Lay v Alliswell Pty Ltd

[2000] VSC 201

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 5299 of 2000

STEPHEN LAY AND OTHERS	Plaintiffs
v.
ALLISWELL PTY. LTD.	Defendant

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	11 MAY 2000
DATE OF JUDGMENT:	12 MAY 2000
CASE MAY BE CITED AS:	LAY & ORS. v. ALLISWELL PTY. LTD.
MEDIUM NEUTRAL CITATION:	[2000] VSC 201

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CATCHWORDS:      Lessor and lessee – Determination of lease by lessor – Relief against forfeiture.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr. W. Houghton QC with Mr. J.M. Selimi	Testart Robinson
For the Defendant	Mr. J. Nunns	Kliger Partners

HIS HONOUR:

1. This was originally the return of a summons filed in the court on behalf of the plaintiffs whereby the plaintiffs sought the following orders: 

1.An interlocutory mandatory injunction compelling the Defendant to deliver up possession of the premises situate at and known as Shops 13 and 14, Glenferrie Market Shopping Centre, 674-680 Glenferrie Road, Hawthorn ("the premises"). 

2.An interlocutory injunction restraining the Defendant, whether personally or by its servants or agents or otherwise from interfering with the Plaintiffs' right to the quiet enjoyment of the premises pending the trial of the action herein. 

3.        Such further or other relief as this court deems fit. 

4.        Costs.

1. However, at the outset of the hearing of the application counsel for the plaintiffs informed me that the plaintiffs would seek, in the alternative, relief against forfeiture.  As that course was not objected to by counsel for the defendant, I proceeded to hear both applications.

1. By a lease dated 30 October 1998 the defendant leased shops 13 and 14 at the Glenferrie  Market Shopping Centre to the plaintiffs for an initial term of three years with a further three-year option.

1. The use of the shops as provided in the lease was for the sale of Asian groceries, fruit and vegetables  (excluding meats) and flowers.

1. Pursuant to the lease rent was payable in advance on the first day of each month.

1. The other clauses of the lease relevant for present purposes are clauses SC1.1, 10.1(a) and 10.2.  Those clauses read: 

"SC1.1    If the tenant punctually and properly complies with this Lease it is not required to pay rent for or in respect of the period 1 November 1998 to 31 January 1999."  

10.1(a) reads:  

"10.1.   Default:  

If:

(a)       Rent in arrears:

the Rent or any part of it is in arrears and unpaid for seven (7) days next after any of the due dates for payment (whether demanded or not and no demand shall be necessary);

then and in any of such cases the Tenant shall be deemed to have made default.  The Landlord may elect to treat any such default as a repudiation of this lease by the tenant."

"10.2    Forfeiture of Lease:  

If the tenant has made default as specified in Clause 10.1 the Landlord may, without prejudice to any other Claim which the Landlord has or may have or could otherwise have had against the Tenant or any other Person in respect of such default, at any time but subject to any prior demand or Notice as is required by Law:

(a)       Termination by re-entry:  

re-enter into and take possession of the Premises or any part of them (by force if necessary) by itself or by any Person authorised by it and eject the Tenant and all other Persons from the Premises and thereupon this Lease shall absolutely cease and be terminated."

1. The evidence before me establishes that since the plaintiffs went into occupation of the shops, a practice has grown up whereby the plaintiffs have not paid the rent in advance on the first day of each month but have paid the rent for a particular month towards the end of that month to the defendant's agent who has been in the habit of calling at the shops to collect it, whilst at the same time delivering the rental statement of account for the following month.

1. On or about 31 December 1999, Franklins Supermarket vacated the large area occupied by it in the shopping centre.  Since that time the defendant has been negotiating with David Jones Ltd. with a view to it occupying the area vacated by Franklins.

1. It is clear from the affidavits before me that the defendant would be greatly assisted in that regard if it could obtain vacant possession of the shops occupied by the plaintiffs.

1. On 1 May the defendant's agent called at the plaintiffs' shops and delivered the rental statement of account for May.  The agent was paid the rent for April.  Although there was some dispute or debate concerning the purpose of that payment and how it was treated by the defendant, if one has regard to Exhibit SL3 to the affidavit of Stephen Lay sworn 5 May, and in particular the handwritten notation on that document, it is clear to my mind that the payment made and received that day was in respect of the April rental.

1. At all events and without any warning whatsoever, at some time between the close of the plaintiffs' business on the afternoon of that same day and the next morning, agents of the defendant retook possession of the plaintiffs' shops, put up four notices of re-entry on the inside of the glass windows of the shops and posted two security guards outside the shops.

1. When the plaintiffs arrived at the shops on the morning of 2 May they were denied entry to them.

1. The damage this has caused to the plaintiffs is set out in paragraph 21 and following of Lay's affidavit, which read: 

"21.As a result of the defendant's conduct we have been unable to trade since 2 May 2000.  This has caused and is still causing us significant damage and embarrassment.  Apart from the Notices which were displayed on the windows of the premises, the presence of the uniformed security guards suggested to general public and in particular our customers as well as our suppliers on credit, that we are unable to continue to trade for financial or other adverse reasons. 

22.I believe that the business will be adversely effected by being unable to provide ongoing trade to our regular customers.  Further, closure of our business will result in our suppliers on credit losing confidence in us.  This will have a potentially disastrous effect on our business as we need to purchase a substantial portion of our stock on credit. 

23.Furthermore, we are currently losing a substantial amount of money as a consequence of being unable to trade.  The stock in our shop is aging and the fresh foodstuffs, fruits and vegetables not sold before 2nd May 2000 and those purchased at the market on 2nd May 2000 are perishing. 

24.I am extremely concerned that our reputation in the Hawthorn and surrounding areas will be damaged by the unlawful actions of the Defendant and/or its agents and that this will have far reaching impact on our business future."

1. In my opinion, the behaviour of the defendant in this case has been arrogant and high-handed to say the least of it.

1. If it was dissatisfied with the fact that the payments of rent made by the plaintiffs were always late, the least it could have done was to inform the plaintiffs of that fact and give them an opportunity to rectify the situation.

1. During the course of his submissions counsel for the defendant stated that the defendant had acted opportunistically to take advantage of its legal rights.

1. One could not but agree.

1. It was argued on behalf of the defendant that this court has no jurisdiction to entertain the plaintiffs' application as the premises are retail premises within the meaning of the Retail Tenancies Reform Act 1998 and that pursuant to ss.3 and 35 of the Act only the Victorian Civil Administrative Tribunal can hear and determine any dispute concerning the lease between the parties.

1. I reject that contention.  By re-entering the premises as it did the defendant determined the lease.  In that situation I consider that this court does have the necessary jurisdiction.  In that regard see Jam Factory Pty. Ltd. V. Sunny Paradise Pty. Ltd. And Others (1989) V.R. 584; Klemet Pty. Ltd. V. Lansdown (1989) V.R. 969, and Waterend Pty. Ltd. V. Ennis Hickey & Co. Pty. Ltd. (1992) 1 V.R. 430.

1. In my opinion, there can be no clearer case than this in which to grant relief from forfeiture.

1. The order of the court is that the plaintiffs, Stephen Lay, Henry Lay and Kin Lin Lie, be relieved from forfeiture of the lease referred to in the plaintiffs' statement of claim.

1. I order that the defendant forthwith deliver up possession of the premises situate at and known as Shops 13 and 14, Glenferrie Market Shopping Centre, 674-680 Glenferrie Road, Hawthorn, to the plaintiffs.

1. I consider that the defendant's behaviour in this matter was so unacceptable that it is appropriate that it pay the plaintiffs' costs of the proceeding and I so order.

(Discussion ensued.)

1. HIS HONOUR:  Yes.  Thank you.

1. I reject those submissions.

1. The costs will be on an indemnity basis.

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