Matthias v Scott

[2000] TASSC 88

[2000] TASSC 88

CITATION:              Matthias v Scott & Anor [2000] TASSC 88

PARTIES:  MATTHIAS, Glenn
  v
  SCOTT, Brian Murraine

SCOTT, Marlene Elizabeth
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED (ACN 005 337 522)

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  308/1996
DELIVERED ON:  3 July 2000
DELIVERED AT:  Hobart
HEARING DATES:  30 June, 3 July 2000
JUDGMENT OF:  Underwood J

[Edited reasons for judgment delivered orally]

CATCHWORDS:

Landlord and Tenant - Rent - Recovery - Distress for rent - Unlawful distress - Unlawful entry - Irregular distress - What constitutes.

Landlord and Tenant Act 1932 (Tas).
Aldenburgh v Peaple (1834) 6 C & P 212: 172 ER 1212; Nash v Lucas (1867) LR 2 QB 590; Ryan v Shilcock (1851) 7 Ex 72: 155 ER 861; Darby v Harris (1841) 1 QB 895; Beck v Denbigh (1860) 29 LJ C P 273; Lucas v Tarleton (1858) 3 H & N 116: 157 ER 409, applied.
Aust Dig Landlord and Tenant [55]

REPRESENTATION:

Counsel:
             Plaintiff:  In Person
             Defendants:  C J Boland
Solicitors:
             Plaintiff:  In Person
             Defendants:  Chris Boland

Judgment Number:  [2000] TASSC 88
Number of Paragraphs:  30

Serial No 88/2000
File No 308/1996

GLENN MATTHIAS v BRIAN MURRAINE SCOTT and
MARLENE ELIZABETH SCOTT and
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED (ACN 005 337 522)

REASONS FOR JUDGMENT  UNDERWOOD J
(DELIVERED ORALLY)  3 July 2000

1. The plaintiff claims damages against the defendants for wrongful distress and interest.  The defendants put in issue the plaintiff's claim and counterclaim damages for breach of covenant to pay rent and other outgoings.  The plaintiff put in issue the allegations in the counterclaim and further alleged that any damages that might be established should be reduced by reason of the defendants' failure to mitigate their loss.

1. The dispute concerns a restaurant at St Helens.  It was and is owned by the defendants.  Prior to 7 January 1994, the restaurant was leased to another.  In some manner, not made entirely clear by the evidence, the plaintiff operated the restaurant as a sub-tenant of the then lessee between 7 January 1994 and 18 February 1994.  Thereafter, the relationship between the plaintiff and the defendants was governed by a written lease.  Although this lease was not signed until 9 November 1994, it was expressed to commence on 18 February 1994.  The demised term was for a period of five years from that date.  The lease made provision for payment of rent in advance in the sum of $1,226.76 per month, together with certain outgoings.  The lease contained a provision for rental increases upon each anniversary date.

1. The plaintiff carried on the business of a restaurant at the demised premises with goods, chattels, stock and equipment, all of which were subject to a bill of sale to the ANZ Bank.  It is not disputed that the plaintiff fell into arrears with his rent.  There were several meetings between the plaintiff and the defendants with respect to this towards the end of 1994. 

1. As the rent remained in arrears, the defendants distrained upon the plaintiff's goods and chattels in the demised premises on 3 April 1995.  It is this distraint that is the subject matter of the plaintiff's claim.  Although the plaintiff does not dispute that he was in arrears with his rent on 3 April 1995, he does dispute the amount of that rent.  However, that issue has been conclusively determined against the plaintiff by a judgment on the counterclaim in these proceedings in the sum of $3,045.30.  This judgment was entered on 3 September 1999 upon an application for summary judgment.  The judgment further provides that the damages on the counterclaim after 3 April 1995 are to be assessed. 

1. Accordingly, I find as a matter of law that on 3 April 1995, the defendants were entitled to distrain upon the plaintiff's goods for arrears of rent.  In so finding, I note that this ancient self-help remedy, conferred upon the defendants by virtue of the common law, has been abolished in all States of Australia, other than South Australia and Tasmania. 

1. The defendants distrained by entering onto the leased premises and notionally seizing all the plaintiff's goods and chattels in the restaurant.  The plaintiff's claim is that the distress was unlawful in that:

·   the manner of entry was unlawful; and/or

·   the extent of the distress was excessive in the light of the extent of the arrears; and further

·   some of the goods distrained upon were tentant's fixtures.

1. It was further alleged by the statement of claim that the distress was unlawful in that it was carried out after sunset.  See Aldenburgh v Peaple (1834) 6 C & P 212: 172 ER 1212; Tutton v Darke (1865) 5 H & N 647: 157 ER 1338. This claim is not made out. The plaintiff was not present when distress was effected and he gave no evidence of the time of sunset on that day. The first defendant's evidence was that distress was effected at 5.45pm and that sunset occurred at 5.57pm.

1. The common law is quite clear that the distrainor's entry must be peaceable.  A distrainor may open an outer door if closed, or further open an already open window to gain entry.  If necessary, an outer door may lawfully be opened by turning a key or drawing a bolt.  See Nash v Lucas (1867) LR 2 QB 590 at 593; Ryan v Shilcock (1851) 7 Ex 72: 155 ER 861. If the destrainor effects an unlawful entry, he or she is liable for the whole of the goods distrained or their value. See Attack v Bramwell (1863) 3 B & S 520: 122 ER 196.

1. As I have said, the plaintiff was not at the premises when they were entered but claimed that the premises were secured by him when he left at the close of business on 3 April 1995.  The unchallenged evidence was that there were two exterior entrances to the demised premises.  The one used by the public consisted of double doors at the front of the restaurant which were locked by bolts which could not be undone from the outside.  The other entrance was down the side of the building and gave immediate access to a storeroom at the rear of the restaurant.  This door was the only one that could be used to gain access when the front doors were locked.  Viewed from the outside immediately prior to the distraint, this door carried a bolt and a deadlock.  The plaintiff said that when he left on 3 April 1995, he secured the door by locking the deadlock.

1. According to the first defendant's evidence, he approached the door and noted that the bolt had been shot home with its handle turned up over the upper lug of the bolt.  The first defendant said that through the bottom lug was a closed padlock.  According to this then, the padlock was not locked in a position that prevented the handle of the bolt being rotated and the bolt withdrawn.  The first defendant said that he did just this and the door opened freely.  He said that on the inside he noted that although the back plate of the deadlock was there, the mechanism of it had been entirely removed.  Thus, according to the first defendant's evidence, he entered the premises lawfully and effected distress on the plaintiff's goods and chattels.

1. The first defendant said that when he was inside the storeroom he used a key that he had to open the door which gave access from the storeroom to the kitchen of the restaurant.  Later that evening, the second defendant advised the plaintiff on the telephone that they had distrained upon his goods and chattels. 

1. The first defendant concluded his account of the distress by saying that at 9.45am the next morning, 4 April 1995, he broke the bottom lug to enable him to remove the plaintiff's padlock and thereafter secured the door by sliding the bolt and placing a padlock through the upper lug. 

1. The undisputed evidence from the plaintiff was that about 12.30pm on 4 April 1995, he found himself locked out of the demised premises.  There was no sign of any damage to the doors or windows.  He did not know how the first defendant had effected his entry.  The plaintiff said that he then took two photographs of the door locks on the door to the storeroom, taken from the outside.  These photographs were tendered in evidence.  The first defendant also tendered photographs of the storeroom door, but they were taken only a few days ago.  One of those photographs was of the inside of the door showing only the plate of the deadlock and no mechanism in place. 

1. The curious thing is that the plaintiff's photographs show that the bottom lug is undamaged.  The first defendant's photographs show the bottom lug cut through.  The first defendant was adamant that he cut that lug at 9.45am on the day after the distress in order to remove the plaintiff's padlock and it has remained in that state ever since.  He was unable to explain how it was that the photographs taken by the plaintiff showed the lug in an undamaged condition. 

1. According to the evidence of the second defendant, she locked the exterior door when she left the premises on 3 April after completing an inventory of goods distrained.  She, too, said that there was no mechanism on the deadlock.  She said that she shot the bolt home and locked it in position with a new padlock that was supplied to her for the purpose by Mr Barker, a carpenter called in by the defendants.  Thus there were two padlocks on the door.  She was unable to explain why only one padlock is depicted on the photographs taken by the plaintiff at 12.30pm the next day.

1. Mr Barker gave evidence that he secured the main doors to the restaurant so that they could not be opened from either the inside or the outside, and changed the locks on the door leading from the store room to the kitchen of the restaurant.  He said that as he went in and out of the back door, he noticed that there was no mechanism for the deadlock, the face of which could be seen on the exterior of the back door.  This evidence is in direct conflict with the evidence given by the plaintiff.

1. It is highly improbable that the plaintiff took the photographs of the door locks before the distress.  He did not know in advance that the distress was going to occur and there would be simply no reason to take two close up photographs of the door locks unless there had been distress.  The plaintiff's evidence in this respect was not the subject of serious challenge.  However, it cannot stand with the evidence of both defendants.

1. The state of the evidence is such that I am unable to make any positive finding about the existence or non-existence of a mechanism for the dead lock.  Further, the state of the evidence is such that I am unable to make a finding about the state and location of the padlock at the moment the first defendant approached the door in order to enter and distrain on the plaintiff's goods.  There are too many conflicts in the evidence to enable one view to appear more likely than another.  However, the inability to make findings about those matters is of no consequence because on any view of the evidence, there was no forced entry of the premises.  This leads me to the conclusion that either the back door was as described by the first defendant, or that he had a key or keys and used them to gain entry.  This finding is sufficient to enable a determination of the plaintiff's claim, for it is incumbent upon the first aspect of his claim for unlawful distress to establish that the building was wrongfully entered, ie, other than by means of drawing back the bolt and/or using a key.  As I have said, all of the evidence points to the conclusion that entry was effected by one or both of those means, for there was no sign of forced entry or damage to the door or door frame.

1. With respect to the items listed in the statement of claim, par8, the plaintiff gave evidence that they and three other items were distrained upon and that they were fixtures.  They appear in the inventory which, together with the notice of distress, was served upon the plaintiff shortly after the distraint.  The plaintiff did not describe the manner in which these goods were attached to the realty, but I infer from their nature that all of them were in the nature of tenant's fixtures. 

1. Tenant's fixtures are exempt from distress.  See Darby v Harris (1841) 1 QB 895; Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344. However, although the tenant's fixtures cannot be distrained upon, it was held in Beck v Denbigh (1860) 29 LJ C P 273, that merely including tenant's fixtures in a notice of seizure without actual seizure and severance will not make the landlord liable for damages for unlawful distress. 

1. It was common ground that the defendants did not sell any of the goods distrained upon.  The ANZ bank, in exercise of its power of sale under the bill of sale, effected a sale of the plaintiff's goods and chattels.  Whether such sale included any tenant's fixtures is unclear on the evidence, but even if it did, such sale did not amount to actual seizure and/or severance by the defendants. 

1. The claim of excessive distress is not made out.  Unless privileged under some exceptional law, all the plaintiff's personal chattels on the demised premises were liable to be distrained.  See Gilman v Elton (1821) 3 B & B 75: 129 ER 1211. However, any distress must not be excessive. A distress must be clearly proportional to the rent and any costs, taking into account the conditions under which a forced sale of the goods must take place. See Field v Mitchell (1807) 6 Esp 71: 170 ER 833. Although the plaintiff did not adduce any evidence of the value of his goods, such evidence was given by the first defendant. He said that the ANZ Bank offered the goods up for sale by public tender. He said that the defendants tendered $12,500 and bought the goods from the Bank for that sum, inferentially, as the highest tenderer. Upon the evidence of the second defendant and of a letter written by the plaintiff's solicitor, I find that at the time of the distress the arrears of rent and other outgoings under the lease were in the vicinity of $9,000. Accordingly, it is not established that the distress was excessive.

1. In any event, a claim of excessive distress is really a claim for irregular distress.  See Megson v Mapleson (1883) 32 WR 318.  At common law a claim for damages for irregular distress cannot be maintained without proof of special damage.  Without that proof, the plaintiff is not entitled to recover even nominal damages.  See Lucas v Tarleton (1858) 3 H & N 116: 157 ER 409; Rodgers v Parker (1856) 18 CB 112: 139 ER 1308. There was no evidence of the plaintiff suffering damage by reason of irregular distress.

1. By the statement of claim, par11, it is alleged that the defendants distrained upon the goods set out in that paragraph, but such goods were not listed in the inventory.  Although the plaintiff gave evidence by way of general assertion that these goods were distrained upon but not listed in the inventory, he did not make out this allegation as pleaded in whole or in part.  In his cross-examination, the first defendant admitted that some goods, not listed in the inventory, were part of the distress, but said that these goods were later returned to the plaintiff.  There is no evidence that the plaintiff suffered any damage by reason of this and in any event, failure to give notice of distress by way of not including all the goods on the inventory is an irregularity in the event of a sale, but does not render the distress invalid.  See Trent v Hunt (1853) 9 Ex 14: 156 ER 7; Lucas v Tarleton (supra).  The allegation in the statement of claim, par11, is not made out.

1. For the foregoing reasons, the plaintiff's claims have failed and there will be judgment for the defendants against the plaintiff on the claim.

1. By the counterclaim, reserved for assessment by virtue of the summary judgment to which I have referred, the defendants claim rent from 4 April 1995 until 31 May 1996, when the premises were relet, calculated at the rate of $1,226.76 per month.  The defendants abandon any claim for increased rental due by virtue of the rent increase clause. 

1. It is not disputed that the premises were relet on 31 May 1996 and, accordingly, as a matter of arithmetic, the damage for the breach of covenant to pay rent for that period amounts to $17,060.

1. I am satisfied from the evidence that the defendants did all they could to mitigate their loss.  Within days of the distress, the first defendant notified the local real estate agent that the premises were available for lease and a notice to that effect was put in the window.  It is also clear that the plaintiff did take a part, and was encouraged by the defendants to take a part, in trying to find another tenant for the premises.  In November of that year, it seemed as though new tenants had been found.  There was correspondence between solicitors but, in the end, the deal fell through.  It was not suggested that there was anything else that the defendants could have done or ought to have done to relet the premises sooner than they did.  Indeed, in the knowledge that the plaintiff could not pay his rent, it is highly improbable that they would not have taken every step they considered reasonably open to them to relet the premises and thus enable it to generate income.

1. On the counterclaim, there will be judgment for the defendants against the plaintiff for the sum of $17,060.  The plaintiffs sought no order for costs.

1. As ordered at the commencement of the trial, the third party proceedings between the defendants and the ANZ Bank are adjourned sine die.