O'Brien v Rushworth
[2011] NSWADT 115
•25 May 2011
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: O'Brien v Rushworth [2011] NSWADT 115 Hearing dates: 11 May 2011 Decision date: 25 May 2011 Jurisdiction: Retail Leases Division Before: K Rickards Judicial Member Decision: 1. The Applicant (O'Brien) is permitted immediate re-entry into possession of the premises located at 30 Nana Street, Nana Glen NSW subject to the conditions as contained within order 5 below.
2. The Respondents (Rushworth) are to immediately provide to the Applicant all keys to enable access to all parts of the premises.
3. The portion of the interior wall of the gallery at the premises which was removed by the Applicant is to be replaced and re-painted to a proper and tradesman like standard within 21 days of the date of these orders with the cost of such work to be paid by the Applicant.
4. The Applicant is to pay to the Respondents the sum of $94 in respect of the mediation fee and a further sum of $185 in respect of lockout fee incurred on 7 March 2011, such payments to be made to the Respondents on or before 10 June 2011.
5. Within 24 hours of being provided with keys to enable access to the premises, the Applicant is to pay rent in advance to the Respondents for the period from the date upon which keys are provided up to and including 9 June 2011 calculated at the rate of $39.73 per day.
6. The Applicant is to pay rent as due and payable pursuant to the terms of the retail lease agreement monthly in advance the first payment to be made on or before 10 June 2011 and thereafter to be paid monthly in advance on or before the 10 th day of each succeeding calendar month.
7. Unless either party files and serves written submissions seeking a costs order within 14 days, each party is to bear its own costs. If such submissions are filed, the other party is to file and serve any written submissions in reply within 14 days, and a decision as to the costs will then be made "on the papers".
Catchwords: Relief against forfeiture; compensation Legislation Cited: Retail Leases Act 1994 Cases Cited: Galaxy Catering Pty Ltd v Trust Company of Australia Ltd [2006] NSWADT 182 Category: Principal judgment Parties: Julianne Fay O'Brien (applicant in 105167 respondent in 115051)
Craig Thomas & Marguerite Anne Rushworth (respondents in 105167 applicants in 115051)Representation: S Campbell solicitor for O’Brien
L Juhasz solicitor for Rushworth
File Number(s): 105167, 115051
REASONS FOR DECISION
The original Application filed in these proceedings by the Applicant Ms O'Brien ("the lessee") sought certain orders which were subsequently amended to include:
(a) Orders granting her relief against forfeiture of her rights as lessee pursuant to a retail lease agreement dated 10 July 2009 relating to retail shop premises at 30 Nana Street, Nana Glen NSW known as the "Lady Matilda Caf" ("the premises");
(b) orders relieving the lessee from any obligation to pay rent as and from 7 March 2011 until such time as possession of the premises was returned to her; and
(c) orders to remedy certain alleged structural defects at the premises.
A cross application was filed by the lessors Mr and Mrs Rushworth ("the lessors") which sought orders that the lessee pay compensation to the lessors for unpaid rent, outgoings, repairs and rectification costs at the premises, cleaning and gardening costs, lockout charges and a foregone mediation fee.
Both parties have also sought costs orders against the other. At the conclusion of the hearing, the parties were advised that they would be permitted a period of 14 days each in which to make or respond to any submissions as to costs, in the event that either party still wished to maintain such application.
The lessors locked the lessee out of the premises on 7 March 2011 because the amount of $408.50 had not been paid by the lessee toward water access charges and non-domestic waste charges levied by Coffs Harbour City Council, as required both by the terms of the retail lease agreement and by the terms of an order made by the Tribunal on 17
February 2011 that "all outstanding outgoings" were required to be paid by the lessee as a condition of her remaining in possession of the premises at that time.
The lessee was also ordered on 17 February 2011 to pay the due monthly rental of $1,191.67. This amount was paid by the lessee on the following day. It is clear that the lessee had also been late with rent payments on a number of occasions in the past, but not for what may be described as extraordinarily long periods nor for large sums of arrears.
There is no issue between the parties that the lessee also paid the sum of $408.50 in respect of the subject outgoings; the problem was that, instead of paying the sum to the lessors or to their solicitor, the lessee paid this sum directly to Coffs Harbour City Council where it was credited against a different outgoing, namely "water usage". Understandably, the lessors were unaware of this payment and saw this perceived failure of the lessee to pay the required outgoings as a valid ground to again lock the lessee out of the premises, a lockout having previously occurred in late 2010.
The lessors' application was originally framed in such a way as to seek rent for the period from 10 March 2011 through until the terminating date of the lease, but at the hearing this claim was amended to be only until 9 June 2011 because of the lessors' stated intention to attempt to sell the premises with vacant possession.
It is clear that there have been a number of festering issues between the parties which have caused a degree of unhappiness between them over the period of the term of the lease. This has unfortunately resulted in a number of ancillary issues being raised both within the filed applications which do not relate to the forfeiture issue, and other issues which in fact had not been pleaded, such as the complaint about the lessee using a deep fryer at the premises.
In relation to the claims for structural repair made by the lessee, what emerged from the evidence was that the lessors have been diligent in attending to problems and complaints at the premises which largely consist of an old but renovated weatherboard building located within a rural village. I would not have considered that the lessors bore any responsibility to effect rectification or repairs in the terms as sought by the lessee in her application and a correct decision was made on behalf of the lessee not to press these aspects of the claim at the end of the hearing.
10 On the other hand, the lessee did admit to removing part of the wall in the gallery located at the premises of her own volition, and not refixing the subject portion. Liability for this must rest with the lessee.
11 It must also be remarked here that it is regrettable that the history of dealings between the parties was such that, upon a perceived failure by the lessee to pay the sum of $408.50 as outgoings, the lessors acted without further notice to effect an immediate lockout from the premises. Had there been any attempt at contact with the lessee, the fact that payment in the relevant sum had been made would have been easily established and the subsequent lockout averted.
12 The lessors seek payment of rent from date of lockout up to and including 9 June 2011. They also claim that the lockout was justified and understandably ask that their circumstances as comparatively small scale landlords relying upon rental income in order to pay a mortgage be taken into account in considering what orders should be made in respect of the premises.
13 The relevant law relating to a situation such as this is set out within the decision of President O'Connor of this Tribunal in Galaxy Catering Pty Ltd v Trust Company of Australia Ltd [2006] NSWADT 182, particularly at paragraphs 25 through to 28; to summarise, it is only in very rare circumstances that a court or tribunal will refuse to grant relief against
forfeiture to a tenant who has remedied a default.
14 The lessors point to a bank statement of the lessee as indicating that she has been operating in what may be described as tight financial circumstances such that the prospect of rent or outgoings being paid in the future is somewhat doubtful. I do not accept that submission. What emerges from the evidence is that, by and large, the lessee has managed to pay rent during the time that the business under her management has been operating and in circumstances, which I accept, where she has lost both parents within a comparably short time of each other which may understandably have taken her attention from the business. The previous rent arrears have not, in my view, been of an aggravated nature. It should also again be noted that the subject lockout was not based upon any non payment of rent but rather upon alleged non payment of an outgoing, the amount of which had been credited in favour of the lessors with the relevant Council.
15 I am satisfied that it is appropriate that the lessee be granted relief against forfeiture and that possession of the premises be returned to her. There was no rent or outgoing actually unpaid in respect of the premises at the time that the lockout occurred; accordingly, it is not considered appropriate that there be imposed any particular pre-condition as to payment of rent other than a requirement that rent covering the period from the date that the lessee re-enters the premises up until the next date when monthly rent in advance is required, should be paid in advance.
16 There are claims for lockout fees. The original lockout fee relates to 11 October 2010 and was the subject of a previous hearing by this Tribunal. I do not propose to now make an order in respect of a matter which was clearly before the Tribunal, or should properly have been put before the Tribunal, on a previous occasion. The lockout fee referable to 7 March 2011 in the sum of $185 has been agreed to be paid by the lessee. Similarly, the lessee has agreed to pay the cancelled mediation fee in the
sum of $94. There is also no issue raised by the lessee that she should meet the cost of restoring and re-painting the affected area of the wall in the gallery of the premises.
17 Given that the lessee is to be granted relief against forfeiture, the claims made by the lessors for lawn and garden maintenance and for cleaning and restoration of the premises are otiose.
18 The relevant outgoing upon which the lockout was based was a relatively small amount, and payment of this very amount had been made by the lessee to the provider of the service for which the outgoing was payable but the payment was erroneously applied against another outgoing. This fact could have been easily discovered had there been any meaningful and timely contact between the parties and in the circumstances, the decision to lockout the lessee was premature. The lessee has not been able to operate her business at the premises for the period from 7 March 2011 to date and there has accordingly been no consideration in respect of any rent which would normally be due and payable for this period. As such, it is inappropriate that there be any order made for payment of rent arrears for the period 7 March 2011 to date. The premises remain vacant, and possession should be returned to the lessee, subject to conditions as set out below.
19 The lessee's solicitor indicated at the end of the hearing that the lessee would acquiesce to a limited order for restoration of possession of the premises to extend only until 31 December 2011 but with the proviso that, if she successfully sold her business then the full term and rights to an option under the subject lease agreement would be transferable to the purchaser. It is inappropriate that this concession be incorporated within the orders to be made, given that the provisions of clause 10 of the retail lease agreement dealing with transfer and sub lease must be complied with in any event, and that the lessee has contracted with the lessors for the full term of the lease.
ORDERS
The Applicant is permitted immediate re-entry into possession of the premises located at 30 Nana Street, Nana Glen NSW subject to the conditions as contained within order 5 below.
The Respondents are to immediately provide to the Applicant all keys to enable access to all parts of the premises.
The portion of the interior wall of the gallery at the premises which was removed by the Applicant is to be replaced and re-painted to a proper and tradesman like standard within 21 days of the date of these orders with the cost of such work to be paid by the Applicant.
The Applicant is to pay to the Respondents the sum of $94 in respect of the mediation fee and a further sum of $185 in respect of lockout fee incurred on 7 March 2011, such payments to be made to the Respondents on or before 10 June 2011.
Within 24 hours of being provided with keys to enable access to the premises, the Applicant is to pay rent in advance to the Respondents for the period from the date upon which keys are provided up to and including 9 June 2011 calculated at the rate of $39.73 per day.
The Applicant is to pay rent as due and payable pursuant to the terms of the retail lease agreement monthly in advance the first payment to be made on or before 10 June 2011 and thereafter to be paid monthly in advance on or before the 10 th day of each succeeding calendar month.
Unless either party files and serves written submissions seeking a costs order within 14 days, each party is to bear its own costs. If such submissions are filed, the other party is to file and serve any written submissions in reply within 14 days, and a decision as to the costs will then be made "on the papers".
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Decision last updated: 25 May 2011
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