Feng Yun v Goulburn International Pty Ltd
[2012] NSWADT 276
•21 December 2012
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Feng Yun v Goulburn International Pty Ltd [2012] NSWADT 276 Hearing dates: 13, 25 September, 29, 30 October and 8 November 2012 Decision date: 21 December 2012 Jurisdiction: Retail Leases Division Before: Deputy President D Patten Decision: 1) The Respondent to pay to the Applicant the sum of $28,340.
2) Subject to paragraph 54 no order as to costs.
Catchwords: Lessee seeks return of bond and alleged overpayment of rent - absence of records- factual issue. Legislation Cited: Retail Leases Act Category: Principal judgment Parties: Feng Yun (Applicant)
Goulburn International Pty Ltd (Respondent)Representation: E Smith (Applicant, agent by leave on 13 and 25 September)
Christopher Levingston & Associates (Applicant) thereafter.
K Hewlett & Co Solicitors and Attorneys (Respondent)
File Number(s): 125091
REASONS FOR DECISION
The application in this matter filed on 11 July 2012 sought various orders in relation to a retail lease from the Respondent to the Applicant in respect of premises known as shop 4, 27 Goulburn Street Sydney (the premises). It was not disputed that during 2011 for a period the length of which was in issue the Respondent was the lessor of the premises and the Applicant was the lessee.
It was also not disputed that the premises constituted a retail shop within the Retail Leases Act. (the Act) as at all relevant times the premises were proposed to be used and were in fact used for the sale of clothing.
During the course of the hearing, which occupied some 5 days, I was provided with a document headed "amended orders sought by Applicant. Those orders other than those concerning interests and costs were
Order declaring that the Applicant entered into possession of the retail shop on 1 March 2011 in accordance with the lease dated 28 January 2011
Order declaring that the Applicant gave possession of the retail shop to Danni Wu on 12 October 2011 in accordance with the agreement of the Respondent.
Order that the Respondent pay the Applicant the sum of $10,185.68 by which rent was overpaid.
Order declaring that the Respondent is not entitled to receive payment of the whole or any part of the security bond.
Order that the Respondent refund to the Applicant the full amount of the security deposit in the sum of $26,000.
In essence the Applicant case was that she overpaid the rent during the period of her tenancy and that the Respondent when the tenancy ended refused to refund the bond of $26000 she paid when the tenancy commenced. The case was complicated by a complete lack of any reliable documentation.
By way of background the Applicant said that in 2010 she was casually employed in a small ladies fashion business conducted at shop 3 27 Goulburn Street Sydney. The Respondent was also the landlord of that shop being the owner of the building at 27 Goulburn Street. Although at the time a university student the Applicant discussed with her mother the prospect of establishing her own ladies retail fashion boutique.
She became attracted to the premises following conversations with her mother deposed to in her affidavit sworn 23 March 2012:
Sometime during late 2010 my mother informed me that the owner of shop 4, Yafei Ji, was interested in selling her shop as she wished to return to China. I told my mother that I liked shop 4 very much as it had a larger floor area and had a better quality fit-out. Further, from what I had observed from time to time, it attracted more customers and Yafei Ji was a good salesperson with a customer base, which would continue into the future if I offered the same type of friendly service and enthusiasm.
Thereafter negotiations were conducted between the Applicant's mother Zuo Qun with Yafei Ji the owner of the business conducted in the premises and with the Respondent through its representative Wing Cheung. During the course of the negotiations the sum of $3000 was paid to Mr. Wing Cheung ---who wrote on a piece of paper, in Chinese, words and numbers subsequently translated (part of Exhibit 2) as
Received deposit payment from Ms Fung Wan (Feng Yun)
Deposit for rent $3000(three thousand dollars)
Owner [Signature]
17/01/2011
There was an issue, which I will need to resolve as to the purpose of that payment.
According to Ms Jun's affidavit a meeting was arranged to take place at the premises on 28 January 2011. The affidavit somewhat laconically gives her version of the events of that day
On the 28 January 2011 my mother and I went to my bank and drew out $26, 000 in cash. We went to shop 4, 27-31 Goulburn Street, Sydney 2000 where we met Wing Cheung. Wing Cheung and I signed the lease. I noted from page 1 of the lease that it referred to shop 3. I informed Wing Cheung that this was incorrect and when I signed the lease on page 41,as requested by Wing Cheung, I hand wrote shop 4, 27- 33 Goulburn Street, Sydney 2000 above my signature.
Although the Affidavit does not expressly say so it is clear that the sum of $26,000 was handed to Wing Cheung who provided a receipt in English which read: Wing Cheung received $26,000 (twenty six thousand) dep. Shop 4
(Signature)
28/1/11
The Applicants affidavit is silent as to what occurred thereafter apart from saying that she subsequently decided to sell the business "but left this to my mother".
Ms Yun was cross examined as to the date she commenced to operate the business on her own account and maintained that it was 1 March 2011. She said that before that date she was in effect only learning about the business. She was however very vague about details when cross examined upon them and indicated that she very much left everything to her mother. She did not know the price for which the business was ultimately sold to Danni Wu
In the result although I do not think the Applicant was a dishonest witness I regard her testimony as very unreliable except to the extent corroborated by other evidence.
A much more important role was undertaken by the Applicants mother Ms Zuo Qun It was she who ascertained that Jafei Ji the owner of the business in the premises was willing to sell and it was she who entered into negotiations with the respondent via Wing Cheung. She deposed as to her early dealings with him in these terms:
I talked to the tenants in shops 2 and three and satisfied myself that Wing Cheung was the owner of the premises or was acting on behalf of the owner/landlord. On the 17 January 2011 I met with Wing Cheung and gave him a holding deposit of $3000 in cash for which he gave me a hand written receipt on a scrap piece of paper, which I provided at his request. As it was not a formal receipt I raised this as an issue but he said there was no need for me or my daughter to worry and it was still a receipt in his handwriting and with his signature.
She also testified as to a conversation with Mr Cheung regarding the payment of a rental bond of $26,000. She said that her agreement with Ms Yafei Ji and with Mr Cheung was that she would take over the business and the tenancy from Monday 1 March 2011. She said that she agreed with Mr. Cheung for a meeting to take place at the premises on 28 January 2011 when the lease would be signed and the $26000 bond would be paid. Her version of what occurred on 28 January 2011 as contained in her affidavit sworn 23 March 2012 was
On the 28 January 2011 my daughter and I went to her bank and withdrew $26,000 in cash. We then proceeded to shop 4 where Wing Cheung presented the lease, which he and my daughter signed. Wing Cheung counted the cash and asked me if I had a piece of paper. He then proceeded to write a hand written receipt for $26,000. He then gave it to me and then left.
According to Ms Qun in or about July 2011 the Applicant told her that she wanted to sell the business. Ms Qun then advertised the business for sale and found a purchaser Ms Danni Wu. It became common ground that the business was sold and a new lease granted by the Respondent to the purchaser as from 10 October 2011
After this date Ms Qun said she attempted to recover the $26, 000 bond paid but Mr. Cheung refused to refund it and gave her no reason for this attitude.
In oral evidence Ms Qun said that in the period up to October 2011 she established a good relationship with Mr. Cheung, which deteriorated after 10 October when he refused to refund the bond money. At some point she said that she told Mr. Cheung of her belief that the rent had been overpaid and asked for a settlement. This was promised but never forthcoming. She said as I understand her evidence that Mr. Cheung on occasions complained of being short of cash which explained her habit of paying rent in instalments at times when according to her evidence the rent was not actually due. She said that she did not want to "spoil our relationship".
Ms Qun said that all payments to the Respondent were made to Mr. Cheung in cash except for three bank transfers. Her evidence was that Mr. Cheung specifically requested cash in order to avoid delays in him obtaining access to the money.
She denied in evidence in chief that after 7 October 2011 she received part return of the bond by 2 payments one of $2000 through Danni Wu
and the other of $15000 paid directly to her by Mr Cheung in cash.
As to the purchase from Yafei Ji, Ms Qun said there was no written agreement and the whole transaction was carried out in cash
As to the execution of a lease on 28 January 2011 Ms Qun said that Mr. Cheung brought two copies of the lease to the meeting, both copies were signed and each kept one copy. She denied that Mr. Cheung signed only a single page, which was not, attached to other pages. She was adamant that the lease commenced on the date stated in it viz 1 March and that neither she nor her daughter was in occupation of the shop before that date otherwise than for the purpose of becoming familiar with the business.
On the first two days of the hearing the Applicant was represented, with leave, by an agent Mr E Smith but for the remaining 3 days by a solicitor Mr J Johnson. Mr. K R Hewlett Solicitor represented the Respondent throughout.
Mr. Hewlett read the affidavits of Rebecca Huynh sworn 21 September 2012 and 29 October 2012 and the affidavits of Wing Cheung of the same two dates.
Ms Huynh a pharmacist by profession had very limited personal involvement in the matter but said she is a shareholder and employee of the Respondent. She is also the sister of Wing Cheung and asserted that she relied upon him to account for the rent, which he collected. Neither he nor she kept a rent receipt book nor even a clear record of rent received. She did however maintain a diary which she claimed accurately recorded what her brother gave her from money he received. Her affidavit of 21 September 2012 testified as to her practice in this regard.
In my 2011 Diary Extracts, for each calendar month, I have usually written at the foot of the page for the month in question the total rent collections Wing advised me had been paid in that calendar month by or on behalf of the Applicant or other occupant of Shop 4. Those total figures shown on those pages often have a brief comment next to the total figure (such as "Shop 4 paid 8000") and both be enclosed by a rectangle shape drawn around them.
In my 2011 Diary Extracts, for each calendar month, I have also usually written under the column titled " Received" how much money I received from Wing on or near the last day of each calendar month, which amounts Wing informed me were the total amounts of rent he collected for Shop 4 as described above.
She annexed to the affidavit a statement to the effect that in all $61900 was paid as rent by the applicant but corrected this in the later affidavit of 29 October 2012:
On or about 2 July 2011, Wing said to me words to the effect of "Shop 4 has paid another $3000 rent" and disconnected the line. I did not write this in my diary because I was busy with stock take for my Cabramatta pharmacy, which I had to complete without interruption, and then I attended a family function. I forgot to enter that $3000 into my diary.
When our solicitor showed me the receipts at the Tribunal on the last hearing date, I realized that I might have made an error. I subsequently inspected the receipts on the court file along with my solicitor's representative, spoke to Wing and understood the error that I had made. I say that this was a very unusual error for me to make and it was primarily due to my heavy end of financial year work and family commitments.
I therefore say that the amount of rent that has been paid by or on behalf of the Applicant is the amount of $64, 900, not $61,900, as claimed in Annexure "B" of my earlier affidavit.
In his earlier affidavit Mr. Cheung testified that like his sister he is a shareholder and employee of the Respondent, which owns the building at 27-31 Goulburn Street Sydney, containing 4 ground floor shops including the premises.
He said that his duties on behalf of the Respondent included negotiations with lessees and prospective lessees collection of rent "and issue receipts to the lessees and account to my sister Rebecca for all monies collected". Curiously for a man with such responsibilities he admitted that he did not keep a receipt book and he also admitted that he only provided receipts for payments made by the Applicant when expressly requested and did so on scraps of paper (Exhibit A) provided by her or by her mother on her behalf.
As to the commencement of the relationship between the Applicant and the Respondent Mr. Cheung deposed.
When I visited Yafei operating the shop, I observed Yafei to be working alone. Yafei said to me to the effect "I work 6 days a week, and take 1 day off. An employee named Poy looks after the shop 1 day a week". In my observation, Yafei operated the business up to about mid January 2011.
In about mid January 2011, I went past Shop 4 at about 6pm and I observed someone operating the shop who was not Yafei or Poy. I now recognise that person as being the mother of the Applicant, Qun Zuo. In the rest of the affidavit I will refer to Qun Zuo as "Iris" or "Sophia's mum" as I have trouble with Chinese names and as I called Qun Zuo by Sophia's mum and occasionally Iris. I walked into the shop for a very short time.
I saw that Sophia's mum appeared to be looking after the business in Shop 4 by herself. I saw Sophia's mum serve one young girl customer and I observed Sophia's mum to have a good sales mannerism in my opinion.
I walked out of the shop and called Yafei (who I sometimes call "LB"). Yafei and I had a telephone conversation to the following effect:
I said "LB, did you employ the old lady. I saw her in the shop?"
Yafei said " I have sold the business to this lady."
I said "Why I didn't know anything? Just to find out the reason".
Yafei said "This old lady gave me some deposit, not settlement yet, trying out the business. If good business or not."
I said "Why didn't you notify me?"
Yafei said "Because it is not settled. She only give some deposit."
I said "At least you have to involve me."
Yafei said, "It is not finished yet. Only give me some deposit. I will contact you."
After the call finished, I waited and watched the premises from across the road nearby the 7/11 store there, I saw Sophia's mum carrying a handbag and also key which she used to close Shop 4 at about 9pm.
Next day at about 6pm, I again went past Shop 4 on the opposite side of Goulburn Street and I stopped opposite BBQ King. I watched for a while. I saw Sophia's mum in the shop and attending to customers. I saw her serve a customer, take money and appear to place the money near or behind, perhaps in a drawer, a counter which is located near the rear of the publicly accessible part of Shop 4. I had seen Yafei place shop takings there when Yafei ran the business, as the business did not have a cash register.
That evening I came back at about 9pm and watched from nearby the 7/11 store opposite and I again saw Sophia's mum leaving the premises, having a key and locking up the premises using that key as she was leaving.
The next day, at about 9pm, I again observed the premises. Again, I saw Sophia's mum leaving the premises and having and using the key to lock up the shop.
I had not heard back from Yafei, the next afternoon, I rang Yafei again and we had a conversation to the following effect.
I said " You sold the business?"
Yafei said "Yes, she only gave me some deposit".
I said "No way, you know why, who guaranteed rent payment, everyday the lady (meaning Sophia's mum) collects the money."
Yafei said "I will contact you later".
The next day I did not hear from Yafei.
The next day, at about 6pm, I passed the shop and I saw Yafei and Sophia's mum inside. I went inside and had a conversation to the following effect:
Yafei said, "This is a new buyer (at the same time indicating Sophia's mum to me)
I said, " This is not right. I don't know you. You not involve me. I saw her (indicating Sophia's mum) close the door, she keep the key, something behind me."
Yafei and Sophia's mum then moved away from me and had a conversation I could not hear, in the Mandarin dialect of Chinese I believe, out in the back private part of Shop 4 behind the rear part of the publicly accessible part of Shop 4, for about 1 or 2 minutes.
Yafei and Sophia's mum then came back into the shop and Yafei sad to the effect:
"OK, we give you $3000 holding deposit."
I said "OK, I accept."
Sophia's mum said to me "You agree 2 years and $2000 per week"
I said, "Yes"
Then, it was Sophia's mum who got $3000 from her handbag and handed it to me. I counted that the money was correct. Sophia's mum gave me a piece of paper and asked me to sign as a receipt and I did so.
I wrote out the receipt for $3000, which is shown at Annexure A of the Affidavit of Feng Yun, dated 23 March 2012. The receipt is made out to Feng Jun as Sophia's mum asked for the receipt to be in her daughter's name and I wrote it out accordingly. The receipt is written in Chinese but in English it roughly states:
"I receive deposit from Fung Yen as rent $3000
I did not say that Yafei's owed the company rent because I didn't want to prejudice Yafei's sale to Sophia's mum.
Yafei or Sophia's mum then said to me "We will contact you about 1 week later". I then left. On this occasion of receiving cash rental from Sophia's mum, as on every other occasion of receiving the cash payments referred to in this my affidavit, I rang Rebecca immediately after receiving the cash to advise Rebecca of the amount and who it was from. If I couldn't reach Rebecca in any of those calls, I would call her the same evening.
Thereafter the affidavit recited Mr. Cheung's version of the events, which led to the Applicant becoming lessee of the premises and owner of the business conducted in it:
About one week later, as I hadn't heard further, I called Yafei and we had a telephone conversation to the following effect:
I said "you deal already, every time close the shop, I see Sophia's mum"
Yafei said "I ring you later".
One day later, Yafei called me back and said to the effect:
"This is Yafei. I am making an appointment. So the other side will give you the equivalent of 3 months rent as security deposit to you. Is 3 months OK?"
I replied, "Yes"
Yafei said " I will ring you to organize the time of hand over"
Shortly after that, Yafei rang and said "we will meet you at the shop at 3:00pm on 28 January 2011 and the buyer will give the money".
At 3:00pm Monday 28 January 2011, I attended the premises. Inside the shop, I saw Yafei, Yafei's then boyfriend, Sophia's mum and a young lady who I know to the Applicant in this matter. I recognized the young lady as a person who had been working as a shop assistant at the shop next door. Sophia's mum said: "This is my daughter (indicating the applicant)"
I call the Applicant Sophia
At that meeting of the 28 January 2011, Yafei said to Sophia's mum and me to the effect:
"We all agree that today is the agreed lease changeover date and that Sophia's mum must pay the monthly rent instalments by the 28th day of each month."
Sophia's mum and I both said to the effect "Yes yes"
Yafei, Yafei's boyfriend, Sophia's mum, Sophia and I were together near the counter in the shop on that occasion from my recollection. Sophia's mum said to Sophia:
"Sophia, you go to Westpac with Mr Cheung (indicating me) to get the money" and then to me "Can you go with Sophia to Westpac to take the $26000.00 because the money is in Sophia's account"
I then went with Sophia to a nearby Westpac branch which is just three minutes walk from Shop 4. Sophia stood in the queue while I waited in the general area. When Sophia was served by the teller, they called me over. We watched money, $26000.00, being counted by a counting machine. Sophia said to me to the effect (indicating the money) "you can hold it". I put the money in my pockets. I walked back with Sophia to Shop 4. Yafei was not there, but I have observed her to be nearby having coffee with her then boyfriend. Sophia's mum was in the shop, Sophia's mum gave me a pen and paper and said "You give a receipt" I then wrote out and signed and handed over to Sophia's mum the receipt, a true copy of which I believe to be annexed and marked "D" to the affidavit of Feng Yun dated 23March 2012.
As to the Applicant's assertion that Mr Cheung signed a lease on behalf of the Respondent on 28 January 2011 Mr. Cheung said
At the Tribunal on 13 September 2012, I was shown a lease document that the Applicant's agent has possession of, in a spiral binder. The first page of that document was an apparent letter of David Leamey dated 28 January 2011. On one page of that document my signature appears, above which is printed my name and the date 28-1- 2011. I did sign this one piece of paper, there was nothing attached to it. Sophia did not sign that page in front of me at the meeting on 28 January 2011. I have been shown a copy of the first page of the "lease" document referred to at Annexure C of the Affidavit of Zuo Qun dated 23 March 2011. I did not see that page at the meeting on 28 January 2011. If that page had been shown to me that displayed a lease commencement date of 1 March 2011, I would not have signed the other page that I did sign.
I did not cause to be created or brought into existence the lease document or that covering letter of David Leamey.
Creating some of the difficulty which has arisen in this case was Mr Cheung's alleged "system" of issuing what he called interim receipts. He referred to this "system" in his affidavit referring to a conversation of 7 February 2011.
Sophia's mum said " I can pay $3000 today. I can pay some more in about 7 days".
I said "OK, I will come back then but I can't give you a receipt for the full rent until you pay the full amount."
She said " Please sign this small piece of paper for me for the $3000.
Later on, I cannot recall exactly when, Sophia's mum said "When I have paid the rest, then you can give me a full receipt and I will destroy this small receipt in your presence."
She also said "Business is no good".
By about 22 February 2011, Sophia's mum had give me a total of $5000 more, making a total of $8000 in that month.
This system of "interim receipts" is what Sophia's mum and I used for her small payments.
These interim receipts would later be replaced by a "full receipt" and then destroyed once a sizeable amount was paid. An example of one of these "interim receipts" I believe is that numbered "3" from the Applicant's Collection of Receipts. It says in English "First received $1,000 26/3/11"
By 1 April 2011, Sophia's mum had paid me by several smaller amounts a total of $16,000 relating to the calendar months of February 2011 and March 2011. Sophia's mum said to me to the effect " I have all these small receipts. They are confusing. Let's add them up and then you give me one clear receipt for February 2011 and March 2011."
Sophia's mum then added the receipts up and said to the effect of " I paid $8,000 in February 2011 and $8,000 in March 2011. Do you agree?" I said "Yes". Sophia's mum said please write one big receipt. I then wrote out and gave to Sophia's mum the receipt numbered 4 in the Applicant's Collection of Receipts. It says in English "I received February $8,000 rent" and on the next line it says " I received March $8,000 rent" It was dated
1-4-11.
On or about that time, Sophia's Mum and I had a conversation to the following effect:
Sophia's mum said to me "Business no one time is good".
I said to Sophia's mum to the effect "Full monthly repayment is $8,666.67. You are short." Sophia's mother said to me "Business is no good"
On about 28 April 2011, I went again to see Sophia's mum to collect the rent. I recall that she paid me about $3000. Sophia's mum said "Business no good".
By 2 May 2011, Sophia's mum had paid another $8,000 relating to the month of April 2011, I wrote out and handed to Sophia's mum the receipt numbered "5" in the Applicants list of receipts. It says in English "I received the rent $8,000" and is dated 2-5-2011. On each occasion I came to collect rent, Sophia's mum would say to the effect "Business is no good".
In May 2011, I recall that Sophia's mum paid rent by more cash payments. By 27 May, she had paid another $8,000 and I gave her a receipt which is the receipt numbered "6" in the Applicant's Collection of Receipts which reads in English "I received $8,000 for the rent on 27/5/11".
Ms Qun denied that there was a system of interim receipts. Whether or not Mr. Cheung said that he had such a system there was in truth no proper system for recording rent payments at all. He certainly did not call in and destroy any "interim receipt" as all the recepts he signed appear to be in evidence. Nor did he ever issue a receipt in a standard form. As indicated earlier all the receipts Mr Cheung signed were on a scrap of paper provided by Ms Qun or the Applicant. Indeed it was not for some months that Mr.Cheung even demanded the correct rent. It was agreed at $2000 per week yet Mr. Cheung for some time sought to collect only $8000 a month.
In relation to rent for June and July Mr. Cheung's affidavit deposed:
In June 2011, I recall that Sophia's mum only paid $3,000 rent in June 2011.
On our mother's birthday, 7 July in the year 2011, Rebecca and I had a conversation to the following effect:
Rebecca said "The Shop 4 tenant is really behind in payment of her rent. You have to chase her up."
After that, in July 2011, I said to Sophia's mum to the effect " You are behind with rent. You need to catch up as soon as possible." I did not say to Sophia's mum how far she was behind in payment of the rent. I collected cash amounts on 26 July 2011 and 28 July 2011 of $800 and $300 respectively, a total of $1,100. This is shown on Receipts numbered "8" and "9" in the Applicant's Collection of Receipts.
The reliability of Mr Cheungs testimony set forth in the preceding paragraph was undermined somewhat by paragraph 4 of his later affidavit sworn 29 October 2012:
On the last Tribunal hearing date, my solicitor was briefly shown for the first time a bundle of handwritten receipts that it is claimed I gave to Applicant's mother. After that Tribunal date, my solicitor's representative sought and obtained consent to examine the Tribunal file and copied some of those receipts. My solicitor has shown to me a copy of several signed receipts that are respectively dated 30/6/11, 1/7/11 and 2/7/11 and which are respectively for amounts of $500, $1,000 and $1,500. I admit that the Applicant's mother did pay those amounts for rent on those days. These payments are not referred to in my earlier affidavit. I did not hand over the total of those additional payments, being $3,000 in cash, to my sister Rebecca because I used that money to pay for painting of the building. I did report to Rebecca on or about 2 July 2011 that I had received another $3,000 saying to her words to the effect of "I received another $3,000 rent from Sophia's mum."
Mr. Cheung's earlier affidavit went on to depose as to his involvement in the sale of the Applicant's business to Danni Wu and the grant of a lease to her company. As I have indicated this took effect from 10 October 2012.
It was not submitted to me that the sum of $26,000 paid by the Applicant to the Respondent on 28 January 2011 was other than a security bond within S16 A of the Act. It should have been, but was not, deposited with the Director General in accordance with S16 C. However notwithstanding the Respondent's breach of its statutory obligation the Applicant is entitled in my opinion to accept that breach and claim for recovery against the Respondent itself which she does in these proceedings.
The Respondents case is that of the $26,000 security bond paid some $17,000 was repaid. The Applicant and her mother simply deny the evidence in respect of such repayment given by Mr. Cheung. As to part namely $2000 he deposed in his affidavit of 21 September 2012 as follows
Next day, Saturday 8 October 2011, at 2pm, my mobile phone received a text message from a mobile telephone number which I had come to know belonged to Sophia stating:
"My mum told me that you will come to me today". I nearly always carry on me a couple of thousand dollars in cash. That afternoon, I had $2000 cash in my pocket. I went to Shop 4. I arrived at Shop 4 at about 3pm.
Sophia was not there. Danni Wu was there. I gave the $2000 to Danni stating
"Give this money to Sophia".
Danni said "Yes I will".
One or two hours later Sophia rang me and said to me to the effect of:
" I've got the $2000. Danni gave it to me"
The testimony set forth in the preceding paragraph was disavowed by Mr. Cheung in oral evidence only a month or so later when he testified that his statement he gave the money to Danni Wu was incorrect and that he had given it to an "elderly lady" whom he could not name".
As to his alleged part repayment of $15,000 Mr. Cheung said
On 12 October 2011, at about 3:45pm, I attended the Commonwealth Bank branch close to Shop 4 and withdrew $15,000 in cash. Annexed hereto and marked "D" is a copy of a bank statement for my account showing the withdrawal of $15,000. I packed that $15,000 into 3 bundles into my trousers pockets and walked down to Shop 4, which was just about 3 minutes away.
I entered Shop 4, Danni and Sophia's mum were there. I went to the counter and took out of my pockets of the 3 bundles of cash in Danni's presence and I gave it to Sophia's mum. Sophia's mum took the money I had given her, all the $15, 000 in 3 bundles of $5000 out the back of Shop and I followed to out to the back private area of the shop while Danni remained in the public area.
Out in the rear private area of Shop 4, Sophia's mum counted the money I had given her and said to me to the effect after she finished counting:
"That is $15000."
I said to Sophia's mum to the effect "The rest we will adjust."
Sophia's mum said "When?"
I said "In a couple of days."
I didn't ask Sophia's mum to sign any receipt because I did not want to argue with Sophia's mum. I walked out very quickly without asking for, being offered or obtaining, a receipt for my $15, 000 payment.
Ms Qun denied that Mr Cheung paid her any sum on 12 October 2011 and she also denied that any part of the security bond of $26,000 has been repaid.
I regard Mr. Cheung as a very unreliable witness particularly in relation to financial transactions. His explanation that he instituted a "system" of giving interim receipts I find simply unbelievable. It is to my mind much more plausible that Ms Qun acceded to Mr Cheung's requests for interim payments of rent not yet due because he needed urgent cash. Having regard to his two very different accounts of a part repayment of the security bond on 8 October 2011 I could not be satisfied as to the truth of what he claims. I accept the evidence of the Applicant and her mother that the alleged part repayment of $2000 was not received by them. Although it is true that the bank statement annexed to Mr Cheung's affidavit did indeed show a withdrawal of $15000 on 12 October 2011 it provides no evidence as to the destination of the sum withdrawn. In the circumstances it seems to me beyond belief that Mr Cheung would pay $15000 to Ms Qun in cash without obtaining some written acknowledgement.
On the other hand I found both Ms Qun and Ms Huynh to be honest and reliable witnesses who did their best to assist the Tribunal although it must be said that Ms Huynh failed to do what I believe any reasonable lessor would do namely maintain an accurate and comprehensible record of rent paid and received.
In the result I accept the evidence of the Applicant and Ms Qun that no part of the security bond of $26000 was repaid and I reject the contrary evidence of Mr Cheung.
I also reject Mr. Cheung's evidence that he only signed one page of the lease without it being attached to the balance of the document. I accept Ms Qun's evidence that Mr. Cheung brought 2 copies of the lease to the meeting on 28 January 2011. On the probabilities I think it likely that the Respondents solicitor Mr Leaney was involved in the preparation of the lease. He was not called as a witness and no explanation for his absence was given. I draw the inference that his evidence would not have assisted the Respondent's case.
However in the view I have formed of the matter the provision of the lease prescribing a commencement date of 1 March 2011 is irrelevant. The definition of "retail shop lease or lease" in S3 of the Act is extremely wide and I think there is sufficient evidence to conclude on the balance of probabilities that following the meeting on 28 January 2011 the Applicant by agreement with the Respondent was in occupation of the premises. In making this finding I accept the evidence of Mr. Cheung as to the physical presence of Ms Qun in the shop even though I think he exaggerated the extent of his observations. It may be that for a time the Applicant after 28 January was not in total control of the business but I think it unreal to accept that for the whole of the period from the middle of January to the end of February the Applicant was making up her mind whether to purchase the business or not. It is much more probable that for a period after the sale Ms Yafei Ji was assisting her with the business.
In my opinion as submitted on behalf of the Respondent the Applicant was liable to pay rent for the period from 28 January 2011 to 7 October 2011 at the rate of $2000 pw. That period is 252 days. At a daily rate of $284.93 the rent which should have been paid amounts to $71,802.36.
According to the sworn testimony of Ms Huynh $64900 was paid without bringing to account either the sum of $3000 paid on 17 January 2011 or the security bond of $26000.
In my opinion there is no basis to conclude that the sum of $3000 paid on 17 January 2011 was to be applied otherwise than towards rent which the Applicant would become liable to pay. It was argued that it should be applied towards arrears of rent allegedly owed by Yafei Ji but there is no evidence of any agreement to this effect nor indeed as to the state of her rent account as at 28 January. Plain words would be required to establish that the Applicant was undertaking to make herself liable for the debt of someone else.
As a result the amount of $3000 should be credited to the Applicant's rent account and on the Respondents own figures she would have paid $67,900 towards the liability I have assessed at $71802.36 leaving a shortfall of $3902.36
On the other hand the Applicant claims that altogether she paid $73,900 that is $6000 more than the sum asserted by the Respondent. It is not altogether clear how the Applicant arrives at this figure but the discrepancy may at least in part be accounted for by Mr Cheung encompassing the one payment in more than one receipt.
In all (excluding the receipt issued for the security bond) 22 receipts were signed by Mr Cheung.Most of them specified an amount and those amounts when totalled aggregate $55000. However not all the receipts specify any amount for instance the one dated 1 August 2011 merely states "Received rent for month of July" and another in evidence as receipt 22 merely specifies 3 sums of money $200, $6300 and $1700. The significance of that document escapes me. 5 receipts for amounts totally $7400 bear the word "initially". There are no receipts for the 3 bank transfers in July and August 2011, which total $11500 although they are recorded in Ms Huyn's Diary:
The evidence is left in such an unsatisfactory state that I am unable to be satisfied either as contended by the Applicant that there was an overpayment of rent or as alleged by the Respondent that there was a shortfall.
As a result the Applicants claim for refund of rent overpaid fails and I hold
that the Respondent is not entitled to deduct anything from the security bond. This should be repaid in full with interest, which I allow at 9% per annum for a period of 14 months. Such interest totals $2,760.
In relation to costs I give each party liberty to apply by written submissions filed and served within 21 days. Each party to have liberty to reply within 14 days. Thereafter the matter to be decided on the papers.
I made these orders:
1 I order the Respondent to pay to the Applicant the sum of $28730 inclusive of interest.
2. Subject to paragraph 54 above no order as to costs.
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Decision last updated: 21 December 2012
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