove his old cars from the basement of Warehouse No 1 within one month. I infer that, at least since 16 July 2000, the plaintiff has been willing to permit the defendant to remove the old cars from the premises, and to do anything necessary to facilitate their removal, but that the defendant has had no interest in removing them. By remaining in possession of the two dye houses since 16 July 2000, and by leaving the cars under Warehouse No 1, the defendant has committed continuing trespasses.
Damages
The plaintiff is claiming damages in respect of the period since 16 July 2000 until judgment in respect of the two dye houses, calculated by reference to a rent of $70 per dye house per week. No damages are claimed in respect of the area under Warehouse No 1, nor in respect of the period up to 16 July 2000.
As a general rule, when a trespasser has made use of a plaintiff's land, the plaintiff is entitled to receive by way of damages such a sum as should reasonably be paid for that use: Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 at 439. However, the plaintiff had arrangements to pay a proportion of the rents it received to its landlord. Prior to 1 November 2003, it was bound by an agreement to pay the owner of the property half of the rental income it received. As from 1 November 2003, it has been bound by an agreement to pay the Launceston Church of Christ, the new owner, 60 per cent of its "income from rental and self-storage activities". Because of those agreements, the damages that will compensate it appropriately for its loss must comprise 50 per cent of the amount that should reasonably be paid for the use of the premises prior to 1 November 2003, together with 40 per cent of the equivalent amount thereafter. There is no basis for construing the agreements between the plaintiff and its landlords in such a way as to entitle the landlords to be paid any part of any damages received from a trespasser.
Neither party called or gave any expert evidence as to the rental value of the premises, but I have some evidence as to what rents the parties considered acceptable. The defendant was willing to pay $70 per week for the rent of the West Dye House at all material times, and the plaintiff was willing to let it for that rental. On 10 February 2000, Mr Ferrall wrote to the defendant indicating that the plaintiff was willing to let the East Dye House for $70 per week, but I have no evidence that the defendant was ever willing to pay more than $30 per week for it. If the East Dye House had been let to another tenant, I think it would have commanded a lower rent than the West Dye House, since the only access to the West Dye House was through the East Dye House. If both dye houses had been let to the same tenant as a package, it seems likely that a rent somewhat less than $140 per week would have been appropriate. I have no other evidence from which I can assess the sum that should reasonably be paid for the use of the two dye houses. Doing the best I can, I find that the sum reasonably payable for their use since 16 July 2000 is $100 per week. I therefore assess the damages payable by the defendant as follows:
| 17.07.00 to 31.10.03 (119 weeks 4 days at $100 per week less 50%) | $5,978.57 |
| 01.11.03 to 02.07.04 (246 days at $100 per week less 6%) | 1,405.71 |
| Total damages | $7,384.28 |
Declaratory and injunctive relief
No trespass has been committed by the defendant in relation to the goods belonging to him that were placed in the area under Warehouse No 1 by the church with the concurrence of the plaintiff. However, it is appropriate to grant an injunction to prevent the continuance of a trespass: Reliance Finance Corporation Pty Ltd v Orwin [1964 - 1965] NSWR 970 at 976; Patel v W H Smith (Ezior) Ltd [1987] 2 All ER 569 at 573. In this case I think a mandatory injunction is required. Because I have made findings that the defendant has no right to occupy either dye house and that the continued presence of his cars under Warehouse No 1 amounts to a trespass, and because I have decided to grant injunctive relief, there is no need for me to make a declaration.
Orders
I therefore make the following orders:
1 That judgment be entered for the plaintiff against the defendant for $7,384.28 damages.
2That the defendant be restrained from entering upon the Coats Patons site at the corner of Glen Dhu Street and Thistle Street, West Launceston, other than for the purpose of removing therefrom property in his ownership, custody, possession or control.
3That within 21 days the defendant remove from the West Dye House and the East Dye House at the said site all property in his ownership, custody, possession or control.
4That within 21 days the defendant remove from the space under Warehouse No 1 at the said site all cars and car parts in his ownership, custody, possession or control.
5That there be liberty to apply.
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