Gill & Ors and Wildnight Pty Ltd - [2008] WASAT 84

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION: GILL & ORS and WILDNIGHT PTY LTD [2008] WASAT 84

MEMBER: DR B DE VILLIERS (MEMBER)

HEARD: 19 AND 20 FEBRUARY 2008

DELIVERED : 17 APRIL 2008

FILE NO/S: CC 1302 of 2006
CC 1298 of 2006
CC 1300 of 2006
CC 1301 of 2006
CC 1303 of 2006
CC 1304 of 2006

BETWEEN: SANTHOK SINGH GILL
CHARNJIT KAUR GILL
LIN LI ZHANG
CHENG LI
PHU LUONG
THUY TIEN LUONG
HUA ZHANG
QING LIN
PENG PENG YENG
Applicants
AND
WILDNIGHT PTY LTD
Respondent

Catchwords:

Commercial tenancies Lettable area Operating expenses Relevant proportion Material changes in the total lettable area Does a change in the operating expenses statement constitute compliance with the statutory requirement to inform tenants of "details of any material changes" in the total lettable area Who is responsible for payment of repair and maintenance of airconditioning units Does an operating statement which contains itemised expenditure for only a part of the accounting period comply with the provisions of the Act

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3(1), s 12, s 16(1)
State Administrative Tribunal Act 2004 (WA), s 66, s 83(7)

Result:

Questions answered and orders made

Category: B

Representation:

Counsel:

Applicants: Mr C Martin
Respondent: Mr D Tong

Solicitors:

Applicants: Chris Martin & Associates
Respondent: Vincent Partners

Case(s) referred to in decision(s):

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The questions arising from these applications can be summarised as follows:
(a)was the alteration made to the 2005/2006 operating statement of the International Eating House of sufficient "detail of any material change" in the total lettable area, to comply with the requirements of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CT Act);
(b) can the reparations and maintenance made to the air‑conditioning units be claimed by the respondent as part of the operating expenses;
(c)does the written statement for the year 2004/2005 which contains only 10 months of itemised expenditure, comply with the CT Act; and
(d)what is the "relevant proportion" of each tenancy in the retail shop?
In response to each of these questions, the applicants contend as follows:
(a)The respondent did not provide them with sufficient detail in regard to its decision to change part of the lettable area, known as the bakery, into common area. According to them, the mere inclusion of the lettable area within the operating statement for the common area does not constitute "details of any material change" in the total lettable area as required by the CT Act.
(b)The type of work done to the air‑conditioning units should be classified as of capital expenses to "plant or equipment" which is the property of the respondent. It is therefore also the responsibility of the respondent to repair and maintain it, and the costs cannot be charged as an "operating cost" to applicants.
(c)In regard to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] WASAT 84
Decision Date: 17 APRIL 2008

CaseChat Overview and Summary

The case involved tenants of a commercial property located in Melbourne, who brought an application to the Civil and Administrative Tribunal (CAT) seeking clarification and rectification of the operating expenses statements provided by the landlord, Wildnight Pty Ltd. The tenants argued that the landlord had failed to provide accurate operating expenses statements as required by the Retail Leases Act 1994 (Vic). The dispute centred around the calculation of the relevant proportion of the total lettable area and the inclusion of certain expenses in the operating expenses statements. The CAT was tasked with determining whether the landlord had complied with the statutory requirements to inform tenants of material changes in the total lettable area and whether certain expenses were appropriately included in the operating expenses statements.

The legal issues before the CAT included whether a change in the operating expenses statement constituted compliance with the statutory requirement to inform tenants of "details of any material changes" in the total lettable area, and whether the landlord was responsible for the payment of repair and maintenance of air-conditioning units. The CAT also had to decide whether an operating statement which contained itemised expenditure for only a part of the accounting period complied with the provisions of the Act. The tenants argued that the landlord had incorrectly included the bakery area as part of the common area and had included expenses for the repair and maintenance of air-conditioning units in the operating expenses statements.

The CAT found that the landlord had not complied with the statutory requirements to inform the tenants of material changes in the total lettable area. The Tribunal held that the bakery area should not be treated as part of the common area and that the works on the air-conditioning units should be excluded from the operating expenses statements. The CAT also found that the operating expenses statements did not comply with the provisions of the Act as they contained itemised expenditure for only a part of the accounting period. The Tribunal ordered the landlord to provide amended operating expenses statements to the tenants and to finalise the relevant proportion of each of the respective tenancies. The CAT further ordered that any amounts owing as a result of the new statements be paid within 30 days. Finally, the CAT granted leave for the applicants to apply for costs arising from these proceedings.

Orders

Orders of the court

1. The respondent must, within 60 days from the date of these orders, provide to all tenants amended operating expenses statements for the accounting periods 2004/2005; 2005/2006; and 2006/2007, whereby effect is given to all the answers by the Tribunal to the questions arising from the leases. In particular - (i) The bakery area must not be treated as part of the common area; and (ii) The works on the air-conditioner units must be excluded from the operating expenses statements. 2. The parties must, within 30 days from the date of these orders, finalise the relevant proportion of each of the respective tenancies pursuant to the Millar Drawings and, if necessary, amend the respective leases. 3. After compliance with order 1 and order 2, the parties must, within 30 days, pay to each other, as the case may be, any amounts that may be owing as a result of the new statements. 4. Leave is granted for the applicants to apply for costs arising from these proceedings. The hearing in respect of costs will take place at 10*am on 25*May*2008. The applicants must, not later than 9*May*2008, file and serve submissions and documents in support of their cost application. The respondent must, not later than 16*May*2008, file and serve its written response to the cost application.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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