HYNES and KORDA
[2014] WASAT 148
•30 OCTOBER 2014
HYNES and KORDA [2014] WASAT 148
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2014] WASAT 148 | |
| COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) | |||
| Case No: | CC:661/2014 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MR D AITKEN (MEMBER) | 30/10/14 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | PETER GERALD HYNES PRESTIGE INTERNATIONAL ENTERPRISES PTY LTD MARK KORDA MARK MENTHA |
Catchwords: | Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) Who are the parties to a lease Whether a receiver and manager of a corporation who executes a lease is the 'landlord' |
Legislation: | Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), s 3(1), s 16, s 16(1), s 25C, s 25D State Administrative Tribunal Act 2004 (WA), s 47, s 60(2) |
Case References: | Nil |
Orders | On the application heard before Member David Aitken it is on 30 October 2014 ordered that:,1. The application is dismissed. |
Summary | The applicants, who were the tenant and the guarantor under a retail shop lease, applied to the Tribunal under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) for the determination of a question which they said had arisen under the lease. The lease stated that the corporation which owned the leased premises was the landlord, with receivers and managers appointed, and that the lease was executed on behalf of the corporation by the receivers and managers. ,The applicants brought the proceeding against one of the receivers and managers and another person who had nothing to do with the lease. The respondents contended that the Tribunal did not have jurisdiction to deal with the application because neither of the respondents was a party to the lease. ,The Tribunal decided that the inclusion in the proceeding of one of the respondents who had nothing to do with the lease, was clearly misconceived. The Tribunal then considered whether the respondent who was one of the receivers and managers fell within the definition of 'landlord' for the purposes of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). , The Tribunal examined the legal effects of the appointment of a receiver and manager to the property of the corporation and noted the disclosure of that appointment in the lease. The Tribunal decided that the corporation was the landlord and that the receivers and managers executed the lease as agent for the corporation. Accordingly, the receivers and managers were not a party to the lease and the inclusion in the proceeding of one of them as a respondent was also misconceived. The Tribunal, therefore, dismissed the proceeding under s 47 of the State Administrative Tribunal Act 2004 (WA) as being misconceived. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) CITATION : HYNES and KORDA [2014] WASAT 148 MEMBER : MR D AITKEN (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 30 OCTOBER 2014 FILE NO/S : CC 661 of 2014 BETWEEN : PETER GERALD HYNES
- PRESTIGE INTERNATIONAL ENTERPRISES PTY LTD
Applicants
AND
MARK KORDA
MARK MENTHA
Respondents
Catchwords:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) Who are the parties to a lease Whether a receiver and manager of a corporation who executes a lease is the 'landlord'
Legislation:
Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), s 3(1), s 16, s 16(1), s 25C, s 25D
State Administrative Tribunal Act 2004 (WA), s 47, s 60(2)
Result:
Application dismissed
Summary of Tribunal's decision:
The applicants, who were the tenant and the guarantor under a retail shop lease, applied to the Tribunal under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) for the determination of a question which they said had arisen under the lease. The lease stated that the corporation which owned the leased premises was the landlord, with receivers and managers appointed, and that the lease was executed on behalf of the corporation by the receivers and managers.
The applicants brought the proceeding against one of the receivers and managers and another person who had nothing to do with the lease. The respondents contended that the Tribunal did not have jurisdiction to deal with the application because neither of the respondents was a party to the lease.
The Tribunal decided that the inclusion in the proceeding of one of the respondents who had nothing to do with the lease, was clearly misconceived. The Tribunal then considered whether the respondent who was one of the receivers and managers fell within the definition of 'landlord' for the purposes of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA).
The Tribunal examined the legal effects of the appointment of a receiver and manager to the property of the corporation and noted the disclosure of that appointment in the lease. The Tribunal decided that the corporation was the landlord and that the receivers and managers executed the lease as agent for the corporation. Accordingly, the receivers and managers were not a party to the lease and the inclusion in the proceeding of one of them as a respondent was also misconceived. The Tribunal, therefore, dismissed the proceeding under s 47 of the State Administrative Tribunal Act 2004 (WA) as being misconceived.
Category: B
Representation:
Counsel:
Applicants : In person
Respondents : Mr D McKimmie
Solicitors:
Applicants : N/A
Respondents : Norton Rose Fulbright Australia
Case(s) referred to in decision(s):
Nil
Introduction
1 The applicants, Mr Peter Gerald Hynes (Mr Hynes) and Prestige International Enterprises Pty Ltd (Prestige), have applied to the Tribunal under s 16(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CTRSA Act) for the determination of a question which they say has arisen under a lease (Lease) of premises described as tenancies TUL 2 and TUL 3, Upper Retail Level, Raine Square, Corner Murray and William Street, Perth (leased premises).
2 The applicants have included with the application a certificate from the Small Business Commissioner under s 25C of the CTRSA Act to satisfy the requirements of s 25D of the Act.
3 The respondents are Mr Mark Korda (Mr Korda) and Mr Mark Mentha (Mr Mentha).
4 In the application the applicants seek the following order:
That we were not at fault in carrying out our fitout (sic) works and were only forced to stop when the landlord failed to rectify faults directly attributable to him and which he refused to allow us to rectify.
5 The Lease, which is dated 21 February 2012, states the parties to be Westgem Investments Pty Ltd (Westgem) as lessor, Prestige as lessee and Mr Hynes as guarantor. The description of Westgem in the Lease discloses that Westgem had both receivers and managers and a voluntary administrator appointed, and that the Lease was executed on behalf of Westgem by its receivers and managers.
6 It is not in contention that Westgem was the owner of the leased premises on the date of the Lease.
7 By a Deed of Appointment dated 11 January 2011 (Deed of Appointment), Mr Mentha and Mr Clifford Stuart Rocke (Westgem Receivers and Managers) were appointed as the receivers and managers of the property of Westgem by BOSI Security Services Ltd, pursuant to a Fixed and Floating Charge dated 23 April 2008 (Charge), it held over the property of Westgem.
8 It is not in contention that the Lease is a retail shop lease for the purposes of the CTRSA Act.
9 However, the respondents contend that the Tribunal does not have jurisdiction to deal with the application because neither of them is a party to the Lease.
Preliminary issue
10 The Tribunal has decided to determine, as a preliminary issue, whether the respondents are a party to the Lease.
11 The parties have each filed written submissions. The respondents have also filed copies of the Lease, the Deed of Appointment, the Charge and a company extract (search) for Westgem.
12 The Tribunal has decided the preliminary issue on those documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
Applicants' submissions
13 The applicants have not made any submissions regarding the preliminary issue, despite being given the opportunity to do so.
14 Instead, in their written submissions, the applicants say that KordaMentha failed in their duty as appointed 'managers' to properly manage the Raine Square development. The applicants refer to a default notice and a termination notice given to them by KordaMentha and say that the reason for the application is to establish who was at fault in causing the termination of the lease and that the applicants need to establish that they 'have no liability to either [KordaMentha] and/or whoever they represent'.
15 In the application the applicants have added the words 't/as Korda Mentha [sic]' after the names of the respondents; 't/as' being an abbreviation for 'trading as'. That indicates that the applicants believe that Mr Korda and Mr Mentha are the persons who carry on the business of KordaMentha. The applicants seem to have made that assumption because the surnames of Mr Korda and Mr Mentha appear in the trading name of the firm KordaMentha. I doubt that that assumption is correct, but it is not of any consequence, because it is not relevant to the determination of the preliminary issue of whether Mr Korda and Mr Mentha are a party to the Lease.
Respondents’ contentions
16 The respondents, in their written submissions, say that neither of them is a party to the Lease, nor are they the landlord under the Lease because:
• the landlord under the Lease is Westgem;
• Mr Mentha is simply one of the receivers and managers of Westgem; and
• Mr Korda is not one of the receivers and managers of Westgem and is in no way connected with the Lease.
Relevant statutory provisions
17 Section 3(1) of the CTRSA Act includes the following defined terms:
landlord, in relation to a lease, means
(a) the person who, under the lease, grants or is to grant to the tenant the entitlement to occupy the premises the subject of the lease; or
(b) a person who obtains a reversionary interest in those premises,
but does not include a person who assigns his interest as tenant under the lease;
tenant, in relation to a lease, means the person who, under the lease, is or would be entitled to occupy the premises the subject of the lease;
18 Section 16 of the CTRSA Act states:
(1) Subject to section 11(5), a party to a retail shop lease may refer to the Tribunal any question between the parties which he believes to be a question arising under the lease and the Tribunal shall
(a) determine whether or not the question referred to the Tribunal is a question arising under the lease; and
(b) if it is such a question, hear and determine it.
(2) The matter for determination referred to in subsection (1)(a) may be determined by the Tribunal in such manner as it thinks fit, subject to each party being given an opportunity to make a written submission.
19 Section 47 of the SAT Act states:
(1) This section applies if the Tribunal believes that a proceeding
(a) is frivolous, vexatious, misconceived or lacking in substance; or
(b) is being used for an improper purpose; or
(c) is otherwise an abuse of process.
(2) If this section applies, the Tribunal may order that the proceeding be dismissed or struck out and make any appropriate orders.
(3) The Tribunal’s powers to act under subsection (2) are exercisable only by a legally qualified member.
(4) The Tribunal may act under subsection (2) on the application of a party or on its own initiative.
Consideration
20 Section 16(1) of the CTRSA Act states that 'a party to a retail shop lease may refer to the Tribunal any question between the parties which he believes to be a question arising under the lease'. That means that a respondent to an application under s 16(1) must be a party to the retail shop lease the subject of the application. If they are not, then the proceeding against them will be misconceived.
21 Section 47 of the SAT Act provides that if the Tribunal believes that a proceeding is misconceived it may order that the proceeding be dismissed.
22 The applicants are each a party to the Lease; Prestige as the tenant and Mr Hynes as the guarantor of the Lease.
23 The only other party to the Lease is the landlord. The question to be decided is the identity of the landlord. There are only two possibilities; it must either be Westgem or the Westgem Receivers and Managers.
24 Mr Korda has nothing to do with the Lease. He is not one of the Westgem Receivers and Managers and therefore he cannot possibly be the landlord and as such, he is not a party to the Lease. The inclusion of Mr Korda as a respondent is clearly misconceived. It seems to me that the only reason that the applicants named Mr Korda as a respondent in the application was because his surname constitutes part of the name of the firm which trades as KordaMentha, which the applicants mistakenly believe to be the receiver and manager of Westgem, which it is not.
25 However, Mr Mentha is one of the Westgem Receivers and Managers and, if the Westgem Receivers and Managers are the landlord, then he is properly a respondent in the proceeding.
26 At first glance, it might be thought that the Westgem Receivers and Managers fall within the definition of 'landlord' in s 3(1) of the CTRSA Act, because they 'granted' to Prestige, as tenant, the entitlement to occupy the leased premises by executing the Lease.
27 However, they executed the Lease in their capacity as receivers and managers of Westgem. To determine the significance of that requires consideration of what their role was in doing that.
28 The effects of the appointment of a receiver and manager to the property of a corporation are detailed in Corporations Law in Australia (2nd ed,2002) by Tomasic Bottomley & McQueen at [23.4] and include the following:
• The legal persona of the corporation is not affected by the appointment of a receiver and manager;
• The powers of the directors of the corporation are suspended for the duration of the appointment of the receiver and manager;
• The corporation is not deprived of its ownership of its property, although the receiver and manager will take possession of the assets of the corporation on behalf of, or as agent for the corporation;
• The receiver and manager will usually be able to act on behalf of the corporation and carry on its business, if the receiver and manager has been given wide powers; and
• The corporation will be liable, as principal, for contracts entered into by the receiver and manager, so long as the receivership is disclosed to the contracting parties.
29 The Deed of Appointment provides firstly, in clause 2.2, that the Westgem Receivers and Managers are, and act as, the agent of Westgem and secondly, in clause 2.3, that the Westgem Receivers and Managers have all the powers provided in the Charge and by statute and law.
30 The Charge provides, in clause 12.2, that the Westgem Receivers and Managers are authorised to do everything that Westgem can authorise an agent to do in relation to the property of Westgem.
31 I make two observations regarding those provisions in the Deed of Appointment and the Charge. Firstly, the Westgem Receivers and Managers clearly had the power to execute the Lease. Secondly, in doing so, the Westgem Receivers and Managers were acting as the agent of Westgem, not as the principal. Westgem is disclosed as being the principal (i.e. the landlord) in the Lease because Westgem is stated to be the lessor (landlord) and the receivership is disclosed, firstly by the words '(Receivers and Managers appointed)' appearing after the name of Westgem and, secondly by the execution provision stating that the Lease is executed by its duly appointed receivers and managers.
32 In my opinion, Westgem is the landlord under the Lease and the Westgem Receivers and Managers executed the Lease as agent for Westgem, and not as the landlord.
33 Therefore Mr Mentha is not a landlord and is not a party to the Lease.
Conclusion
34 For the reasons I have given, I have concluded that neither Mr Korda nor Mr Mentha is a party to the Lease and therefore the application should be dismissed pursuant to s 47 of the SAT Act as being misconceived. The Tribunal's power to make an order under s 47 can only be exercised by a legally qualified member. I am a legally qualified member and, therefore, I can exercise that power.
Order
It is ordered that:
1. The application is dismissed.
I certify that this and the preceding [34] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR D AITKEN, MEMBER
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