COLIN and MARGARET Strahan and Total Eden Watering Systems Pty Ltd
[2005] WASAT 127
•14 JUNE 2005
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985
CITATION: COLIN & MARGARET STRAHAN and TOTAL EDEN WATERING SYSTEMS PTY LTD [2005] WASAT 127
MEMBER: MR T J CAREY (MEMBER)
HEARD: 11 MAY 2005
DELIVERED : 14 JUNE 2005
FILE NO/S: CC 1544 of 2004
BETWEEN: COLIN & MARGARET STRAHAN
Applicant
AND
TOTAL EDEN WATERING SYSTEMS PTY LTD
Respondent
Catchwords:
Landlord and tenant Lessee's covenant to repaint surfaces "which are now painted" Alleged agreement for nonremoval of material affixed to fascia Consequences for applicability of covenant Whether "Colorbond" a painted surface
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) s 16
Result:
Application successful in part.
Category: B
Representation:
Counsel:
Applicant: Self-represented
Respondent: Self-represented
Solicitors:
Applicant: Self-represented
Respondent: Self-represented
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
MR TJ CAREY (MEMBER):
REASONS FOR DECISION
This matter was brought before the Registrar of the former Commercial Tribunal by way of a reference of a question arising under a retail shop lease under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) ("the Act"), which was received by the Tribunal on 14 December 2004. On 1 January 2005, the Tribunal came into existence pursuant to the State Administrative Tribunal Act 2004 (WA), and the jurisdiction of the Commercial Tribunal was conferred to the Tribunal.
In its terms, the application requests reimbursement of monies expended by the applicants as lessee to repaint leased premises after the expiry of the lease under which the respondent occupied the premises as lessee. In terms of s 16 of the Act, I am satisfied that the question of the lessee's liability, if any, for repainting the premises is a question arising under the lease.
Leased premises - respondent’s use
The leased premises are the whole of the land comprised in certificate of title volume 1236 folio 20, known as 214B Great Eastern Highway, Midland. During the period of its occupation, the respondent used the premises for its garden reticulation business, either on a franchise basis (when the premises were sublet to the franchisee) or in its own right. From 2000 until the termination of the lease, the respondent occupied the store as lessee in its own right.
Lease
According to the documents filed by the applicants, a lease was entered into between the parties on 19 July 1994 with a threeyear term commencing 1 July 1994. At the hearing, a representative for the respondent advised that the landlordtenant relationship commenced earlier than the date signified in the lease, but that is not a matter I need to determine. Subsequently, options to extend the lease were exercised by the respondent resulting in it remaining in occupation (including a short overholding period) until 14 October 2003. On that date, the respondent vacated the premises, having given the applicants due notice of its intention to do so.
There is no dispute that, for all relevant purposes, the provisions of the lease applied for the whole of the period of occupation, and, in particular, that cl 3.25 of the lease governs the dispute which has arisen regarding the respondent’s obligation to re-paint the premises.
Clause 3.25 of the lease is in the following terms:
"During the last three (3) months of the term and during the last three (3) months of any further term or upon any sooner determination by the Lessor of this Lease the Lessee covenants to paint and varnish with at least two (2) coats of good quality paint and varnish (of colours first approved in writing by the Lessor) and in a proper and workmanlike manner those parts of the Premises which are now painted and varnished or are usually painted and varnished and to redecorate in any other fashion (with suitable material of good quality approved by the Lessor in writing and in a proper and workmanlike manner) all such parts of the Premises as have been previously or are usually so decorated."
Matters in dispute
To the credit of the parties, during the hearing the matters in dispute were reduced quite significantly. The applicants' original application was "for the reimbursement of the monies, $1,520 plus GST $152 which we had to pay Mill's Sign & Painting to repaint the premises after the expiration of the lease". At the hearing, the applicants produced the quotation of Mill's Sign & Painting Service ("Mill's") which set out the painting work performed for the contract amount. The work comprised (I have added the numbers for reference purposes):
"1.Fascias to front where sign where [sic] removed incl bringing sign to side walk;
2. Paint large roller door both sides;
3. Pesonell [sic] door both sides;
4. All previously painted surfaces to rear of store;
5. Two toilet doors and frames; and
6. Repaint ceiling to shop."
Item 6 ("Repaint ceiling to shop") had been controversial; there was an issue regarding the causation of water staining to the ceiling, and also whether the tiles comprising the ceiling were subject to the lessee’s painting obligation. In any event, Mr Strahan advised the hearing that the applicants no longer pursued reimbursement for that item and consented to their claim being reduced by $330 (inclusive of GST), reducing the claim to $1342 (inclusive of GST). The respondent did not contest the amount of the reduction and I accept it as reasonable.
Again at the hearing, the respondent accepted liability in respect of the "personnel door" and two toilet doors and framing (items 3 and 5). The respondent did so in relation to item 3 because the respondent could not be certain that the door in question was not subject to the obligation to paint, and in relation to item 5 because the respondent was unclear whether a painter whom the respondent contracted before vacating the premises had attended to the doors and frames in question or not. In my consideration of the matter, I will return to the question of putting a figure on items 3 and 5.
The surviving items in dispute, therefore, concern the repainting of:
1. front fascias where a sign or signs were removed;
2. large roller door at the rear of the premises; and
3. any other previously painted surfaces at the rear.
Evidence and submissions
Front fascias
Mr Kennedy, store manager of the leased premises, gave evidence that the respondent put tin sheets over the face brick on the front of the premises above the doors. Mr Stewart, the respondent's General Manager, provided further details of the construction of the signage on what he described as a "boxed fascia". He said that the original fascia affixed to the wall was a ribbed fascia. The respondent attached tin plating on the front of that fascia to give it a smooth finish. That surface was painted green, in accordance with the standard livery for the respondent's stores. On top of that painted surface was affixed a "Total Eden Watering Systems" polystyrene sign in green, gold and white, again consistent with its usual livery. Photographs produced by the applicants included two of the front of the store with the respondent's signage in place.
In addition to the signage on the front fascia, there was another sign affixed to a narrow strip of wall down the side of the premises forming part of a zigzag effect between it and the adjoining premises, which was painted according to the respondent's livery and contained customer information. Mr Stewart said that the respondent installed that sign (which was less elaborate than the one on the fascia) as well.
Mr Hodgson, the respondent's Regional Manager, appeared to have had the conduct of most of the respondent's dealings with Mr Strahan regarding termination of the lease. His evidence was that, in the course of one or more telephone conversations with Mr Strahan, it was agreed that the tin cladding on the fascia would remain for the incoming tenant to use, but that the respondent's polystyrene signage would be removed. According to Mr Hodgson, he was aware of relocations of three stores in the last four to five years where the respondent removed all similar cladding, as it belonged to the respondent and it was a requirement of the lease that the respondent do so. The respondent did not do so in this case at Mr Strahan's request. Mr Hodgson accepted that the respondent's polystyrene signage was not removed as requested by the respondent by the time Mr Strahan himself did, a few days after the lease was terminated.
Mr Strahan's evidence at the hearing was to deny the alleged agreement for retention of the cladding in any discussion with Mr Hodgson. According to Mr Strahan, he could, and did, not come to any agreement with Mr Hodgson on any matter.
Subsequent to the hearing, in a facsimile sent to the Tribunal, Mr Strahan complained that "Total Eden … now claim without warning that the front fascia had been brick and they had erected the steel front fascia, therefore they did not need to paint the front fascia", and enclosed a letter from a real estate agent sent in 1987 setting out conditions said to be incorporated into a lease of the premises entered into at that time, including a condition referring to "the fascia and metal frontage", and referred to photographs (not produced) of the property at the time the applicants purchased it. However, in its response to the Tribunal filed prior to the hearing, the respondent had submitted "The front face brick had some metal cladding applied by Total Eden for signage. Normally we would have removed the cladding. However at the landlord's request this was left in situ for the new tenant".
Rear roller door
The applicants asserted that the roller door was a painted surface, and drew support for this claim from the photograph of the rear of the premises which showed the roller door prior to being painted by Mill’s. In its response document, the respondent stated the door was galvanised metal and not a painted surface. At the hearing, Mr Stewart said that it is a Colorbond door. This was not, according to Mr Stewart, inconsistent with the respondent's earlier response, as galvanisation is one of the processes applied to Colorbond products. Mr Strahan, in his facsimile to the Tribunal, again complained of an alleged change in the respondent's position in relation to this issue.
In further support of their assertion, the applicants relied on a quotation received from a painting company other than Mill’s in respect of the adjoining 214A Great Eastern Highway. Although it was accepted that the quote did not apply to the premises formerly leased to the respondent, the roller doors for the two premises are identical. The relevance of the quote was said to be that it was expressed to be for "all previously painted areas to the rear of unit A including the steel cladding, roller door and painted timber door". In the opinion of that paint contractor, the roller door in the case of unit A fell within the description "previously painted areas".
Rear painted surfaces
The surfaces in question are a ribbed metal section immediately above and the same width as the roller door, metal flashing on both sides of the roller door and metal strip, and a small section of guttering along the roof line extending to the boundary of the premises.
The arguments of the parties in respect of these surfaces are the same as for the roller door. The applicants claim they were previously painted surfaces, and, as such, were included in the lessee’s obligation to repaint. The respondent argues they are of the same Colorbond finish and therefore not painted surfaces.
Consideration
Front fascias
I am satisfied on the evidence that the boxed fascia constructed on the front of the premises above the doors was constructed by the respondent. The first suggestion that this was not so was contained in the facsimile from Mr Strahan to the Tribunal after the hearing. As for the letter submitted from the real estate agent, the condition of the fascia of the premises many years ago, and prior to the respondent's tenancy, is not to the point.
I also accept the evidence of Mr Hodgson that there was an agreement between Mr Strahan and Mr Hodgson that the fascia and signage at the side of the building should not be removed. Mr Hodgson's evidence, although not specific as to actual words used (which is perhaps understandable in light of the apparent differences between Mr Strahan and him at the time) was quite clear. Further, I accept Mr Hodgson’s evidence that it is the respondent's policy to remove its own signage on the determination of its leases, and that its failure to do so on this occasion is explicable by Mr Strahan's request that it did not do so. The photographs provided by the applicants indicate that the boxed fascia, at least, was used and extended by the incoming tenant.
The respondent's obligation to repaint was limited to "those parts of the premises which are now painted … or are usually painted … ". The reference to "now" is a reference to the date of the making of the lease, 19 July 1994. The obligation cannot extend to surfaces which have been affixed to the premises during the lease or any extension of it. The lessee’s obligation under the lease in respect of any such surfaces is to be found in cl 3.26, which required the lessee on the vacation of the premises to remove any sign or names, advertisements or notices erected, painted, displayed, affixed or exhibited upon the premises. The agreement between the parties had the effect of discharging the respondent's obligation under cl 3.26 in respect of the fascia signs. There is simply no basis under the terms of the lease for imposing on the respondent any obligation to paint those signs.
Rear roller door
The difficulty I had with the applicants' argument is that no expert evidence was produced either way that may have cleared up the dispute over whether the rear roller door had undergone the treatment known as "Colorbonding". I am certainly not in a position to dismiss, on some inherently unlikely basis, that the roller door was, indeed, Colorbond. To the contrary, going on its appearance disclosed in the photographs, I think it more likely than not that the respondent's claim that it is of a Colorbond finish is correct.
After consulting the website of Bluescope Steel, which markets Colorbond in Australia, I am satisfied that Colorbond surfaces do not fall within what was contemplated in the description, in cl 3.25, of "those parts of the premises which are now painted". As the website information describes it, Colorbonding is a four-stage production process, comprising:
(i)a zincalume steel base (which supports the respondent's claim that Colorbond products are galvanised);
(ii)chemical application of a conversion layer to enhance coating adhesion;
(iii)an epoxy primer is baked onto the surface; and
(iv)a durable exterior grade topcoat is baked on.
According to the website, this process delivers "high-performance beauty for years to come". Platitudes aside, it is clear that Colorbonding is a more involved process than that normally associated with the word "painting". In my view, it would not have been within the contemplation of the parties to the lease that a Colorbond surface so described should be repainted each threeyear term.
Rear painted surfaces
I refer to and repeat my reasoning under the previous subheading.
Conceded claims
As indicated, the respondent accepts liability for repainting of a small "personnel door" (both sides), and two internal toilet doors and frames. The question I have to decide is what dollar figure to put on those claims, bearing in mind that the painting contractor's quotation, which included six separate items, provided only a global cost amount. When I directed this potential problem to Mr Strahan, he submitted it would be necessary for me to "guesstimate" how much of the quoted figure related to the successful claims. I accept, and proceed on the basis of, that submission.
The total of the five items pursued by the applicants is $1342 (GST inclusive). It is clear that some of the more significant of the applicants' surviving claims have been unsuccessful. I have also obtained some guidance from the fact that the claim in respect of the ceiling that was not pursued accounted for $330 (GST inclusive) of the original claim amount. Doing the best I can, I believe that the same amount of $330 (GST inclusive) is an appropriate figure for the three doors (back and front) and two door frames.
Order
Pursuant to s 26(1)(a) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), the respondent is ordered to pay to the applicants the sum of $330 within 14 days of the date of this order.
I certify that this and the preceding 9 pages comprise the reasons for decision of the Tribunal.
________________________________
T Carey, Member
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