CITATION: PEARCE & ANOR and GERMAIN [2007] WASAT 291
MEMBER: JUDGE J CHANEY (DEPUTY PRESIDENT)
HEARD: 22 AUGUST 2007
DELIVERED : 6 NOVEMBER 2007
FILE NO/S: CC 3592 of 2005
BETWEEN: MURRAY GRAHAM PEARCE
MARGARET EVA PEARCE Applicants
AND
TERRANCE ANTHONY GERMAIN Respondent
FILE NO/S :CC 3714 of 2005
BETWEEN :TERRANCE ANTHONY GERMAIN
Applicant
AND
MURRAY GRAHAM PEARCE MARGARET EVA PEARCE Respondents
Catchwords:
Lease Commercial tenancy Lessees ceasing to carry on business from premises Lessor carrying out works on premises without lessees' consent Whether breach of quiet enjoyment Whether lessees in breach for parting with possession Rent cheque not received by lessor Whether entitled to terminate lease Whether prior notice of reentry required Damage following termination
Toscana (WA) Pty Ltd v Pidd (Unreported, WASC; BC 990080B; 19 February 1999)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The lessees and the lessor of shop premises in Busselton brought proceedings against each other concerning alleged breaches of the lease in late 2004 and May 2005. The lessees had ceased conducting their business from the premises in November 2004, but continued paying rent until May 2005. Although the lessees said that they had paid the May 2005 rent by post, the lessor did not receive the cheque and terminated the lease by re-entering the premises.
The Tribunal examined the events of December 2004 and concluded that, although the lessor undertook certain works on the premises without the lessee's consent, his conduct did not amount to a breach of the covenant for quiet enjoyment. However, the Tribunal also concluded that the lessees had not breached the lease at that time as alleged by the lessor because they had not parted with possession in the sense prescribed by the lease.
The failure to pay the May 2005 rent was found by the Tribunal to justify termination of the lease by the lessor. The Tribunal awarded damages to the lessor flowing from the termination.
Outline of the dispute
Mr Terrance Germain owns a property located at 22 Prince Street Busselton. By a lease dated 4…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Pearce & Anor and Germain [2007] WASAT 291
Case
[2007] WASAT 291
Decision Date
CaseChat Overview and Summary
The parties to the dispute were Mr and Mrs Pearce, who were the lessees of a commercial property at 22 Prince Street, Busselton, and Mr Germain, who was the lessor of the same property. The nature of the dispute was primarily about alleged breaches of the lease by both parties, including claims by the lessees for damages due to certain actions by the lessor, and claims by the lessor for payment due to breaches by the lessees. The dispute was heard by the Tribunal under the Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA). The central legal issues the Tribunal had to decide were whether the lessor had breached the terms of the lease by carrying out works on the premises without the lessees' consent, whether the lessees were in breach for parting with possession, and whether the lessor was entitled to terminate the lease due to non-receipt of a rent cheque. Additionally, the Tribunal had to determine whether prior notice of re-entry was required and whether damages followed the termination.
The Tribunal found that the lessor was not in breach of the lease for carrying out works on the premises without the lessees' consent, as there was no evidence that the works interfered with the lessees' quiet enjoyment of the premises. The Tribunal also found that the lessees were in breach for parting with possession, as they had vacated the premises without a valid reason. Regarding the termination of the lease, the Tribunal found that the lessor was entitled to terminate the lease due to the non-receipt of a rent cheque, but this was not a breach of the lease. The Tribunal also found that the lessor was not required to provide prior notice of re-entry. The Tribunal considered the clause in the lease which required payment by the lessees of the lessor's costs and expenses resulting from a default under the lease. The Tribunal considered this clause to be a relevant factor in exercising its discretion in relation to costs. The Tribunal also found that the lessees' conduct in the proceedings did not provide a basis for an order for costs being made against the lessees.
In conclusion, the Tribunal dismissed the claims by the lessees in CC 3592 of 2005 and ordered that in CC 3714 of 2005, the respondents pay to the applicant the sum of $21,462.47 together with interest thereon at the rate of 2% more than the ANZ Banking Group Limited reference rate from time to time from 1 December 2005 to the date of payment. The Tribunal also granted liberty to apply in relation to costs.
Orders
Orders of the court
For the forgoing reasons, the claims by the lessees in CC 3592 of 2005 should be dismissed. In matter CC 3714 of 2005, there will be orders that: 1. The respondents pay to the applicant the sum of $21,462.47 together with interest thereon at the rate of 2% more than the ANZ Banking Group Limited reference rate from time to time from 1 December 2005 to the date of payment. 2. There is liberty to apply in relation to costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
JUDGE J
Conclusion For the forgoing reasons, the claims by the lessees in CC 3592 of 2005 should be dismissed. In matter CC 3714 of 2005, there will be orders that:1.The respondents pay to the applicant the sum of $21,462.47 together with interest thereon at the rate of 2% more than the ANZ Banking Group Limited reference rate from time to time from 1 December 2005 to the date of payment.2.There is liberty to apply in relation to costs. The lessor of premises in Prince Street, Busselton succeeded in part of his claim against the lessees after a hearing by the Tribunal in August 2007. He sought payment of his costs by the lessees on a full indemnity basis. The Tribunal examined the principles which apply in relation to the costs of proceedings under the Commercial Tenancies (Retail Shops) Agreements Act 1985 (WA). In doing so, the Tribunal disagreed with aspects of the approach taken to applications for costs under that Act in some earlier decisions of the Tribunal. The Tribunal considered the significance and effect of a clause, in the lease the subject of the dispute, which required payment by a lessee of costs and expenses of the lessor resulting from a default under the lease. In the particular circumstances of this case, the Tribunal considered that the existence of that clause was a relevant factor to be taken into account in exercising a discretion in relation to costs. The Tribunal also considered claims that the lessees had acted unreasonably or inappropriately in the conduct of the proceedings, but considered that the lessees' conduct did not provide a basis for an order for costs being made against the lessees. Having regard to the provisions in the lease, the Tribunal made an order that the lessees pay so much of the lessor's costs as related to the lessees' breach of the lease. By reasons for decision published on 6 November 2007, the Tribunal determined cross‑applications by each of the lessees and lessor of retail premises located at 22 Prince Street, Busselton. The lessees, Mr and Mrs Pearce, had claimed damages for certain alleged breaches of the lease. Those claims were unsuccessful. The lessor, Mr Germain, was partially successful in his claim for payment of various amounts of money on the basis of a breach of the lease by the lessees. The Tribunal's reasons are published as Pearce & Anor and Germain [2007] WASAT 291. Following delivery of the Tribunal's decision, Mr Germain applied for orders that Mr and Mrs Pearce pay his costs of the proceedings on an indemnity basis. The orders sought by Mr Germain were as follows:"1.[Mr and Mrs Germain] are to pay the applicant's costs of the proceedings numbered CC 3592 of 2005 and CC 3714 of 2005 including the reserved costs; 2.The costs payable by [Mr and Mrs Pearce] to [Mr Germain] are all of [Mr Germain's] costs except insofar as they are an unreasonable amount or have been unreasonably incurred; and3.In the event that such costs are not agreed:(a)Within 30 days after the making of this order [Mr Germain] is to file and serve a bill of costs; and(b)The matter thereafter be set down before a member of the Tribunal for assessment of the amount of costs so payable by [Mr and Mrs Pearce] to [Mr Germain] using (by analogy) the Supreme Court costs scale."