Damiano v Dhaliwal
[2023] ACTMC 36
•29 September 2023
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Damiano v Dhaliwal |
Citation: | [2023] ACTMC 36 |
Hearing Dates: | 10 August 2022; 14 September 2023 |
Decision Date: | 29 September 2023 |
Before: | Magistrate Stewart |
Catchwords: | CIVIL LAW – Counter-claim – Original Application Struck Out – Commercial Lease |
Legislation Cited: | Leases (Commercial and Retail) Act 2001 (ACT) |
Cases Cited: | Damiano v Dhaliwal [2021] ACTMC 14 Secured Income Reals Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 |
Parties: | Manjit Dhaliwal (Counter-Claimant) Marilena Damiano (Respondent) |
Representation: | Counsel Mr Donohue ( Counter-Claimant) Self-represented ( Respondent) |
| Solicitors Donohue & Co (Counter-Claimant) Self-represented (Respondent) | |
File Number: | CL 24 of 2015 |
MAGISTRATE STEWART:
Background
The original application in this matter was struck out by me on 26 October 2021 after the original applicant Ms Damiano abandoned the proceedings half-way through the first day of the hearing.[1] The resolution of the counterclaim in this matter has proceeded in the absence of Ms Damiano, who is the counter-defendant in this decision. The counter-defendant has not placed any admissible evidence before the Court that would properly explain her absence or allow the matter to have been further adjourned without a judgment. There has, in any event, been a significant adjournment period that has allowed for any amount of material to be filed in support of her case, but that has not occurred.
No legal practitioner has filed a notice of appearance or attempted to appear on the behalf of the counter-defendant.
On 10 August 2022 the hearing of the counterclaim commenced as listed. There was no appearance by the counter-defendant or her representatives. The matter proceeded. Evidence was called by the counter-claimant. A timetable was set out for the filing of submissions on the topics of the legal bases for the counterclaim, authorities in support, the precise sums claimed and evidence in support.
[1] Damiano v Dhaliwal [2021] ACTMC 14 (26 October 2021).
The engrossed orders of the Court allowed:
a.Ms Dhaliwal (the counter-claimant) to file submissions by the close of business 26 August 2022; and
b.By error Ms Damiano (counter-defendant) was given two opportunities to reply namely by the close of business on 9 September 2022 and 23 September 2022.
The bench sheet reflects that the date of 23 September 2022 was actually the date for the counter-claimant to reply – thus no prejudice has come to the counter-defendant Ms Damiano out of the error in the engrossed orders.
Submissions were filed on behalf of the counter-claimant on 24 August 2022.
The counter-defendant has declined to take advantage of the opportunities to provide written submissions to the Court on the issues raised in the counter-claim and the cross-applicant’s written submissions.
More than one year has elapsed since the counter-claimant’s compliance with the orders of 10 August 2022 and the counter-claimant sought to have the matter called on for a resolution.
The parties were advised of potential dates and the matter was listed on 14 September 2023. In the absence of any submissions contrary to the case marshalled in support of the counter-claim I returned an interim finding in favour of the counter-claimant.
I now provide written reasons for that interim finding.
Evidence and Submissions
On 10 August 2022 affirmed evidence was taken from Manjit Dhaliwal, Surjit Dhaliwal, Indira Pal Singh Keng and Ronald Anthony Clapham. No-one was present to cross-examine those witnesses. There was no reason to form a view other than that they were honest and reliable and doing their very best to remember the events from the last decade.
On the same day the following material was tendered on the counter-claimant’s case:
A. Exhibit A – sublease RN1752531;
Exhibit B – photographs of fit-out, equipment and stock on hand;
Exhibit C – a copy of an Allhomes listing for the premises in February 2017 showing the fit-out and equipment;
Exhibit D – a document headed “Manjit Kaur schedule of correspondence – CL 24 of 2015”;
Exhibit E – a statement of Manjit Kaur Dhaliwal filed 28 January 2022;
Exhibit F – a statement by Surjit Singh Dhaliwal filed 28 January 2022;
Exhibit G – a statement by Indar Pal Singh Kang filed 28 January 2022;
Exhibit H – a statement Ronald Anthony Clapham filed 14 April 2022;
Exhibit I – the affidavit of Zareen Qayyum dated 8 July 2016;
Exhibit J - the affidavit of Manjit Daur Dhaliwal dated 8 July 2016;
Exhibit K - the affidavit of Arshdeep Singh dated 8 August 2022;
Exhibit L - the affidavit of John Milhailaros dated 8 July 2016;
Exhibit M - the affidavit of Christopher John Donohue dated 8 July 2016;
Exhibit N – expert report of Paulo George Alves dated 3 February 2017;
Exhibit O – counter-claimant’s outline of submissions.
There are also the written submissions that were filed on behalf of the counter-claimant on 24 August 2022.
The Pleadings
The counterclaim is set out in:
a. Document 14 on the Court file - defence and counterclaim filed 27 January 2016;
b. Document 22 on the Court file - amended particulars of claim filed 20 April 2016;
c. Document 48 on the Court file – Rejoinder to replay to amended defence and answer to counterclaim filed 2 March 2017; and
d. Document 67 on the Court file – further amended defence and counterclaim filed 7 July 2017.
Three responses were filed by the counter-defendant and as a matter of fairness I have considered each of them even though they were not tendered and no evidence was called or tendered in support of them:
a.Document 15 on the Court file – Answer to Counterclaim filed 10 February 2016;
b.Document 16 on the court file – Reply to defence filed 10 February 2016; and
c. Document 27 on the Court file - Reply to Amended defence and answer to counterclaim filed 20 May 2016.
The Case for the Counterclaim
The original (but dismissed) claim was made pursuant to an application under the Leases (Commercial and Retail) Act 2001 ACT (the Leases Act). It was a claim that exceeded $200,000 for loss of rent, loss of outgoings payments, making good the premises, interest and costs. These insults were said to have been caused by the counter-claimant abandoning the commercial lease (being Exhibit A) and leaving behind a restaurant fitted out on the leased premises.
The counterclaim disputes the entire basis of that claim and sets out a story of conduct whereby the counter-defendant twice refused to assist and approve the sale of business and assignment of the lease and locked the counter-claimant out of the premises in contravention of the terms of the lease.
I will set out a broad history of the counter-claimant’s version of the key events:
a.Her father, Darshan Thind, first leased the premises from the counter-defendant’s father, Vince Damiano, in 1996;
b.In about 2006 the premises were transferred into the name of the counter-defendant;
c. The lease that is the subject of this litigation was executed on 24 June 2011 and allowed for a five year term commencing 1 July 2011. It contained standard commercial conditions about assignment of the lease, making good the premises and termination.
d.In June 2012 Darshan Thind attempted to sell the business and have the lease assigned to the purchase. The counter-defendant refused to assign the lease to allow the sale.
e.Mr Thind passed away on 14 March 2013 and left the business to the counter- claimant.
f.The counter-claimant struggled to run the business in the absence of her father.
g.A sale was of the business was negotiated with a third party in April 2014. The counter-defendant delayed a decision on transfer of the lease at the time of the negotiations, waited until September that year to make a formal refusal – by which time the sale had fallen through.
h.On 20 February 2015 the counter-claimant was locked out of the premises without any notice. She was two rental payments behind – the rent being paid up until 31 December 2014.
i.The counter-defendant filed her original claim on 27 November 2015; and
j.The cross-claimant filed her defence and counterclaim.
What followed was five years of little progress of the original claim. The claim was ultimately dismissed by me and we are now at the point of final determination of the counter claim.
Findings
All of these findings have been found proved on the civil standard of proof.
I find that there was an agreement between the Dhaliwals and Arunkumar Asharikkandy and Asheep Dingh to sell the restaurant business in April 2014. That agreement was for the sum of $60,000 plus stock. It included a bond amount of $17,066.40 that was attributable to the lease.[2]
[2] See exhibit E at pages 5-6 and exhibit K in its entirety.
Written consent to assign the lease to the new purchasers occurred on 28 May 2014. There was no response within 14 days as required under the lease.[3] The prospective buyers forwarded financial information to the counter-defendant for consideration of assignment of the lease to them. By letter the transfer was ultimately formally refused on 29 September 2014,[4] but the sale had fallen through by that time due the purchaser finding the counter-defendant too difficult to deal with.[5]
[3] Exhibit A clause 13.
[4] See exhibit E page 6.
[5] See Exhibit K pages 2-3.
The only evidence available proves that this refusal to assign the lease was both late and unreasonable – it appears that there was no basis at all to refuse to approve the assignment of the lease and assist the sale of the business within 14 days of the notice in writing. The basis of the refusal was unlawful, something ”extraneous and dissociated from the subject matter of the contract”[6] and contrary to s100 of the Leases Act. I find that the refusal to assign the lease in accordance with the lease was unlawful and in breach of the lease.
[6] Secured Income Reals Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596.
I find that the loss due to the breach was the agreed sale price of $60,000 less the bond sum of $17,066.40 amounting to $42,933.60.
I accept the evidence of Ms Dhaliwal about her being in arrears for rent in 2015.
There were several options open to the counter-defendant as landlord in circumstances of rent default – none of them involved locking the counter-claimant out of the premises without notice.
I find that there was never a termination notice served upon the counter-claimant in accordance with the lease.[7] It was a fundamental breach of the contract to lock the counter-claimant out of the premises. This act caused the restaurant business to stop trading and I find that that was the obvious intention of the counter-defendant.
[7] See page 26, clauses 18.1-18.4 generally at exhibit A.
As tenants, the counter-claimants were lawfully entitled to carry on their business and resolve the rental arrears in accordance with the lease agreement. They were unlawfully deprived of that opportunity by the counter-defendant and suffered loss and damage as a result.
I find that the counter-claimants should be awarded the following damages in those circumstances:[8]
a.The loss of the partial bond that had been paid - $8,033.20;
b.The loss of glasses and hardware, dry stock, takeaway containers and drinks - $7,508.33; and
c.The loss of cash floats and other goods - $2,288.90.
[8] All taken from the schedule to Exhibit E.
I find that there should be an adjustment for the rent owed from 1 January 2015 to the date of exclusion – 20 February 2015. I accept the calculations set out at page 23 of the written submissions of Mr Donohue. This gives an adjustment of $8,363.51 in rent owed at the time of the counter-respondent’s breach of contract.
The total award for damages is therefore: $52,400.52
Interest and Costs
The counter-claimant is to file and serve written submissions on the basis of any claim for interest, the start date of such an order and the calculations forte quantum of it and submissions on an appropriate costs order by the close of business Friday 20 October 2023.
I will allow a further four weeks for the counter-defendant to file and serve her reply by close of business on Friday 17 November 2023.
There will be an opportunity to reply by the cross-claimant to be filed and served by close of business Friday 01 December 2023. All of those submissions are to be limited to ten pages and are to be filed in electronic form in Microsoft Word format.
I will publish my decision on costs thereafter.
| I certify that the preceding thirty-four [34] numbered paragraphs are a true copy of the Reasons for Decision of his Honour Magistrate Stewart. Associate: Jonathan Pears Date: 29 September 2023 |