FA & SP Holland P/L v Bayside Insurance Brokers P/L - [2014] SADC 138

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
FA & SP HOLLAND P/L v BAYSIDE INSURANCE BROKERS P/L
[2014] SADC 138
Judgment of His Honour Judge David Smith
15 August 2014
MAGISTRATES
Review of a Minor Civil Action pursuant to s 38 of the Magistrates Court Act 1991 - discussion of nature of Application for Review - consideration of whether a Magistrate hearing a Minor Civil Action could award a judgment in excess of the applicable statutory limit - discussion of the Magistrates Court's power to hear and determine a Minor Civil Action as if it were commenced in another Division - consideration of the breadth of the discretion in s 10B of the Magistrates Court Act in its application to a Minor Civil Action.
Minor Civil Action subject to a statutory limit of $6000 - Judgment awarded for $10,360 - Application for Review successful in so far as Magistrates Court unable to exceed statutory limit and judgment for $10,360 rescinded and judgment for $6000 substituted.
Magistrates Court Act 1991 (SA) ss 3, 8, 10A, 10B, 38, 38(1)(f), 38(7)(b)(c)(e), 40; Statutes Amendment (Courts Efficiency Reforms) Act 2012 s 23; District Court Act 1991 (SA) s 39, referred to.
Fox v Percy (2003) 214 CLR 118; O'Sullivan v Farrer (1989) 168 CLR 210; Cretazzo v Lombardi (1975) 13 SASR 4; Radaich v Smith (1959) 101 CLR 209, considered.

FA & SP HOLLAND P/L v BAYSIDE INSURANCE BROKERS P/L
[2014] SADC 138
Introduction

This is an Application by the Defendant (‘Applicant Company’), pursuant to s 38 of the Magistrates Court Act, 1991 (SA) to Review a decision of the Magistrates Court, made in November 2013, in which a Magistrate entered judgment for the Plaintiff, (‘Respondent’) for $10,360.00 for rent owing pursuant to a tenancy agreement, in respect of a garage or workshop premises at Glenelg.
Nature of Application for Review
This Court’s powers on Applications for Review are found in s 38 of the Magistrates Court Act 1991 (SA). It may inform itself, as it thinks fit, and is not bound by the rules of evidence (see s 38(7)(b)). Further, it is empowered to rehear evidence taken before the Magistrates Court (see s 38(7)(c). Also, in both the trial of a Minor Civil Action and in the hearing and determination of a Review, the ‘... court must act in accordance with equity, good conscience and with substantial merit of the case without regard to technicalities and legal forms’ (see s 38(1)(f) and (7)(e)).
Finally, I consider that the accepted precepts, concerning the role of an appellate Court, have a guiding application to Reviews under s 38. Accordingly this Court is obliged to respect the advantage enjoyed by the Magistrate of seeing and hearing the witnesses, particularly if the decision is based upon impressions of credibility (see Fox v Percy (2003) 214 CLR 118). To the extent that this Court rehears evidence it can, of course, make up its own mind. As will be seen, that has been done in this matter, but only in a limited way.
Conduct of this Application
On 13 May 2014, I heard argument. Then on 19 June 2014, I called the matter on for what could be described as a Directions Hearing. And finally, on 4 July 2014, the parties having taken legal advice at my suggestion, I proceeded to deal with the matter in the ordinary way. In particular, on 4 July 2014, I took some further explanatory evidence from the principal witnesses, heard further argument, and reserved my decision. The ‘reheard’ evidence merely supplemented and explained the evidence taken by the Magistrate. I will refer to the Magistrates Court transcript of evidence as for example ‘MC whatever’ and the District Court transcript of evidence as for example ‘DC whatever’.
Background Circumstances
The background circumstances are largely uncontroversial. I will identify the controversial matters as I traverse the history, and resolve them in the course of considering the grounds of this Application.
The Respondents for many years have owned office premises together with a rear workshop at 613 Anzac Highway, Glenelg.
From about 1991 to 2009 the Applicant Company leased the office from the Respondent (DC 22). In about 2002, when the workshop became available, the Applicant Company also leased those premises for the purposes of storage (DC 23). There was no written agreement. The rent for the workshop was agreed at $134.00 per week plus a contribution of $14.00 per week to outgoings (DC 23). The workshop was accessible through two roller doors which opened onto a paved forecourt which, in turn, was open to and accessible from a side street namely Mary Street (photographs Exhibit P1). The roller doors were secured by a padlock and the Managing Director of the Applicant Company Mr Nick Cadd, initially at least, had a key to that padlock (DC 12, 34). It is common ground that the Respondents, with the agreement of the Applicant Company, had Baltic pine floorboards stored in the workshop (MC 10, DC 6). The Respondents claimed that, for a time, without any objection from the Applicant Company, they also stored some maintenance equipment such as trestles, drop sheets and painting equipment in the workshop. While there is no argument about the storage of the timber, the Applicant Company, by its Managing Director, denies that there was any sustained consent to other equipment being stored in the workshop. The Applicant Company also complains that it has not been able to access the workshop because parked cars blocked the doorway and the door lock was changed by the Respondents and no key was provided. I will deal with these issues in due course. They constitute the core of the dispute between the parties.
After giving due notice, the Applicant Company, on 23 December 2009, moved out of the office premises to nearby premises in Glenelg South (DC 24). At that time the parties agreed that the Applicant Company would continue to rent the workshop. The first Respondent, Mr FA Holland, said in evidence:
… when Nick gave notice to vacate the premises by 31 December 2009 he asked me if he could rent the workshop for storage. He had a lot of bags of shredded office records and he was pressed for time and he said “can I rent the shed for storage until I get settled in my new premises at Barr Street Glenelg South”, and I agreed. He paid rent for two and a half years and all of a sudden he decided that he wasn’t going to pay rent …
(MC 4 and see also DC 8-9)
The photographs of the inside of the workshop show stored papers, files, filing cabinets, computer equipment and even a motor car. The rent continued to be $134.00 per week plus $14.00 per week contribution to outgoings (MC 12, DC 25).
The Applicant Company paid the agreed rent and contribution to outgoings until July 2012 (MC 3, DC 10). From that time onward it stopped paying and claims through its director Mr Cadd, that it did so because of the Respondents’ continuing breaches of the tenancy agreement. At the time of the trial in the Magistrates Court in October and November of 2013, the Applicant Company’s property remained stored in the workshop.
Upon the Applicant Company ceasing to pay rent the first Respondent, without success, attempted to speak to Mr Cadd of the Applicant Company about the matter (DC 17).
On 3 December 2012, faced with what they saw as continuing default, the Respondents served a ‘Notice of Default and Intention to Terminate’ on the Applicant Company (see Exhibit P4). The Applicant Company responded with a particularly strident letter dated 6 December 2012 in which an array of objections were particularised (see Exhibit P5). The first Respondent in his evidence expressed shock at the vehemence of the response and the allegations of repudiation. He considered that for many years there had been an amicable landlord and tenant relationship. Nothing was resolved (DC 11, 18).
On 3 April 2013 the Respondents instituted a Minor Civil Action against the Applicant Company in which they claimed $5772.00 for the then outstanding rent, rates and taxes.
The pleadings were a focus of attention in this Application and so I need to make mention of them.
The Applicant Company denied the claim. In its defence it invoked a non- existent enactment which it called, the Retail Tenancies Act, 1995 (SA), and claimed, inter alia, that in breach of the provisions of that Act, the Respondents had repudiated the oral tenancy agreement and were thereby disentitled to enforce it and claim rent. That Defence was later replaced by an Amended Defence and Counterclaim.
In the Amended Defence there was no reliance upon any Statute but it pleaded as it had in the original Defence, that the Respondents had repudiated the tenancy agreement by:
·unlawfully entering and taking possession of the workshop on or about 2012 by changing the lock and moving its own possessions into the premises;
·denying the Applicant Company the implied right to quiet enjoyment of the premises by allowing parking in front of the roller doors, changing the lock, and by storing its own possessions in the premises.
The Applicant Company claimed that the repudiation occurred in about February 2012, and so rent paid between then and July 2012, should be refunded. Accordingly, the Applicant Company counterclaimed the repayment of that rent being $3792.00.
The Action proceeded as a Minor Civil Action, in the Magistrates Court, on 3 October 2013 and 8 November 2013. Then for Reasons published and despatched by post to the parties on about 27 November 2013, the Magistrate entered judgment for the Plaintiffs (‘Respondents’) against the Defendant (‘Applicant Company’) in the sum of $10,360.00 plus costs. There was no order made in respect of the Counterclaim. The Magistrate amended the claim, without reference to the parties, from $5772.00 to $10,360.00, to account for the fact that the Applicant Company was still in occupancy of the workshop as at the time of judgment, and the quantum of the outstanding rent had, as a result, grown to approximately $10,360.00. He also ordered that the Applicant Company remove its goods and surrender up the premises. The Court’s final orders were set out in paragraphs [21] to [24] of the Reasons for Decision in the following terms:
I shall allow an amendment to the plaintiff’s claim to increase the amount claimed as it is a claim that by nature accumulates over time.
Based on the outstanding amount as at 14 November (when the plaintiff’s submissions were received) the plaintiff’s claim is amended to $10,360.
Judgment shall be entered in favour of the plaintiff in the amount of $10,360 plus costs to be agreed or taxed.
The defendant shall remove all his belongings from the workshop and deliver up the premises as soon as possible and in any event within 14 days of receipt of this order.
I turn to the Application for Review.
Limitation of Time
The Application was out of time. The question of extending time was not argued. It was not necessary. I extend the time within which the Applicant Company has to Review the Magistrate’s Court decision.
Grounds of Application for Review
There are 23 grounds of Review. They can be distilled into the following contentions:
1The trial Magistrate erred in that he had regard only to the original Defence of the Applicant Company which, by the time of the trial, had been superseded by an Amended Defence and Counterclaim.
2The trial Magistrate erred, when in his Reasons for Decision, and without there being any previous reference to the parties, he amended the quantum of the claim, from the originally pleaded sum of $5772.00 to $10,360.00, notwithstanding that the proceeding was a Minor Civil Action with a statutory limit of $6000.00 applicable to it.
3The trial Magistrate erred in failing to conclude that, on or about February 2012 the Respondents repudiated the tenancy agreement and were thereby disentitled to claim rent thereafter, because they had, without agreement or consent, re-entered and taken possession of the workshop by:
·changing the locks to the roller doors and failing to provide keys to the Applicant Company; and
·storing their own property in the workshop without consent of the Applicant Company.
4The trial Magistrate erred in failing to conclude that the Respondents in about February 2012, repudiated the tenancy agreement and were thereby disentitled to claim rent thereafter because they had denied the Applicant Company the right to quiet possession of the leased premises by:
·allowing users of the adjoining property to bar access to the workshop by parking their vehicles across the doorways;
·changing the locks to the doorways without supplying a key to the Applicant Company; and
·storing their own property in the workshop without agreement or consent of the Applicant Company.
Decision
Ground 1) Overlooking the Applicable Pleadings
I consider that the Magistrate probably did overlook the Amended Defence and Counterclaim, because, first in his Reasons for Decision he dealt at some length with a plea, which was only agitated in the original superseded Defence, namely that a non-existent piece of legislation had application to the tenancy, and second, he made no mention of any Counterclaim or made any orders in respect of it. However, on the Magistrate’s findings of fact, it would have made no difference to his final decision, because the substantive points of Defence in both the superseded and Amended Defences were the same, namely that the Respondents had repudiated the tenancy agreement by re-entering the workshop and by denying the Applicant Company quiet enjoyment of the premises. The Magistrate found against the Applicant Company, on the facts, on both issues. Inevitably, he would have rejected those same points in the Amended Defence and consequently would have dismissed the Counterclaim. Accordingly, there is no basis to interfere with the Magistrate’s decision on the basis of this point alone.
Finally, it is to be noted that in Minor Civil Actions the parties are not bound by written pleadings, (see s 38(1)(d) of the Magistrates Court Act).
Ground 2) Judgment Impermissibly Exceeded Statutory Limit
I conclude, for the following reasons, that the Magistrate impermissibly exceeded the statutory limit of $6000.00 in entering Judgment for the Respondents for $10,360.00.
On 3 April 2013, this action was instituted in the Civil (Minor Claims) Division of the Magistrates Court. The claim was for $5772.00. As such, it was a ‘small claim’ and the proceeding was a Minor Civil Action (see Sections 3 and 10A of Magistrates Court Act and see the Originating Process).
The status of the action did not change in the course of the proceedings.
The Magistrates Court Act was amended to increase a ‘small claim’ from ‘$6000.00 or less’ to ‘$25,000.00 or less’ (see s 23 of Statutes Amendment (Courts Efficiency Reforms) Act 2012, (‘the Amending Act’)). The increase to the statutory limit did not apply to proceedings which were commenced before the date of the commencement of the Amending Act (see s 27 of the said Amending Act). The Amending Act was to commence on a date to be fixed by proclamation (see s 2 of the Amending Act). By proclamation gazetted on 16 May 2013, the Amending Act came into operation or commenced, on 1 July 2013 (see Statutes Amendment (Courts Efficiency Reforms) Act (Commencement) Proclamation 2013: SA Government Gazette 16 May 2013 at p 1541).
Accordingly, notwithstanding the increase in the statutory limit, for this action the limit was ‘$6000.00 or less’, because it was instituted on 3 April 2013, which, at the risk of being obvious, was three months before the proclaimed commencement date of the amendment, namely 1 July 2013.
The question which remains, is whether, even given the statutory limit, the Magistrate could nonetheless have properly amended the quantum of the claim to $10,360.00 and entered judgment in that sum. If it was unobjectionable, the proceeding would have to be regarded as within the Civil (General Claims) Division of the Court, (see s 8 of the Magistrates Court Act), and any challenge to the judgment would have had to be by way of an appeal to the Supreme Court (see s 40 of the Magistrates Court Act). It would follow that this Court would have no power to entertain this Application which, of course, is predicated upon the proceeding being ‘a Minor Civil Action’ (see s 38(6) of the Magistrates Court Act).
The Magistrate may have been under the impression – a mistaken impression, that the statutory limit for the Minor Civil Action before him was the new limit of ‘$25,000.00 or less’. If he was correct, the amendment, though objectionable, because the parties were given no opportunity to be heard on it, might survive on the basis that it should have been made anyway. However, once the quantum of the claim became $10,360.00, the claim was in the wrong Division of the Court. That is not, of itself, fatal to the Court being able to give effect to the amendment. Such a circumstance is dealt with by s 10B of the Magistrates Court Act which provides as follows:
Power to continue hearing as another Division
If proceedings commenced in one Division of the Court should have been commenced in another Division, the Court may, if it thinks fit, continue to hear and determine the proceedings as if it were sitting as that other Division and as if the proceedings had been commenced in that other Division.
It can be seen that the provision confers on the Court a discretion to ‘… continue to hear and determine …’ a proceeding started in the wrong Division as if it commenced in the correct Division.
I pause here to comment on the nature of the apparently broad discretion conferred by that provision.
The words ‘… if it thinks fit …’ confer on the Court an apparently unfettered discretion, to decide ‘to continue to hear and determine …’ the proceeding as if it is in the correct Division. However, even given unconstrained language, and the lack of any confining statutory considerations, it is always the case that the scope, intent and purpose of the legislation controls even the most generously framed discretion (see O’Sullivan v Farrer (1989) 168 CLR 210 at 216). Further, even an apparently unfettered discretion must be exercised judicially, not arbitrarily or capriciously, and not on grounds unconnected with the litigation (see Cretazzo v Lombardi (1975) 13 SASR 4 per Bray CJ at [11]).
The exercise of the discretion in s 10B to treat an action commenced in one Division as having been commenced in another, requires that a decision be made based upon the relevant considerations. It is apparent that the Magistrate did not turn his mind to s 10B. It is nowhere canvassed in the Reasons. Moreover nowhere in either the transcript or the papers, is there any indication that the parties were given an opportunity to be heard, in relation to, either the amendment, or the linked decision to proceed with the action, as if it were a proceeding in the Civil (General Claims) Division. To exercise, judicially, what are really two discretions, the first to amend and the second to implement s 10B, would require, at least, giving the parties an opportunity to be heard.
Although it is not necessary to decide it, I would suggest, that, given that the trial of a Minor Civil Action is, uniquely, required by statute to be conducted as an inquisition, as opposed to an adversarial contest, (see s 38(1) and (2)), there would have been serious hurdles to first, any amendment, and second, any decision that the Court, having fully heard the proceeding as a Minor Civil Action, then determine it as if it were commenced in the Civil (General Claims) Division.

While it is a time honoured principle that the parties to litigation cannot, by consent, confer on a court a jurisdiction which that court does not otherwise have, I consider that the parties in this case, given the power in s 10B, could consent, at any time, to the Magistrates Court exercising the discretion conferred by s 10B, to hear a Minor Civil Action as if it were commenced in, for instance, the Civil (General Claims) Division. However, the Court would need to apprise the parties of their rights thereafter not to be bound by the statutory boundaries of the Minor Civil Action as set out in s 38 of the Magistrates Court Act. If the hearing of evidence has begun or, as in this case, concluded, the giving of full adversarial rights may mean the revisiting of evidence etc, with the assistance of legal representation. In the circumstances of this case, for instance, the Applicant Company would be unlikely to consent to any such exercise, given the conclusion of the hearing, because the necessary invitation to amend and then implement s 10B, would surely flag the imminent prospect of a judgment exceeding the statutory limit. Accordingly, the Court needs to be alert to any prospect that the action is, or will with the effluxion of time, end up wrongly located in the division structure of the Court and, address that problem before it is too late.
In all I am satisfied that the primary error of the Magistrates Court is that it entered a judgment in excess of the statutory limit of $6000.00. En route to that error, whether wittingly or not, the Court erred in not giving the parties an opportunity to be heard on the amendment. Further, having amended, the Court compounded the initial error by entering judgment for the amended amount, without addressing, again with input from the parties, the discretionary requirements in s 10B, which was the only pathway to the entry of such a judgment.
It was this issue, amongst others, which I canvassed with the parties at the Directions Hearing on 19 June 2014. Because this Court has no power to remit, I raised with the parties they themselves going back to the Magistrates Court, setting aside the judgment and starting again. As I have indicated, having taken legal advice, the parties accepted that I should proceed to entertain the Application.
Accordingly, I conclude that the trial Magistrate erred in amending the quantum of the Respondents’ claim, from the originally pleaded sum of $5772.00 to $10,360.00 and so erred in entering a judgment for a greater sum than $6000.00. It follows that, if the Respondents are wholly successful in resisting this Application for Review, the judgment recovered by them cannot exceed the sum of $6000.00.
Despite it being canvassed in the Directions Hearing, I do not regard myself as empowered to adopt the powers of a Magistrate and treat this Application as an action in the ordinary Civil jurisdiction of the Magistrates Court and so proceed to a judgment afresh.
Grounds 3) and 4) Repudiation
Though it does not matter, I accept that the agreement between the parties in relation to the workshop, constituted a lease rather than, for instance, a licence. In either case the law would imply into the agreement a term that, so long as the Applicant Company paid the rent and the agreed share of outgoings, it would be entitled to undisturbed possession and use of the workshop for the purposes of storage (see Commercial Leases in Australia by WD Duncan (6^th ed, 2011) at [8.10]. ‘Possession’ within the meaning of that term, would mean exclusivity, that is, the Applicant Company would have the right to occupy the premises for the purposes of storage to the exclusion of others (see Radaich v Smith (1959) 101 CLR 209 at 217 per Taylor J).
The Applicant Company claims that the Respondents breached that implied term in the following three respects, and thereby were disentitled to claim rent:
1by replacing the lock to the workshop door and not providing a key to the Applicant Company;
2by obstructing access to the premises by permitting cars to park on the forecourt in front of the roller door; and
3by entering onto the premises and storing materials of their own in the workshop.
I turn to the Applicant Company’s first claim that it was effectively locked out of the workshop. I agree with the Magistrate’s findings that the lock was changed because the existing lock was defective and that a key was always made available to the Applicant Company (see Reasons at [17]). There is no basis to interfere with the Magistrate’s findings. There was before him compelling evidence to support such a conclusion (see MC 6, 16, 18-24, see also Exhibit P4). I reheard evidence as to this topic from the first Respondent, Andrew Holland who was the first Respondent’s son, and from Mr Cadd of the Applicant Company. On the evidence before me I would come to the same conclusion as the Magistrate. In particular, I accept without reservation the evidence of the first Respondent and his son Andrew in preference to that of Mr Cadd. They said that on about 24 November 2012 the lock was changed when, after clearing out the workshop at the insistence of Mr Cadd, the existing lock was discovered to be defective and so was replaced. Both the first Respondent and his son Andrew, said they left messages at the Applicant Company’s offices to the effect that the new key to the workshop was available (see DC 12, 13, 14 and 15).
Accordingly I reject the claim that the Respondents repudiated the lease by locking the Applicant Company out of the workshop.
I turn then to the claim that the Respondents obstructed the Applicant Company’s access to the workshop by permitting car parking across the workshop doorway.
Certainly an obstruction to access to leased premises can constitute a breach of the occupant’s right to undisturbed use of possession. The interference must be direct and physical and must inhibit access to a substantial extent (see Commercial Leases in Australia (supra) at [8.50]). In this case there is no question of, for instance, customers being inhibited from accessing the premises. The purpose of this letting was to store spent office records, office equipment and an old motor car (see photographs Exhibit P1). Further, and in any event, access, at will, was always available to the Applicant Company by simply using the key and entering the workshop through the roller door. The workshop was accessible off the side Mary Street. If more space was necessary by reason, for instance, of wanting to have a trailer at the doorway, then a request could easily have been made that the tenants on site make room by moving a car (see DC 12 evidence of first Respondent and evidence of Andrew Holland). Further, the history of the occupancy, accepted by the Magistrate, was that the Applicant Company hardly ever wanted access. The Magistrate did not accept Mr Cadd’s evidence that he made ‘repeated demands’ concerning the parking in front of the workshop (see Reasons at [20]). Nothing I heard in evidence in this Court would cause me to interfere with that finding of credit. In his evidence in this Court Mr Cadd struggled to make out a case that his access was substantially obstructed. Notably, from December 2009 until July 2012, his Company paid the rent and outgoings without complaint (DC 38). Mr Cadd’s evidence in this Court on the topic of obstruction was manifestly unconvincing. (DC 37-45).
Accordingly, once again I agree with the Magistrate. Further, to the extent that I heard considerable evidence on this topic myself, I would come to the same conclusion. Therefore I reject the contention that the Respondents have repudiated the lease agreement by obstructing access to the workshop.
I turn to the final contention that the Respondents breached the letting by entering the workshop and storing their own materials there.
This matter was not dealt with directly by the Magistrate. I took evidence as to this topic from the parties. It can be dealt with shortly. I unreservedly accept the evidence of the Respondents about this topic in preference to that of Mr Cadd of the Applicant Company. I find the following. In the early days of the Applicant Company’s tenure of the workshop, that is, from 2002 until 2009, the Respondents stored Baltic pine floorboards and some maintenance equipment such as trestles, drop sheets and painting equipment in the workshop. That was done without any objection from the Applicant Company (DC 6, 7). However, difficulties arose after July 2012, when the Applicant Company stopped paying rent (DC 10). Up until then, according to the first Respondent, there was no objection to the presence of maintenance equipment or the Baltic pine floorboards and nor did the Applicant Company, and in particular, Mr Cadd, object to the Respondents going in and out of the workshop (DC 10). Then in about November 2012, Mr Cadd spoke with Mr Andrew Holland who helped his elderly father with the property. According to Mr Andrew Holland, the following was said:
MR A HOLLAND:       I’ve got around about late November I think, I called Nick around about late November, I’m not too sure of the exact date in November, I rang him to ask why the rent was not being paid. Nick advised he was not going to pay because he could not get access to the shed because someone was parking in front of it. He mentioned he spoke to my other brother Chris about that. I said Chris is not dad’s representative, he needs to phone Frank. Up until that time up until we had not – Frank had not received a call from Nick about anything any of that matter at that time. Dad had – Frank had tried contacting Nick on at least four occasions to discuss the rent issue and had no responses.
HIS HONOUR:           What about the lock issue?
MR A HOLLAND:      There was no mention of any lock. I mentioned to Nick, when I did call Nick about it –
HIS HONOUR:           This is in November?
MR A HOLLAND:       This is in November 2012.
HIS HONOUR:           What was discussed?
MR A HOLLAND:       I rang Nick to ask why he wasn’t paying the rent and he said he had some, we had some maintenance gear in there as well. I said I wasn’t aware of that but I’ll arrange to speak with dad to get it removed. So Nick was aware of the maintenance being there, he said to me at that time he wanted to rearrange some of the things in his shed. So I said ‘Fine, I’ll speak with Frank and get that removed’. I then spoke with Frank and asked him to – ‘Have you got some maintenance gear, can we move it?’ He said ‘Yes’. Sean, my maintenance person, another brother, had left gear in there for painting purposes he will get that removed. When Sean went in to do that he had trouble opening the lock, got the maintenance gear out and then couldn’t close the lock. He merely went down to the Mitre 10 hardware, bought another lock and put it on straightaway, that was around about 28 November. We submitted in evidence the receipt for the lock. That was the only time the lock was changed. I attempted then to ring Nick after that to say ‘The lock has now been changed, we have another key available for you’ and we never had contact back from him at all. In fact, the second time I was leaving messages.
HIS HONOUR:           You didn’t physically hand him a key.
MR A HOLLAND:      I had the key. I advised him the key was available, that Frank – all he had to do was contact Frank.
HIS HONOUR:        Did you speak with him directly about that or was that a message left?
MR A HOLLAND:       That was a message.
HIS HONOUR:           To his work?
MR A HOLLAND:      To one of his secretaries. I left messages there about the spare key.
MR F HOLLAND:               He wouldn’t answer the phone when we rang him and we left messages for him to contact us. At no time during this dispute has he ever approached me personally to discuss this matter.
MR A HOLLAND:      Sorry, I’ll refer to my notes. I called Nick on 7 December to advise that the change of lock and the key was available from Frank. Nick was not available at that time.
(DC 13, 14)
Accordingly, in the face of Mr Cadd’s objection, the maintenance gear was shifted out (see also evidence of Sean Holland, MC 18-24). After November 2012 the Respondents did not have any equipment in the workshop apart from the Baltic pine floorboards in respect of which there was no objection.
Again Mr Cadd’s evidence about equipment stored by the Respondents without his consent in the workshop, was unconvincing in the extreme. Despite persistent questioning what was offered was vague references to trestles and painting equipment which I have already dealt with. At one stage in his evidence Mr Cadd showed me some photographs on his iPhone which I am satisfied showed some insulation on top of an internal office which had always been there (DC 45-48). Accordingly, I do not accept this third ground of review.
Conclusion final orders
In determining this matter, the courses open to this Court are set out in s 38(7) of the Magistrates Court Act 1991 which provides as follows:
38(7)The following provisions apply to such a review by the District Court:
…
(d)in determining the matter, the Court may—
(i)affirm the judgment; or
(ii)rescind the judgment and substitute a judgment that the Court considers appropriate; or
(iii)if the review arises from a default judgment or summary judgment, rescind the judgment and—
(A)substitute a judgment that the Court considers appropriate; or
(B)remit the matter to the Magistrates Court for hearing or further hearing;
In the result, this Application for Review succeeds, but only in respect of the challenge to the Magistrate entering a judgment in excess of the statutory limit of $6000.00. The other grounds for review have failed. In particular, the Applicant Company has not established that the Respondents breached the lease agreement and are thereby disentitled to insist on the payment of rent.
Accordingly, the Respondents are entitled to be paid the rent of $134.00 per week plus $14.00 per week contribution to outgoings, from July 2012 till February 2014 when the Applicant Company finally vacated the workshop (see DC 20). However, the outstanding rent for that period, that is, from July 2012 till February 2014, is a sum well in excess of $6000.00. This Court in all the circumstances is unable to award a judgment in excess of $6000.00.
In the final result the judgment of the Magistrate’s Court being in excess of the statutory limit must be rescinded and substituted for it is a judgment in favour of the Respondents against the Applicant Company in the sum of $6000.00.
The Counterclaim of the Applicant Company is dismissed.
The Respondents are entitled to pre-judgment interest (see s 39 of the District Court Act 1991). The rent debt to the Respondents reached $6000.00 by approximately mid-April 2013. Accordingly, the Respondents are entitled to pre-judgment interest on the accumulating and outstanding rent through to when it reached $6000.00 in mid April 2013 and thereafter on the sum of $6000.00 until today. That is a period of approximately 2.038 years. An interest rate of six per cent would be appropriate. Therefore I award the Respondents a lump sum for interest of $550.00. The end result of the indicative calculation, which I have made, has been discounted by 25 per cent to allow for the accumulation of the entitlement, in the periodic steps I have indicated, over the 2.038 years since July 2012 when the Applicant Company stopped paying rent (i.e. $6000.00 x 2.038 years x 0.06% per annum discounted by 25%).
Of course interest will run on the judgment debt from today until paid. I will now hear the parties as to costs.
The question which now arises in this case is whether the Respondents can pursue the Applicant Company for the rent owing from the period from about the middle of April 2013 until February 2014 when the Applicant Company vacated the workshop, or whether some form of estoppel operates to prevent any such action. It is not for this Court to rule on that. Rather the Respondents will have to take their own advice on what is, in accordance with my findings, their just entitlement. I note in this respect the provisions of s 39 of the Magistrates Court Act.