FJL Pty Ltd trading as Wyoming Caravan Park and James Louizos v Munday

[2013] NSWADT 117

Administrative Decisions Tribunal

New South Wales

Case Title:	FJL Pty Ltd trading as Wyoming Caravan Park and James Louizos v Munday
Medium Neutral Citation:	[2013] NSWADT 117
Decision Date:	29 May 2013
Jurisdiction:	Retail Leases Division
Before:	The Hon G Mullane, Judicial Member
Decision:	1. The Respondent must pay to the second Applicant James Louizos damages of $25,655.14; 2. The application,so far as it relates to the first applicant, is refused and dismissed.
Catchwords:	Retail shop lease - Lessor not owner, but entitled. - lessees' breaches of obligations to pay rent, repair and leave clean and tidy. - damages
Legislation Cited:	Retail Leases Act 1994
Cases Cited:	Colesteel V Alton House Holdings Ltd (no 2) 2 All ER 240 (CA)
Category:	Principal judgment
Parties:	FJL Pty Ltd trading as Wyoming Caravan Park (First Applicant) James Louisoz (Second Applicant) Michael Munday and Janice Munday (aka Janice McGlinn) (Respondents)
Representation
- Solicitors:	CBD Law (Applicants) No appearance (Respondents)
File Number(s):	125179

REASONS FOR DECISION

INTRODUCTION

1. This was the hearing of an Amended Application filed on 17 January 2013 seeking damages for breaches of covenants, including non payment of rent, in respect of a lease of a retail shop leased for use as "a Restaurant/ Takeaway".

2. Although the Respondents had appeared in person or been represented at earlier Directions Hearings, there was no appearance by either of them or by anyone on behalf of either of them at the hearing on 30 April 2013.

THE LESSOR

1. The lease names Mr Louizos (the second applicant) as the "landlord" and was executed by him as such. The owner of the shop is in fact the first applicant FJL Pty Ltd ("the Company") of which Mr Louizos is the sole secretary and director. The lease names the Respondents as "the tenant". The application commencing the proceedings filed on 13 December 2012 named the company as the sole applicant. Mr Louizos was added as second applicant by the amended application.

2. In the written submissions for the applicants, the solicitors for the applicants argued that the parties must have intended the lessor to be the company, not Mr Louizos. However, the lease is clear that Mr Louizos is the lessor, and as the sole director and secretary and director of the company that owned the property, he was in a position to ensure he complied with the covenant for quiet enjoyment for the lessees implied by common law. That is not a guarantee of title (see Colesteel V Alton House Holdings Ltd (no 2) 2 All ER 240 (CA)).

3. The lease contains no ambiguity about who the lessor is and there is no other evidence that would justify an inference that Mr Louizos did not sign the lease in his own capacity, but on behalf of the company or anyone else. That submission for the applicants is not accepted.

THE LEASE - SOME GENERAL COMMENTS

1. It appears that the Lease document was not prepared by a person with legal qualifications. It appears to have been prepared on instructions from the lessees. It is headed "Commercial Lease Agreement", although it is clearly a "retail shop lease" within the meaning of that expression in the Retail Leases Act 1994.

2. The Lease is dated 18 January 2012. The term of the lease commenced 1 March 2012. The covenants in the Lease included a covenant for the Lessees to pay rent of $1,800.00 per month on or before the 30th day of each month, despite the lease commencing on the first day of a month and the fact that February does not have 30 days.

3. In Clause 6 of the Lease there is a covenant that the lessees make:

   "all necessary repairs to the premises at his/her expense during the Lease term. This includes repairing all defects and faults at any part of the premises due to damage or tear and wear."

4. The Lease provides that the lessees will be in default of the Lease if the "Tenant":

   "(1) Fails to pay the rent when due on at least three occasions; or

   (2) Fails to fulfil any term or condition of this Lease and such default continues for 30 days after the Landlord has given notice of it to the Tenant."

5. The Lease also provides in the same Clause:

   "If the Tenant is in default, the Landlord shall have the right to terminate this Commercial Lease Agreement by giving the Tenant a 30 day notice in writing."

SOME OTHER BACKGROUND

1. The lessees traded on the premises as a restaurant and take-away shop from about 10 April 2012 for about 3-4 weeks. They then ceased trading, but then resided in the shop. They were 6 months in arrears with the rental when, on 18 October 2012, Notice of Breach signed by the Second Applicant on behalf of himself and the Company was served on the lessees on about 19 October 2012.

2. That Notice gave the lessees 14 days in which to pay the arrears of rent, and Council Rates of $1,683.00, which they were liable to pay under the Lease. The lessees did not pay either of these amounts. They continued to occupy the shop premises as a residence.

3. On 24 January 2013 an Order was made by the Administrative Decisions Tribunal for the lessees to vacate the premises by 14 February 2013 and leave the premises clean and tidy.

4. The lessees abandoned the premises on 14 February 2013.

CLAIM FOR RENTAL

1. The Lessor does not claim any amount for rental for the period after the date on which the lessees vacated.

2. The Lease commenced on 1 March 2012, the day the Lease was signed. The first payment was to be made on 30 March 2012. The lessees provided a cheque for the $1,800.00, but it was post-dated to a date in late April. Apart from the initial payment of $1,800.00 rent, the only other rental payments by the lessees were $500.00 on 29 June 2012, $500.00 on 4 July 2012, and $1,000.00 on 2 August 2012.

3. The rental payable by the lessees up to the date of vacating is for the period from 1 March 2012 to 14 February 2013, and calculates to be $20,700.00. Of this the lessees paid a total of $3,800.00, leaving a balance owing of $16,900.00.

UTILITY CHARGES

1. Clause 11 of the Lease provides that:

   "The Tenant shall pay all utility charges for electricity, water, gas, sanitation, waste disposal and other services to be used by the Tenant on the premises."

2. The lessees breached this requirement and the total utility charges that the lessees failed to pay in respect of the period that they occupied the premises is $1,831.50.

REPAIRS AND MAINTENANCE

1. The expressed covenant in Clause 6 of the Lease required the Tenant to make all necessary repairs to the premises during the term of the Lease, including "repairing all defects and faults in any part of the premises due to damage or tear and wear". There was also an implied Condition of the Lease that the Lessees would leave the premises in a tidy and clean condition and that was also required by the order of the retail Leases Division of this Tribunal of 24 January 2013.

2. But there is extensive evidence of the damage that was occasioned to the premises during the occupation by the Lessees which included smashed windows, holes in the walls, and locks broken and removed. In relation to the failure to leave the premises clean and tidy, the evidence disclosed that there was a large accumulation of rubbish around the outside of the building, rubbish on the floors, dirty dishes in the sink, furniture left behind by the lessees, rotting meat in the freezer, and rat faeces in the premises.

3. The Lessors incurred a cost of $1,003.64 for the hire of an industrial skip bin for removal of rubbish of the lessees and also incurred an expense of $5,920.00 for repairs, which was paid to Restoration Work and Joinery Pty Limited.

TOTAL DAMAGES

1. The losses and expenses claimed by the Lessors and established on the evidence as attributable to the breaches of the lease by the Lessees are as follows:

   Unpaid Rent $16,900.00

   Unpaid Utilities charges $ 1,831.50

   Repairs $ 5,920.00

   Hire of Skip Bin $ 1,003.64

   TOTAL $25,655.14

CONCLUSION

1. The Respondent lessees are liable to pay damages to the Lessor (second applicant) in respect of the unpaid rent and utility charges and in respect of the costs for the repairs and the hire of the skip bin as a result of the lessees' breaches of their obligation under the lease.

ORDERS

1. The order of the tribunal are:

   1. The Respondent must pay to the second Applicant James Louizos damages of $25,655.14;
   2. The application, so far as it relates to the first applicant, is refused and dismissed.

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