Evans v Coughlin

[2001] NSWADT 38

CITATION:	Evans and Ors -v- Coughlin [2001] NSWADT 38
DIVISION:	Retail Leases Division
PARTIES:	APPLICANTS Ronald Evans and Pamela Evans Kenneth Wilson and Julie Wilson Jeffrey Welbourne and Joy Welbourne Vicbar (Kingsway Plaza) Pty Limited RESPONDENT Steven James Coughlin
FILE NUMBER:	005035
HEARING DATES:	On papers
SUBMISSIONS CLOSED:	02/23/2001
DATE OF DECISION:	03/12/2001
BEFORE:	Donald B - Judicial Member
APPLICATION:	Claim for payment of money
MATTER FOR DECISION:	Further damages
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:
REPRESENTATION:	APPLICANT J Quinn, solicitor RESPONDENT In person
ORDERS:	1. The Respondent to pay $4,105 to the Applicants as further damages for invalid termination of the lease.

1 In my decision in this matter of 14 November 2000 I stood over for further written submissions the issues of further damages and mitigation. In my earlier decision I assessed damages up to the intervention of the bankruptcy of one of the Lessor partners at $8,660.

2 I indicated that I required further evidence that:-

• the bankruptcy of the partner has ceased to interfere with the management of the premises and that the premises are once more on the market in a renovated condition in which the Lessors wish to lease them.
• sufficient advertising at a realistic market rent has occurred. An appropriate rent sought when a lessor is endeavouring to mitigate its loss may well be to accept a moderate discount on rents otherwise prevailing at least until the end of the period for which the Lease would have run had it continued to full term, claiming only this discount amount from the Lessee by way of damages if the premises are relet.
• the cleanliness issues as to the air-conditioning and the passageways which I have found to some degree made out, have been properly dealt with.

3 The Applicants through their lawyers filed and served written submissions and evidence dated 6 December 2000. The Tribunal extended the time for response by Mr Coughlin at his request. Following correspondence from lawyers subsequently retained by him, indicating that they were advising on an appeal and also required further time for a submission on damages, this extension was further extended until close of business 23 February 2001. No further submission having been received by that date I now proceed to conclude my decision on damages.

4 The Applicants claim $5,354 as further damages being the monthly rent and outgoings for the period 7 September 2000, (being the date they assert the bankruptcy ceased to constrain re-leasing) to 7 January 2001 (being the date on which they propose to occupy the premises themselves to operate a coffee shop).

5 The Applicants/Lessors filed a letter from the Trustee of 7 September 2000 removing constraints on the Lessors which satisfies me that this is the relevant date from which to begin the assessment of damages. I also accept that the date for the cessation of any damages is the date of the new use, 7 January 2000. From the Lessee’s point of view this already significantly limits his exposure.

6 The Applicants also filed a letter that the air conditioning system has been maintained and through their solicitors assert that one of the Applicant partners has taken responsibility for specific cleaning of the delivery areas and the passage ways. I am satisfied this issue left open by me has been addressed.

7 This leaves the question of the extent to which the Lessors adequately endeavoured to relet the premises between those dates in mitigation of their loss. The Applicants filed a letter of 30 November 2000 from the managing agent as to attempts to relet the premises but this letter does not indicate any press advertisements being placed for the property since 1 July 2000. The agents certainly state that no interest was displayed in the property which I take to include the period up to 30 November and which is some evidence of their continued endeavour to let the space. However there is no indication of any specific activity such as on site notices or notices in the vicinity of the Centre that the premises were available to let.

8 Bearing in mind that the Applicants had taken their decision on operating the premises themselves by 6 December 2000, this partially explains the absence of evidence of attempts to relet. However, while it is reasonable to infer that the agents and the Lessors continued to leave the premises on the market up to about that date, this limited promotion of the space and canvassing for tenants should in my view be reflected in an allowance to the Lessee in the assessment of damages.

9 In my view a proper figure for further damages in these circumstances is three months rent and outgoings, namely $4,105. I will make an order to this effect.