Marcinko & Boceanu and Ors (Civil Dispute)
[2011] ACAT 34
•17 May 2011
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
MARCINKO & BOCEANU AND ORS (Civil Dispute) [2011] ACAT 34
XD 1292 of 2010
Catchwords: CIVIL DISPUTE – commercial lease – interpretation of contract – who pays for the cleaning of grease trap? – is the grease trap a service to a particular tenant or to the building complex? – amendment of claim under s 47 of the ACT Civil and Administrative Tribunal Act 2008
List of legislation: ACT Civil and Administrative Tribunal Act 2008, s 47
Tribunal: Ms J. Lennard, Senior Member
Date of Orders: 17 May 2011
Date of Reasons for Decision: 17 May 2011
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 1292 of 2010
BETWEEN:
BOZICA & PERO MARCINKO
Applicants
AND:
ION BOCEANU
1st RESPONDENT
ILEANA BOCEANU
2nd RESPONDENT
B&R AUSTRALIA IMPEX PTY LTD
3rd RESPONDENT
RENATO CERVO AND MARGARET CERVO
4TH RESPONDENTS
TRIBUNAL: Ms J. Lennard, Senior Member
DATE: 17 May 2011
ORDER
The 4th Respondents, Renato Cervo and Margaret Cervo, are to pay an amount of $9,302.13, being $9,183.13 wrongly claimed under the bank guarantee and $119 filing fee, to the Applicants within 14 days of the date of this order.
The Applicants have leave to file within 14 days submissions in relation to costs of the matter and/or interest on the above amount.
………………………………..
Ms J Lennard
Senior Member
REASONS FOR DECISION
The 4th Respondents are the owners of Block 14 Section 44 Ngunnawal. This is a complex of 7 commercial units, each of which is tenanted by separate businesses: including a real estate agent, video hire, chemist shop, hair dressing salon, take away food shop, bakery and supermarket. Each and every one of these commercial units is connected to the grease trap, which is located in the common area of the complex. A copy of the plan of the ground floor of the complex was before the Tribunal and is Exhibit 1.[i]
Unit 3 of the complex is operated as a takeaway food shop: ‘Ngunnawal Takeaway’.
The 4th Respondent, as lessor, and the Applicants, as lessee, entered into a lease in relation to Unit 3 for a five year term commencing 1 April 2004 and expiring 31 March 2009. A copy of the lease was before the Tribunal as attachment B to the amended application and is Exhibit 2.
The Applicants sold the business of the Ngunnawal Takeaway to the 3rd Respondent pursuant to a Deed of Sale of Business dated 17 November 2005. A copy of the Deed of Sale of Business was before the Tribunal as attachment A to the amended application and is Exhibit 3. The 3rd Respondent occupied the premises under a licence from the Applicants as provided in the Deed of Sale of Business. Under Clause 18(c)(ix) of that Deed the 3rd Respondent agreed to comply with the terms of the lease between the Applicants and the 4th Respondent as if the 3rd Respondent was the lessee. The 1st and 2nd Respondents guaranteed the performance of the obligations of the 3rd Respondent.
After the expiration of the first lease, referred to in paragraph 3 above and therefore also the expiration of the licence agreement referred to in paragraph 4 above, the 4th Respondent, as lessor, and 3rd Respondent, as lessee, entered into a lease in relation to Unit 3 for a 10 year term commencing 1 April 2009.
Under Clause 19 of the first lease referred to in paragraph 3, the Applicants had given a bank guarantee to the lessor for the payment of amounts arising under clause 12 of the lease.
Clause 12(1) of the lease provides: The Lessee will promptly pay throughout the term for any electricity, power, fuel, gas, oil, water, telephone, garbage removal, waste disposal and other services or utilities provided by public, local or statutory or other authorities or suppliers to the Premises, to the supplier of the service or utility.
In June or July of 2009, the 4th Respondent called on the bank guarantee given by the Applicants in the amount of $9,183.13. This amount related to the costs incurred over the period of 9 February 2005 to 22 April 2009. In the response to the claim, the 4th Respondent relies on clause 12 above as entitling him to claim from the lessees the cost of cleaning the grease trap.
The Applicants have brought an application against the 3rd Respondent pursuant clause 18(c)(ix) of the Deed of Sale of Business, and the 1st and 2nd Respondents pursuant to their guarantee of the performance of the 3rd Respondent’s obligations. The Applicants claim an amount of $8,093.23 being $7,974.23 relating to the costs of cleaning the grease trap during the licence period and $119 application fee.
The matter came before the ACT Civil & Administrative Tribunal (the ACAT) on 1 February 2011.
Issues for decision
The key issue for the Tribunal is to determine whether Clause 12 of the lease obliges the tenant to pay for the cleaning of the grease trap. This is a matter of interpretation of the contract for lease.
In giving meaning to the words of a contract, the Tribunal’s role is to determine and declare what the words used by the parties mean. The primary guide in this process of interpretation is the objective intention of the parties, which may be gathered from evidence of the words used and the conduct of the parties. The meaning of a clause is to be determined by construing the clause according to its usual and natural meaning, read in the light of the contract as a whole.[ii] Contracts are not created or performed in a vacuum and the meaning of the contract may be gathered from the words used, the surrounding circumstances and the conduct of the parties.[iii]
The lease itself does not specifically refer to cleaning of the grease trap. The issue then is whether the cleaning of the grease trap falls within the other services ... provided ... to the premises within Clause 12? “Premises” is defined in the lease in Part 1(z) to include the internal area of the area leased, lights and fittings, lessor’s fixtures and pipes wholly within and exclusively serving the premises. The front page of the lease describes the AREA BEING LEASED thus “Unit 3 on S.L. Plan No. 3885 (“Premises”)”. Clause 12 means that the lessee will pay to the supplier the costs of any services provided to the Premises.
The grease trap is located, not in the premises, but in the common area.
Mr Cervo ( the 4th Respondent and landlord of the complex) gave evidence that the grease trap is connected to each shop in the complex. Mr Cervo asserted that the only tenant which made use of the grease trap was the takeaway and therefore that the tenants of the takeaway should pay for the cleaning. There was no evidence to support this assertion and the Tribunal finds that it is more likely than not that the tenants of the other units in the complex also make some use of the grease trap. Thus the grease trap is a benefit to the entire complex, the cleaning of the grease trap is not a service provided to the tenants of Unit 3 only, but a service provided to the complex. Thus according to the ordinary meaning of the words used, there is no obligation on the tenants or licensee of Unit 3 to pay for the cleaning of the grease trap. The facts that the takeaway shop may produce more grease than any of the other shops in the complex is irrelevant in the circumstances.Mr Cervo gave evidence to the Tribunal that he pays the costs of water supply and garbage removal for the complex and does not pass these costs directly on to the tenants.
Mr Cervo gave further evidence that he had always paid the cost of cleaning the grease trap; he had claimed this cost as a landlord’s expense in his tax returns at least since April 2004 and he had made no formal demand of either the Applicants or 3rd Respondent for reimbursement of the costs of cleaning the grease trap in the period from April 2004 to April 2009.
The Disclosure statement provided by the lessor prior to the commencement of the lease with the Applicants in April 2004 makes no mention of the lessee’s obligation to pay the costs of cleaning the grease trap. However, the disclosure statement provided by the lessor prior to entering into the new lease with the 3rd Respondent in April 2009 states that the tenant is required to regularly clean and maintain the grease trap.
Thus an examination of the conduct of the parties and surrounding circumstances confirms the intention found in the ordinary meaning of the words: that the tenant is not obliged to pay the cost of cleaning the grease trap.
The claim against the 1st, 2nd and 3rd Respondents is dismissed. The lease does not oblige the 3rd Respondent to pay the cost of cleaning the grease trap and there is no call upon the guarantee of the 1st and 2nd Respondents.
The calling upon the bank guarantee given by the Applicants for the payment of $9,183.13 was not in compliance with the terms of the lease and is therefore invalid. While the claim is for a lesser amount, the claim was amended after the Tribunal ordered that the 4th Respondent be joined in the matter, and, the evidence of written correspondence between the parties reveals that the lessor called on the bank guarantee in the amount of $9,183.13. The ACAT amends the application to a claim for $9,183.13 under section 47 of the ACT Civil and Administrative Tribunal Act 2008.
………………………………..
Ms J. Lennard
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: XD 1292 of 2010
APPLICANT:
RESPONDENT:
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
SOLICITORS: APPLICANT:
RESPONDENT:
OTHER: APPLICANT:
RESPONDENT:
TRIBUNAL MEMBER/S:
DATE/S OF HEARING: PLACE: CANBERRA
DATE/S OF DECISION: PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
[i] ACAT has allocated exhibit numbers to those documents, to which it refers during this decision, in the process of writing the decision. The exhibit numbers were not allocated during the hearing.
[ii] Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510 -511.
[iii] Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd [1990] VR 834.
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