Owners of Strata Plan 13529 v Fowler
[2013] WADC 5
•18 JANUARY 2013
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: OWNERS OF STRATA PLAN 13529 -v- FOWLER [2013] WADC 5
CORAM: DEANE DCJ
HEARD: 10-13 APRIL 2012
DELIVERED : 18 JANUARY 2013
FILE NO/S: CIV 3224 of 2010
BETWEEN: OWNERS OF STRATA PLAN 13529
Plaintiff
AND
BRENT FOWLER
Defendant
Catchwords:
Lease of a residential unit - Lease expired - Defendant sent a copy of the new lease - Fire at unit before new lease signed and returned - Whether defendant holding over pursuant to lease - Whether defendant a sole tenant - Proof of damage to property and claim for loss of opportunity to rent unit - Whether this is an apportionable claim for purposes of Pt 1F of the Civil Liability Act 2002 - Whether either or both of two of the clauses in lease oust proportionate liability provisions of the Act pursuant to s 4A of the Act if it is an apportionable claim
Legislation:
Civil Liability Act 2002
Supreme Court Act 1935
Result:
Judgment for plaintiff in sum claimed plus interest
Representation:
Counsel:
Plaintiff: Mr M N Blandford
Defendant: In person
Solicitors:
Plaintiff: Corser & Corser as agent for Mason Black Lawyers
Defendant: Not applicable
Case(s) referred to in judgment(s):
Aquagenics Pty Ltd v Break O'Day Council (No 2) [2009] TASSC 89
Bofinger v Kingsway Group Ltd (2009) 239 CLR 269
Coghlan v SH Lock (Australia) Ltd (1987) 8 NSWLR 88
Commonwealth Bank of Australia v Witherow [2006] VSCA 45
Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500
Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450
Draper v Crofts (1846) 153 ER 807
F & D Normoyle Pty Ltd v Transfield Pty Ltd (2005) 63 NSWLR 502
Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd (2008) 21 VR 84
Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VCSA 355
Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187
Tancred v Christy (1843) 152 ER 1219
DEANE DCJ:
The pleadings, background and issues
The defendant's application for an adjournment of this trial was opposed by the plaintiff and was heard and dismissed on 10 April 2012. The defendant initially had legal representation but some months prior to trial that had ceased for financial reasons and so the defendant, Mr Fowler, represented himself at the trial.
The plaintiff is a strata company created under s 32(1) of the Strata Titles Act 1985 (WA) in respect of a group of three residential units located at 121 Stock Road in Attadale, although location is sometimes referred to as the suburb of Bicton (the plaintiff's premises). For ease of reference in these reasons the location will be referred to as Attadale. It is alleged that at all material times the defendant Mr Fowler was tenant and/or occupant of Unit 1 of the plaintiff's premises. Although it might be said there is an issue as to whether the defendant was the sole tenant or one of a number of tenants of that particular unit, in the end in the submission of counsel for the plaintiff that is not material. On or about 21 June 2007 the defendant and the owner of the tenanted premises entered into a standard residential property lease agreement in respect of Unit 1 (the lease agreement). The particulars of that lease agreement included among other things:
(a)the defendant was listed as a tenant;
(b)the tenancy was to commence on 22 June 2007 and end on 10 May 2008 unless extended by way of cl 6.1 referring to periodic tenancy and holding over;
(c)the rent was to be $580 per fortnight;
(d)the tenants were to comply with all rules and by‑laws governing the use of the tenanted premises and common areas;
(e)the tenants:
(i)were to pay for any damage or repairs that arose from or were attributable to any act or omission by the tenants or other visitors (sub-clause 2.27); and
(ii)agreed to indemnify the plaintiff against any loss sustained by the plaintiff or any other sum the plaintiff might at any time be liable to pay as a result of damage to the plaintiff's premises (sub‑clause 2.36).
It is alleged that upon the expiry of the fixed term of the lease, the defendant remained in possession of those tenanted premises as a periodic tenant pursuant to cl 6.1 of the lease agreement. Further, on or about 15 May 2008, the real estate agent for the owner of the defendant's tenanted premises forwarded to the defendant a new lease which included the defendant as the sole tenant and increased the rental to $680 per fortnight. At trial counsel for the plaintiff was permitted to amend its claim to reflect the amount of rent claimed to $680 per fortnight. Counsel pointed out that if the plaintiff succeeded in this aspect of its claim the insurer had paid out on the basis of $620 rent per fortnight and so they would have to make up the difference by paying the insured an extra $60 per fortnight for loss of rental for the 12 fortnights claimed, resulting in a sum of $720.
On or about 22 May 2008 a fire originated in the defendant's tenanted premises and as a result of that fire the plaintiff's premises were damaged. According to the amended statement of claim the plaintiff has suffered loss and damage including;
(a)damage to roof area, windows, lounge room, hall, kitchen, bathroom, laundry, exterior painting, emergency repairs, electrical works, carpet and curtains; and
(b)loss of rent and consequential loss including assessor's fees.
Pursuant to the provisions and terms of the lease agreement it is said that the defendant became liable to compensate the plaintiff for the damage to the property and for the loss of rent and consequential loss. As a result of the defendant's alleged breach the plaintiff claims the sum of $92,333.13 by way of damages. That figure is made up of the following claimed amounts:
(a)loss of rent $ 8,160.00
(b)cost of repairs $81,403.13 (excluding GST)
(c)assessor's fees $ 2,772.00 (excluding GST)
$92,335.13 (note this amount later reduced by $2)
In addition to these damages the plaintiff also claims interest pursuant to s 32 of the Supreme Court Act 1935 as amended from the date of the cause of action arising to the date of judgment upon the whole of the damages awarded other than for future losses and detriments as well as their costs.
It should be noted that the claim for loss of rent is based on the loss of 12 lots of fortnightly rent in the sum of $680 per fortnight.
In an amended defence filed on 22 June 2011 the defendant admits that he was an occupant of the premises but alleges that at the time of the fire, the occurrence of which does not appear to be in dispute, three other people also occupied those premises being a Jesse Johnson, Sinaed Trotman and Matthew Smith. The defendant denies that he was 'the tenant' to the extent that:
(a)he and Matthew Smith were both named as the tenant under the original lease agreement which had expired on or around 10 May 2008;
(b)after that original lease agreement expired the defendant and Matthew Smith continued in occupancy of the premises;
(c)in December 2007, prior to the expiry of the original lease agreement Jesse Johnson moved in to the premises and became a tenant.
The defendant admits the particulars of the lease agreement pleaded but does not admit that on 15 May 2008 the real estate agent on behalf of the owner of the relevant premises forwarded to the defendant a new lease including the defendant as the sole tenant and advising of a rent increase to $680 per fortnight. Although the defendant admits that a fire occurred in the relevant premises on or about 22 May 2008 there is no admission as to the origin of the fire in the amended defence. There is an admission that the plaintiff's premises were damaged, but there is no admission as to the loss and damage allegedly suffered and for that reason the plaintiff is put to strict proof of the items of loss and damage claimed.
Although it was not really an issue which the defendant pursued at trial, the amended defence pleads that the plaintiff's failure to install a fire alarm contributed to the loss and damage claimed. The defendant has not paid for any damage or repairs or indemnified the plaintiff for any loss suffered. For this reason the defendant denies that the plaintiff is entitled to the relief claimed or any relief at all. There is a further denial that there was a breach of the lease agreement because it is pleaded that cl 2.27 of the lease agreement only requires the defendant to pay for any damage or repairs caused by the acts or omissions of the tenant or its visitors and in this particular case it is said that the plaintiff has not proven this.
The issue as to whether the defendant Mr Fowler was the sole tenant or one of a number of tenants of Unit 1 is said to be immaterial because counsel for the plaintiff argues that if the plaintiff obtains a judgment in its favour and the defendant is found to be a joint tenant then the plaintiff could not issue proceedings against any other tenants and so it does not affect the plaintiff's right to obtain the entire damages it claims from the defendant if in fact the plaintiff makes out its case.
In written submissions filed on behalf of the plaintiff a table of costs of repairs excluding the loss assessor's fees are referred to. The table is reproduced below, and reflects an amount of $2 less than in the amended statement of claim which overstated the amount claimed in this regard by $2.
Supplier Description Amount
(excluding GST
Maunder Builders WA Pty Ltd
Temporary repairs
$582.44
Melville Carpets
Supply and installation of carpets and vinyl
$3,600.00
Central Building & Maintenance (2002) Pty Ltd
Reinstatement of the premises
$76,792.00
VJ's Home Maintenance`
Curtains
$1,026.69
Total
$81,401.13
In addition in a book of documents filed on behalf of the plaintiff a number of documents were tendered without objection. These include exhibit 1, Certificate of Title vol 172 folio 918 and exhibit 2, certified copy of strata plan 13529 relevant to the building and unit in question. Exhibits 8, 9, 12, 13 and 14 are various copies of tax invoices in relation to the repairs carried out on the unit for which damages are claimed. Exhibit 10 is a copy of a tax invoice from McLarens Young International dated 13 January 2009 relevant to the loss assessor's fees excluding GST which are claimed on behalf of the plaintiff.
In an affidavit of Lisa Cole sworn on 5 April 2012 there are annexures 'LC1 ‑ LC4' which prove the strata insurance policy and attest that the insurer CGU indemnified the insured pursuant to the policy for damage claimed under claim 081WMC093328.
Paragraph 7 of that affidavit sets out a series of specific payments made for loss of 24 weeks rent as well as repairs to the premises including replacement costs of fixtures and fittings and fees payable to the loss adjustor.
Exhibit 16 is a letter dated 1 April 2011 from Cullen Babington Hughes, the defendant's former solicitors to Mason Black Lawyers in New South Wales, advising of the basis upon which the defendant's former solicitors asserted that Matthew Smith, Jesse Johnson and Sinaed Trotman were current wrongdoers. The plaintiff relies on exhibit 16 because par 3 of that document contains an admission that a heater was left on in the unit at the time of the fire and it is submitted that exhibit 16 is a document that would have been written or prepared on the defendant's instructions.
Whilst counsel for the plaintiff asserts that the plaintiff has a right to obtain its entire damages from the defendant even if the defendant is found to be a joint tenant, it acknowledges that this gives rise to a particular issue in that it is dependent on the proportional liability provisions of the Civil Liability Act 2002 (the Act) and whether they apply in this situation or not. It is argued on behalf of the plaintiff that even if those provisions do apply in this particular case, they have been ousted in any event by particular provisions of the lease, such ousting being permitted by legislation. At the time of the fire on or about 22 May 2008 the original lease had expired but the defendant was holding over as a tenant by reason of that original lease, which contained clauses ousting the proportionate liability provisions of the Act.
In this regard the plaintiff did not have an executed copy of the new lease which the managing agents sent to the defendant in respect of the premises by letter dated 15 May 2008, because it seems it was not returned to the managing agents, however the defendant remained living in the unit between the date of the expiry of the original lease and the date of the fire. A copy of that lease which is exhibit 5 contains specific reference in par 6 to holding over where it states:
If the Tenant with the prior consent of the Owner remains in possession after the expiration of the Fixed Term, then the Tenant shall remain as a periodic tenant at the rent stipulated in item 16 but shall otherwise be on the same terms and conditions as this Lease.
The defendant does not dispute that he was a tenant of Unit 1 at the relevant time however he disputes that he was the only tenant. Nonetheless cl 2 of the lease dealing with the tenant's obligations applied to the defendant as did the remaining clauses of the lease. In this regard counsel for the plaintiff relies on two specific clauses in the lease which he submits are relevant to the defendant's liability in this matter.
The first of those clauses is cl 2.27 which relates to damage and disrepair. That clause states:
The Tenant shall pay for any damage or repairs that arise from or are attributable to an act or omission by the Tenant or the Tenant's visitors. The Tenant agrees to report all damage and any state of disrepair to the Premises within three days of the same occurring. Failure to do so will render the Tenant liable for all costs incurred by the Owner as a result of such failure to report.
With respect to this clause the plaintiff's case is that if the fire was started by reason of one of the defendant's visitors leaving a heater too close to flammable material such as a mattress in the unit, the defendant is liable for the resulting damage. The other clause on which the plaintiff relies, which is more direct in nature, is cl 2.36 which is an indemnity clause. Counsel for the plaintiff argues that this particular clause is in two parts which must be considered separately. The defendant, as will become apparent later, takes issue with this interpretation. Clause 2.36 states:
The Tenant agrees to indemnify the Owner against any loss sustained by the Owner or any sum the Owner might at any time be liable to pay, as a result of damage to the Premises or any furniture or chattels belonging to the Owner or in relation to any claim made against the Owner, whether in relation to property damage or personal injury, or any other matter whatsoever, arising from any negligent act or omission on the part of the Tenant or anyone visiting the Tenant at the Premises from time to time.
With respect to cl 2.36 the plaintiff's case is that there was a fire and however it was caused there was resulting damage to the premises and pursuant to the first limb of the clause it is said that the defendant is liable. Counsel for the plaintiff submits that the second part of the clause containing the words
whether in relation to property damage or personal injury, or any other matter whatsoever, arising from any negligent act or omission on the part of the Tenant or anyone visiting the Tenant at the Premises from time to time
is a second indemnity relating to a negligent act or omission on the part of the tenant or anyone visiting the tenant and the plaintiff does not rely on this part of the clause, rather it relies on the first part of cl 2.36 which ends after the words 'or in relation to any claim made against the owner'. Further it is said that the second part of the indemnity clause relies on proof of negligence which counsel for the plaintiff argues it does not have to establish.
Therefore the plaintiff's case is put on two bases, the first of which is that the fire started in the unit as a result of a flammable item, for example a mattress, being placed too close to a heater that was on and as a tenant the defendant is liable even if it was a visitor who left the heater on and too close to the flammable item. On this basis counsel for the plaintiff concedes that pursuant to cl 2.27 expert evidence is required to establish the claim.
The second and alternative basis upon which the plaintiff's case is put is that there was a fire at the units which resulted in damage to Unit 1, of which the defendant was a tenant and however the fire may have started the defendant is liable to the owner to make good any damage which was caused because the defendant was a tenant of the unit. On this basis it is said that expert evidence is not required to establish the plaintiff's claim pursuant to the first part of the indemnity in cl 2.36. It simply requires proof that there was a fire, however caused, which resulted in damage to the unit of which the defendant was a tenant and it therefore follows that the defendant is liable for such damage. On this scenario it is argued that even if any expert evidence called on behalf of the plaintiff as to the fire and its origins were to be rejected by the court the plaintiff still would have a claim on this alternative basis pursuant to the first part of the indemnity in cl 2.36.
There is an issue as to whether the fraudulent liability provisions of the Act apply to the plaintiff's claim in this matter. Counsel for the plaintiff submits that its claim at the least relates to breaches of strict contractual provisions being cl 2.27 and cl 2.36 of the lease. There is, counsel submits, conflict on the authorities as to whether such a claim can be said to arise from a failure to take reasonable care and that is a matter that will be examined later in the course of these reasons.
At this point however in order to place in context the plaintiff's claim and the position of the defendant on his case it is necessary to refer to the evidence which was called at trial.
Marilyn Hawkins
Ms Hawkins has been employed for nearly nine years as a property manager. Her employer was previously Glen O'Brien Real Estate which was the agency with whom the defendant dealt, but it then at a later point in time became known as Salt Property Group. In her capacity as property manager Ms Hawkins was responsible for meeting owners of various properties, signing management authorities, placing properties on the firm's website, advertising properties for lease, arranging leases and the signing of leases as well as meeting tenants for inspections of properties. She also dealt with rent increases with respect to various properties and maintenance issues in relation to the properties. She confirmed that Glen O'Brien Real Estate was the managing agent for Unit 1/121 Stock Road, Attadale from 2007 onwards including the date of this trial.
She was referred to exhibit 5, a lease agreement signed by the defendant and Matthew Smith and confirmed that her signature appeared as the owner/owner's agent. She also signed the document as a witness but could not recall if either the defendant or Matthew Smith were present at the time. The lease was signed on 21 June 2007 to commence the following day and to expire as previously noted on 10 May 2008. Ms Hawkins was the author of a letter from Glen O'Brien Real Estate dated 25 May 2009 to Mason Black Lawyers advising that the copy of the new lease which was sent to the tenant with a covering letter for signing on 15 May 2008 was not in the possession of the real estate agent because they had been told the lease was destroyed in the fire. That letter exhibit 6 enclosed a copy of the letter of 15 May 2008. That enclosed letter is addressed to the defendant but refers to both the defendant and Matthew Smith. It advises that the lease was due to expire on 10 May 2008 and it enclosed a new lease requesting that it be signed and initialled where indicated and returned to the real estate agent as soon as possible. It makes specific reference to the fact that the rent had increased and that Matthew Smith's name was not on the new lease. The copy of the enclosed letter was not under the name of Ms Hawkins as she was on leave at the time, but rather the person filling her position appears to have authored that document. Exhibit 7 is in exactly the same terms as the letter enclosed with exhibit 6 however exhibit 7 is addressed to the defendant at PO Box 207 Esperance WA, rather than to the address in Stock Road, Attadale.
Ms Hawkins' explanation for why it appeared that two letters were sent on the same day to the defendant at two different addresses was that she believed that the Esperance address was where the defendant's parents resided at the time and this would appear to be the case. She agreed that those two particular letters although the same in content in each case, save for the address of the defendant, appeared to have been typed in a different font. As far as Ms Hawkins was aware the defendant had a copy of the new lease but she confirmed it was not returned to her office, so all she could say was that the lease was sent to the defendant. Each of the two letters enclosing a copy of the new lease which were sent to the defendant refer to an increase in the rent but give no further information as to that matter. Exhibit 18, however, a letter of 28 April 2008 addressed to the defendant at the Esperance address descends into greater detail. It refers to both the defendant and Matthew Smith confirming that the lease agreement is due to expire on 10 May 2008 and advising that the new fortnightly rental will be $680, applicable as from 11 May 2008. It further advises that a new lease would not be offered until the outstanding rent was paid in full. An inquiry was made as to whether the tenants wished to proceed with a further lease at the new rental price. As previously noted, however, when the new lease was forwarded for signing the covering letter pointed out that Matthew Smith was not named as a tenant in the new lease.
In relation to the issue of outstanding rent Ms Hawkins was referred to a number of emails, the most recent of which is dated 19 May 2008. That email is from the defendant to Ms Hawkins giving her a receipt number for the transfer of overdue rent and inquiring if it had been received. The defendant further advised Ms Hawkins that he was currently busy with work and would bring the lease into her office as soon as he was able to do so. That email followed an email from Ms Hawkins to the defendant of 6 May 2008 requesting that he contact her office to discuss the lease and advising that Matthew Smith had already attended the office and told them he wanted his name off the lease. The defendant was advised that he needed to pay all outstanding money, which appears to be a reference to outstanding rent, before the lease could be renewed in the defendant's name. It would seem in part that the defendant's email to Ms Hawkins of 19 May 2008 was in response to the issue of outstanding rent.
When Ms Hawkins returned to work from her leave she learned of the fire at the unit and confirmed in her evidence that as a result the premises were not habitable and were next let for rent on a fortnightly basis of $680 on 8 December 2008.
In cross‑examination Ms Hawkins agreed that on exhibit 5 there was no date next to either of the defendants' signatures on page 2 of the document. There is however a date of 21 June 2007 next to Matthew Smith's signature and Ms Hawkins' signature as agent. I do not consider that anything of any consequence turns on this. Paragraph 16 of that lease states that if the tenancy is for a fixed period and it reverts to a periodic tenancy, then the periodic rent upon expiry of the fixed term will be a certain sum. The defendant pointed out that no figure was placed next to that amount and asserted that it should have been filled in. Ms Hawkins was asked to contrast this with the holding over clause in the lease and agreed that no rent was stipulated in that clause. The point the defendant seemed to be making was that item or cl 16 in the lease appeared to be at odds with the holding over clause in par 6.1 of the standard residential property lease conditions. Ms Hawkins pointed out however that at the time in question the lease had not expired and that the real estate agency had notified the defendant prior to the lease expiring that the new lease would commence on 11 May at that particular rate. Therefore at the time given the lease had not expired, it was not a periodic tenancy, the relevance being that as at 28 April 2008 the original lease was still current and would remain so until 11 May 2008.
As I understood it the point the defendant wished to make in this line of questioning was that after 11 May 2008 it was in his words 'a periodic lease as per holding over' pursuant to par 6.1 and that as a result item 16 in the lease should have contained a figure be it $580 per fortnight or another sum and that any figure by way of fortnightly rent should be stipulated in the document and not in a letter sent shortly before the lease was due to expire.
In this regard I accept counsel for the plaintiff's response that the defendant's argument is irrelevant because if the premises were going to be vacated on 11 May and the fire occurred for example the night before, rendering the premises uninhabitable for a period of time, whether or not the lease provided for a periodic tenancy or not did not make any difference at all. The fact is that the conditions attaching to the tenancy agreement would still apply. The only relevance of the letter of 28 April 2008 is that it confirms that after the expiration of the lease on 11 May the new rent the owners were requesting and would have been able to obtain from a tenant, whoever the tenant might be, was $680 per fortnight whether the tenancy was periodic in nature or not. In this matter the landlord is suing or seeking damages for loss of opportunity to rent out the premises for six months as they were not habitable due to fire damage.
In his cross‑examination of Ms Hawkins the defendant sought to make a number of points in relation to Matthew Smith. He inquired as to whether Matthew Smith had returned his keys to the real estate agency but Ms Hawkins could not recall if this had occurred. The defendant's contention appeared to be that if Matthew Smith had not returned his keys then pursuant to cl 7.8 and more particularly 7.9 of the lease then Matthew Smith still had obligations and continued to be a tenant under the lease regardless of whether he had vacated the premises or not. In the first place this argument is somewhat speculative as there is no proof that Matthew Smith did not return the keys to the real estate agent. Further, Ms Hawkins pointed out that if a tenancy was still current and one of two or more tenants wanted to vacate then that person had to confer with the other tenant or tenants by way of going through a property condition report to ensure that the premises were in the same condition as they were when the tenancy commenced and the tenants moved into the premises. The vacating tenant and co‑tenant or tenants then are required to settle as between themselves any damage that may have occurred to the property or any outstanding issues by way of rent, rates and costs. A final property inspection will not be done where one tenant is in mutual agreement with the other tenant or tenants in relation to vacating the premises.
Clause or item 7 of the standard lease conditions deals with the end of lease conditions. Ms Hawkins noted that these conditions do not apply where one tenant is vacating the premises and the other tenant or tenants are remaining at the premises. She disagreed with the defendant's contention that it applies to a situation where only one tenant is vacating and another or others are remaining. In this regard given Ms Hawkins' employment and her experience I am prepared to accept her evidence.
The defendant Mr Fowler also queried Ms Hawkins as to what the situation would be if Matthew Smith had decided to vacate the premises but had not advised the defendant of his intention to do so. In my view nothing really turns on this because as Ms Hawkins pointed out in the letter of 15 May 2008 addressed to the defendant he was advised not only that the rent on the property will increase at the expiration of the current lease but also that Matthew Smith's name was not on the new lease. Further, the defendant by email advised Ms Hawkins on 19 May that he had paid the overdue rent and would bring in the lease, which I understand in the context of the documentation to be reference to the new lease, as soon as he could. About a fortnight earlier by email Ms Hawkins had told the defendant that Matthew Smith wanted his name off the lease. There does not appear to be any reference to the defendant taking issue with Matthew Smith's proposal.
Darryl Hoad
Mr Hoad has been employed by FESA for 23 years and at the time of trial had been the station officer at Fremantle Fire Station for 11 years. Over the years he has undergone numerous training courses relevant to fire fighting and accidents and in addition has undergone some training in fire investigation.
He was on duty on 22 May 2008 and attended with other fire fighters at Unit 1/121 Stock Road, Attadale in relation to the fire although, perhaps not surprisingly at trial, did not have a detailed recollection of the events of that evening. He was able to say that the 000 call was received at 20:13 hours relevant to the fire and it was completely extinguished at sometime between 20:37 and 20:46 hours. In addition he is the author of exhibit 4 which is a copy of a FESA report dated 11 November 2011. He explained that the report was completed by him on 25 May 2008 satisfying protocol requirements that a report of any such incident must be completed within 16 days of the incident. The report is apparently completed by the author selecting options that are available on the computer screen, given as I understand it that it is a standard form document, although the witness pointed out that there is a section for comments. Some of the information is entered into the report by the FESA communications centre when they receive the initial call for assistance. In the report Mr Hoad noted: 'Tenant in attendance reporting three heaters were left on in lounge area'. He explained that this was information which he radioed back to base.
When Mr Hoad attends a scene such as this, his role is to supervise the fighting of the fire and to ensure that safety procedures such as disconnecting power are in place and followed. Once the fire has been extinguished he attempts to determine the cause of the fire. Where it is a fire in a premises, for example, he commences by attempting to find the room where the fire originated. This is done by a process of elimination based on burning and charring patterns as well as smoke damage. In relation to the issue of ignition in his report Mr Hoad entered a response based on information he gathered during the course of his investigation and noted 'combustible too close to heater'. Although he did not now recall speaking to the defendant at the scene, in the report he has noted the occupant's name as 'Brent Fowler'. Mr Hoad said he would have obtained that information from the occupant at the time. He said there was no reason to doubt the comment he made in his report that a mattress, pillow was the form of material ignited first.
On his recollection a fire investigation officer did not attend the scene because Mr Hoad believed he contacted them with the information he had and he believed that if the unit concerned were content with his conclusions they would not have investigated further and in this case he did not believe they did so. As I understood his evidence Mr Hoad was satisfied with his conclusions based on his investigation of the fire.
Exhibit 19 is a copy of information from the Fire Incident Reporting System relevant to this particular fire. It does not add a great deal of relevance to the evidence of Mr Hoad and confirms his conclusion as to the ignition factor and the type of material ignited first. He explained that ESL Category 2 which is referred to in his report relates to how much money is paid through rates to the fire service in the form of an emergency services levy. He noted that since he completed his report some things had altered which may account for the different language in categories appearing in the report he prepared being exhibit 4 and the copy of that report obtained earlier through freedom of information channels. In my view nothing turns on these differences which appear to fairly minor in nature.
Desmond Lee
Mr Lee is a loss adjustor with considerable experience in the industry. For some 15 years he has been employed by the same company which was originally called McLarens Young International but subsequently it has changed its name to Cerno.
On 23 May 2008 he was engaged by CGU Insurance Ltd as the loss assessor with respect to damage to property at 1/121 Stock Road, Attadale following a fire at those premises. He arrived at that location around noon on that date and noted that the building consisted of three units one of which had sustained severe damage. He took a number of photographs, being exhibit 20, of the damage to the affected unit. It was part of his role to determine, subject to the applicable insurance policy, who would be engaged from a panel of service providers to reinstate the property by repairing the damage. This process is based on tenders or quotes provided by persons or businesses comprising the panel. Following this invoices are then sent to his firm by persons or businesses who have been selected to carry out the repairs. The work is then inspected to ensure that it has been done in accordance with the scope of the agreed repairs and if that has occurred then there is a recommendation for settlement by the insurer. He believed the repairs to the unit were completed towards the end of October or beginning of November but was not certain about this. He did recall that in this case there was one repairer who was selected by the owners' or property manager directly, rather than being selected by the insurer from the panel. This related to a comparatively minor cost in relation to the replacement of curtain rails. In this regard he referred to exhibit 10, being an invoice from VJ's Home Maintenance for services rendered it would appear in the sum of $1,026.69, which was paid by the insurer. I did not understand the defendant to challenge the nature or content of the invoices before the court, nor did he suggest they were not paid by the insurer.
Mr Lee explained in cross‑examination to the defendant that although he was aware there were contents in the property, he did not make a list of them and did not know of any other persons living in the property. In his role he has no communication with the tenant, rather it is with either the owner or property manager of the premises.
The defendant's evidence
The defendant Mr Fowler is a 24‑year‑old sail maker by trade, although at the time of trial he was employed as a sailing coach. He left school at 16 or 17 years of age prior to taking up his trade. There is no issue that his former solicitors filed an amended defence on his behalf, but by the end of July 2011 unfortunately he was no longer in a position to afford their services and so on 2 September 2011 they got off the record and the plaintiff's solicitors were advised of the situation.
According to Mr Fowler in July 2007 he and Matthew Smith had dealings with Marilyn Hawkins as the result of which they took a lease on the unit in question. Mr Fowler told the court that they lived there for approximately a year leading up to 22 May 2008. During that period Matthew Smith was engaged in shift work and Mr Fowler was also working very long hours. Around Christmas time in 2007 a friend of the defendant's from Esperance, called Jesse Johnson, moved into that unit along with his girlfriend Sinaed Trotman and so there were four persons living in the unit.
The defendant told the court that he was unaware that Matthew Smith had advised Ms Hawkins that he wanted his name off the lease when it came to an end and the email which Ms Hawkins subsequently sent to the defendant was the first he came to know of this. He also said that he was unaware that there was a 'holding over' clause in the lease because he did not understand the lease and its contents when he signed it. He agreed that he did receive a copy of the new lease by post, which is clear in any event from the relevant email which he sent to Ms Hawkins. Mr Fowler said that his friend Jesse Johnson was going to be a tenant under the new lease, which according to the defendant was in Jesse Johnson's possession on the night of the fire.
Relevant to the events of the evening of the fire Mr Fowler's evidence was that he arrived home after dark and he, along with Jesse Johnson and Sinaed Trotman, decided to go to a nearby movie store to rent a movie. Whilst they were at the store the defendant said that he saw the fire brigade go past and either Jesse Johnson or Sinaed Trotman said something to the effect that it would be funny if it was the unit (being as I understand it a reference to the unit in which they were living) because whichever of the two persons made that remark commented they had left the heater on. When the defendant arrived back at the unit it appeared as though the fire had been extinguished. He said he spoke to a police officer and then he spoke to Mr Hoad from the fire brigade and he told Mr Hoad that he lived at the unit. The defendant said that he then entered the property to get the keys for his vehicle and that he was fortunate to be able to obtain alternative accommodation for the time being. He claimed that somebody, he did not name the person, from the real estate agency advised him the following day that his share of the bond would be retained due to the fire having occurred. He pointed out that half of the bond was his and the other half belonged to Matthew Smith, but that portion was also retained.
The defendant confirmed that his signature appears along with that of Matthew Smith as a tenant in exhibit 5, the lease dated 21 June 2007. He told the court he received a copy of the new lease at some point between 15 and 22 May 2008. It was put to him that he would have received a copy of the lease under cover of letter in either exhibit 6 which was addressed to him at the unit in Attadale or exhibit 7 which was addressed to him at a post office box in Esperance. The defendant said he did not remember the covering letter but conceded that if it was enclosed with a copy of the lease then he would have seen the letter at some point. He was not sure of the exact time he would have seen it, given he said that there was a difference or a time delay in relation to correspondence being sent to and from Esperance. Further the defendant said that he could not say whether he had received exhibit 18, the letter of 28 April from the real estate agency addressed to him. He conceded however that the address nominated in the correspondence in Esperance was an address to which mail had been sent to him and from which he had in the past received mail. He also agreed that in exhibit 17, an email he sent to Ms Hawkins on 19 May 2008, he made no mention of Matthew Smith being removed as a tenant from the lease nor did he make any mention about any other person, namely Jesse Johnson being added as a tenant to the new lease.
When he was cross‑examined regarding the comment in exhibit 4 being the fire incident report, that the tenant in attendance reported to Mr Hoad that three heaters were left on in the lounge area, the defendant said that he had told Mr Hoad that the defendant's housemate had left the heater on. He added that he was unaware that a heater had been left on in the sense he did not know that when he left the premises with the other two people to rent the movie. He only learnt of this whilst he was at the movie rental store. Further the defendant said that he did not know how many heaters there were at the unit at the time.
In his evidence Mr Fowler, the defendant, confirmed that he had not paid CGU Insurance any money for the cost of repairs to the property in question, although he pointed out not only did the real estate company keep his half of the bond but as far as he was aware they also kept Matthew Smith's half of the bond which he thought related to a clause under the heading Excess on insurance in the lease. When questioned as to whether he intended to call any other witnesses on his behalf the defendant advised the court that the person he was going to call was absent on holidays and he had been unable to locate them.
The law and submissions
As noted earlier in opening the plaintiff's case, counsel identified there was an issue to be determined, among a number of issues, that being whether the fraudulent liability provisions of the Act applied to the plaintiff's claim. The claim is for breaches of strict contractual provisions at the least being cl 2.27 and cl 2.36 of the lease and there is a conflict on counsel's submission on the authorities as to whether such a claim can be said to arise from a failure to take reasonable care. This is a reference to s 5A(1) of the Act which triggers the application for these provisions. That section states:
(1)Subject to sections 3A and 4A, this Part applies to any claim for damages for harm caused by the fault of a person unless this section states otherwise.
Section 3A states:
(1)The provisions of this Act specified in the third column of an item in the Table to this subsection do not apply to damages of a class specified in the second column of that item or to claims for, or awards of, such damages.
Table
Item
Damages
Provisions that do not apply
1.
Damages relating to personal injury caused by ‑
Parts 1A, 1C, 1CA, 1D, 1E and 2 (other than section 10A).
(a) an unlawful intentional act that is done with an intention to cause personal injury to a person, whether or not a particular person; or
(b) an intentional act the doing of which is a sexual offence as defined in the Evidence Act 1906 section 36A or sexual conduct that is otherwise unlawful.
2.
Damages to which the Motor Vehicle (Third Party Insurance) Act 1943 applies.
Parts 1C, 1E, and 2 (other than section 10A and Division 4).
3.
Damages to which the Workers' Compensation and Injury Management Act 1981 Part IV Division 2 applies and the class of damages referred to in section 93B(3a) of that Act.
Parts 1A, 1B, 1C, 1D, 1E and 2 (other than section 10A and Division 4).
4.
Damages relating to personal injury that resulted from smoking or other use of tobacco products.
Parts 1A (other than sections 5A, 5B, 5C, and 5D), 1B, 1D, 1E and 2 (other than section 10A and Division 4).
5.
Damages under the Civil Aviation (Carriers' Liability) Act 1961 (including the applied provisions as defined in that Act).
Parts 1A, 1B, 1C, 1D, 1E, 1F and 2.
6.
Damages relating to personal injury that resulted from the inhalation of asbestos.
Parts 1A (other than sections 5A, 5B, 5C and 5D), 1B, 1D, 1E and 2 (other than section 10A and Division 4).
Section 4A states:
4A. Limited contracting out
(1)A written agreement signed by the parties to it may contain an express provision by which a provision of Part 1A, 1B, 1C, 1CA, 1D, 1E or 1F is excluded, modified or restricted and this Act does not limit or otherwise affect the operation of that express provision.
(2)Subsection (1) applies to any provision of this Act referred to in that subsection even if the provision applies to liability in contract.
Part 1F of the Act deals with proportionate liability. Section 5AI for the purposes of that Part says ‑
apportionable claim means ‑
(a)a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care (but not including any claim arising out of personal injury).
Further it defines a concurrent wrongdoer in relation to a claim which it says
means a person who is one of 2 or more persons whose act or omission caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
Putting to one side any ousting or contracting out clauses, if the aforementioned provisions apply, then in this matter the court could only find the defendant liable to the extent that he was responsible for fire. If the court were to find that the fire was started by someone other than the defendant in the sense that someone other than the defendant was responsible for the fire and the defendant had nothing to do with it, save for the fact hat he was a tenant of the premises and the provisions of the Act did apply, then the court could only find the defendant liable to the extent that he was responsible, if indeed the defendant bore any responsibility at all.
Counsel for the plaintiff's argument however is that the provisions do not apply on either one of two bases. The first is that the claim is not an apportionable one and the second is that if it is found to be an apportionable claim there has in this instance been a contracting out of those particular provisions, in the sense that the argument is that the effect of cl 2.27 and the first limb of cl 2.36 as counsel for the plaintiff interprets that latter clause of the lease constitute a contracting out of the provisions which is permitted pursuant to s 4A of the Act. Counsel advised the court that there is obiter in some cases from other jurisdictions in Australia suggesting that it is unnecessary in order to invoke the contracting out clause for the particular provisions of the particular Civil Liability Act which is sought to be invoked, to make reference to that fact in the contracting out clause. This suggests by way of analysis in counsel's submission that one does not have to state that one is contracting out of the proportionate liability provisions by virtue of s 4A of the Act as it applies in Western Australia. This is obiter only and not binding in this jurisdiction.
In relation to the first bases upon which the plaintiff rests its case, namely that this claim is not an apportionable one, counsel concedes there is an issue as to whether a claim dealing with the breach of a strict contractual obligation can be an apportionable claim given that there is conflicting authority on the point. This will be referred to and considered later in the course of these reasons. If the court were in the end to find that the plaintiff's claim fails on this basis then the plaintiff relies on the second basis upon which it rests its case, namely that on a proper interpretation the language of either cl 2.27 or what it contends is the first limb of cl 2.36, either individually or in conjunction, exclude apportionment applying because it has been ousted as permitted by the relevant section of the Act.
Counsel for the plaintiff addressed six areas which it was argued were relevant to the resolution of this matter. They were:
(1)the lease;
(2)the interpretation of cl 2.27 and cl 2.36 of the lease;
(3)the plaintiff's case under cl 2.27;
(4)the plaintiff's case under cl 2.36;
(5)the plaintiff's claim that this is not an apportionable claim for the purposes of Pt 1F of the Act;
(6)that if the court were to find this is an apportionable claim under Pt 1F of the Act then the plaintiff's argument that the aforementioned clauses of the lease individually oust the proportionate liability provisions of the Act which is permitted by virtue of application of the application of s 4A of the Act.
There is in regard to this final area an argument that if the plaintiff were to fail to establish an ousting under one of the clauses then it may well be that it could establish an ousting pursuant to the other clause. Fundamental issues which arise in this case involve an application of the principles of interpretation to the relevant clauses of the lease and consideration of the legal principles in relation to proportionate liability. It is clear from the evidence that there were other persons occupying the premises at the time of the fire and this would be relevant if the court were to find this was an apportionable claim and further that the proportionate liability provisions of the Act would not ousted by reason of cl 2.27 and cl 2.36 of the lease either individually or in conjunction with each other. It would then fall to the court to determine the defendant's liability on the evidence at trial bearing in mind that the plaintiff's case does not lie in negligence but rather is for what is said to be a breach of the lease.
I accept counsel for the plaintiff's submissions that there are at least some matters that are relatively clear or not particularly in dispute being:
(1)On 22 May 2008 the defendant Mr Fowler was a tenant of the premises.
(2)On that date there was a fire at the premises which resulted in damage to them.
(3)FESA attended and extinguished a fire. There is some debate as to what precisely the defendant says he told Mr Hoad because Mr Fowler recalls it being that one of the occupants either Jesse Johnson or Sinaed Trotman but not the defendant, left a heater on and what Mr Hoad recalled he was told.
(4)The fire was caused by a piece of combustible material perhaps a mattress or a pillow being left too close to a heater that was on.
(5)The damage to the unit was subsequently repaired.
(6)The insurance company has paid for the cost of those repairs.
(7)As from 5 December 2008 after repairs had been effected the unit was re‑let. It is to be noted that the rent the landlord subsequently obtained for the unit was $720 per fortnight, although the plaintiff is claiming loss of opportunity to rent during the period in question being 12 lots of fortnightly rent at $680 per fortnight.
Exhibit 5 makes it clear that the original lease which both the defendant and Matthew Smith signed for the premises was for the period 22 June 2007 to 10 May 2008. On the evidence I accept that Matthew Smith advised Ms Hawkins in essence that he did not wish to be a tenant under the new lease. Even if Matthew Smith did not communicate this to the defendant personally, certainly Mr Fowler was aware of this by virtue of the email Ms Hawkins sent him on 6 May. On the evidence I find that a copy of the new lease, which increased the fortnightly rental was posted to the defendant at two addresses, one in Perth and one in Esperance. It is not clear whether the defendant received both of those pieces of correspondence, but he certainly received at least one copy of the new lease, because he acknowledged this in his email to Ms Hawkins of 19 May, indicating that he would sign the new lease and take it into the real estate agent's office as soon as he had the opportunity to do so.
There is an issue albeit one which counsel for the plaintiff asserts in the end is not particularly material which arises on the pleadings as to whether the defendant at the relevant time was the sole tenant of the premises, as asserted by the plaintiff or whether he was a tenant of the premises. Given that the new lease was apparently destroyed in the fire it is not clear whether as at the date of the fire it had been signed by either the defendant or Jesse Johnson, whom the defendant asserts wished to have his name on the lease. In the end I do not consider this to be a matter that requires determination because whatever the situation at the very least there is no dispute that the defendant was living in the premises on the date of the fire and that if he had not signed the lease either solely or in combination with another person Mr Fowler was in my view at that time 'holding over' pursuant to cl 6 of the lease so the terms of the lease continued to apply as at the date of the fire.
The existence of the lease is admitted on behalf of the defendant but proof of it is required in order to establish clauses including cl 6, cl 2.27 and cl 2.36.
The plaintiff does not take action against Matthew Smith but it seems to me worth noting that at the time of the fire Matthew Smith was not a tenant as such at the property. He had earlier indicated to Ms Hawkins that he did not wish to continue as a tenant under the new lease and as at 22 May the original lease had expired. It is not clear on the evidence if he had returned his keys to the unit to Ms Hawkins prior to the fire. There is no positive evidence that Matthew Smith had vacated the premises by the date of the fire although the evidence does not suggest he was present at the time of the fire because the defendant spoke only of arriving home and then going to the shop to rent a movie with Jesse Johnson and Sinaed Trotman. Even if it was the case that Matthew Smith was still in residence and 'holding over' subject to cl 6 of the lease I accept the submission on behalf of the plaintiff that putting aside any provisions relating to the apportionment of liability the only effect of that, if the plaintiff were to succeed in its case against the defendant, is that the plaintiff could not then proceed to take action against Mr Matthew Smith to recover damages. It would of course be open to the defendant in those circumstances pursuant to cl 8.4 of the lease dealing with joint and several liability, to take action against Matthew Smith seeking a contribution from him.
In relation to counsel's contention that Matthew Smith was not a tenant at the relevant time (though this has no real relevance to the plaintiff's case) counsel cited Draper v Crofts (1846) 153 ER 807 and Tancred v Christy (1843) 152 ER 1219. It is said that those cases are authority for the proposition that where one co‑tenant 'holds over' and the other co‑tenant does not consent to the holding over then that other co‑tenant will not be liable for rent during the holding over period. As noted, there is scant evidence in relation to the exact circumstances of Matthew Smith relevant to his occupation and tenancy of the unit at the relevant time and these cases present some difficulty in their application to Matthew Smith's position because there is no evidence as to whether or not he consented to the defendant 'holding over' during the relevant period including the date of the fire.
Both cl 2.27 and cl 2.36 of the lease are indemnity clauses. Although the facts in Bofinger v Kingsway Group Ltd (2009) 239 CLR 269 are quite different from the facts in this matter, nonetheless the observation of the members of the court at [53] of their judgment is applicable to this case. The court noted:
The settled principle in Australia governing the interpretation of contracts of guarantee and indemnity has been stated by this Court in authorities the most recent of which is found in the joint reasons in Andar Transport Pty Ltd v Brambles Ltd(2004) 217 CLR 424 [433] – [437]. The principle is that a doubt as to the construction of a provision in such a contract should be resolved in favour of the surety or indemnifier. It is implicit in this that the doubt may arise not only from the uncertain meaning of a particular expression but from its apparent width of possible application.
The effect of this is that each of these clauses must be construed strictly and if any ambiguity arises it must be resolved or construed in favour of the defendant Mr Fowler.
The plaintiff's case is however that the meaning and intention of each of these two clauses is clear and there is no ambiguity contained in either of them and further the plaintiff's position is that there is no uncertainty arising from the width or breadth of the language employed in either of the clauses, which it is said are clear and unambiguous in their terms.
Aligned with the issue of the interpretation of these two clauses is the question of whether individually or in combination they oust the proportionate liability provisions of the Act.
The exercise of resolving this issue involves a number of stages. The first requires the court to apply the legal principles relating to the interpretation of indemnity clauses as discussed in Bofinger v Kingsway Group Ltd. Next if relevant to a particular clause or clauses the court finds it applies and the plaintiff is entitled to an indemnity there then follows the question of whether or not the proportionate liability provisions of the Act apply. In this case as previously noted the argument on behalf of the plaintiff is that those provisions do not apply. If the court were to make a finding that the proportionate liability provisions of the Act do apply then it must next consider whether those clauses individually or in combination oust the proportionate liability provisions of the Act pursuant to s 4A. I accept, as counsel for the plaintiff submitted, that at the point where the court is considering the question of whether there is an ousting of the proportionate liability provisions it must apply the principles dealing with interpretation of exclusion clauses as set out by the High Court in Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500, 510. There the court in reviewing authorities dealing with exclusion clauses noted:
These decisions clearly establish that the interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity.
The court went on to observe the same principle applies to the construction of limitation clauses and added that the manner in which it had expressed the principle clearly did no more than express the general approach to the interpretation of contracts and was sufficiently general to accommodate any different considerations that might arise in the interpretation of a wide variety of exclusion and limitation clauses which may be found in commercial contracts. The reasonableness or fairness were not in question. The principles however which must be applied to interpretation of exclusion clauses and those of indemnity clauses are somewhat different: see F & D Normoyle Pty Ltd v Transfield Pty Ltd (2005) 63 NSWLR 502.
It now seems clear that the principles relating to the interpretation of indemnity clauses are the same as those relating to the interpretation of guarantees as distinct from exclusion clauses: see Coghlan v SH Lock (Australia) Ltd (1987) 8 NSWLR 88, 92. That was a case argued before the Privy Council relating to the interpretation of a document described as a deed of guarantee and indemnity. There the court noted there were well known principles of construction in relation to guarantees which required such a document to be strictly construed as it was to be read contra proferentem. In the case of any ambiguity the document is to be construed in favour of the surety. However their Lordships went on to note that those principles did not mean that where parties to the document deliberately chose to adopt wording of the widest possible import that such wording was to be ignored. Further they observed that the principles do not oust the principle that where wording is susceptible of more than one meaning then regard may be had to the circumstances surrounding the execution of the document in order to assist in the exercise of its construction.
I now turn to an examination of the plaintiff's case pursuant to cl 2.27 of the lease. The essence of this clause is that the tenant shall pay for any damage or repairs that arise from or are attributable to an act or omission by the tenant or the tenant's visitors. The submission by counsel for the plaintiff is that this clause is very clear in its meaning and contains no ambiguity, therefore it is unnecessary to apply any principles of interpretation of it in the defendant's favour. I accept that there is no dispute on the evidence, which has previously been canvassed, that a heater was left on it seems by one of the occupants of the unit, not the defendant. Neither of those two persons, being Jesse Johnson or Sinaed Trotman were tenants at the time. There is no doubt that there was a fire as a result of combustible material catching alight and that damage was caused to the unit, so clearly the situation falls within the ambit of cl 2.27. That damage was subsequently repaired and payment made on invoices as outlined in exhibit 15, the affidavit of Lisa Cole. At the expiration of the original lease the new fortnightly rent was to be $680, but due to the unit being uninhabitable for approximately six months the owners lost the opportunity to receive 12 lots of fortnightly rent in that amount. I accept the submission on behalf of the plaintiff that on this analysis it is clear that the loss involved flowed directly from a breach of cl 2.27 of the lease.
The plaintiff relevant to the alleged breach of the lease by the defendant also puts its case under cl 2.36 of the lease submitting that it is open to the court to find for the plaintiff on the basis of a breach of either or both of these clauses. As previously noted the defendant takes issue with the interpretation that counsel for the plaintiff seeks to apply to cl 2.36. This is because counsel for the plaintiff contends that clause contains two separate indemnities, the first of which applies as a result of damage to the premises causing loss and the second which applies only in circumstances where a claim is made against the owner of the premises arising from negligence on the part of a tenant or tenants or their visitors. In this regard it is important to appreciate that the plaintiff's case against the defendant lies not in alleged negligence but rather in alleged breach of the contract, being the lease. The defendant's argument in relation to cl 2.36 is that the clause must be read in its entirety and in essence it does not consist of two limbs and further that the qualification in relation to any damage arising means that the requirement that negligence must be proved applies to the entire clause and not simply the second limb as contended on behalf of the plaintiff.
It seems to me that the language employed in cl 2.36 is clear and I do not see any ambiguity. A reading of the clause makes it plain by use of the language use that it is disjunctive in nature, in the sense that it contemplates two different and distinct categories of circumstances. The first limb or category makes no mention of negligence whatsoever because it simply contemplates that the tenant agrees to indemnify the owner against any loss sustained by the owner or any sum the owner might at any time be liable to pay, as a result of damage to the premises or any furniture or chattels belonging to the owner. The second limb or category contemplates the tenant agreeing to indemnify the owner but in circumstances where there is a claim made against the owner, whether it relates to property damage or personal injury or any other matter which claim arises from any negligent act or omission on the part of the tenant or anyone visiting the tenant at the premises. It seems clear to me that cl 2.36 only requires negligence to be proved in circumstances where there is a claim against the owner rather than in circumstances where the owner is making a claim against the tenant for loss and damage sustained by the owner. Clearly in this case there is no claim being made against the owner, rather the owner is making a claim against the defendant relevant to the first limb of the clause for loss sustained by the owner as a result of damage caused by the fire and the loss of opportunity to rent the premises for a period of time.
There is another flaw in the defendant's argument relevant to the interpretation he submits should be applied to cl 2.36. As counsel for the plaintiff points out, if the defendant's argument is correct then it would render cl 2.27 of the lease superfluous because it is clear that cl 2.27 does not require proof of negligence, rather it requires either an act or omission to occur. If cl 2.36 was given the interpretation urged by the defendant then cl 2.27 would have no purpose, as all situations would fall under and be covered by cl 2.36. It may be the case, as submitted by counsel for the plaintiff, that there are policy reasons which explain cl 2.36 dealing with two indemnities or indemnity situations. The property contemplated in the first limb of the clause is arguably finite being confined to loss sustained by the owner or any sum the owner might be liable at any time to pay and it does not require qualification by way of negligence being demonstrated. The indemnity in the second limb however contemplates claims against the owner in relation to property damage or personal injury or any other matter whatsoever, which in theory could be much greater and broader in scope and in all likelihood much more expensive, which is a reason why negligence must be proved in order to sustain such a claim.
Again in my opinion the language employed in cl 2.36 is clear and unambiguous and therefore there is no need to construe it in favour of the defendant. Moreover, there is no question that the fire occurred because this is admitted and there is no issue that the premises were damaged as a result and the damage has now been rectified and paid for by the insurer in combination with the loss of rent during the relevant period.
I turn now to a consideration of a further issue, which is whether this is an apportionable claim in the sense of whether Pt 1F of the Act applies to these circumstances. Reference has previously been made to s 5A of Pt 1A of the Act. As previously noted s 5AI in Pt 1F of the Act deals with the meaning of apportionable claim and also provides the definition of what constitutes a concurrent wrongdoer. Section 5AK deals with proportionate liability for apportionable claims and is in the following terms.
(1)In any proceedings involving an apportionable claim ‑
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss; and
(b)the court may give judgment against the defendant for not more than that amount.
(2)If proceedings involve both an apportionable claim and a claim that is not an apportionable claim ‑
(a)liability for the apportionable claim is to be determined in accordance with the provisions of this Part; and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
(3)In apportioning responsibility between defendants in the proceedings ‑
(a)the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and
(b)the court is to have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.
(4)This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.
(5)A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.
As can be seen from s 5AK(1)(a) in proceedings involving an apportionable claim the liability of a defendant who is a concurrent wrongdoer is limited to the amount reflecting their proportion of the damage or loss for which the court considers they are responsible. Section 5AK(3)(a) deals with apportioning responsibility between defendants in the proceedings and requires pursuant to subsection (a) that the court exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law. There is no suggestion in this case that this subsection applies. Section 5AK(3)(b) also requires the court to have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. As previously noted the amended defence pleads that there was no fire alarm installed and the FESA report confirms this. However this was not a matter that the defendant particularly pressed at trial and so I accept the submission that this aspect of the amended defence has apparently been abandoned but in any event it was not pursued as a relevant factor in cross‑examination of Mr Hoad or indeed in the evidence of Mr Fowler himself.
On the material before the court at trial it would appear that in this jurisdiction for the purposes of s 5AI of Pt 1F of the Act the issue as to whether a breach of a strict contractual obligation is an apportionable claim has not been considered or determined. That is an issue which arises for determination in this case because the plaintiff claims for alleged breaches of strict contractual obligations in cl 2.27 and cl 2.36 of the lease. It is not a claim 'arising from a failure to take reasonable care' and so the plaintiff takes the position that it is not required to prove failure on the part of any person including the defendant to take reasonable care.
Counsel for the plaintiff however points to what is essentially a conflict on the authorities in other jurisdictions as to whether or not, despite the fact if after the conclusion of the evidence the court makes a finding that the loss although contractual in nature did in fact arise from a failure to take reasonable care, whether the claim can be said to be apportionable.
In this regard a number of those authorities were referred to by counsel for the plaintiff. In Commonwealth Bank of Australia v Witherow [2006] VSCA 45 the Victorian Court of Appeal held that breach of a contractual term, which in that case related to a guarantee rather than an indemnity, was not an apportionable claim. It is the case however that the principles of interpretation relating to guarantees are the same as those relevant to interpretation of indemnities. In that case the bank claimed against Mr Witherow the defendant for damages with interest on the basis of a deed of guarantee under which Mr Witherow guaranteed to the bank the due payment by a particular company of all money which the company was liable to pay under an overdraft facility between itself and the bank subject to a limit of $150,000, plus the bank's enforcement expenses. Subsequently the bank brought a summary judgment application against Mr Witherow who was liable to the bank under the contract of guarantee. The bank's application was dismissed at first instance because Mr Witherow argued in part that the proportionate liability provisions of the relevant legislation operated to reduce his liability pursuant to the guarantee. The bank then appealed that judgment and on appeal the court entered judgment against the defendant Mr Witherow. In the meantime prior to the appeal Mr Witherow joined the company and his own accountant as second and third defendants in the action. On appeal the court noted that the bank's claim was not a claim in an action for damages, rather, it was a claim in an action for a certain sum of money being $150,606.90. In [11] the court made it plain that the claim was not in an action for damages arising from a failure to take reasonable care but rather it was a situation where the bank was suing on a guarantee and seeking specific performance of that contract of guarantee so there was no issue at all of failure to take reasonable care.
Whilst no criticism was levelled at Mr Witherow for joining his accountant as a third party, claiming that the accountant was negligent in failing to advise him accurately of the financial position of the borrower company which resulted in Mr Witherow being exposed to loss when the guarantee was called up, nonetheless the court noted that in the circumstances for the purposes of the appeal the fact that Mr Witherow was seeking contribution from his accountant was entirely irrelevant. There was no suggestion that the accountant owed any duty of care to the bank or that the bank had any cause of action against the accountant. Certainly Mr Witherow's third party claim against the accountant was properly based on an allegation that he had suffered damage because of the accountant's failure to take reasonable care but that duty of care was one owed to Mr Witherow alone by the accountant. In his judgment Maxwell P dealt with the question in relation to Pt IVAA of the Wrongs Act 1958. Under s 24AE in Pt IVAA the term 'apportionable claim' was defined to mean 'a claim to which this Part applies'. In turn subsection 24AF(1) relevantly provided that ‑
(1)This Part applies to ‑
(a)a claim for economic loss or damage to property in an action for damages (whether in tort, in contract, under statute or otherwise) arising from a failure to take reasonable care ... .
His Honour said it seemed to be perfectly clear what Pt IVAA was intended to achieve. He noted in [13] of the judgment that where an action for damages was brought based on an alleged failure by the defendant to take reasonable care, and there were concurrent wrongdoers (that is, 'two or more persons whose acts or omissions cause, independently of each other or jointly, the loss or damage that is the subject of the claim') then the liability of a defendant who is one of those concurrent wrongdoers is, in the language of par 24I(1)(a) –
limited to an amount reflecting that proportion of the loss or damage claimed that the Court considers just having regard to the extent of the defendant's responsibility for the loss or damage.
His Honour went on to observe that this was not the case before him. It would be impossible to make an apportionment between Mr Witherow's liability in contract to the bank and the liability of the accountant in tort to Mr Witherow. In his Honour's view Parliament did not have in mind in enacting Pt IVAA that the court could be asked to take into account in an action involving a contract of guarantee, the fact that the guarantor had a claim in negligence against a third party on whose evidence the guarantor relied in giving the guarantee. The point of relying on the judgment on appeal in this case as I understand the submission of counsel for the plaintiff is that just as that court determined that a guarantee was not an apportionable claim nor by analogy is an indemnity.
Counsel concedes however that there is an argument to the contrary based on a number of single instance decisions in other jurisdictions including New South Wales and Tasmania. Whilst they are not binding upon this court and whilst some of those decisions relevant to this issue are obiter only, nonetheless it is necessary to make reference to some of them.
In Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187 the plaintiff, Mr Reinhold purchased a lottery ticket for a $2,000 lottery draw. The ticket was printed but unfortunately was incomplete and therefore invalid. A second ticket was issued and that was valid. Mr Reinhold left the newsagency with the second valid ticket. After his departure however the second valid ticket rather than the first and invalid ticket was cancelled in error. This left Mr Reinhold in possession of an invalid ticket by reason of the fact that it had been mistakenly cancelled. As luck would have it this second ticket, which unknown to Mr Reinhold had been cancelled in error, was the winning ticket in the lottery but by virtue of having been incorrectly invalidated Mr Reinhold was unable to collect his winnings.
He subsequently took proceedings against the New South Wales Lotteries Corporation and the newsagency from whom he had purchased the ticket in both contract and negligence. One issue which arose was whether the claim in contract was an apportionable claim and if it was whether liability would then be shared between the Lotteries Corporation and the newsagency. Counsel for Mr Reinhold argued that it was not an apportionable claim because it did not arise from a failure to take reasonable care. As an aside it may be that this argument was advanced to enhance Mr Reinhold's prospects of recovering damages against the Lottery Corporation as distinct from a single newsagency which may not have been as financially secure.
In [26] of the judgment of Barrett J his Honour noted that there would have been a breach of the relevant contractual term had the Lotteries Corporation or the newsagency intentionally and knowingly cancelled the second ticket without Mr Reinhold's consent. However on the findings made there was a breach of the contractual term because of actions entailing want of care rather than intention to breach or knowingly breach. There was no positive or conscious intention that the second ticket which Mr Reinhold took when he left the shop should actually be cancelled. Its cancellation was essentially the product of the conduct of both the Lotteries Corporation and the newsagency which involved a breach by each of them of a duty of care in negligence. His Honour went on to observe that the breaches of contract to which the cancellation of the second ticket, being the valid ticket, gave rise were of the same character as the negligence because each had a central element a failure to take reasonable care. In [27] his Honour said that each of those relevant claims determined by the court in accordance with the findings made, was a claim in an action for damages 'arising from' the failure to take reasonable care which was also at the centre of the tortious claim in negligence. That applied equally to the claim in contract, which in his Honour's view was sufficient to bring the contract claim as well as the tort claim within the relevant section of the legislation being an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care'). It therefore did not matter that the claim in contract was not framed in terms of a failure to take reasonable care because in the end there was evidence of that, despite the case pleaded. In the end the Lotteries Corporation was held 90% responsible for Mr Reinhold's loss and the newsagency was responsible for the remaining 10%.
Counsel contended that the decision of Barrett J in Reinhold's case can be distinguished from this case because the former did not deal with whether the breach of a strict contractual obligation was apportionable, rather it dealt with the issue of whether a person who had settled a claim that was apportionable could in fact claim contributions from other alleged wrongdoers.
Reference was made to Reinhold's case by Blow J of the SCt of Tasmania in Aquagenics Pty Ltd v Break O'Day Council (No 2) [2009] TASSC 89 at [39] of his judgment. His Honour referred to Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450 where Middleton J held that a claim that was not based on a breach of duty to take reasonable care could still be held to arise from a failure to take reasonable care, for the purposes of Victorian legislation the equivalent of that section in the Tasmanian legislation. While he accepted that on a narrow interpretation of the relevant section of the legislation a claim based on a failure to perform a contract according to its terms might not be regarded as a claim arising from a failure to take reasonable care this in his view would not promote the purpose of the Act. His Honour preferred a wider interpretation of the provision, namely if such a breach or contract occurred because there was a failure to take reasonable care then the claim in contract would amount to a claim arising from a failure to take reasonable care within the meaning of the section being s 43A(1)(a).
The reasoning in Reinhold's case was accepted as correct in obiter by the Victorian Court of Appeal in Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd (2008) 21 VR 84.
In that case the court was dealing with Pt IVAA of the Victorian Wrongs Act 1958 providing for proportionate liability of concurrent wrongdoers in relation to claims for damages for economic loss, or damage to property, arising from a failure to take reasonable care or for contravention of s 9 of the Fair Trading Act 1999. The legislation provided in s 24AI that the liability of a concurrent wrongdoer was limited to the proportion of the claim which the court determined to be just having regard to the extent of the concurrent wrongdoer's responsibility for the loss and damage suffered. Section 24AJ provided that despite anything to the contrary in Pt IV of the Act, a defendant against whom judgment was given under Pt IVAA as a concurrent wrongdoer in relation to an apportionable claim could not be required to contribute to the damages recovered or recoverable from another concurrent wrongdoer in the same proceeding for the apportionable claim, and could not be required to indemnify any such wrongdoer. There was also a provision that a person who in good faith had made or agreed to make any payment in settlement or compromise of a claim made against that person in respect of any damage, including a payment into court which had been accepted, should be entitled to recover contribution in accordance with the section without regard to whether or not the person had made or agreed to make the payment or was ever liable in respect of the damage, provided that the person would have been liable assuming the factual basis of the claim against that person could be established.
The matter concerned an action for damages in contract and tort against a contractor and Spowers the architect for economic loss in relation to the construction of an office building. Spowers commenced a third party proceeding against an engineer and two surveyors claiming that if the plaintiff established liability then the third parties caused or contributed to the plaintiff's loss and there was a claim of apportionment pursuant to Pt IVAA of the Act or alternatively contribution or indemnity pursuant to that section. Spowers settled the plaintiff's claim in terms that were expressed to be for the entire alleged loss and damage which in turn conferred upon Spowers the right to call upon the plaintiff to release the third parties from the risk of action being brought against them as alleged concurrent wrongdoers under the Act. Spowers then proceeded to prosecute its third party claim after amending its statement of claim seeking contribution or indemnity pursuant to Pt IV of the Act. Summary judgment was entered for the third parties on the basis that the compromise by Spowers could only have related to its potential proportionate liability pursuant to an assessment by the court made under s 24AI(1) of the Act. Spowers then appealed. In the appeal Ashley JA with whom Neave JA agreed, approved and applied the reasoning of Barratt J in Reinhold's case in obiter, agreeing that a claim may properly be regarded as arising from a failure to take reasonable care where at the end of the trial the evidence warrants such a finding, even if the pleadings do not allege negligence or a failure to take care because the matter is to be judged in the light of the findings made at trial and not by the wording in which the claim is framed. There is an apparent conflict between the reasoning and decision of the Victorian Court of Appeal in Witherow's case and that of the court in the Godfrey Spowers' case, but counsel for the plaintiff urges that the authority which should be adopted and applied in this case is that of Witherow because the context and circumstances of that case reflect more accurately the case before this court.
Counsel for the plaintiff also addressed court on the issue of whether, in the event that it was found to be an apportionable claim under Pt IF of the Act, the effect of cl 2.27 and cl 2.36 individually or in combination ousted the proportionate liability provisions pursuant to the application of s 4A of the Act.
I will now turn to this particular issue.
In these circumstances, were they to arise, the court must take into account the relevant responsibilities of the defendant Mr Fowler and any other person, for example a visitor to the unit who is not a party to these proceedings. There is some confusion in this regard in the sense that the defendant's evidence was that he was told by either Jesse Johnson or Sinaed Trotman that one of them left the heater on in the unit. This is to be contrasted with the contents of exhibit 16 a letter from solicitors at that time representing the defendant to Mason Black Lawyers, advising that Ms Trotman turned the heater on, and further that she admitted to both the defendant and Jesse Johnson that she left the heater on at the material time. Notwithstanding what is in the correspondence, which was untested at trial because neither Jesse Johnson nor Sinaed Trotman gave evidence, it seems the situation on the defendant's evidence is that it was one of those two people who left the heater on.
In the event that the court in this case did not apply the reasoning of the court in Witherow's case and found that this is in fact is an apportionable claim, the question then arises as to whether or not proportionate liability has been ousted which is permitted pursuant to s 4A of the Act, by either cl 2.27 or cl 2.36 of the lease.
Again there does not seem to be any direct authority on this point in this jurisdiction. The court however was referred by counsel to two authorities, both being obiter only, which address this issue. The contention as previously noted on behalf of the plaintiff being that cl 2.27 and cl 2.36 oust the provisions of Pt IF of the Act. One of those authorities, Aquagenics Pty Ltd v Break O'Day Council (No 2), has previously been mentioned in these reasons. There Blow J was considering the issue of contracting out of the Tasmanian Civil Liability Act. The relevant section of that legislation being s 3A(3) and s 3A(4) provides that:
(3)This Act, other than Part 7, does not prevent the parties to a contract from making express provision for their rights, obligations and liabilities under the contract in relation to any matter to which this Act applies and does not limit or otherwise affect the operation of such an express provision.
(4)Subsection (3) extends to any provision of this Act even if the provision applies to liability in contract.
It can be seen that the Tasmanian legislation in the relevant section is not identical in wording to s 4A of the Act in Western Australia but it is very similar and I accept counsel's submission that in the end there is no substantive difference between the sections. In that case counsel for the defendant submitted that there had been a 'contracting out' of the proportionate liabilities of the legislation because cl 9.3 of the contract dealing with the contractor's responsibility stated:
Approval to subcontract shall not relieve the Contractor from any liability or obligation under the Contract. Except where the Contract otherwise provides, the Contractor shall be liable to the Principal for the acts and omissions of subcontractors and employees and agents of subcontractors as if they were acts or omissions of the Contractor.
On the other hand counsel for the plaintiff submitted that this was not the case because where proportionate liability legislation applies and where it permits contracting out, that it was conventional for the parties to the contract to refer specifically to the relevant part of the relevant Act in a clause providing for its exclusion. The argument was that the wording of cl 9.3 was not specific in that regard and therefore insufficient to exclude the operation of the proportionate liability provisions of the legislation.
That argument did not find favour with Blow J who was of the opinion that s 3A(3) permitted the operation of the legislation to be superseded by an express contractual provision without imposing any requirement that specific legislative provisions be mentioned. He noted a little later however in his judgment at [46] that for the reasons he gave it was not possible for him to reach a conclusion as to whether cl 9.3 had resulted in a complete contracting out and the question was left open in the sense that if a possible or proposed arbitration proceeded the issue would have to be addressed and resolved at that time if necessary. Nonetheless Blow J considered that all that was required to trigger the operation of the ousting out provision was that there had to be an express contractual provision which created rights, obligation and/or liabilities of the party to the contract and that the provision must relate to a 'matter' to which the legislation applied. In this case counsel for the plaintiff submits that each of those criteria are satisfied and so therefore it would relevant to the two clauses in question trigger the application of s 4A of the Act.
The other authority, Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VCSA 355 is a decision of the Victorian Court of Appeal. There is little point in referring in any detail to the facts of the case which are very different from those in the current matter, but there were a series of appeals concerning the application of the usual rule as to costs being that costs follow the event. It involved proceedings in relation to a mortgage where a defendant had joined third parties who in turn joined fourth parties. The defendant's claims against the third parties were dismissed as it succeeded against the plaintiff. The third parties' claims against the fourth parties were also dismissed they having succeeded against the third parties. In determining the appropriate costs orders the trial judge considered the apportionment legislation which the Court of Appeal said was an error and it applied the normal rule that costs follow the event. The effect of this was that each successful party was awarded costs against each unsuccessful party. Although the Court of Appeal considered in passing the Wrongs Act of Victoria as well as the equivalent New South Wales and West Australian legislation in the end at [95] of the judgment it considered it was not necessary for the court to determine whether or not the apportionment legislation was applicable because even if it had been, it would have been incumbent on the trial judge to determine which of those pieces of legislation applied and he did not do that. This was important because whilst both the New South Wales and West Australian legislation permitted parties to contract out of their provisions the Victorian legislation did not. In the event that either the New South Wales or West Australian legislation applied then the relationship between the bank and Aussie Home Loans Pty Ltd, who were parties to the action, would have been governed by the contractual indemnity and not by the apportionment legislation which would have been ousted.
Although these two authorities are obiter only, counsel for the plaintiff submits that they lend weight and support to the argument that were the court to find this to be an apportionable claim, which is not accepted by the plaintiff, then little would turn on that because the argument is that the apportionment provision has been ousted by either cl 2.27 or cl 2.36 of the lease (or both) and therefore it is said that the plaintiff is entitled to recover its entire loss from the defendant.
This is said to be the case albeit neither of those two clauses specifically make reference to an ousting or contracting out of apportionment. Counsel argued this is not necessary when one considers the principles of interpretation regarding indemnity clauses referred to by the High Court in Darlington Futures Ltd v Delco Australia Pty Ltd.
Issues raised on behalf of the defendant
Although it is perhaps curious that the two letters, being exhibit 7 and exhibit 18, sent from Glen O'Brien Real Estate to the defendant on 28 April and 15 May 2008 the different addresses are in different font I do not see that this is of particular issue in this case. In the end the defendant accepted that he did receive a copy of the new lease and he was made aware of the rent increase that was proposed and would be charged to any tenant entering into that lease. In his closing submissions to the court however the defendant said that he did not receive or sight the letter dated 20 April addressed to him in Esperance which indicated the lease would be $680 per fortnight under the new lease and so from that he reasoned it seemed to me that he did not enter into a lease or agree to enter a lease at that higher rent. He was however at the time of the fire in my view 'holding over' pursuant to cl 6 of the lease and all that it entailed. The defendant submitted that there was not a particular amount of rent stipulated for the purpose of the holding over clause and so therefore although the plaintiff was claiming the loss of opportunity to rent the unit at $680 per fortnight it was not admissible evidence because there was no proof that a higher rent would have been paid. The point regarding the lack of stipulation of a rental amount pursuant to the holding over clause has already been dealt with in these reasons and is not relevant. It is not a question of whether there is proof that a higher rent would have been paid, it is a question of the loss of opportunity to obtain a higher rent that was foreshadowed in the new lease.
The defendant contended that as at 11 May after the original lease expired Matthew Smith was a co‑tenant with the defendant and occupied a bedroom at the unit. He reiterated he only learnt of Matthew Smith's intention not to have his name on the new lease from Ms Hawkins' email to him of 19 May 2008 shortly before the fire. In that regard the defendant took issue that he was the sole tenant of the premises at the relevant point in time. He disagreed that as at the date of the fire Jesse Johnson was a visitor, rather he suggested he was an occupant of the unit who apparently intended to become a tenant under the new lease. In the end however for the purposes of the lease and cl 2.27 and cl 2.36 it seems to me that there is not a great deal of difference between the status of an occupant of the premises (who is not a tenant) and that of a visitor to the premises.
Findings
On the evidence before the court there is no doubt in my view that the original lease expired on 10 May 2008. The new lease at least one copy of which was forwarded to the defendant under cover of letter nominated the defendant as the sole tenant and the increased rent was to be $680 per fortnight. It may well be that Jesse Johnson did wish to become a co‑tenant under the new lease but that new lease was apparently not signed and it was definitely not returned to the real estate agency who had apparently had no discussions or indications from Jesse Johnson that he wished to be named as a tenant under the new lease. I am satisfied that pursuant to cl 6 of the original lease as at the date of the fire the defendant was 'holding over' under the lease and was therefore subject to that clause and the obligations of the lease. In the end I accept the submission on behalf of the plaintiff that whilst there might be an issue as to whether the defendant was the sole tenant or not at the time of the fire is not material. Certainly Matthew Smith had been a tenant under the previous lease which expired and he had indicated quite clearly to Marilyn Hawkins that he did not wish to be a tenant under the new lease. It is not possible to make a finding as to whether Matthew Smith had returned the keys to the real estate agency prior to the fire but it does not seem to me in all of the circumstances that he was holding over at the relevant time.
There is no question that a fire occurred at the premises on the evening of 22 May 2008 and that the cause of the fire was a heater being left on at the premises which caused flammable material such as a mattress or a pillow nearby to ignite. At the time of the fire in my view both Jesse Johnson and his girlfriend Sinaed Trotman were occupants of the unit and in the particular circumstances I do not see their respective roles as being particularly different from that of visitors to the unit. I am satisfied that neither of them were tenants of the unit as at 22 May 2008. On the evidence I find that it was either Jesse Johnson or Sinaed Trotman that left the heater on at the relevant time and although there is correspondence from the defendant's then lawyers that it was Sinaed Trotman who left the heater on in my view in the end it does not make a great deal of difference for the purposes of the facts in this matter whether it was her or Jesse Johnson. Neither of them are defendants in this action and neither of them gave evidence at trial.
I am satisfied in relation to the damages claimed with respect to the repairs that were subsequently carried out pursuant to the invoices before the court in combination with the assessor's fee have been made out in the plaintiff's case. Further I am satisfied that the loss of opportunity claimed by way of lost rental from the time of the fire until the unit was able to be re-let in December 2008 has been proved in the sum of $680 per fortnight.
Some time has been spent during the course of these reasons considering and discussing the contents and construction or possible construction of cl 2.27 and cl 2.36 of the lease. I do not intend to repeat those matters at this juncture. In this case I am satisfied that each of those clauses are very clear in their language and their meaning and further I am satisfied that counsel for the plaintiff is correct in submitting that cl 2.36 deals with two separate and distinct indemnities. The first indemnity or limb of cl 2.36 applies in the circumstances of this case. Relevant to cl 2.27 expert evidence from Mr Hoad sufficiently establishes the basis of the claim under that clause.
That aside, although it is put as an alternative basis, I am satisfied that in any event relevant to the first limb of cl 2.36 the plaintiff has made out its claim because clearly there was a fire which resulted in damage to the unit of which the defendant was a tenant and I accept that he is therefore liable for such damage. Each of these clauses are indemnity clauses but on any reading in my view neither of those clauses contains any ambiguity.
Consideration has been given in these reasons as to whether or not proportionate liability pursuant to the Act applies to the plaintiff's claim in this case. There does not seem to be an authority directly on point in this jurisdiction. In the end this is a case that deals with indemnities and on the material before the court I accept that for the purposes of the argument they are not dissimilar in terms of the principles involved regarding interpretation to guarantees. That is why I am inclined to follow the reasoning in Commonwealth Bank of Australia v Witherow case and conclude that, despite authorities to the contrary that this is not an apportionable claim to which the relevant sections of the Act applied. If I am wrong in that however it seems to me to be quite clear that if it is an apportionable claim and proportionate liability applies then there has been an ousting by virtue of the language of both cl 2.27 and cl 2.36 of the lease of Pt 1F of the Act and there is no question that this is permitted by s 4A of the Act. I do not take the view that language used in order to oust such provision must be so specific and narrow as to, for example, mention the word oust or use wording that specifically says that the parties are contracting out of particular portions of the Act. It seems to me that the answer is found in a common sense interpretation of the wording of the clause rather than particular legislative provisions to be referred to and in the comments on this issue by Blow J in the Aquagenic's case.
In all of the circumstances there will be judgment for the plaintiff against the defendant in the sum of $105,109.13 which consists of damages claimed in the sum of $92,333.13 and interest for the period claimed (being 4 years and 32 weeks) in the sum of $12,776 which I am minded to calculate on a discretionary basis at 3% per annum pursuant to s 32 of the Supreme Court Act 1935 from the date the cause of action arose to the date of judgment.
I will hear counsel for the plaintiff regarding the issue of costs.
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