Gani v Maiolo
[2012] NSWADTAP 10
•05 March 2012
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Gani v Maiolo (RLD) [2012] NSWADTAP 10 Hearing dates: 30 January 2012 Decision date: 05 March 2012 Jurisdiction: Appeal Panel - Internal Before: M Chesterman, Deputy President
K Rickards, Judicial Member
J Butlin, Non-judicial MemberDecision: 1. The appeal is dismissed.
2. There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the opposing party is to file and serve submissions in response within a further 21 days. The question of costs will then be determined 'on the papers', pursuant to section 76 of the Administrative Decisions Tribunal Act 1997, unless the Appeal Panel decides that a further hearing is required.
Catchwords: Retail shop lease - date when rent first payable - liability for cost of awning - claim for value of lessee's goods left in shop Legislation Cited: Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994Cases Cited: Armstrong Jones Management Pty Ltd v Saies-Bond & Associates Pty Ltd [2006] NSWADT 323
Gani v Maiolo [2011] NSWADT 219Category: Principal judgment Parties: Mohammad Murul Gani (Appellant)
Maria Maiolo and Raffaele Maiolo (Respondents)Representation: M Rollinson (Appellant)
M Tibbey (Respondents)
Karam C Ramrakha & Associates (Appellant)
L Muriniti & Associates (Respondents)
File Number(s): 119047 Decision under appeal
- Citation:
- Gani v Maiolo [2011] NSWADT 219
- Date of Decision:
- 2011-09-14 00:00:00
- Before:
- Retail Leases Division
- File Number(s):
- 105144
decision
Introduction
(M CHESTERMAN (DEPUTY PRESIDENT), K RICKARDS (JUDICIAL MEMBER), J BUTLIN (NON-JUDICIAL MEMBER)): This is an appeal against a decision of the Retail Leases Division ( Gani v Maiolo [2011] NSWADT 219 - hereafter 'the Tribunal's decision') refusing relief claimed by the Applicant (now Appellant), Mr Mohammad Murul Gani.
Mr Gani sought relief following his eviction from retail shop premises at Manly ('the Premises') that had been leased to him by the Respondents, Ms Maria Maiolo and Mr Raffaele Maiolo.
The Tribunal's decision was delivered on 14 September 2011. We heard the appeal on 30 January 2012. At that hearing, Mr Rollinson of counsel appeared for Mr Gani and Ms Tibbey of counsel appeared for Mr and Ms Maiolo.
Factual outline
In this outline, we have drawn mainly on the Tribunal's account of the evidence that it admitted and on its findings, but have included also some parts of the evidence (both documentary and oral) that the Tribunal did not mention.
The memorandum of lease executed by the parties ('the Lease') contained provisions to the following effect:-
(a) The term of the Lease was five years and two days, commencing on 13 April 2010.
(b) The permitted use was 'restaurant'.
(c) A bond was stipulated in the form of a bank guarantee in the amount of $25,000.
(d) The lessee was obliged to keep the interior of the Premises and all fixtures and fittings inside them 'in a state of good repair having regard to its condition at the commencement of the Lease fair wear and tear and damage caused by fire, flood, storm tempest excepted' (clause 7(a)).
(e) The lessee was required to 'regularly clean and service any grease traps provided for the use of' the Premises (clause 7(g)).
(f) In the event of a failure by the lessee to pay rent or other monies within 14 days of the due date, the lessors were entitled to re-enter the Premises and determine the estate of the lessee (clause 11(a)).
(g) Any fixtures, fittings and goods of the lessee that had not been removed from the Premises within seven days of any such determination were forfeited to the lessors and became their property (clause 11(a)).
(h) The lessor was entitled to enter the Premises 'at all reasonable times to install, maintain or repair' any of the 'services' within them (clause 13 (j) and (k)).
A further provision of particular importance (clause 1(c) of Annexure A, appearing under the heading 'Summary') was as follows:-
1(c) Rent, Turnover Rent, and GST
$93,600 inclusive of GST per annum, payable by monthly instalments of $7,800 calculated for the year following the commencement day.
The first monthly payment is due on 13 May 2010. If this is not the commencement day it is because a set up period or rent free period from the commencement day to that day has been allowed by the lessor.
In the original typed version of this clause, the date given in the final paragraph was 1 May 2010. This had been struck out and the date 13 May 2010 substituted in handwriting. This alteration had been initialled by Mr and Ms Maiolo, but not by Mr Gani.
It was common ground that the Lease was governed by the Retail Leases Act 1994 ('the RL Act').
A brief disclosure statement given to Mr Gani by Mr and Ms Maiolo before execution of the Lease made no mention of a rent-free period. It contained a clause in the following terms:-
The lessee has to pay for the finishes, fixtures, fittings, equipment and services to be provided by the lessor: yes.
If yes, to what extent: 100%.
The previous occupier of the Premises was the owner of a restaurant called Terracotta, which served Greek food. The business that Mr Gani carried on was that of a restaurant serving Indian food.
At about the time when the Lease commenced, there was a discussion between Mr Gani and Mr Maiolo regarding the replacement of an awning that had been installed at the front of the Premises. This led to a claim by Mr Gani that Mr Maiolo borrowed the sum of $4,500 from him in order to pay for a new awning, and had failed to repay this sum. Further details about this aspect of the case are set out below.
On 13 April 2010, the parties signed an agreement for the sale of a quantity of goods, listed in a schedule headed 'restaurant inventory items', from Mr and Ms Maiolo to Mr Gani. The price stipulated in this agreement (hereafter 'the equipment contract') was $27,000, payable in four instalments of $6,750 on 11 May, 11 August, 11 November 2010 and 11 February 2011. Further details about this aspect of the case are set out below.
At the hearing at first instance, there was a dispute between the parties as to the condition of the Premises when Mr Gani first sought to take possession, and as to the measures taken to render them fit for use as a restaurant.
Mr Gani made the following allegations regarding these matters. A grease trap servicing the Premises was in a particularly unsatisfactory condition, because 'it was leaking oil and very unhygienic'. Other fixtures and equipment such as a fly screen, a 'very outdated air conditioner' and a coffee machine had to be repaired or replaced. At his request, Mr Maiolo attended to these matters, retaining the keys to the Premises and entering them from time to time to carry out intrusive operations such as emptying oil from the grease trap into a bucket and replacing the grease trap. The required operations continued until 6 May 2010. Before that date, the Premises were not fit for use as a restaurant. Mr Maiolo and Mr Gani therefore agreed orally that the commencement date of the Lease should be 7 May 2010, not 13 April, and the rent-free period should run until 7 June.
Mr Maiolo's evidence on these matters was to the following effect: (a) during the rent-free period stipulated in the Lease (i.e., between 13 April and 12 May 2010) he attended to all the matters raised by Mr Gani; (b) the only operation required in relation to the grease trap was replacement of its lid; (c) Mr Gani had keys to the Premises during this period and, at Mr Gani's request, he himself retained a set of keys; and (d) he never agreed that the commencement date of the Lease should be changed to 7 May 2010 or that the rent-free period should run until 7 June.
In its decision at [34 - 35], the Tribunal stated, giving reasons, that it regarded Mr Maiolo as a more credible witness than Mr Gani and that in general terms it accepted Mr Maiolo's version of these events.
The Tribunal then recorded the following findings, at [36], [37] and [39]:-
36 ...the works undertaken were not substantial, they were checking that various appliances and the air conditioning was in working order. These works appear to be far less intrusive on any lessee seeking to start up a business in the Premises, as opposed to the general nature of the works alleged by the Applicant which he says prevented him from exclusive possession of the Premises.
37 The concession by a lessor for a start-up period or rent free is really a period of grace to allow a lessee to fit out the premises before commencing to trade. The works undertaken, or described by Mr Maiolo should not have interfered with the Applicant and the Applicant did not provide any evidence as to how and why these minor works interfered with his possession of the Premises.
39 In light of the evidence and cross-examination of both parties this Tribunal finds that the parties did not orally agree to change the commencing date, nor the date for first payment of rent in clause 1 (c) of Annexure A to the Lease. The Lease was not amended.
The first payment of the monthly rent of $7,800 due under the Lease was made by cheque on or about 2 June 2010. A receipt bearing this date and signed by Mr Maiolo (though not by Mr Gani) contained the following description: 'Payment of rent for the period: 13 May to 12 June 2010.' The cheque was however dishonoured.
On 24 June 2010, GP Legal, who were solicitors then retained by Mr and Ms Maiolo, wrote to Macquarie Legal, who had been acting for Mr Gani. They stated that Mr Gani had failed to pay his rent on time, that the first rent cheque had been returned by the bank unpaid and that the instalment of rent due on 14 June remained unpaid. They asked for confirmation that Mr Gani would 'pay his rent on time' and for advice as to when he intended to 'make good the current rent in arrears'.
In his second affidavit, sworn on 14 February 2011, Mr Gani stated that Macquarie Legal only acted for him in relation to the execution of the Lease and that if any letter was sent by GP Legal to Macquarie Legal it was not passed on to him.
On 2 July 2010, GP Legal wrote to Mr Gani stating that the first instalment of rent had been 'returned by the bank', and that both the second instalment of rent and the first instalment due on 11 May under the equipment contract were unpaid.
In a further letter to Mr Gani dated 27 July 2010, GP Legal pointed out that he had still failed to pay the amount due under the equipment contract and that the instalment of rent falling due on 14 July was also unpaid. The letter stated that a failure to make these payments on or before 28 July 2010 would 'result in immediate action as is permitted by law... without any further warnings'.
On 3 August 2010, Mr and Ms Maiolo caused Mr Gani to be locked out of the Premises.
On 5 August 2010, Karam C Ramrakha, acting on instructions from Mr Gani wrote a letter to GP Legal, in which the following claims were set out: (a) because Mr Maiolo did not finish his works in the Premises or give Mr Gani the keys to them until 6 May 2010, Mr Gani did not have 'quiet enjoyment', and the rent-free period stipulated in the Lease did not commence, until 7 May; (b) accordingly, the first instalment of rent was not due until 7 June and only two instalments had become payable; (c) Mr Gani, having paid two instalments, was therefore not in arrears of rent; (d) Mr and Ms Maiolo also held a bond in the sum of $25,000; and (e) 'in any case', it was open to Mr Gani to apply for relief against forfeiture.
On 9 September 2010, Steinfeld and Associates, Solicitors, filed an Application on Mr Gani's behalf in the Tribunal, seeking relief against forfeiture and an order that the bond money of $25,000 retained by Mr and Ms Maiolo to be returned to 'the Rental Bond Unit'. They also filed an Application for an Urgent Interim Order granting relief against forfeiture.
Subsequently, Mr Gani abandoned his claim for relief against forfeiture. In consequence, as the Tribunal stated in its decision at [8], the only issue before it was the claim for return of the bond money.
Mr and Ms Maiolo asserted that they were entitled to retain the bond of $25,000 on account of lost rent under the Lease and costs incurred in making good the Premises after Mr Gani had vacated them.
The hearing before the Tribunal took place on 10 March and 18 April 2011.
As already stated, the Tribunal's decision, delivered on 14 September 2011, was in favour of Mr and Ms Maiolo. Its orders were as follows:-
1. The Applicant was in breach of the Lease on 3 August 2010.
2.The bond money is not to be returned to the Applicant but forfeited by ( sic ) the Respondent.
3.The parties are to pay their own costs of the proceedings.
The grounds of the appeal
The principal topic discussed by the Tribunal in its reasons was Mr Gani's claim that the rent-free period commenced on 7 May 2010, not 13 April 2010 as stated in the Lease. It rejected this claim, then held that in consequence Mr Gani, at the date of the lockout, was in default of rent for a sufficient period to justify termination of the Lease by Mr and Ms Maiolo.
The Tribunal also dealt with a topic to which we have briefly referred above: namely, the claim by Mr Gani that Mr Maiolo owed him the sum of $4,500 as repayment for a loan granted in order to enable Mr Maiolo to pay for a new awning for the Premises. The Tribunal rejected this claim also.
These two matters were the focus of separate grounds on which Mr Gani sought in this appeal to challenge the decision of the Tribunal.
A third ground put forward in the appeal related to equipment used in Mr Gani's restaurant business during the period of his occupation of the Premises. As mentioned above, he signed an agreement to purchase goods for use in his restaurant from Mr and Ms Maiolo. His claim in the appeal was however that he had brought a substantial quantity of other goods into the Premises, that Mr and Ms Maiolo had failed to return them to him after he had been locked out and that his entitlement to compensation for their value should have been, but had not been, given consideration by the Tribunal.
We will now discuss each of these three grounds of appeal in turn.
Deferment of the rent-free period
We have already summarised the principal matters of fact relating to this ground.
At [22 - 23], the Tribunal made the following observations about clause 1(c) of Annexure A to the Lease:-
22 I agree that the clause on first reading is a little difficult. The more usual clause granting a rent free period is:
"The lessee is entitled to one month rent free".
23 However, notwithstanding the initial difficulty comprehending the clause, I find that clause 1(c) is quite explicit as to how it operates. It states when the first monthly payment is due and then gives an explanation if that date is different to the commencing or commencement date in the Lease. The rent free or set up period is an allowance by the lessor. It is a concession by the lessor not an express agreement or covenant between the parties. The clause expresses it as the Vendor allowing a grace period. There may be a collateral agreement and no doubt there often is regarding the rent free but the way the clause is drafted, in my view, is that it is not an express grant but a concession by the lessor.
At [40 - 41], the Tribunal quoted passages from textbook authorities (Snell's Principles of Equity and Meagher, Gummow and Lehane, Equity Doctrines and Remedies ) to the effect that according to principles of promissory estoppel, on which Mr Gani had relied, no estoppel can be established unless the words or actions allegedly giving rise to the estoppel were 'unambiguous' and 'unequivocal'.
At [43 - 47], the Tribunal set out the following reasons for rejecting Mr Gani's claim that the date of commencement of the rent-free period had been deferred from 13 May to 7 June 2010:-
43 For the Applicant's contention that the Applicant was up to date and not in default of rent, then the date in clause 1(c) of Annexure A to the Lease would have to be altered from 13 May to 7 June 2010 as being the first date for payment of rent (extending of the rent free/start up period.) There is no documentary evidence to this effect, there is no evidence of an express agreement between the parties to this effect and there is no evidence of an implied agreement either.
44 The Applicant appears to have unilaterally decided that this is what clause 1(c) will read and consequently operated on that basis, but there is no evidence that this was ever agreed to by the Respondent and in fact the evidence is totally to the contrary.
45 As there was no promise express, implied or by conduct by the Respondent to varying or altering the rent free/start up period, there can be no promissory estoppel because there was no such promise. There was no such unambiguous conduct as required by Snell, nor words or conduct as required by Meagher, Gummow and Lehane.
46 The Respondent's solicitors clearly demanded rent in accordance with the terms of the Lease and wrote to the Applicant on at least two occasions asserting that the Applicant owed rent, consistent with the conduct of the Respondent. If the Applicant had believed that there was in effect such an agreement with the Respondent about the alteration to the Lease and consequently a later payment date for rent then the Applicant would have communicated his belief to the Respondent well prior to the letter from the Applicant's then solicitor, Karam C Ramrakha who wrote after the lock out raising this issue only after the Respondent had exercised its right to terminate the Lease.
47 There was no evidence of any collateral agreement by the parties to alter the rent free/start up period.
At the hearing of the appeal, Mr Rollinson, appearing for Mr Gani, submitted that this reasoning was erroneous in law because the Tribunal, when interpreting and applying clause 1(c) of the Lease, had failed to take account of section 17 of the RL Act. This section states as follows:-
17 Payment of rent when lessor's fitout not completed
(1) This section applies to a retail shop lease if:
(a) the liability of the lessee to pay rent under the lease commences on the lessee entering into possession of the retail shop (whether or not the lessee is required to enter into possession by a specified date), and
(b) the lessor has fitout obligations under the lease (that is, the lessor is required to provide any finishes, fixtures, fittings, equipment or services before the lessee enters into possession of the shop).
(2) A retail shop lease to which this section applies is taken to provide that:
(a) the lessee is not liable to pay rent, or any other amount payable under the lease by the lessee (such as an amount payable in respect of outgoings), in respect of any period before the lessor has substantially complied with the lessor's fitout obligations, and
(b) the lessor is not entitled to deny the lessee possession of the retail shop merely because the lessor has not complied with the lessor's fitout obligations under the lease.
Mr Rollinson maintained that by virtue of the final sentence of clause 1(c) Mr Gani's liability to pay rent could not arise earlier than 13 May 2010, but could arise at a later date. He claimed that on account of section 17(2)(a) it did in fact arise at the later date asserted by Mr Gani, namely, 7 June 2010.
The line of argument advanced by Mr Rollinson was as follows: (a) clause 1(c) fixed the commencement of Mr Gani's liability to pay rent as the day on which he entered into possession; (b) although he obtained keys to the Premises on 13 April 2010, he did not genuinely 'enter into possession' - in the sense of both having undisturbed possession of the Premises and engaging in the conduct of his restaurant business within them - until 7 May; (c) the reason for this was that Mr Maiolo did not comply with the lessor's fitout obligations, which included rendering the grease trap fit for use, until 6 May; (d) this task, along with the others which Mr Maiolo performed, were 'lessor's fitout obligations' (within the meaning of paragraphs (1)(b) and (2)(a) of section 17) despite the absence of a provision to this effect in the Lease; and (e) the reason why they were 'lessor's fitout obligations' was that at or before the time when the Lease was executed, the parties had orally agreed that Mr Maiolo would rectify those aspects of the Premises that were unsatisfactory, including but not limited to the grease trap.
We are not persuaded by this argument, for a number of reasons.
In the first place, section 17(2)(a) will not apply to a lease unless the two conditions stated in section 17(1) are satisfied. In our opinion, neither of them was satisfied in this case.
Neither the Lease nor any agreement found by the Tribunal to have been made between the parties had the result that 'the liability of the lessee to pay rent under the lease' commenced 'on the lessee entering into possession of the retail shop', as required by section 17(1)(a). That liability commenced instead on the date stipulated in the Lease itself: 13 May 2010. The Tribunal, it may be noted, applied similar reasoning with regard to section 17(1)(a) in Armstrong Jones Management Pty Ltd v Saies-Bond & Associates Pty Ltd [2006] NSWADT 323 at [349].
So far as section 17(1)(b) is concerned, it may well be that Mr Maiolo, by promising to remedy certain defects in the Premises, became subject to 'lessor's fitout obligations'. He took on the responsibility to 'provide... finishes, fixtures, fittings, equipment or services'. But he did not undertake to provide these 'before the lessee enters into possession of the shop'. In fact, the clear intention of the parties was that he should perform them after the date - on or about 13 April 2010 - on which Mr Gani obtained keys to the Premises and entered into possession of them. We do not accept Mr Rollinson's submission that he should not be treated as having acquired 'possession' until the condition of the Premises was such that he could engage in the conduct of his restaurant business within the Premises. Just because Mr Maiolo, pursuant to clause 13(j) and (k), retained keys to the Premises and visited them from time to time afer 13 April 2010 in order to perform the tasks that he had promised to perform, it does not follow that Mr Gani had not 'entered into possession'.
Secondly, we agree with a submission by Ms Tibbey that the Tribunal's findings (at [36]) that the works undertaken by Mr Maiolo were 'not substantial' and were 'far less intrusive' than Mr Gani alleged were entirely justified by the evidence. Ms Tibbey pointed out that, according to evidence that the Tribunal did not mention, most of the tasks for which Mr Maiolo assumed responsibility were in fact completed before 13 April 2010 or within a few days thereafter. This was the case with the exhaust ventilation system, the refrigeration and air-conditioning system and the gas appliances. All that had to be done with the coffee machine on 15 May 2010 (as indeed the Tribunal pointed out at [34]) was to check that it was in order. With regard to the grease trap, which had received considerable emphasis in Mr Gani's case, the task performed by Mr Maiolo (according to his evidence) was that of replacing its lid (though according to the Tribunal at [35], he said in evidence that he cleaned and replaced the filter). Ms Tibbey pointed out also that under clause 7(g) of the Lease it was in fact Mr Gani's responsibility to 'clean and service' the grease trap.
In the light of these matters, it cannot be said that Mr Gani was denied 'possession' of the Premises in any practical sense at any time after 13 April 2010.
Thirdly, we would observe that the Tribunal made no express finding that the work performed on the grease trap was not completed until 6 May 2010. It merely recorded (at [32]) an allegation by Mr Gani to this effect.
Fourthly, as Ms Tibbey emphasised, it was not until Mr Ramrakha's letter of 5 August 2010, written after Mr Gani had been evicted, that there was any claim by or behalf of Mr Gani that his liability to pay rent did not start until 7 June 2010. This was the case even though the receipt given to him for his first payment of rent, made on 2 June by a cheque (later dishonoured), described the payment as being for the period from 13 May to 12 June.
All these considerations point in the same direction. The Tribunal's rejection of Mr Gani's claims that the rent-free period commenced on 7 May 2010 and his liability to pay rent therefore commenced on 7 June 2010 was entirely correct in law and in accordance with the evidence. This ground of appeal fails.
The cost of the awning
The Tribunal's account of this rather confused aspect of the case was given at paragraphs [48] to [55] of its decision:-
48 Again from the submissions of Mr Kennedy on behalf of the Applicant:
"8. The evidence relied upon respectively by the lessee and the lessors as to the awning is likewise polarised. The lessee contends that:
(a) the existing awning was unsatisfactory;
(b) it was a pre-condition to him entering in a lease of the premises and the awning be replaced at the lessors' cost;
(c) he had no contact with the supplier of the awning;
(d) he advanced the lessors $4,500.00 towards the awning as the lessee was short of money (I believe it should read "the lessor was short of money";
(e) the lessors paid in full $7,300.00 cash on 27 April 2010;
(f) the supplier issued a tax invoice and receipt addressed to Mr R Maiolo.
49 The lessors contend that:
(a) the lessee ordered the awning and is responsible for paying for it; and
(b) the lessee was always short of money and that he wrote a cheque for $2,300.00 to the awning supplier.
50 The awning is clearly a landlord's fixture in the absence of clear evidence to the contrary (and) is the lessors' responsibility. The lessors have not evidenced any demand for repayment of the $2,300.00 which was allegedly loaned to the lessee. No claim is made for this amount in the accounting statement dated 18 April 2011. There is no evidence as to when the awning was ordered or when the application to Manly Council for consent was made.
51 The Lessors' Disclosure Statement states the following:
"The lessee has to pay for the finishes, fixtures, fittings, equipment and services to be provided by the lessor: yes.
If yes, to what extent: 100%."
52 Clause 7(a) of the lease states the following:
"The lessee shall keep the interior of the demised premises and all fixtures and fittings therein in a state of good repair having regard to the condition of the commencement of the lease fair, wear and tear and damage caused by fire, flood, storm, tempest excepted ..."
53 Whilst the awning is a fixture clause 7(a) of the Lease does not pass responsibility of the awning onto the Applicant as lessee, as the clause specifically refers to only the interior of the premises. In fact on reading of
54 ( sic ) the lease there is no mention of the exterior of the premises being the responsibility particularly of the lessee.
55 However, this dispute is not about the responsibility for a fixture attaching to the premises or what in fact certain clauses of the Lease mean with respect to replacing the awning. This dispute is about a purported loan of money by the Applicant to the Respondent . There may be a jurisdictional point (which was not raised in the hearing) as to whether such a dispute is a Retail Lease Dispute under Section 70 of the Retail Leases Act. I suspect not. However, in any event this Tribunal is not persuaded by the evidence from the Applicant both in Affidavit and in cross examination that the scenario he paints actually happened. This Tribunal finds that there was no loan made by the Applicant to the Respondent.
The evidence included a photograph of the front of the Premises showing the awning that existed before the Lease commenced. It advertised them as a 'Greek restaurant', using large letters.
In the course of reviewing the transcript of evidence at the Tribunal hearing, we have ascertained that according to Mr Maiolo's testimony the cheque for $2,300 that he claimed to have contributed towards payment for the awning was a cash cheque. This might be considered compatible with the description of the payment, appearing in the supplier's invoice and receipt, as '$7300 cash'.
Mr Rollinson submitted that the Tribunal did not address the correct issues because (as we understand his argument) it initially accepted by implication Mr Gani's claim to have lent $4,500 to Mr Maiolo to enable him to pay for the awning, then found (at [55]) that there was no such loan. Thus, although the Tribunal correctly attributed responsibility for payment to Mr and Ms Maiolo, it erred through failing to conclude that Mr Maiolo, by 'in effect charging the lessee with $4,500 towards the cost of the awning, was to that extent not complying with his obligations under clause 7(a) of the Lease'. According to Mr Rollinson, this way of framing the claim dispelled any concern that a ruling relating to the loan might be outside the scope of the Tribunal's jurisdiction under the RL Act.
Mr Maiolo's statement that he contributed only a cash cheque of $2,300 towards the cost of the awning, which was $7,300, does indeed appear to be in conflict with the Tribunal's finding that Mr Gani did not contribute $4,500 by way of loan, or indeed any sum whatsoever, and with the fact that the invoice and receipt for $7,300 cash were made out to Mr Maiolo.
Ms Tibbey's argument was that the Tribunal had reached the correct conclusion for the wrong reasons. It should, she said, have found (relying on a statement in Mr Maiolo's affidavit) that the existing awning did not have to be replaced because it was in good condition and the words 'Greek restaurant' could have been painted over, but that Mr Gani insisted that it be replaced and agreed to pay for the new awning. It should also have held that by virtue of the clause that it quoted from the disclosure statement Mr Gani was obliged to pay for the installation of this fixture. But because it rejected Mr Gani's allegation that he provided a loan of $4,500, its conclusion in favour of Mr and Ms Maiolo was correct.
Ms Tibbey pointed out also that Mr Gani had adduced no documentary evidence in support of his allegation of lending $4,500 to Mr Maiolo and, moreover, that at no time before the lockout occurred did he seek to set this amount off against the demands for payment of arrears of rent contained in the letters written by GP Legal.
In our judgment, this ground of appeal must fail, principally for two reasons. First, the Tribunal's finding that the alleged loan of $4,500 by Mr Gani was not made was clearly open to it on the evidence, having regard particularly to the matters noted in the preceding paragraph and to the Tribunal's criticisms, mentioned earlier, of Mr Gani's credibility as a witness. Secondly, even though Mr Maiolo's evidence on this matter was also unsatisfactory, with the consequence that it is not at all clear who paid for the awning and in what amount(s), it was Mr Gani, not Mr Maiolo, who bore the onus of adducing reliable evidence on the matter.
The goods left in the Premises
As indicated above, the Tribunal did not refer in its decision to any claim having been made by Mr Gani for compensation for the value of goods owned by him that remained in the Premises after his eviction from them.
Mr Rollinson pointed out that, although no such claim was made in Mr Ramrakha's letter of 5 August 2010 to GP Legal (see [23] above) or in the Applications by Mr Gani setting these proceedings in train (see [24]), it was clearly stated, both in affidavits sworn by Mr Gani and in submissions made on his behalf to the Tribunal, that he sought relief of this nature.
In his first affidavit, sworn on 18 November 2010, Mr Gani deposed in paragraph 5 that he brought to the Premises all the equipment that he had acquired in his previous business, together with computers and other items listed in an annexure to the affidavit. The list comprised 27 brief descriptions of different types of goods: for example, 'two neon signs', 'computer', 'monitors', 'plasma TV', 'cooking pots, bowls and frypans', 'vegetable, meat, fish in deep freezer', and 'petty cash'. In paragraph 9, Mr Gani stated that after the lockout, he was unable to remove any of his equipment or his personal and business records. In paragraph 17, he provided a 'summary' of his losses, which included 'Equipment in the premises'.
Material exhibited to Mr Gani's second affidavit, sworn on 14 February 2011, included the same list of 27 brief descriptions of types of goods, appearing in the same order. Beside 24 of these 27 descriptions, different sums of money were entered, ranging between $6,500 (for 'two neon signs') and $80 (for 'answering machine'). The total of these amounts, shown at the bottom, was $38,505.
In the submissions filed on 20 May 2011 for Mr Gani, after the Tribunal hearing had concluded, the final paragraph (paragraph 13) stated that the heads of damages sought by him included 'stock & equipment - $38,505.00'. In paragraph 11, reference was made to admissions by Mr Maiolo in cross-examination that Mr Gani had brought some knives and forks and a plasma TV into the Premises. It should be added, however, that paragraphs 1 and 2 of the submissions identified the two 'critical issues' for determination as the 'commencement date' of the Lease and the question of liability for the replacement of the awning, and made no reference to a claim with respect to stock and equipment.
By virtue of these components of the evidence and the submissions, Mr Rollinson maintained, a claim of this nature had been properly put before the Tribunal and should have been determined. It should have been determined in Mr Gani's favour because Mr Gani was not cross-examined on his evidence relating to the claim and Mr Maiolo, in testifying, did not contradict any of this evidence.
Ms Tibbey referred us to evidence given by Mr Maiolo, in paragraph 10 of an affidavit sworn by him on 9 March 2011, to the effect that after the first directions hearing before the Tribunal, the solicitors for the parties arranged on two occasions for a joint inspection of the Premises 'with the express purpose of identifying the property of the applicant that could be returned and quantifying the damage that had to be accounted for'. He stated that because Mr Gani's representative cancelled both these appointments he assumed that Mr Gani had abandoned his property. He then organised the clean up of the Premises.
With reference to these statements by Mr Maiolo, Ms Tibbey drew our attention to the provision in clause 11(a) of the Lease to the effect that any fixtures, fittings and goods of the lessee that had not been removed from the Premises within seven days of any determination of the Lease on the ground of default by the lessee were forfeited to the lessors and became their property.
Ms Tibbey also argued that (a) the evidence on which Mr Rollinson relied was totally inadequate to establish the value of the goods of Mr Gani allegedly left in the Premises, and (b) because his claim for compensation was not brought forward by his representative until submissions were filed after the Tribunal hearing, no opportunity had been given to Mr and Ms Maiolo to put on evidence in rebuttal of the claim.
Our perusal of the transcript of the Tribunal hearing has revealed that, contrary to this last submission by Ms Tibbey, Mr Gani's representative did briefly mention his client's claim for compensation for the goods during his opening address. Shortly after, Mr and Ms Maiolo's representative referred to the cancelled appointments for inspection of the Premises, to Mr Maiolo's decision to treat Mr Gani's goods as abandoned pursuant to clause 11 and to a willingness on Mr Maiolo's part to return Mr Gani's computer and 'some other personal equipment' to him.
The transcript also records (a) an assertion by Mr Maiolo that Mr Gani brought no equipment into the Premises because he had agreed to purchase all that he needed under the 'equipment contract' (see [12] above) and (b) the later acknowledgment by Mr Maiolo that we have just mentioned, to the effect that Mr Gani did bring in some knives and forks and a plasma TV.
In our opinion, 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 for the appeal to extend to the merits pursuant to section 113(2)(b) of the Administrative Decisions Tribunal Act 1997 ('the ADT Act').
We are however satisfied, having regard to the material before us, that 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.
We realise that the documents left by Mr Gani in the Premises may have contained material relevant to the nature, quantity and value of the goods. But no claim to this effect was made on his behalf. Furthermore, we see no reason to disbelieve the unchallenged assertion by Mr Maiolo that on two occasions Mr Gani's representative cancelled appointments for a joint inspection of the Premises, at which any such documents could have been identified and returned to Mr Gani.
In addition, this assertion by Mr Maiolo did, in our opinion, provide grounds to support his claim to be entitled under clause 11 to treat the goods as abandoned.
The third ground of appeal must accordingly be dismissed.
Our orders
For the foregoing reasons, the appeal is dismissed.
As far as we can discern, neither party to the appeal made any claim for the costs of the appeal. It is appropriate that we provide an opportunity for such claims to be made. In this context, we observe that in our opinion the grounds of appeal advanced by the Appellant were not strong.
We direct as follows. There will be no order for the costs of this appeal unless a party files and serves an application for costs, with supporting submissions, within 21 days. In such event, the opposing party is to file and serve submissions in response within a further 21 days. The question of costs will then be determined 'on the papers', pursuant to section 76 of the ADT Act, unless the Appeal Panel decides that a further hearing is required.
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I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal.
Registrar
Decision last updated: 05 March 2012
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