Gani v Maiolo
[2012] NSWSC 1417
•27 November 2012
Supreme Court
New South Wales
Medium Neutral Citation: Gani v Maiolo [2012] NSWSC 1417 Hearing dates: 15 November 2012 Decision date: 27 November 2012 Jurisdiction: Civil Before: Hall J Decision: (1) An order is made extending time for the commencement of proceedings.
(2) The Summons filed on 10 July 2012 is dismissed.
(3) Costs would normally follow the event. In the event that the plaintiff wishes to be heard on the question of costs, then written submissions on that question should be lodged with my associate within 14 days of the date of this judgment. If no submissions are lodged by that date then I order the plaintiff to pay the defendants' costs of the proceedings on the ordinary basis. The defendants are to file any submissions in reply to any submissions on costs within a further 14 days.
(4) Leave to either party to apply in respect of the form of orders.
Catchwords: LEASES - Appeals from decision of Administrative Decisions Tribunal and decision of Appeal Panel under s 119 of the Administrative Decisions Tribunal Act 1997 - Tribunal proceedings commenced by lessee plaintiff who was locked out of defendant lessors' premises for failing to pay rent - parties in dispute as to commencement date of lease and length of the rent-free period - Tribunal rejected plaintiff's version of events and held that rent payable under written terms of lease in arrears - Tribunal also found in favour of defendants regarding other issues including: (i) plaintiff's claim various chattels not returned; whether same had been abandoned, (ii) liability for cost of a new awning; whether lessors liable, (iii) whether bond forfeited - Appeal Panel affirmed Tribunal's decision - no error on part of the Tribunal or Appeal Panel on a question of law.
COSTS - Appeal from decision of Administrative Decisions Tribunal Appeal Panel - Appeal Panel found plaintiff liable to pay the defendants' costs of proceedings - plaintiff failed to apply for leave to appeal decision and did not advance any grounds for the appeal in relation to costs - no demonstrable error as to fact or law identified regarding Appeal Panel's decision on costs - leave to appeal refused.Legislation Cited: Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994Cases Cited: Devries and anor v Australian Nation Railways Commission [1993] HCA 78; 177 CLR 472
Gani v Maiolo [2011] NSWADT 219
Gani v Maiolo [2012] NSWADTAP 10
Gani v Maiolo [2012] NSWADTAP 21
Toufic Laba Sarkis v Mahmoud Moussa [2011] NSWSC 1172Category: Principal judgment Parties: Mohammed Nurul Gani (Plaintiff)
Raffaele Maiolo (First defendant)
Maria Maiolo (Second Defendant)Representation: Counsel:
Mr A Kumar of counsel (Plaintiff)
Ms M Tibbey of counsel (First and second defendants)
Solicitors:
Karam Ramrakha (Plaintiff)
LC Muriniti & Associates (First and second defendants)
File Number(s): 2012/214069
Judgment
These proceedings were commenced in this Court by summons commencing an appeal filed on 10 July 2012. The plaintiff sought to appeal both the decision of the Administrative Decisions Tribunal New South Wales made on 14 September 2011 (Judicial Member, D Bluth, Gani v Maiolo [2011] NSWADT 219) and the decision of the Appeal Panel - Internal of the Tribunal made on 5 March 2012 (M Chesterman, Deputy President, K Rickards, Judicial Member and J Butlin, Non-judicial Member, Gani v Maiolo [2012] NSWADTAP 10). The plaintiff purported to appeal without leave against the decision the Appeal Panel - Internal in relation to costs (M Chesterman, Gani v Maiolo [2012] NSWADTAP 21).
Although the summons sought to appeal the decision of the Judicial Member made on 14 September 2011, as well as the decision of the Appeal Panel, the written Outline of Submissions of the Plaintiff restricted the appeal to "... the orders of Appeal Panel of Administrative Decision Tribunal made on 30 January 2012..." at [1].
The proceedings are by way of appeal under the Administrative Decisions Tribunal Act 1997 ("the ADT Act"). Section 119 of that Act provides for an appeal from a decision of an Appeal Panel of the Tribunal to this Court "on a question of law." That is an important limitation. These proceedings, in other words, are not a general appeal or a review of the Appeal Panel's decision.
Factual matters
The dispute arose between the plaintiff, Mr Gani, as the lessee and the defendants as the lessors in connection with a lease of premises at 155 Pittwater Road, Manly ("the premises") being a registered lease entered into on 13 April 2010.
The plaintiff commenced occupation for the purpose of operating an Indian restaurant at the premises. The evidence indicated that the plaintiff took the keys to the premises and signed the lease on 13 April 2010.
The lease was for a term of 5 years and 2 days. The plaintiff entered into possession after a rent-free period of unpaid rent.
On 13 May 2010 the plaintiff provided the defendants with a cheque for rent which, on the evidence of the defendants, was rent for 1 month from 13 May 2010. The cheque was subsequently dishonoured and the rent was then paid in cash in two amounts of $7400 and $400 on 2 June 2010. These were acknowledged in a rent receipt as: "Payment of rent for the period 13 May to 12 June 2010." Set out below is a summary of payments made.
Summary of payments:
13 April 2010
Lease commenced:
1 month rent free
13 May 2010
1st monthly payment of $7800 in advance due
13 May 2010: Cheque paid but subsequently dishonoured
2 June 2010: Amounts of $7400 and $400 paid in cash
14 June 2010
2nd monthly payment of $7800 in advance due
Rental payment not paid in advance. On 24 June 2010 a letter was sent to plaintiff's solicitor re arrears of rent.
13 July 2010 - $7800 transferred to Defendants' account for rent owed.
14 July 2010
3rd monthly payment of $7800 in advance due
Rent not paid
3 August 2010
Plaintiff locked out for failure to pay rent
It was the defendants' case that on 14 June 2010 rent was due but was not paid. On 24 June 2010 a letter was written by the defendants' solicitor to the plaintiff's solicitor in respect of arrears of rent.
On 2 July 2010 a further letter was written by the defendants' solicitors to the plaintiff's solicitor on the subject of arrears of rent.
On 13 July 2010 an amount of $7800 was transferred by the plaintiff into the account of Mr and Mrs Maiolo, the defendants, for rent owed up until 13 July 2010.
On 14 July 2010 the defendants claimed that rent due had not been paid.
On 27 July 2010 a further letter was written by the defendants' solicitors to the plaintiff's solicitor concerning arrears of rent.
Following the above correspondence, the defendants on 3 August 2010 locked the plaintiff out of the premises on the basis of a failure ot pay rent.
The proceedings, as earlier indicated, were initially heard in the Tribunal before a judicial member, Mr Bluth, (the Retail Leases Division of the Tribunal) on 10 March and 18 April 2011.
In the proceedings before the Judicial Member, affidavit evidence was filed on behalf of both the parties as follows:
Affidavit evidence filed on behalf of the plaintiff, Mr Gani
(1) Affidavit of Mr Gani sworn 18 November 2010;
(2) Affidavit of Mr Gani sworn 14 February 2011;
(3) Affidavit of Mr Gani sworn 15 April 2011.
Affidavit evidence filed on behalf of the defendants, Mr and Mrs Maiolo
(1) Affidavit of Mr Maiolo sworn 18 January 2011;
(2) Affidavit of Mrs Maiolo sworn 18 January 2011;
(3) Affidavit of Mr Maiolo sworn 9 March 2011;
(4) Affidavit of Mr Wicks sworn 9 March 2011.
In addition to the affidavit evidence, the Tribunal received a number of documents. The deponents to the above affidavits were cross-examined. Each party was legally represented at the Tribunal hearing.
On 14 September 2011 the Tribunal made orders in the following terms:
1) The Applicant was in breach of the Lease on 3 August 2010.
2) The bond money not to be returned to the Applicant but forfeited by the present plaintiff.
3) The parties to pay their own costs of the proceedings.
Extension of time application
In the Summons commencing the present appeal an order was sought for an extension of time as the application had been filed out of time. In support of the application the plaintiff relied upon his own affidavit affirmed on 21 September 2012. In it he put forward a number of matters in relation to both the length of the delay and an explanation for it. In particular he referred to the fact that the decision of the Appeal Panel had not determined costs. He said he had sought advice on his right to appeal soon after the decision. He stated that his solicitor, Mr Ramrakha, told him that the decision had not dealt with the costs and that "...we might like to wait until the issue of costs is determined. We would file the appeal once the decision about the costs is made. That would then finalise all the matters in the Tribunal." Plaintiff's Affidavit of 21 September 2012 at [15].
According to the affidavit, the plaintiff understood the proceedings remained "unresolved" and that there was a further decision to follow. He said that he understood that the appeal had to be filed subsequent to the decision on costs. He said that following the decision on costs he made diligent efforts to seek advice and he then filed the present appeal proceedings.
In all the circumstances disclosed by the evidence I consider that the plaintiff should be granted the extension of time sought in his Notice of Motion. I propose to make an order extending time.
Defendant's Notice of Motion
The defendants filed a Notice of Motion dated 5 September 2012 in which the following orders were sought:
1) That no stay be granted of the orders of the ADT Appeal Panel in this matter (being orders made on 5 March 2012 and 20 June 2012).
2) That leave be refused to appeal against the Order of the ADT Appeal Panel as to costs of the appeal.
3) That time for lodging the Appeal not be extended and the Appeal be dismissed; or, in the alternative,
4) That the Plaintiff pay the Court the sum of $20,751.32 towards costs of the ADT Appeal Panel proceedings, to be held by the Court until the conclusion of these proceedings or the further Order of the Court.
5) That security of the costs of this Appeal be granted in the sum of $10,000, to be paid into Court within 14 days hereof.
In support of the orders sought, the defendants relied upon the affidavit of Leonardo Carlo Muriniti sworn 15 October 2012. Annexed to that affidavit were copies of correspondence as evidence in support of the orders sought. The affidavit refers to the fact that on 29 June 2012, Mr Muriniti wrote to the plaintiff's solicitors submitting a memorandum of fees in the amount of $20,751.32 and offering to accept an amount of $15,000 in full and final satisfaction of the costs awarded to the defendant by the Appeal Panel. At [10] he stated that at the time of swearing his affidavit he had not received a response from the plaintiff's solicitors to any of his letters, referred to in his affidavit.
As the hearing of the substantive proceedings were expedited it was unnecessary to separately consider orders 1, 3, 4 and 5 sought in the Notice of Motion.
The proceedings in the Tribunal
(1) The Tribunal Decision
The reasons for decision of the Judicial Member identified the specific issues raised by the parties (paragraphs [11] and [13]). The first issue considered by the Tribunal was identified as the "commencement date" of the registered lease. It was noted that the evidence of the parties on that issue was "polarised": Decision at [15]. The second critical issue concerned liability for the cost of an awning replacement: Decision at [16]. The defendant lessors contended that the plaintiff was liable for the cost. The plaintiff argued that it was a "landlord fixture" for which the lessors were responsible.
The Judicial Member set out the documentary evidence and the "Applicant's Position" and the "Respondent's Position" at [22]-[31].
In relation to the issue concerning the commencement date of the lease, the Tribunal concluded that the works that needed to be undertaken by the defendants in relation to the premises were not substantial. It was determined that they were far less intrusive than had been alleged by the plaintiff who had asserted that the rectification work prevented him from taking exclusive possession. The Judicial Member referred to the evidence on that issue and to "significant inconsistencies" in the evidence of the plaintiff on the subject of work done on the premises: at [34].
The Judicial Member concluded that, in light of the evidence, including the evidence adduced during the cross-examination of both parties, there had in fact been no agreement to alter the commencement date of the lease. Whilst the reasons did not disclose the Tribunal's precise basis for that conclusion, the evidence strongly supported it (as to which, see the discussion below).
The Judicial Member also made a finding that there had not been a loan by the plaintiff to the defendants in the amount of $4,500 to be used to fund the cost of the new awning. That finding was not supported by specific reasons and to that extent the finding was deficient. The issue, however, was considered by the Appeal Panel as discussed below.
(2) The Appeal Panel's Decision
The decision of the Appeal Panel recited in some detail the issues that had arisen before the Judicial Member: at [4]-[12]. The matters the subject of dispute and evidence were set out at [13]-[29].
The issue as to the commencement date of the lease and the Judicial Member's determination of that issue was referred to by the Appeal Panel at [38]. The decision of the Tribunal, as noted above, was well supported by the evidence.
Present proceedings - Rental obligations under the Lease
Appeal grounds
The Summons sets out eight appeal grounds. The principal issue in relation to the matter of rent concerned the commencement date for the lease, see Grounds 1, 2 and 3 of the Summons.
Ground 1:
This Ground asserted an error of law in the Appeal Panel failing to take into consideration "14 days notice for alleged rent if any existed in terms of the lease conditions". The Ground asserted the Tribunal's application of the wrong test on the question of "early determination of the lease ...". It asserted that the lease was wrongly determined and should have been so found.
Ground 2:
This Ground asserted an error in "failing to take into consideration the payment of $7,800 paid in cash in lieu of the dishonoured cheque". The Ground also claimed that there had been misapprehension by the Tribunal at first instance and the Appeal Panel as to the payments made by the plaintiff and asserted that the Tribunal and Appeal Panel "thus applied the wrong test on the question of early determination of the lease ...".
Ground 3:
This Ground asserted error both in the Tribunal at first instance and the Appeal Panel:
"... in failing to find that rectification work under the lease was carried out until 6 May 2010 and therefore the period of the lease did not commence until 7 May 2010."
This Ground alleged that the wrong test was applied on the question of "early determination of the lease of the demised premises" and asserted that a finding should have been made that the lease was wrongly determined by the defendants.
Ground 4
This Ground asserted error at first instance and by the Appeal Panel "in affirming the decision of the Tribunal ... made on 14 September 2011 when it made decision in the absence of evidence or failed to give reasons for award of damages ...".
Grounds 5 to 8 are addressed below.
The parties' written submissions in the present proceedings
At the hearing of the proceedings in this Court Mr Ashok Kumar of counsel appeared on behalf of the plaintiff and Ms Mandy Tibbey of counsel appeared on behalf of the defendants.
The Outline of Submissions of the Plaintiff dated 16 October 2012 were directed to the Notice of Motion that had been filed on behalf of the defendants. It was submitted that the Notice of Motion ought to be dismissed with costs.
Mr Kumar also provided extensive written submissions (21 pages in length) for the purposes of the final hearing. I will refer to those submissions shortly.
The written submissions for the plaintiff dated 26 October 2012 essentially fell into two parts.
The first part of the submissions is to be found in pp 1-15 of the written submissions. This section deals in particular with the subject of "Rent Consideration by Appeal Panel" at pp 7-15.
The second part of the plaintiff's written submissions is entitled "Further consideration of pleaded grounds" at pp 15-21.
I have considered the submissions made on behalf of the plaintiff, firstly, to determine whether they do raise a question of law and, if so, whether any error has been established.
On behalf of the defendants, Ms Tibbey relied at the final hearing upon her submissions dated 13 November 2012.
Consideration of the rent provisions
The commencement date for the lease was specified as 13 April 2010.
Annexure "A" to the Lease included a "Summary" in respect of the plaintiff's liability for rent payable under paragraph [1](c). The first monthly payment, according to the lease, was due on 13 May 2010, instead of 1 May 2010 which date had been deleted. The change in date was not initialled by the plaintiff, as noted by the Tribunal. That paragraph continues:
"If this is not the commencement day it is because a set up period of rent free period from the commencement date to that day has been allowed by the lessor." (Emphasis added)
In cl (4) of Annexure A, provision is made in relation to the rent, in part, as follows:
"For the first One (1) year period of the term hereof the Lessee will pay to the Lessor ... a rent at the rate specified in summary (c) per annum such rent to be paid in advance by regular and consecutive monthly payments specified in summary (c) each on the first day of each month during the term except the first and last payments which, if necessary, will be proportionate, the first being payable on the day of commencement of the term ..." (Emphasis added)
It had been the plaintiff's claim before the Tribunal that the rent-free period had been deferred by agreement from 13 May to 7 June 2010. That, of course, if supported by the evidence, would have postponed liability under the lease to make advance monthly payments of rent. The Tribunal, however, rejected that claim.
The Tribunal noted that it was the plaintiff's contention that there had been no default by him as the date for the commencement of the lease had been altered from 13 May to 7 June 2010, (extending the rent-free start-up period). The Tribunal observed that there was no documentary evidence to support an alteration in the commencement date of the lease from 13 May 2010. In that respect, the Tribunal made a finding that there was no evidence of any express variation to the agreement between the parties to that effect and that there was no evidence from which such an agreement could be implied. Further there was no basis to invoke the doctrine of promissory estoppel as there had been no promise and no unambiguous conduct upon which an estoppel could be found.
The Tribunal noted that the evidence revealed that there had been three demands made by the defendants for payment of rent. It observed that if the plaintiff had in fact believed that there had been an agreement altering the date for the payment of rent then it would be expected that he would have raised that with the defendants well before his solicitor wrote a letter on his behalf after the lock-out occurred. The evidence, however, established that he did not assert in response to the letters of demand that there had been any alteration.
It was common ground that the plaintiff obtained keys to the premises on 13 April 2010. However, it was argued for him that he did not genuinely "enter into possession" in the sense of undisturbed possession of the Premises until 7 May 2010.
It was contended before the Tribunal that the reason for this was that the lessors had not complied with their fit-out obligations, which included the rendering of a grease trap fit for use, until 6 May 2010. The plaintiff asserted that this particular task, as well as others, fell within the description "lessor's fit-out obligations" within the meaning of (1)(b) and (2)(a) of s 17 despite the absence of a provision to this effect in the lease.
The basis upon which it was argued that these matters were "lessor's fit-out obligations" was that at the time the Lease was executed the parties had orally agreed that the lessor would rectify those aspects of the premises that were considered to be unsatisfactory.
The Appeal Panel stated that it was not persuaded by the argument and set out a number of reasons at [43] to [50] for its decision on that issue.
Counsel appearing for the plaintiff before the Appeal Panel developed a submission based on the provisions of s 17 of the Retail Leases Act 1994. The argument may be shortly stated. It was submitted that cl 1(c) of the lease, although stating that the first monthly payment was due on 13 May 2010, was premised upon that being the commencement date of the lease.
The Appeal Panel dealt with the argument at [39] to [47] of its Reasons for Decision, ultimately dismissing the argument. Counsel for the plaintiff had relied upon the provisions of s 17(2)(a) which, in effect, stated that the lessee was not liable to pay rent in respect of any period before the lessor had substantially completed the lessor's fit out obligations. The argument was that Mr Gani's liability to pay rent could not have arisen earlier than 13 May 2010: Reasons at [40].
The argument had been that although the keys to the premises were given to the plaintiff on 13 April 2010 he did not "genuinely" enter into possession, that is undisturbed possession, as the defendants had not complied with the lessor's fit out obligations until 6 June 2010. The Appeal Panel stated its reasons for not accepting the argument commencing at [42]. The first ground for dismissing it was that the lease stipulated the commencement date as 13 May 2010 and the liability to pay rent was not expressed to be dependent upon the date upon which the lessee entered possession of the shop.
The Appeal Panel, in relation to s 17(1)(b), stated that whilst the defendants (in particular Mr Maiolo) had promised to remedy certain defects on the premises, he did not undertake to remedy them before the lessee entered possession and that it was clear that the parties had intended that the lessor would perform them after the date on which Mr Gani obtained the key (13 April 2010).
The Tribunal additionally accepted the submissions put on behalf of the plaintiff that the Tribunal's findings (at [36]) indicated that the works undertaken by the lessor were not substantial and were far less intrusive than Mr Gani had alleged. The submission was that most of the tasks had been completed by 13 April 2010, although this date was not detailed in the Reasons of the Tribunal.
The Appeal Panel concluded that the plaintiff had not been denied possession of the premises in any practical sense at any time after 13 April 2010.
Discussion
As noted in the written submissions for the defendants findings of fact made in the original decision of the Tribunal, in respect of which leave was refused by the Appeal Panel, are not open for appellate review, so long as there was evidence upon which the findings of fact were made and from which permissible inferences could be drawn or unless it is demonstrated that the Tribunal misdirected itself in law: Defendants' Submissions at [7].
In support of that submission reference was made to the decision in Toufic Laba Sarkis v Mahmoud Moussa [2011] NSWSC 1172 at [6] - [7].
The defendants' submissions noted at [8] that a number of factual findings made in the Tribunal, at first instance, were made in the context of "... sharp factual differences in the evidence of the parties."
Authorities were also cited for the proposition that even on a rehearing, which the present proceedings are not, where findings depend to any substantial degree on credibility, an appellate court cannot substitute its own view for that of the decision maker at first instance who had the advantage of assessing the credibility of the witnesses, unless it can be shown that the judge or Tribunal failed to use or has misused his or her advantage or has acted on evidence which was inconsistent with facts incontrovertibly established by the evidence or which was glaringly improbable: Devries and anor v Australian Nation Railways Commission [1993] HCA 78; 177 CLR 472 at 479.
The findings in the present case, including particular findings made in respect of the failure to pay rent on due dates involved matters of credit. In the Outline of Submissions of the Plaintiff dated 26 October 2012 at [61] it was contended that:
"... the Tribunal failed to properly consider commencement date, when rent-free period was clearly to cover works when trading was not occurring ...".
It was further submitted at [82]:
"... that the Tribunal has clearly misconstrued the terms of the lease."
Consideration: issues concerning the lease
It has not been established in the proceedings that the Tribunal or the Appeal Panel failed to properly consider the issue of the commencement date of the lease. Nor do I consider that there is any basis for the plaintiff's submission that the Tribunal misconstrued the terms of the lease. In my opinion, the submissions as to error in these respects amount to no more than unsupported assertions.
The Tribunal recognised that the fundamental issue for its determination in relation to the right of the lessors to terminate the lease concerned the terms of the lease that specified the obligation to make advance monthly payments. That issue, the Tribunal recognised, turned upon the commencement date of the lease.
In relation to this issue, the plaintiff's submissions do not establish error in the Tribunal or the Appeal Panel involving a question of law. A consideration of the decision of the Tribunal in light of the evidence, indicates that the decision by it made on the issue concerning arrears of rent was clearly correct.
The Tribunal recognised, at [43] of its decision of 14 September 2011, that there was no contemporaneous or objective evidence to establish the plaintiff's contention that the commencement date of the lease has been altered by agreement from 13 May to 7 June 2010. The Tribunal, in fact, recognised, at [44], that the evidence was very much against the plaintiff's contention that there had been agreement to vary the commencement date of the lease. There was in fact evidence that supported the fact that the plaintiff himself acted on the basis that the commencement date was 13 May 2010. Ms Tibbey's submissions drew attention to specific documents which made that plain.
In this respect reference was made to the affidavit of Mr Muriniti, solicitor for the defendants, sworn on 7 November 2012. This affidavit contained Annexure A to the Application for Original Decision, signed by Mr Gani and filed with the Tribunal on 9 September 2010.
In that document (signed by the plaintiff) it was stated that the lease for the restaurant was for the period 13 April 2010 to 14 April 2015 and that rent had been paid to 12 July 2010, it being noted "Business slow" (See full statement below). Ms Tibbey further submitted that the first commencement of the lease stated as 13 April 2010 was a critical fact rather than any other date as later asserted. It was submitted that it was open to the Tribunal to reject the contention made on behalf of the applicant that there had been an oral agreement to vary the commencement date to 7 June 2010, an assertion that had been denied by the defendants.
In the abovementioned Application for Original Decision made by the plaintiff, under the heading "Grounds for Application (including Particulars)" the plaintiff wrote against the entry "Particulars 1.1" the following:
"Lease for Indian restaurant 13/4/2010 - to 14/4/2015. Rent $7800 inc GST pm rent paid to 12/7/2010. Business slow."
Against the entry "Particulars 2.1" the plaintiff wrote:
"I will pay the rent if relief given and I return to the property to conduct business."
The Application was signed by the plaintiff on 8 September 2010.
In the document, Application for Urgent Interim Order, also filed on 9 September 2010, the plaintiff wrote:
"... the Lease commenced on 13/4/2010. Business is very slow and requires time to develop, able to resume rental payments ..."
That Application was also dated 8 September 2010.
The defendant relied upon both Annexures A and B to the Applications made on 9 September 2010 for support of the contention that had been made by the defendants that the rent-free period was a period commencing 13 April 2010 until 12 May 2010 and that the payments under the lease were due as and from 13 May 2010: Defendants' Written Submissions at [22].
It was further submitted on behalf of the defendants that the first time that it was suggested that there had been an oral agreement for the lease to commence on a later date was that contained in the affidavit of 18 November 2010. The plaintiff in that affidavit at [6] stated that shortly after 7 May 2010 he asked Mr Maiolo to amend the first rent payment under the lease from 13 May 2010 to 7 June 2010 so that he could take full advantage of a 1-month rent-free period from 7 May 2010 to 6 June 2010. In that paragraph he asserted that Mr Maiolo agreed to this but said that it was not necessary to amend the date as the lease agreement allowed the landlord to change the date and he trusted him.
The defendants further relied upon the fact that the letter from the plaintiff's solicitor dated 5 August 2010 did not include any assertion that there had been an oral agreement to vary the date of the commencement of the lease.
The assertion that, as at 27 July 2010 when the lessors wrote demanding payment of rent, the rent was not 14 days overdue is an assertion made upon the premise the Tribunal ought to have accepted the plaintiff's account that there had been an agreement to defer the commencement date of the lease. It is clear from what I have earlier stated that the assertion in these written submissions at [91] cannot be accepted.
Once the Tribunal determined (in my opinion correctly) that the lease commenced on 13 May 2010, there was no basis for the plaintiff's contention that the defendants were not entitled to terminate the lease on the basis that the rental payments were in arrears. In other words, the evidence established a proper basis, having regard to the terms of the lease, for a contractual right in the defendants as lessors to terminate the lease.
Before leaving this issue, there is one matter to which I should make particular reference. In his oral submissions Mr Kumar accepted that the principal issue before the Tribunal was the issue of the lease commencement date: T 15 November 2012 at p 5. At p 6 of the transcript, Mr Kumar is reported as stating:
"... but there are a couple of issues arising from that. As your Honour was earlier exploring, the issue of the construction of cl 11(a). Even if your Honour were to find that the clock started to tick on 13 April and there was one month rent-free period up to 13 May and then the two months - I think it's common ground that two months worth of rent was paid. So, that took it up to 13 July. On my friend's version that takes us up to 13 July. A letter was issued on 27th, being a notice [27 July]."
Mr Kumar continued:
"Then the lease was determined on 3 August. In the plaintiff's submission, on a true construction of cl 11(a) that should not have occurred.": T at p6.
Ms Tibbey, at p 7 of the transcript of 15 November 2012, stated that cl 11(a) was not argued either at first instance or on appeal. Mr Kumar drew attention to the fact that in the Notice of Appeal reference was made to "denied 14 days' notice according to the terms of the lease." However, it became apparent that although the issue was raised in the Notice of Appeal it was not one that was pursued or argued either before the Tribunal or the Appeal Panel.
If it had been relied upon as an issue in the proceedings below I do not consider that the issue would have had any significant or decisive effect on the outcome of the proceedings in relation to the issue of the plaintiff's failure to make advance payments of rent.
The following matters would have arisen had the issue in relation to cl 11(a) been raised below. As the "Summary of Payments" set out in [7] above indicates, the plaintiff failed to pay the monthly payments on the due dates for payment, namely, 13 May 2010 (not paid until 2 June 2010) and 14 June 2010 (not paid until 13 July 2010). No payment at all was made in respect of the month of July 2010.
The notice of default by letter dated 24 June 2010 (Annexure "H" to Mr Muriniti's affidavit sworn 15 October 2012) noted that rent due on 14 June 2010 had not been paid and a demand for payment was made. The plaintiff was in "default" under cl 11(a) of the lease in respect of June. No payment was made by the plaintiff within 14 days of the letter of 24 June 2010. Payment of the June rent was not made until 13 July 2010. The condition stipulated for termination of the lease under cl 11(a) had, in other words, been fulfilled by 8 July 2010 (14 days after notice of 24 June 2010). The defendants were entitled to rely upon the default by the plaintiff to make payment, the letter of 24 June 2010 and the plaintiff's failure to pay within 14 days of 24 June 2010.
The plaintiff's failure to comply with the lease provisions which governed his rent obligations continued in July 2010 for which no payment of rent was paid or proffered.
However, the fact remains that the issue was not argued before the Tribunal. It is not open to the plaintiff to now raise it as a matter that establishes "a question of law" for the purposes of the present proceedings.
I should add that the decision of the Appeal Panel reveals that very close attention was given by it to the question of default in payment of rent. Factual matters relevant to that issue were set out in the decision at [5] to [24]. No error has been demonstrated in relation to any of the matters to which the Appeal Panel there referred nor to any conclusions expressed by it in relation to those matters.
The Appeal Panel proceeded to examine in close detail the question of what it termed "deferment of the rent-free period" at [35] to [38] and in relation to the issue raised under s 17 of the Retail Leases Act at [39] to [49]. The Panel concluded that the Tribunal's findings in respect of the rent-free period and the plaintiff's liability under the lease to pay rent was:
"... entirely correct in law and in accordance with the evidence". At [50].
The assertion in the submissions for the plaintiff at [89] that the Tribunal had "misapprehended the payment of $7800 paid in cash ...", in my opinion, has no foundation whatsoever. There is, with respect, no basis for the assertion that "the Tribunal had not properly set out its findings of facts on this issue": Plaintiff's Written Submissions dated 26 October 2012 at [90].
In the present proceedings, attention was directed by counsel on behalf of the defendants to the fact that the first receipt that was issued related to the cash payment made of $7800 (which on the defendants' case was late as it had been due on 13 May 2010 but payments not made until 2 June 2010). That receipt, it was emphasised, specified the period of rent as commencing on 13 May 2010. The plaintiff did not, before the lockout occurred on 3 August 2010, assert that the receipt wrongly recorded the commencement date as 13 May 2010. As the Summary in [7] above indicates, the rent due on 14 June 2010 was not paid until 13 July 2010. The next monthly payment due on 14 July 2010 was not paid.
Other issues
(a) Return of chattels
In relation to the issues raised regarding Ground 3, to the effect that the Tribunal ought to have found in favour of the plaintiff's claim and made orders in his favour ordering the return of chattels and refund of bond monies, the plaintiff failed to establish that there was any question of law in respect of those matters arose and failed to establish any error in the Tribunal's determination of those issues.
In relation to Grounds 5 and 7, the claim for the value of chattels, as was observed in the written submission for the defendants at [34] there was no claim made in the original application filed on 9 September 2010 for stock and equipment and no orders were sought in relation to the same. However, the Tribunal gave leave for the issue to be dealt with on its merits but found against the plaintiff on the issue. Again, it has not been demonstrated that the Tribunal's findings and conclusions involved or were affected by an error of law.
On the issue of "abandonment" it was contended that the defendants had not raised the issue in the pleadings. I accept, however, the submission made on behalf of the defendants that that issue was raised in response to the claim made by the plaintiff. Arrangements had been made for the plaintiff's lawyers to attend two appointments at the premises. Mr Maiolo's evidence was that they did not attend. The evidence given by Mr Maiolo was that the failure to attend, as had been arranged, effectively led to an abandonment of the property and the defendants proceeded to organise the clean up of the premises and then advertise them for rent.
The Appeal Panel dealt with this issue at [59] to [74]. It noted that the total of the amounts paid in respect of the goods as referred to in Mr Gani's affidavit sworn on 14 February 2011 was $38,505. The Tribunal accepted the submission made by Ms Tibbey to the effect that the evidence relied upon was totally inadequate to establish the value of the goods which the plaintiff alleged he had left in the premises. The Appeal Panel expressed the opinion that:
"...the Tribunal should have dealt with this claim by Mr Gani, even if only briefly. There were sufficient references to it in the opening addresses, the evidence and the submissions filed on Mr Gani's behalf. Its omission to do so was an error of law, warranting a grant of leave by us." At [70].
The Appeal Panel however went on to state that having regard to the material that was before the Panel:
"... this claim must be dismissed. Our principal reason is that, as Ms Tibbey argued, the evidence adduced by Mr Gani as to both the nature and [most importantly] the value of the goods left in the Premises falls well short of what was required. A list of broadly described categories of goods, without any indication of the numbers of items in a number of the categories or of the age or other defining characteristics of any of the goods, is clearly inadequate. So too are a series of bald assertions as to the value of the items in each of the 27 categories.": At [71].
In relation to the goods which the plaintiff said he had left on the premises, there was an insufficiency of evidence in so far as the plaintiff failed to adduce evidence to establish the value of the goods, he, of course, having the onus of proof on that issue.
These findings and conclusions were certainly open on the evidence before the Appeal Panel. Further it was not demonstrated that any error was made in any factual finding in relation to this aspect, let alone an error of law. I do not consider that the plaintiff has established a valid ground of appeal in respect of the claim for the value of the goods left on the premises.
(b) Bond forfeiture
The defendants' entitlement as lessors to the bond was set out in the lease. A breach of a covenant was said to entitle the Lessor
"... to call upon the guarantee for or utilise such amount towards the cost of rectifying any breach otherwise the amount less any necessary expenditure shall be refunded to the Lessee at the end of the Lease and any guarantee released ...".
The only issue raised in the written submissions for the plaintiff on this issue was that the forfeiture of bond money:
"... does not provide any evidence of the losses suffered by the Lessors. The Tribunal has not addressed whether the losses are just and reasonable.": At [124].
It was further contended that the Tribunal's decision did not "... address any issue of quantum ..." and that the defendants had asserted that the monies had been accounted as lost rent and restoration of the premises but they did not provide sufficient evidence of the claim: At [125].
Finally it was submitted that in all the circumstances the lessors had obtained a benefit and were unjustly enriched: At [126].
The Tribunal made a finding that the Bond of $25,000 should be forfeited.
In the written submission for the defendants there were several matters identified at [39] which provided a basis for the forfeiture of the Bond. These included:
(1) If the rent was not paid up to date in accordance with the lease provisions. The amount of rent due was calculated and set out in the submissions as at 3 August 2010 (a period of 21 days) as $5,283.87 plus interest as per the lease at 9%.
(2) The circumstances for forfeiture of the Bond had arisen.
(3) The premises were left in a dirty condition which required cleaning and replacement of carpets and other matters set out in subparagraph (c) of the submissions.
(4) The premises had to be relet. The oral evidence indicated that a tenant only entered into occupation on 12 April 2011. Accordingly, the premises were vacant for the period 3 August 2010 to 12 April 2011.
(5) There was a failure to pay the amount due under the equipment contract, ie $6,750 due on 11 May 2010.
(6) That Mr Maiolo had to pay $2,300 towards payment of an awning replacement, there being a basis for disputing the need for the awning to be replaced although it had been required by the plaintiff.
I do not consider that the plaintiff established any material error let alone an error of law in respect of the forfeiture of bond issue.
(c) The cost of the awning
In respect of Ground 6 concerning the awning, the plaintiff bore the onus of proof that he had paid the amount of $4500 towards the cost of the awning as a "loan" to Mr Maiolo. There was no documentary evidence that he had done so and the Tribunal's decision on the issue is a question of fact not of law. The Tribunal's finding that there was no loan by the plaintiff in respect of the awning was a finding of fact. It is unnecessary to set out the surrounding factual matters concerning this aspect of the matter as they are correctly summarised in [30] of the defendants' written submissions.
No question of law was involved in relation to the cost of the awning.
I have concluded that the plaintiff's proceedings must be dismissed as no error on a question of law has been established and I so order.
(d) Costs order by the Appeal Panel
In proceedings before the Appeal Panel - Internal, the Deputy President, found in favour of the defendants in relation to costs on the basis that "the grounds of appeal advanced by the appellant were not strong:" Gani v Maiolo [2012] NSWADTAP 21 at [25]. Pursuant to s 88 of the ADT Act the plaintiff was ordered to pay the defendants' costs of the appeal as agreed or assessed.
The plaintiff, in the present proceedings, has stated that he appeals in relation to costs of the ADT Appeal. However, no grounds for the appeal in relation to costs have been stated.
Ms Tibbey, in her written submissions of 15 October 2012, addressed the issue and observed that s 119(1A)(c) of the ADT Act provides that an appeal does not lie to the Supreme Court against a decision of the Appeal Panel in relation to costs, except with leave of the Court: at [4].
The plaintiff did not in terms seek leave to argue the issue of costs. Nor were any reasons advanced as to why leave ought to be granted or as to the basis for the appeal in relation to costs.
The defendants have submitted that the decision in relation to costs was orthodox, that there were no features of the decision or reasons for decision which suggest that it would be appropriate to grant such leave and that in all the circumstances no leave should be granted.
In my opinion, no demonstrable error whether as to fact or law has been identified regarding the Appeal Panel's decision on costs. Accordingly I find there is no basis for the grant of leave to appeal that decision. Leave to appeal the Appeal Panel's decision on costs is accordingly refused.
Orders
I make the following orders:
(1) I make an order extending time for the commencement of proceedings.
(2) The Summons filed on 10 July 2012 is dismissed.
(3) Costs would normally follow the event. In the event that the plaintiff wishes to be heard on the question of costs, then written submissions on that question should be lodged with my associate within 14 days of the date of this judgment. If no submissions are lodged by that date then I order the plaintiff to pay the defendants' costs of the proceedings on the ordinary basis. The defendants are to file any submissions in reply to any submissions on costs within a further 14 days.
(4) Leave to either party to apply in respect of the form of orders.
**********
Decision last updated: 27 November 2012
3
5
2