CROMMELIN and CUCCOVIA
[2012] WASAT 186
•4 September 2012
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
CITATION: CROMMELIN and CUCCOVIA [2012] WASAT 186
MEMBER: MR T CAREY (MEMBER)
HEARD: 22 JUNE 2012
DELIVERED : 4 SEPTEMBER 2012
FILE NO/S: CC 460 of 2012
BETWEEN: GUY WILLIAM CROMMELIN
Applicant
AND
FELICE CUCCOVIA
GUISEPPE CUCCOVIA
LUCIANO CUCCOVIA
Respondents
Catchwords:
Landlord and tenant Retail shops Questions arising under a lease Whether breaches of lease by tenant and landlord Whether landlord entitled to reenter leased premises
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 16
Property Law Act 1969 (WA), s 81, s 81(2)
State Administrative Tribunal Act 2004 (WA), s 32(2), s 91, s 91(2)
Result:
Answers to referred questions provided
Matter listed for directions hearing in order for possible relief from forfeiture claim to be addressed
Category: B
Representation:
Counsel:
Applicant: Self-represented
Respondents : Mr PJ Griffin
Solicitors:
Applicant: N/A
Respondents : Peter J Griffin & Co
Case(s) referred to in decision(s):
British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063
Foran v White [1989] HCA 51, (1989) 168 CLR 385
Indrisie v General Credits Ltd [1985] VR 251
Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97 11,173
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The guarantor of a tenant of commercial premises referred a series of questions to the Tribunal for determination, arising from service on the tenant of a notice of default. The default notice was grounded on various alleged breaches by the tenant of the lease. The questions referred to the Tribunal included whether the tenant was in default, whether the landlord had breached its obligations, and whether the landlord was entitled to exercise rights contemplated by the default notice.
After considering all the evidence, and the claims and counterveiling claims of the parties, the Tribunal concluded:
a)the tenant was in default, and identified the extent of its breaches;
b)the landlord was also in default, and identified the extent of its breaches; and
c)the landlord had the capacity to exercise rights, such as the right of re-entry, but subject to the outcome of any claim of the tenant from relief from forfeiture.
The Tribunal also commented on the appropriateness of remedies sought in the nature of declarations and an injunction, in addition to the provision of answers to the referred questions.
Overview
By a lease dated 9 November 2005 between the respondents, Mr Felice Cuccovia (Felice), Mr Guiseppe Cuccovia (Guiseppe) and Mr Luciano Cuccovia (Luciano) (the Cuccovias or respondents) and Aardvark Translations Pty Ltd (Aardvark), Aardvark was granted a lease of commercial premises at No 205 South Street, Beaconsfield. The lease was for an initial term of two years, with two options, the first for three years and the second for five years. Both options have been exercised, and the term of the lease, if it were to go full term, will expire on 14 October 2015.
Under the lease, Aardvark is required to operate the permitted business 'Retail, wholesale and office'. It runs a retail bedroom furniture business under the name 'Bedtek' at the premises.
The parties are in agreement, and I am satisfied that it is the case, that the lease of the premises is a retail shop lease for the purposes of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CT(RS)A Act).
The applicant, Mr Crommelin (applicant or Mr Crommelin), is one of two guarantors of the obligations of Aardvark under the lease. The Cuccovias expressly renounce any challenge to Mr Crommelin's standing to bring the application as a guarantor of the tenant. I consider such a concession is well made, given that a referral under s 16 of the CT(RS)A Act to the Tribunal of questions arising under a lease (which this proceeding is) may be made by 'a party to a retail shop lease'.
On 13 March 2012, a notice of default prepared by the respondents' solicitors was served on Aardvark and the guarantors. The default notice alleges against Aardvark a number of breaches of covenants of the lease, not including the covenant to pay rent.
The default notice, which is addressed to both Aardvark and its guarantors, including the applicant, requires, in the case of each of the alleged breaches, that remedial action be taken, the nature of which is specified in each case, and that the Cuccovias' solicitors' costs of the default notice be paid. It goes on to indicate that any failure to comply will result in the Cuccovias exercising a right of reentry to the property.
Mr Crommelin refutes the claims of breach, and alleges that the Cuccovias have breached their lease obligations in various respects.
Mr Crommelin, by his application, has referred the following questions to the Tribunal for determination (the numbering corresponds with the questions as they appear in the application):
2)Whether the tenant is in default of the lease of the Premises.
3)Whether the landlord has the right to the remedies described in the purported notice of default issued by the landlord dated 13 March 2012 …
4)Whether the landlord has breached its obligations to the tenant under the lease of the Premises.
A fourth question, concerning the identity of the applicable lease (and particularly the plan of the premises and its neighbouring premises and certain common areas) was the subject of agreement in the course
of the hearing. It is therefore no longer a question arising under the lease that requires an answer.
In the 'order sought' field in the application document, the following orders are referred to (again, the numbering corresponds with what appears in the application):
1)A declaration that the Default Notice is void.
2)A declaration that the tenant is not in default of the lease of the Premises.
3)A declaration that the tenant is entitled to erect barriers to parking bays 10 to 13 in the car park of the Premises and use those bays for temporary storage of pallets.
4)A declaration that the landlord places the neighbouring tenant[']s yellow commercial bin back in the area it was in at the beginning of the lease.
5)A declaration that the landlord is not entitled [to] park trucks in the common areas behind the Premises.
6)An injunction preventing the landlord from evicting the tenant on the grounds set out in [the] Default Notice[.]
I will consider and make a determination in relation to each of the three surviving questions in the slightly amended order, question 2, question 4 and question 3. I will then make some observations concerning the orders sought.
Is the tenant in default of the lease? [Question 2]
There are three broad allegations of breach which continue to be relied upon by the Cuccovias. They concern:
1)An alleged failure to repair damage to a roller door at the rear of the premises.
2)An alleged failure to repair scratching to the front shop glass window, and a related allegation, which appeared to have been withdrawn in the respondents' statement of issues, facts and contentions, only to be revived in their submissions at the hearing, of a failure to demonstrate that insurance cover for such damage had been taken out.
3)Obstruction, by Aardvark or its agents or invitees, of designated common areas. Three categories of obstruction are alleged:
a)inappropriate use of parking bays for Aardvark's own use;
b)relocation of a waste bin in a parking bay; and
c)inappropriate use of a disabled parking bay.
I will deal with each of these in turn.
1) Damaged roller door
According to the Cuccovias, the roller door at the back of the premises has been damaged during Aardvark's tenancy. They contend that the roller door was part of the new construction at the time the premises were built in 2005, and the roller door was in pristine condition in mid-September 2005, when Aardvark (or Mr Crommelin) moved in early in order to finish off internal fittings and paint the premises.
Mr Crommelin's evidence, appearing in his witness statement, on the roller door issue is as follows:
The allegation that the rollerdoor was new when installed in 2005 is simply untrue. It was known and discussed at the time of occupation that the door was second-hand and in need of repair. I performed these repairs myself. After the issuing of the default notice, I looked at the age of the roller door and identified the dents claimed by the Lessor as having been caused by us. I have no recollection of causing such dents. I identified a manufacturer[']s label, with name and telephone number on the inside of the door. The telephone number pre-dates the '9' numbers which are now attached to all Perth numbers. Being unable to identify exactly when the telephone number formats [changed], I then performed a search of the ASIC site of companies and entitles. I identified that the door must have been manufactured before 1997 because the company listed as the manufacturer on the label was deregistered in 1997. It is my belief that the [witness] statements submitted by the respondants [sic] in regard to the rollerdoor issue are therefore false.
Mr Crommelin explained, in his oral evidence at the hearing, that the repairs effected by him to the door concerned its operation, rather than rectifying dents. Mr Crommelin did confirm such denting, however, describing the door as a 'battered old secondhand roller door'. The reference to the door being secondhand picks up on his view of the door having been manufactured before 1997.
Mr Crommelin denied that he, or any of his servants or agents, had hit the door with a forklift as alleged. He said that the dent was not caused by him.
According to Felice, he first noticed damage to the roller door in approximately May 2011. The damage was, according to Felice, 'from the inside outwards'.
Felice's evidence is supported by the written evidence of Guiseppe, which is in the following terms:
About 12 months ago the damage at [sic] the roller door to the rear of [S]hop 205 was mentioned by Felice[,] which I inspected. I took a photo about 5 months ago. I was standing about two metres away and the damage to the roller door is from the inside outwards and it looks like a forklift from inside the shop has hit the door from the inside with its forks which match the fairly large dents in the door. The dents are about 30cms off the ground. The roller door was supplied new when the shop premises was built in 2005 and there was no indentation marks then at the start of the tenancy.
The photograph provided with Felice's statement is a photograph taken from outside the premises. Three areas of indentation are identified by arrows.
Guiseppe was not crossexamined on those parts of his witness statement concerning the damaged roller door.
Felice gave oral evidence at the hearing which, in one respect, introduced significant evidence regarding the initial installation of the roller door, and in another respect, contradicted his written statement.
According to Felice's oral evidence, the roller door was sold to him as 'new old stock'. The builder told him that he had a door left over from another job. The door was still in its wrapping material when the door was delivered on site. He personally installed the door with his brother, unwrapped the door and noticed it was still bound with plastic straps.
Felice, in his oral evidence, retracted part of his written statement referring to a conversation he had, upon becoming aware of the damage, with Mr Crommelin, to the effect that the damage appeared to be done by a forklift from inside and going outwards, and Mr Crommelin denying any responsibility. He said that the only discussion he had regarding the matter was with Mr Mark Jones, the property manager for the premises, via email.
Some limited corroboration of the Cuccovias' accounts is provided by Mr Jones in his statement. Mr Jones confirms having seen the dent in the roller door, subsequent to being informed of it by Felice in about May 2011. His statement goes on:
… because the premises was brand new when the tenant took occupation, it would be an assumption that it has been caused by the tenant and will be made good in accordance with the Lease.
The reference to the tenant's obligation to make good is an invocation of cl 5.2.5 of the lease, under which Aardvark is required to keep the leased premises in good and substantial repair.
Again, Mr Jones was not crossexamined on this part of his statement.
In reexamination, Felice said that the door was in perfect condition, although a bit discoloured. In his view, it was 'definitely' hit by a forklift from inside and needs to be repaired.
I must reach a view, based on the evidence, in relation to the factual dispute about the condition of the roller door at the time of the commencement of the lease.
Although support for Mr Crommelin's submission of the door not being new at the time of its installation is provided by the identification of a corporate manufacturer which became deregistered in 1997, and the reference to a telephone number which did not include the prefix '9', I accept the evidence of Felice that the door was supplied by the builder of the premises, by way of a discrete contract, which was supplied in original wrapping and binding.
As Mr Crommelin pointed out in his crossexamination of Felice, the just mentioned evidence was not referred to in Felice's witness statement. Felice's explanation for this was that he had not been asked about it (which I took to be a reference to the process by which he was proofed by his lawyer for the purposes of compiling his written statement). As already indicated, Felice volunteered that his written statement is also inaccurate to the extent that it referred to a discussion he had with Mr Crommelin about the nature of the damage, when, in his oral evidence, he said no such conversation took place. Although the effect might be to cast a doubt upon the accuracy of Felice's written version of events, it is consistent, in my view, with a candid approach to the giving of his oral evidence.
Mr Crommelin, in his statement of grounds attached to the application (Exhibit 1), states that, prior to the default notice, no request was received from the lessor to repair the roller door. This is not disputed, in either any written statement, with the possible exception of the now retracted part of Felice's statement, or the oral evidence called on behalf of the Cuccovias. However, although it might be relevant to the exercise of a discretion to grant relief from forfeiture (a subject to which I will return), it is not a factor which can militate against the conclusion I have reached that the damage to the roller door occurred during Aardvark's occupation of the premises as tenant.
By reason of Aardvark's obligation, under cl 5.2.5 of the lease 'at all times during the continuance of this Lease [to] maintain and keep the Leased Premises in good and substantial repair order and condition', Aardvark had an obligation to bring the damaged roller door back into good and substantial repair, order and condition. Its failure to do so constitutes a breach of the lease.
2) Scratched front window
I turn to the allegation of a default under cl 5.2.5 of the lease arising from failure to repair scratch damage to the front shop glass window, and the alleged failure of the applicant to take out insurance cover for damaged glass, contrary to cl 5.5.3 of the lease.
The two allegations can conveniently be considered together, because Mr Crommelin's response to the first allegation involves a claim that the insurance obligation against the actual damage is the responsibility of the Cuccovias.
According to the Cuccovias, at the start of the lease, there were no scratches in the shop window. At some point, the letters 'SALK' were graffitied on the window in letters, estimated by Felice to be 20 30 centimetres high and about 2 metres long. A photograph of the graffiti in question is in evidence.
According to Mr Crommelin's written statement, he advised Felice verbally, on site, of the scratch damage, on a date which is not referred to. He said in oral evidence that he 'thought' the graffiti was there at the commencement of the tenancy. There is, however, no corroboration of such a claim, and Mr Crommelin's lack of certainty about, on the basis of the photographic evidence, an obvious example of graffiti is in contrast to the assertiveness of the bulk of his evidence.
Felice's written statement refers to his (Felice's) complaint to Mr Crommelin about the graffiti in about May 2011. Felice states that he requested that the glass panels be replaced; Mr Crommelin's version, in his written statement, indicates that, in about mid2011, he was contacted by the lessor's agent and asked to replace the scratched glass.
Both Mr Crommelin's written statement and oral evidence went on to discuss the insurance aspect. He says that the lessee's insurance taken out by Aardvark does not cover scratching or defacing of glass fixed to the building, although it does cover glass breakage. This was demonstrated when Aardvark's insurance covered the cost of having the front door glass replaced after a rock was thrown through it. He relied upon advice received from Aardvark's insurance broker, Mr Tony Brian, to the stated effect.
Felice's witness statement suggests that scratching of graffiti on a glass surface is a risk which Aardvark is able to insure against. This suggestion was echoed in the oral evidence of Mr Jones, despite the reference in his written statement to item 3 in the default notice (being concerned with proof of relevant insurances, including against glass breakage and damage) having been 'satisfied', which, no doubt, led to the indication in the respondents' statement of issues, facts and contentions that this was no longer an issue.
I believe that a pragmatic approach to the vexed question of which party bears the responsibility for the scratched glass is appropriate.
I accept Mr Crommelin's submission that the scratching of the front window falls within the cover of an insurance policy which is available only to the Cuccovias as owners of the building. Although his evidence supporting the submission is hearsay, the Tribunal is not bound by the rules of evidence, and must act according to the substantial merits of the case: s 32(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). Further, unlike the respondents' evidence on the point, the applicant's evidence attributes as its source an operative in the insurance industry.
It was therefore necessary for the Cuccovias to insure against the risk of the graffiti damage, and, assuming such insurance is in place, to claim against its own insurance for repairs or replacement of the affected windows. The Cuccovias are unable to deflect their responsibility by reference to the insurance term of the lease (cl 5.5.3) ascribing
responsibility to Aardvark which, based on my findings, was impossible for it to comply with.
3) Obstruction of common areas
The default notice accuses Aardvark of:
… [f]encing off and [erecting] barriers to designated parking bays from 10 to 13 in the car park at the rear of the property … and using same for a storage facility of rubbish and pallets.
It is convenient at this point to record a number of features of the lease.
'Leased Premises' are defined in item 2 of the schedule as '205 South Street, Beaconsfield as shown edged red on the attached plan' to the lease. Although the identity of the plan said to be attached was the subject of debate and a good deal of written evidence produced before the hearing, ultimately, it was agreed that the plan proffered by the Cuccovias is 'the attached plan' for the purpose of the definition, or, if it is not, it presents an accurate depiction of the conditions of the entire complex. This plan was admitted into evidence as Exhibit 12, and a copy is annexed to these reasons to assist the reader in understanding the matters which follow.
'Land' is defined in item 1 of the schedule as '[t]he total land and building(s) at 201, 203, and 205 South Street[,] Beaconsfield'. The parties agree that the references to No 201 and No 203 South Street are in error, and that, apart from Aardvark's premises, the only other premises forming part of the development is the adjoining shop operating as 'La Macchia', known as No 199 South Street, Beaconsfield.
'Building' is defined by the lease to mean 'the buildings improvements fixtures and fittings on upon or forming part of the land'.
'Common areas' are defined by the lease to mean:
… all those parts of the Building or the Land not leased to any tenant from time to time but intended for the use of the tenants occupying the Building or the Land and their respective employees agents contractors invitees licensees and sub-tenants in common with each other.
Clause 8.2 of the lease is described as 'Right of the Lessee to Use Common Areas'. It provides:
The Lessee shall have the right for the Lessee and the Lessee's permitted assigns servants employees and invitees in common with the Lessor and the Lessor's assigns and employees tenants occupiers customers invitees and all other person [sic] authorised by the Lessor and together with the other Lessees to use the Common Areas subject to the right of Lessor to close temporarily any Common Areas, and to make such repairs or changes as in the Lessor's judgement may be necessary or desirable to improve the convenience thereof.
Clause 8.5 of the lease provides:
Neither party shall unreasonably obstruct or permit the obstruction of the Common Areas or any part thereof.
According to the Cuccovias, for the period of 18 months prior to the hearing, Aardvark/Mr Crommelin has used some of the parking bays at the rear of the premises for storage of pallets, trailers, a forklift, empty cardboard boxes and rubbish. They further allege that, at the commencement of that period, Mr Crommelin erected barriers dividing parking bays 10 14 off from the rest of the rear parking bays, and a shed structure to house the forklift. Although the barriers were dismantled and removed in April 2012, pallets, trailers, the forklift, empty cardboard boxes and rubbish have remained.
A number of photographs bearing the dates 7 October 2011, 15 April 2012 and 3 May 2012, which are annexed to Guiseppe's statement, provide support for the claims of the use by Aardvark/Mr Crommelin of the car bays as claimed in question.
Mr Crommelin denies neither the erection of barriers in the manner suggested, nor his use of car bays, at least for storage of a trailer and a forklift. His principal rejoinder is to refer to the use by a neighbouring tenant and the Cuccovias of parking bays in the common areas at the rear of the complex for their own purposes, in contravention (so it is claimed) of Aardvark's rights.
Mr Crommelin is unashamed in advancing his entitlement to use the private parking bays, by reason of what he sees as the unwarranted actions of the lessor and others which impact upon his operations. Thus:
•he claims that access to the rear of the premises is compromised by the activities of the others;
•he considers that his resort to the use of barriers and the like is justified 'for protection of the lessees' quiet enjoyment and reasonable use of the common area behind the Bedtek premises';
•Aardvark has been 'forced to physically stake claim to a rubbish-free area';
•the lessor, in its management of the complex, has caused dissention between the respective lessees;
•the lessor has enforced its purported rights selectively against Aardvark, but has not done so against its neighbours, resulting in problems associated with vehicles, bins and crates, as well as organic matter.
At the hearing, Mr Crommelin stated that the barriers have been removed (which the Cuccovias accept) and that the forklift was to be sold in three weeks' time.
In the context of a claim of obstruction of common areas comprising the car parks, it is necessary to have regard to a particular local government perspective, arising from the contents of a letter from the City of Fremantle to the Cuccovias dated 9 March 2012 (attached to Felice's witness statement Exhibit 14).
The City of Fremantle's letter appears to have been in response to a complaint by Mr Crommelin that the Cuccovias had been parking rubbish removal trucks in the allocated car parks at the rear of the complex. The letter advises:
It has come to the City of Fremantle's (City's) attention that you are parking rubbish removal trucks in the allocated parking in the rear of the subject property.
Officers of the City inspected the subject property and observed the following in the allocated parking in the rear of the property;
1.)Two commercial vehicles with registration numbers 1DBW 637 and 1CEP 645;
2.)A yellow commercial type bin;
3.)Blue pallets.
The City approved shop additions for the business as per DA862/02 with stamped approved plans dated 21 March 2003 which [show] 30 parking bays in total for the property.
You are advised that it is a breach against the [development approval of the shop additions] and the City's Local Planning Scheme No 4. to use [parking bays at the rear of the property] for any purpose other than parking for patrons of the approved businesses.
…
Although the City of Fremantle's letter was referable to a complaint against the Cuccovias, and has consequences for my consideration of the allegations made against them in this matter which I discuss later in these reasons, the quoted advice applies to the use of the common area car parks generally. Therefore, the right of Aardvark to use common areas, for which cl 8.2 of the lease provides, must be regarded as subject to the constraint to which the letter refers.
None of the parking bays at the rear of the complex is subject to any exclusive use right (which is, for example, to be contrasted with Aardvark's right to the exclusive use of bays 7 and 8, at the front of the premises, under cl 7.6 and item 13 of the lease). And, as I have observed, any use is conditioned by the requirements of the City of Fremantle's letter.
It is clear, on the evidence, that Aardvark has, for sustained periods, used car parking bays for its own uses, thereby preventing their use by anyone else. This amounts to a clear breach of cl 8.2 and cl 8.5 of the lease. The evidence, in particular the photographic evidence, indicates, to at least some degree, that these breaches continue.
It is not an answer to a claim of breach against one tenant (Aardvark) that another tenant (La Macchia) has breached its lease in a similar manner. Subject to any claim against the landlord that its failure to pursue the other tenant for its breaches amounts to a failure to afford quiet enjoyment to the former tenant, it is a matter for the landlord whether or not to do so. In any event, the landlord is still entitled to pursue its remedies against the former tenant in consequence of its breaches.
I will deal with the impact of any breaches of the lease by the Cuccovias upon their ability to act upon the proven breaches by Aardvark in my consideration of Question 3.
I turn to the allegation regarding the yellow bin.
Mr Crommelin's evidence is that Aardvark's neighbour, La Macchia, acquired the use of the commercial bin some two years prior to Aardvark taking up occupation. This is not denied by the Cuccovias. Initially, according to them, it was kept in an area shown in the plan (Exhibit 12) as 'BIN AREA', although, from approximately 2008, it was moved a number of times. Mr Crommelin denies that he ever moved the bin, except when he moved it to its present location in early 2011.
None of the Cuccovias' witnesses are able to identify, from direct observation, who has moved the bin from time to time. In his written statement, at page 12, Felice states:
… I have not seen anybody else [as distinct from Mr Crommelin] move the bin. I do not know how the bin was moved from the south[]east corner of the car park up to bay 19. It is a 3 cubic metre bin with no wheels and you need a forklift to move it.
The evidence of any involvement of Aardvark/Mr Crommelin with the location of the yellow bin at any time, apart from early 2011, is simply nonexistent. As will be discussed in my consideration of Question 4, Mr Crommelin does admit to moving the bin from the rear of Aardvark's premises to the 'top west end' of the rear car parking area. This was done as a defensive measure against what he claimed was the inappropriate use of the bin, which were said to have adverse consequences for the applicant's business. As will be seen, this claim has been upheld.
Further, in an email dated 23 March 2011 from Mr Jones to Mr Crommelin, the respondents were represented as being 'happy to leave [the bin] there permanently[;] however, Council are to prove [sic] the location first'. The first Mr Crommelin knew of any ongoing issue regarding the bin's location was the mention of it, with reference to the City of Fremantle's letter of 9 March 2012 previously unseen by him, in the default notice.
In the circumstances, I am satisfied that Mr Crommelin, effectively, performed part of the task that either the Cuccovias themselves, or their tenant, La Macchia, should have undertaken in order to alleviate the problem Aardvark was experiencing, and that, subsequent to the receipt by the Cuccovias of the City of Fremantle's letter, they should have taken action to have it removed from the car parking bay.
The allegation of inappropriate use of the disabled parking bay can be shortly dealt with.
The parties were at odds concerning the frequency with which Aardvark, its servants, agents and invitees used the designated disabled parking bay at the front of the premises when they should not have. There is a serious question whether such use is in breach of the lease, as opposed to constituting a contravention of a local government law. However, even if a breach is proven, the Cuccovias accept that no such breach has occurred since service of the default notice. It could not, therefore, be relied upon in any action taken by the Cuccovias for failure to comply with the notice. That being so, it is unnecessary for the Tribunal to determine whether or not a breach has occurred.
Has the landlord breached its obligations to the tenant under the lease of the premises? [Question 4]
Mr Crommelin has raised numerous complaints or concerns he has in relation to the Cuccovias' conduct. His 'Statement in relation to … referred Question 4' is not as precise as it might have been in terms of identifying relevant breaches of the respondents' obligations under the lease. However, as best as I can glean them, the following are the alleged breaches upon which the applicant relies:
1)The Cuccovias have regularly parked their own rubbish trucks in the rear car parking area, contrary to any entitlement under the lease.
2)The Cuccovias are accused of breaches of both commission and omission in relation to La Macchia piping vegetable waste from its shop directly into the car park in front of Aardvark's shop, and regarding the placement and use of its yellow bin directly behind Aardvark's shop.
3)The applicant makes allegations arising from specific events, namely: that the Cuccovias effectively locked Aardvark out of the rear car park for a period; that, on a day in October 2011, the Cuccovias parked their truck across the entrance to the car parking area, and they 'organised a mob of other family members and came to the Bedtek premises and attacked one of its staff'.
General reliance, relevant to some of Aardvark's claims, is placed upon the Cuccovias' covenant, in the usual terms, of quiet enjoyment found in cl 6.1 of the lease. It also submits that the Cuccovias have sought to apply rules and regulations which are inconsistent
with Aardvark's rights expressed in the lease (contrary to cl 8.6 of the lease), which have not been applied to the other lessee or the lessors themselves.
1) Impermissible parking of trucks on common areas
The Cuccovias contend that cl 8.2 of the lease gives Aardvark the right to use the parking bays numbered 10 13 at the rear of Shop 205. Aardvark does not, it is submitted, have a right to use any other rear car parking bays. The respondents also rely upon a verbal agreement at the commencement of the lease that Aardvark would have the right of access to only the rear parking bays at the rear of Shop 205, and Aardvark's rights under item 13 (special provision) to:
13.3 [p]arking bays numbered 7 and 8 … being directly in front of the leased premises … set aside for the exclusive use of the Lessee …
13.4 [p]arking bays at the rear of the premises … available to the Lessee for the unloading of containers and the Lessee shall make good, at the Lessee's expense, any damage caused by containers to the bitumen [at] the rear of the premises.
The Cuccovias further submit that, by parking their trucks in the parking bays opposite the rear of Shop 199, the applicant's rights to the common areas are not affected. They rely upon cl 8.2 of the lease. In any event, the Cuccovias contend that they have complied with cl 5 of the lease by complying with any request of Aardvark to move any truck of theirs to enable access by the applicant to the rear parking bays of Shop 205.
In my view, the respondents have impermissibly read down the definition of 'common areas'. It is not the case that Aardvark's rights in respect of parking bays at the rear of the complex are limited to the four identified bays at the rear of its shop. The right of use under cl 8.2 of the lease is a right of Aardvark, in common with the lessor and other lessees, 'to use the Common Areas'. The 'common areas' are those areas of the 'building' or 'land' which are not leased from time to time, and otherwise are identified by reference to an intention to be used by 'the tenants occupying the building or the land' in common with each other. And, as has been discussed, the use must also conform with the applicable local government and planning requirements.
Just as Aardvark's use of the parking bays at the rear of its leased premises, to the exclusion of anyone else and in breach of the requirements referred to in the City of Fremantle's letter,
is a contravention of cl 8.2 and cl 8.5 of the lease, so must be the Cuccovias' similar use of the parking bays at the rear of Shop 199.
The Cuccovias refer to discussions between the parties (specifically, Mr Crommelin and Felice) prior to the commencement of Aardvark's lease, which are said to give rise to a present entitlement to park their trucks as they had in the past. According to Felice's written statement at page 3:
… He also asked for permission to unload containers in the rear car park. I pointed out that my 2 trucks parked in the rear parking bays opposite La Macchia's shop were my parking bays. Mr Crommelin agreed and said that he did not have an issue with that. …
The principal difficulty with any such agreement between the parties is that it cannot mandate unlawful use.
Further, the fact, if it be such, that conduct not in accordance with the obligations of a party to the lease is allowed to continue for a period, does not mean that the same conduct will be forever deemed as consistent with those obligations. This appears to be a case in point, where Mr Crommelin accepted that the parking of the respondents' trucks did not present a problem for him until December 2007, when he first raised the matter with the Cuccovias. In response to this complaint, it appears that Felice changed the manner of parking the trucks in order to allow more space for other vehicles using the driveway along the back of the shops. As a result, when both trucks are there, they occupy car park bays 17 23 inclusive. According to Mr Crommelin, the backs of the trucks regularly extend outside the parking bays, presenting an obstacle and risk to private and delivery vehicles. This is the very mischief that cl 8.5 of the lease proscribes.
The respondents claim that their trucks are generally not present during business hours. They state that the trucks are away working Monday to Friday and Saturday morning. They are gone from 7 am and return at 2 pm to 3 pm. They deny any interference with the applicant's use of the rear common areas. With regard to the City of Fremantle's requirement that use of the parking bays be restricted to patrons of the businesses conducted at the complex, Felice said that, while the vehicles are there (presumably during business hours), he regularly obtains a coffee or other drink from La Macchia, and that this is the only reason for parking there during the day.
For the purposes of the relevant question referred to the Tribunal, it is necessary only that I determine whether or not the respondents have breached their obligations under their lease with Aardvark. I am satisfied, on the evidence, that such a breach has occurred in respect of the respondents' use of the car parking spaces at the rear of the complex. By their own admission, there has been parking during business hours after 2 pm or 3 pm. Further, I accept Mr Crommelin's evidence that the extent of the presence of the Cuccovias' trucks in the car parks is more extensive than this. Indeed, I am satisfied, on the evidence, that the regular presence of the trucks in the common areas, in breach of cl 8.2 and cl 8.5 of the lease, has been a constant cause of annoyance for Mr Crommelin.
2) The yellow bin
Mr Crommelin alleges that the Cuccovias instructed the neighbouring tenant, La Macchia, to place its yellow bin, which had been against the back of La Macchia for approximately two years, behind the applicant's shop. Although this is denied, the respondents claim that they are entitled to insist that Aardvark (whom they accuse of having moved the yellow bin from the designated bin area on the plan attached to the lease) relocate the yellow bin in accordance with the lease plan.
Once again, I am faced with an assertion and denial, with little extraneous support for either side's position. Mr Crommelin refers to the neighbouring tenant telling him in 2008 that the Cuccovias instructed them to move their yellow waste bin as claimed. The neighbour did not give a statement for either party, and was not called to give evidence. Felice's written statement goes no further than to infer that the bin was moved by Mr Crommelin by reason of his access to a forklift.
Although, on the basis of the photographic evidence produced by the applicant, it appears that, for an extensive period, the yellow bin was not in the area designated on the lease plan as a bin area, but rather, in front of that area and closer to the rear door of Aardvark's shop, it is not possible, on the evidence, to identify the respondents as being liable for that positioning. Further, one would have thought that the time for the applicant to pursue a remedy in respect of the matter was when the yellow bin was in the inappropriate location, rather than in response to a notice of default. On Mr Crommelin's evidence, he relocated the yellow bin to the top west end of the car park in early 2011.
I am not satisfied that the Cuccovias had any direct involvement in the placement of La Macchia's bin in any particular location at any particular time.
Mr Crommelin's main complaint about the yellow bin concerns his claim that, in its relocated position behind Aardvark's premises, the bin overran with rubbish from La Macchia's operations, spewed rotten biomatter, and ran a river of liquid waste into the drains. He contends that the Cuccovias breached their obligations towards Aardvark by failing to take action against La Macchia to alleviate the consequences of inappropriate use by them of the bin, along with a claim regarding their refuse disposal habits.
According to Mr Crommelin:
•for many months, a 'putrid river of liquid waste' ran past Aardvark's shop, which was traipsed into the shop by clients;
•for many years, rotten vegetable matter overflowing from the yellow bin fell to the ground, which was again brought into the applicant's shop by clients, staff, vehicles and equipment.
Mr Crommelin, in his oral evidence, said that it was a 'regular thing' for La Macchia personnel to come out with buckets full of refuse and water, and pour them into the drain.
Consistent with my view of the other claims and counterclaims between the parties, I find that both parties have engaged in exaggeration and minimisation in relation to these complaints. The claim regarding running liquid waste is, in my view, sufficiently dealt with by the respondents' reference, which is unchallenged, to a problem encountered with La Macchia's refrigeration units, which was rectified in a timely fashion in 2008. I am not satisfied that the respondents were deleterious of their responsibilities towards the applicant in relation to the matter.
I am, however, satisfied, on the basis of Mr Crommelin's written and oral evidence, that there has been an ongoing problem with organic matter being unrestrained in La Macchia's yellow bin and causing mess, odour, and the potential for migration into Aardvark's shop. Although, as pointed out on behalf of the Cuccovias, the lessor's covenant of quiet enjoyment does not relate to common areas outside the leased premises, it can still apply where a particular condition outside the confines
of leased premises significantly impacts upon a lessee's enjoyment of the leased premises: Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97 11,173 is an example. In my view, the evidence supports such an impact in this case. It is clear that complaints were directed to both the Cuccovias themselves and to their agent, to no avail. The problem only appears to have been resolved from the applicant's perspective when it physically relocated the yellow bin.
3) Specific events relied upon by applicant
The complaint about a locked rear gate appears to have been the product of a determination by Aardvark's neighbouring tenant, La Macchia, to keep the rear gate padlocked on the basis that each tenant had a key. According to the Cuccovias, the applicant lost the key, which led to its lack of access for a period. The Cuccovias responded by removing the lock from the gate.
This was not a matter referred to by Mr Crommelin at the hearing. In any event, I am not satisfied that any failure on the part of the Cuccovias of their obligations towards Aardvark under the lease has been established.
As for the events of 11 October 2011 (the Cuccovias believe the correct date to be 7 October 2011), the confrontation is the subject of a violence restraining order application, which was, as far as I am aware, still unresolved at the time of the hearing. In the course of the preliminary proceedings prior to the hearing, I indicated that it was inappropriate for the Tribunal to make findings in relation to what is essentially a quasicriminal matter the subject of other proceedings, a view which I continue to hold.
Is the landlord entitled to the remedies described in the default notice? [Question 3]
In accordance with reasons I have already given, I find that some, but not all, of the breaches of the lease referred to in the default notice are sustained.
The default notice notified Aardvark and its guarantors of the defaults being relied upon, and provided an opportunity to remedy them. In so doing, it complied with the requirements of s 81 of the Property Law Act 1969 (WA). None of the sustained breaches was remedied within the 14 day period provided in the notice.
It is therefore open to the Cuccovias to exercise their rights under cl 7.1 of the lease, including a right of reentry, subject to any claim made for relief against such forfeiture, either under s 81(2) of the Property Law Act 1969 (WA) or in the exercise of this Tribunal's powers under the CT(RS)A Act to grant such relief. I apprehend that, in light of my findings, the applicant (or Aardvark) will seek to avail themselves of an opportunity to seek such relief. It is appropriate that the applicant be given an opportunity to consider the matter, and for any claim for relief to be made and dealt with, before final orders are made on the current application.
I reject the applicant's submission that the Cuccovias' found breaches of the lease disqualified them from issuing a valid default notice. The submission relied upon the decision of the High Court of Australia in Foran v White [1989] HCA 51, (1989) 168 CLR 385. That was a case concerning a contract for the sale of land, where the vendor's obligation to deliver good title and the purchaser's obligation to pay the purchase money are acknowledged as concurrent and mutually dependent obligations. Traditionally, the position in relation to the respective obligations of a landlord and a tenant under a lease is that the obligations are independent. This is subject to qualification where the connection between the claim and crossclaim is such that the latter can be said to impeach the former: Indrisie v General Credits Ltd [1985] VR 251 at 254. A typical example arises where the landlord's breach (for example, of a covenant to repair) is so closely connected with the payment of rent that it would be unjust to allow the landlord to recover unpaid rent without taking effect of its own breach: British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063. The nature of the respective claims in this case does not bring it within the qualification.
Observations on the orders sought
In any application such as this under s 16 of the CT(RS)A Act, the provision of answers to the questions referred to the Tribunal will generally be the principal result. In appropriate cases, additional relief may be granted to further regulate the relationship of the parties to a lease, where this is seen as necessary or desirable.
Five of the six orders sought by the applicant are in the nature of declarations. Although the Tribunal is empowered to make declarations by s 91 of the SAT Act, its power in that regard is exercisable only by a judicial member: s 91(2) of the SAT Act. I am not such a member.
However, if it were appropriate to do so, arrangements could have been made for a judicial member to hear the matter. I did not do so in this case, based on my view that, once the answers to the referred questions are provided, no further manifestation of the answers is necessary. The parties are bound by each of the answers, and are required to regulate their conduct accordingly. Further, based on my findings and conclusions, the applicant could not be entitled to any of the first three declarations sought.
The sixth order sought is for an injunction preventing the eviction of Aardvark. As I have explained, although a valid basis for forfeiture of the lease exists, the possibility of a claim being made for relief from forfeiture is still to be explored. The form of an appropriate order, in the event that such a claim is made, will no doubt be the subject of discussion with the parties.
Order
The Tribunal shall issue an order in the following terms:
1.The Tribunal makes the following determinations in relation to the questions under the lease referred to it:
1)Is the tenant in default of the lease of the premises?
Answer: Yes, to the extent referred to in the reasons for decision published today.
2)Has the landlord breached its obligations to the tenant under the lease?
Answer: Yes, to the extent referred to in the reasons for decision published today.
3)Does the landlord have the right to the remedies described in the notice of default dated 13 March 2012?
Answer: The answer depends upon the making of a claim for relief from forfeiture and the outcome of any such claim.
2.The proceeding is listed for a directions hearing at 11.30 am on 12 September 2012 in order for any possible claim for relief from forfeiture to be addressed.
I certify that this and the preceding [105] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR T CAREY, MEMBER
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