Perpetual Limited v Gelato Ingredients Manufacturers of Australia Pty Ltd
[2014] NSWCATCD 25
•14 March 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: Perpetual Limited v Gelato Ingredients Manufacturers of Australia Pty Ltd [2014] NSWCATCD 25 Hearing dates: 21, 22, 23 October 201328 November 2013 Decision date: 14 March 2014 Jurisdiction: Consumer and Commercial Division Before: D Patten
Principal MemberDecision: 1. That Perpetual pay Gelato $26,659.00.
2. That Gelato and Mr Di Francesca pay Perpetual $28,500.00.
3. Subject to paragraph 90 no order as to costs.
Catchwords: Retail lease - breach of covenant for quiet enjoyment - repudiation by lessee - damages Legislation Cited: Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 57 ALR 609
Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313Cases Cited: Retail Leases Act Category: Principal judgment Parties: Perpetual Limited (applicant)
Gelato Ingredients Manufacturers of
Australia Pty Ltd (first respondent)
Giovanni Di Francesca (second respondent)Representation: Mr D Mobellan (Applicant)
Mr G Di Francesca in person
RAJ Lawyers (Applicant)
File Number(s): COM 14/14518 COM 14/14521
reasons for decision
APPLICATION
There are two matters before the Tribunal 125109 (the earlier proceedings) in which Perpetual Ltd (Perpetual) is applicant and Gelato Ingredients Manufacturers of Australia Pty Ltd (Gelato) is first respondent and Giovanni Di Francesca (Mr Di Francesca) is second respondent and 125126 (the later proceedings) in which Mr Francesca is applicant and Perpetual is respondent.
In the earlier proceedings commenced by Statement of Claim in the District Court Perpetual sought return of fit out contribution, interest, arrears of rent, damages and costs in relation to a lease indisputably a Retail Lease within the Retail Leases Act of premises known as shop 3, Parkes Metro Plaza 307-313 Clarinda Street Parkes NSW 2870 (the premises). The earlier proceedings were transferred to this Tribunal by order of the District Court.
In the later proceedings Gelato sought damages for alleged unconscionable conduct; damages for alleged false and misleading conduct and damages as a consequence of Perpetuals alleged repudiation of the lease. It also sought various forms of declaratory relief. In interlocutory proceedings the claim for damages in respect of unconscionable conduct was dismissed.
The hearing of the matter occupied four days. Perpetual was represented throughout by Mr D Mobellan of Counsel. I gave leave to Mr Di Francesca to appear for Gelato as well as for himself, as guarantor of the lessee's obligations under the lease, and directed that all evidence be treated as evidence in both proceedings.
In support of his case Mr Mobellan read the affidavits of Mark Swan 5 December 2012, Nicole Chapman 1 May 2012 and 30 January 2013, Paul Davis 21 December 2012, Jessica Lacey 6 December 2012, Melissa Turton 1 October 2013, Michael Martin 5 February 2013 and Nicholas Kelly 20 December 2012. Mr Swan, Ms Chapman, Mr Davis, Ms Lacey, Ms Turton, Mr Kelly and Mr Martin gave supplementary oral evidence and were cross examined by Mr Di Francesca.
Mr Swan testified that he is a director of Madley Swan Pty Ltd which from 26 November 2005 had contracted to clean the Shopping Centre known as Parkes Metro plaza at 307-313 Clarinda Street Parkes (the Centre). Mr Swan said that Madley Swan also provides other services at the Centre as required. The cleaning work is personally performed by him or by persons organised by him.
He said that the premises for some time up to about November 2009 were operated as a kebab shop. Madley Swan was retained to clean up the premises after the kebab business ceased trading and they became vacant. His instructions came from employees of Perpetual, Nicole Chapman, Shayne Cullen and Paul Davis. He was given no authority to make any representations on behalf of his principal.
In November 2009 he said that an officer of Perpetual asked him to allow a Mr Robert Di Francesca to inspect the premises. Facilitating inspections was a service he regularly performed without remuneration. Shortly afterwards he met Mr Di Francesca and his son Robert at the premises and let them inside. He denied that during the inspection he made any comment as to the nature or quality of them. He also denied describing himself as having any role in the management of the Centre.
Mr Swan subsequently at the request of Mr Di Francesca prepared a quotation for the fit out of the premises involving plumbing, electrical and ceiling works and was later told by him that the quotation was accepted. Mr Swan arranged for the work to be carried out by various sub contractors.
The state of the air conditioning unit in the premises looms large in these proceedings. Mr Swan's affidavit makes limited reference to the problem which later arose:
49.As part of the fit out works, Madley Swan replaced the ceiling in the Premises and put in a new ceiling.
50.At that time there was no overflow tube from the air conditioning unit. I believe Madley Swan sub-contracted with the same plumber we used when conducting a clean up of the Premises after Ispa Kebab ceased trading. To the best of my recollection, the plumber informed me that there was no overflow tube from the air conditioning unit.
51.As part of the fit out works the plumber ran a tube from the air conditioning unit up in the cavity of the ceiling of the Premises into the gutter outside the front of the Premises. This would allow condensation from the air conditioning unit to be pumped through the over flow tube into the gutter and then to run away down the gutter down pipe. Prior to the overflow tube being installed, the air conditioning unit relied on an internal drip tray to capture condensation.
52.The plumber informed me that the drip tray would fill up. In which case, to the best of my recollection, the plumber informed me that he had installed a bigger drip tray when Ispa Kebab was the tenant. So as part of the fit out works when I was replacing the ceiling, my plumber installed an overflow tube as note above.
Under cross examination Mr Swan acknowledged that he replied in the affirmative at the first inspection when asked whether the air conditioning was working. He said that he was aware that it was a unit which serviced only the premises and conceded that he did not specifically point that out.
In her first affidavit Ms Chapman testified that from July 2007 to June 2011 she was the Retail Manager of the Centre. On 1 July 2011 she became the Centre Manager. She identified a copy of lease AF 590585 T as the lease of the premises from Perpetual to Gelato for a term of 5 years commencing 7 December 2009. It might be observed that the lease comprises some 59 pages many of which seem to me more relevant to the lease of a large supermarket rather than an ice cream parlour having a floor space of only a few square metres. However some provisions of the lease have particular relevance to this case:
The permitted use of the provisions
"Retail sale of Gelato ice cream and the sale of coffeee tea cakes soft drinks and all related gelato / ice cream products e.g. gelato shakes, milk shakes and fruit juices."
Provisions regarding fit out:
Fitout means the works to be performed by the Tenant and approved by the Landlord to fully refurbish and/or fitout the Premises to meet the Tenant's occupational requirements in accordance with this Lease, and in particular this Special Provision 1.
1.4. Tenant's Works to Conform
The Tenant shall submit its shop fitout plans for the Landlord's approval prior to the commencement of the Tenant's Fitout Works. The Tenant's Fitout Works shall be carried out in accordance with the terms of this Lease (including Special Provision 1) and to the standard and according to the requirements set out in the Fitout Manual or any requirements reasonably imposed by the Landlord. Without limiting any other provision of this lease, the Tenant's Fitout Works must be not commenced or carried out by the Tenant prior to obtaining the Landlord's written consent to:
(a) the design of; and
(b) the materials to be used in carrying out,
(c) the Tenant's Fitout Works.
4.1. Defined terms
In this Lease:
Fitout Contribution means $20,000.00 plus GST.
Fitout Cost means the actual GST exclusive cost to the Tenant of the Fitout.
Purchase Event means if:
(a) the Lease is terminated by reason of a default by the Tenant, and Landlord gives notice that it wishes to exercise its rights under this clause;
(b) the Tenant ceases to trade or threatens to cease to trade from the Premises and the Landlord gives notice that it wishes to exercise its rights under this clause;
(c) the Tenant assigns, underlets, parts with possession of the Premises or any part of them, or purports to do so, without the consent of the Landlord; or
(d) the Tenant breaches the obligation of confidentially in Special Provision 4.7 and the Landlord gives notice that it wishes to exercise its rights under this clause.
4.4. Landlord to pay Fitout Contribution
Subject to Special Condition 4.5, the Landlord will pay the Fitout Contribution to the Tenant within a reasonable time (and no less than 30 days) after the Tenant completes the Fitout in accordance with this Lease.
4.8. Fitout Landlord's property
Notwithstanding anything in this Lease:
(a) if the Landlord pays to the Tenant the Fitout Contribution, the Landlord may nominate items of the Fitout to the value of the Fitout Contribution, which will be: the shop front, ceiling, lighting, air-conditioning unit, and flooring (Nominated items).
(b) if the Landlord makes a nomination under this clause, the Nominated items will:
(i) become the absolute property of the Landlord; and
(ii) be deemed to be part of the Landlord's Property.
4.9.Transfer of ownership of Nominated Items
(a) If a Purchase Event occurs during the first five years of the Term, on the date that the Purchase Event occurs the Tenant will purchase and the Landlord will sell the Nominated Items at a price determined as follows:
(i) if the Purchase Event occurs during the first year of the Term, 100% of the Fitout Contribution;
(iii) if the Purchase Event occurs during the second year of the Term, 80% of the Fitout Contribution;
(iv) if the Purchase Event occurs during the third year of the Term, 60% of the Fitout Contribution;
(v) if the Purchase Event occurs during the fourth year of the Term, 40% of the Fitout Contribution; and
(vi) if the Purchase Event occurs during the fifth year of the Term, 20% of the Fitout Contribution.
(b) Subject to Special Provision 4.9(a), if at the expiry or sooner determination of the Term the Nominated Items remain in the ownership of the Landlord and if required by the Landlord, the Nominated Items specified by the Landlord will be transferred to the ownership of the Tenant at the instant in time immediately prior to the expiry or sooner determination of the Term for a nominal value of $1.00 (if demanded).
The definition of services:
Services means the services provided to or for the benefit of the Centre, including Common Area Electricity, gas, water, sewerage, lifts, escalators, air conditioning, sprinkler systems, fire protection and control, essential services, security equipment, rubbish storage and removal and communication together with all plant and equipment relating to those services and includes services provided by the Landlord, authorities and others.
13.5 The Tenant's quiet enjoyment
The Landlord must allow the Tenant to occupy and use the Premises without the Landlord interrupting or disturbing the Tenant, except where this Lease allows the Landlord to do so.
13.6 The Landlord's Services
If the Landlord supplies any Services to the Centre (for example: airconditioning, elevators), the Landlord must do all the Landlord reasonably can to ensure that they are working efficiently during the Centre's trading hours. However, if any of the Services do not work efficiently, unless the Act applies and provides otherwise, the Landlord is not liable to compensate the Tenant and the Tenant cannot end this Lease if the Landlord does not.
14.2 When the Landlord does repairs or building work
(a) When the Landlord does repairs, maintenance or building work to the Premises or the Centre, the Landlord must cause as little disruption to the Tenant's use of the Premises as is reasonable in the circumstances.
(b) If the work referred to in clause 14.2(a) is likely to adversely affect the Tenant's business at the Premises, the Landlord must give the Tenant notice of the proposed works at least 2 months before the Landlord commences the work.
(c) The Tenant cannot make a claim for compensation or pursue any other remedy for any occurrence if the Landlord drew the Tenant's attention to the likelihood of the occurrence before the Lease was entered into.
18.1 Interpretation
In this clause:
(a) Guaranteed Money means all money that the Tenant is or may at any time be liable (actually, prospectively or contingently) to pay to the Landlord under or in connection with:
(i) this Lease (including the Tenant's default); and
(ii) the Tenant's occupation of the Premises,
(iii) and includes money which the Tenant would be liable to pay but for its insolvency.
(b) Guarantor Assets means all debits and liabilities owed by the Tenant to the Guarantor and any security the Guarantor holds over the Tenant's assets.
(c) Lease includes any holding over under it and extension and renewal of it.
18.3 Guarantee
The Guarantor irrevocably and unconditionally guarantees to the Landlord that the Tenant will:
(a) pay the Guaranteed Money on time; and
(b) comply on time with the Tenant's obligations under this Lease and in connection with the Tenant's occupation of the Premises.
18.5 Indemnity
As an additional obligation of the Guarantor which the Landlord may enforce separately from the guarantee in clause 18.3, the Guarantor irrevocably and unconditionally indemnifies the Landlord against and undertakes as principal debtor to pay the Landlord on demand a sum equal to all liability, loss, penalties, costs, charges and expenses directly or indirectly arising from or incurred in connection with
(a) the Tenant not paying the Guaranteed Money on time;
(b) the Tenant not complying on time with the Tenant's obligations under this Lease or in connection with its occupation of the Premises; and
(c) the Landlord not being able to recover all of the Guaranteed Money from the Tenant or enforce all of the Tenant's obligations under this Lease or in connection with the Tenant's occupation of the Premises for any reason.
whether or not the Landlord or the Guarantor knew or should have known about a fact or circumstance that gives rise to a claim under this indemnity. It is not necessary for the Landlord to incur expense or make a payment before enforcing this indemnity.
20.2 If the Tenant breaches this Lease
(a) If the Tenant breaches this Lease the Landlord may do any one or more of the following:
(d) re-enter and take possession of the Premises;
(ii) end this Lease (see clause 11.10);
(iii) recover from the Tenant or the Guarantor any loss the Landlord suffers due to the Tenant's breach;
(iv) use the bank guarantee (see clause 9.1(c)) to recover any loss the Landlord suffers due to the Tenant's breach; or
(v) exercise any of the Landlord's other legal rights.
20.3 What the Landlord may do if the Tenant breaches an essential term
(a) If the Tenant breaches an essential term of this Lease and the Landlord re-enters and takes possession of the Premises, the Landlord may recover all money payable by the Tenant under this Lease up to the Expiry Date. The Landlord must take all reasonable measures to minimise the Landlord's loss.
(b) The essential terms for this clause are Part 4, Part 5 and clauses 3.1, 6.1, 7.1, 7.4(c), 7.5(b), 8.1(b), 8.2, 8.3, 8.4, 9.1(a), 9.1(b), 9.1(e), 10.4, 11.1, 11.2, 11.3(e), 11.4(a), 11.5 and 17.1.
Rule 1.5 The Landlord's standards for Premises
(a) The Tenant must get the Landlord's consent before the Tenant does any thing that affects the quality and standard of the Premises and its presentation. The Tenant must comply with the Fitout Manual and the Landlord's reasonable requirements and standards of design, quality, style and appearance.
(b) The Tenant must observe the maximum load weights throughout the Centre.
Rule 1.11 Cooling and heating of Premises
The Tenant must get the Landlord's consent before the Tenant uses any services for cooling or heating the Premises other than those the Landlord supplies (for example: lighting, cooling, heating or circulating air).
In rule 1.5 reproduced above and in cl 11.8 of the lease itself there is reference to "the Fitout Manual" and to the lessees obligation to comply with it. The Fit Out Manual is described within it as prepared "to assist the Tenant, Tenant's Designer and Fit Out Contractor in understanding the responsibilities and criteria which must be followed to ensure the successful completion of each shop fitout". The document contains a "Summary of Responsibilities" including against "air conditioning" an indication that the lessor is responsible for the cost "to suit open plan and for lighting and equipment head load up to 55 watts / m² and occupancy of 7.7 m² / person. Includes plant ducting and air registers".
The Fit Out Manual stipulates that at the lessee's cost are "Alterations to ducting and air registers to suit lessees' layout. Alterations to system for increased heat loads and / or occupancy carried out by lessors' contractors."
It is a pity that such a lengthy and detailed document as the lease in this case, when dealing with the subject of air conditioning was not particularly apt to the situation where the premises rely on a stand alone unit rather than upon the system which air conditioned virtually the whole of the rest of the Centre.
Ms Chapman went on to state in her affidavit that on 10 March 2011 she caused a Notice of Breach of Covenant to be served on Gelato and upon Mr Di Francesca alleging arrears of rent outgoings etc. She said that on 22 March Gelato ceased trading from the premises and removed its stock fixtures and fittings. She said that Gelato repudiated the lease on 24 March by stating that it did not intend to reoccupy the premises or pay the outstanding debt. Perpetual was invited to take back the keys.
According to Ms Chapman, Perpetual accepted the repudiation re entered possession of the premises and became entitled to damages. I will need to return to this subject. Likewise I will need to return to Ms Chapman's second affidavit which for the most part as with her oral evidence was directed to the damages case mounted by Gelato.
Mr Davis was a Leasing Executive employed by Macquarie Real Estate Management Services Pty Ltd and was at relevant times responsible inter alia for the leasing of the Centre. In November 2009 he wrote to Mr Di Francesca enclosing a tenancy proposal for the premises. The proposal recorded a use of "Retail sale of Gelato ice cream and the sale of coffee and tea" and listed other terms and conditions of the proposed lease. Under the heading Fit Out the following appeared:
FIT OUT
Fitout period:
The Tenant will be given 4 weeks in which to carry out the Tenant's fitout works from the lease start date.
Landlord's works:
Refer attached Tenancy Fitout Guide.
Tenant's works:
The Tenant must obtain the consent of the Landlord to its plans and specifications for the Tenant's works. All works are to be undertaken in accordance with the Tenancy Fitout Guide.
Alterations to Landlord's works:
If the Tenant's works require any alteration to the Landlord's works to the Premises, or work to other parts of the Centre, then all such works must be performed by the Landlord at the cost of the Tenant. The Landlord may choose not to perform such works until their estimated cost has been paid by the Tenant.
Mr Di Francesca signed and returned an acknowledgement of the terms of the proposed lease and also acknowledged that no representations had been made to him other than as set out in the documents sent to him.
Jessica Lacey was employed at relevant times as the person responsible for coordinating landlord and tenant work in relation to the fit out of shops in retail shopping centres including the Centre. She sent a copy of the Fit Out Manual to Mr Di Francesca on or about 15 November 2009. After stating this Ms Lacey's affidavit identifies many emails passing between her and Gelatos' representatives regarding the fit out of the premises and the landlords insistence that all its requirements be strictly adhered to. Curiously there was no mention of the fact that the air conditioning unit in the premises was stand alone and not part of the system provided for the rest of the Centre. As it appears by early January 2010 fit out was practically complete. There was this exchange of emails:
Good Afternoon Robert,
I trust you had a safe, happy and relaxing Christmas (although with opening a new store I am sure relaxing was far from the case).
As I am back on deck I thought I would drop you an email to remind you that we will require all Pre-Occupation documentation along with all Leasing documentation complete and returned prior to you being granted approval to commence trade.
Please do not hesitate to call me should you have any questions or require any assistance I will be more than happy to help.
Look forward to seeing some photos.
Kind Regards
Jessica Lacy
National Tenancy Coordinator
0405356527
Hi Jessica
Ive got the council inspection on wed and once approved should have all the paper work ready for you, in regards to the lease just waiting for my ins broker to email me the paper work, then ill shoot them off to your lawyers, i do have to speak to paul quite urgently but dosnt seem to answer if you get a hold of him could you tell him to contact me quite urgently.
Thanks
Robert Di Francesca
On 6 January 2010 Parkes Shire Council issued an Interim Occupation Certificate.
Ms Lacey said that on 7 January 2010 she received an email from Mr Di Francesca which attached a certificate prepared by Hastie Services Pty Ltd in relation to the air conditioning. Ms Lacey said that she did not arrange for that certificate to be given.
The certificate stated:
"Check & tested air conditioner
In new shop found unit running okay no affects from new refurbishment."
On 18 January Ms Lacey notified Gelato that she was satisfied that all works were completed and consented to trading commencing forthwith.
Ms Turton's affidavit and Mr Kelly's affidavit deal with Perpetuals' attempts to re-lease the premises after the lease to Gelato terminated. I will need to return to their evidence. I will also need to return to the evidence of Mr Martin who testified as an expert in air conditioning.
On behalf of Gelato Mr Di Francesca read affidavits of himself sworn 3 July 2012, his son Robert sworn on the same date and of Mr Ken Brooke sworn 13 July 2012. The affidavits, were drafted by solicitors previously acting for Gelato.
Mr Di Francesca described himself as the "proprietor of a family company" namely Gelato and said that his son Robert and daughter Joanna are the primary managers of its business as a Manufacturer and Distributor of gelato ice cream coffee and other similar type foods. He said that Gelato established a factory in Molong about 2008. In late 2009 while in Parkes with Robert he noticed that the premises were vacant. He exhibited interest in obtaining a lease to the leasing agent Mr Davis and subsequently met Mr Swan for the purpose of making an inspection. Mr Di Francesca went on to depose:
8. Robert and I attended the centre to inspect the vacant shop. We met Mark Swan from Madley Swan Pty Ltd. Mark introduced himself as follows:
Mark: I basically look after the centre. I work for my own company, Madley Swan. Nicole, who is the official manager, is never around, so I run things day to day for the landlord. Whatever needs to be done, I look after it. My company also has a contract for cleaning the centre and collecting the trolleys.
9. Mark took us on a tour of the inside of the vacant shop, which was known as Shop No. 3 Parkes Metroplaza. It was locked up. He opened it up and showed us around.
10. As soon we entered the vacant shop, we noticed that it was in a mess, as the previous tenant had just up and left the premises, leaving all their equipment. I believe the former tenants operated a kebab shop.
11. The shop was in extreme need of repairs. It required renovation of the walls, removal of fridges and freezers, repair of exhaust pipes and extensive cleaning.
12. Mark, Robert and I then had the following conversation:
Giovanni: Does the shop have its own air conditioning?
Mark: Yes.
Giovanni: Does it work property?
Mark: Definitely it works properly. What are you going to put in the shop?
Giovanni: A gelato shop.
Mark: That'll go really well. It's a small shop. It's nice and neat. It's a great location too.
13. We then had a discussion about the state of the shop:
Giovanni: Mark, it's a mess. Will the landlord make a contribution to help repair it? We've got to remove all this garbage. Look, they've left fridges, freezers and a lot of other stuff behind. We're going to have to put in a new ceiling. The shop front also needs repairing. We need to put in some anti-vermin installations. We always make sure our business is safe from vermin. It needs to be re-tiled everywhere too.
Mark: I'll see what we can do. I'm sure that can be accommodated if you enter into the lease. I can do most of the work myself. I can use my company and we'll employ local guys to do the job to keep costs low.
Giovannni: Okay.
Mr Di Francesca said that he received a lessor disclosure statement in 2009. He drew attention to the fact that "Outgoings" to be paid by the lessee" included as an item "air conditioning ventilation" the estimate per annum of which was $347.44. He also drew attention to the appearance of the words Air Conditioning in a schedule against the item "Facilities and Services provided by the lessor". The word "No" was indicated against each of the provisions for particularising "Changes or Developments planned by lessor" for "Retail Shopping Centre" and "surrounding Roads".
There was an annexure to the Disclosure Statement - "Schedule of Anticipated Disturbances". The schedule did not disclose the disturbance hereafter mentioned, the complaint about which forms part of Gelatos case.
Mr Di Francesca said that Gelato contracted with Madley Swan for the work and equipment required to prepare the Shop for opening and paid $25,310.00 for such work. The cost of new equipment amounted to $49,880.20.
There were other expenses which according to Mr Di Francesca when added to the amounts already mentioned totalled in all $73,875.32. Of this $20,000.00 was reimbursed by Perpetual as a Fit Out Contribution pursuant to the lease.
In the result the premises were open for business prior to the Parkes "Elvis Festival" which occurs in the second half of January each year. According to Mr Di Francesca there were immediate problems with the air conditioning:
31. As soon as we opened the shop up for business, Robert and I noticed that the air conditioning was not working properly. It would turn on and off.
32. I called Mark, and we had the following conversation:
Giovanni: Mark, something is wrong with the air conditioning. It keeps turning on and off? We need this sorted as soon as possible. We need a cool and non-humid environment to run the gelato shop.
Mark: Don't worry mate, I'll get someone in to try and fix it up.
33. Mark then arranged for some specialists to come and fix the air conditioning. They suggested we try it at different temperatures. This did not work and it continued to operate intermittently.
34. Robert and I had a conversation with Mark:
Giovanni: They didn't fix it Mark, we need it working so our staff can function in the shop - it gets very hot in a gelato shop.
Mark: Look, it probably needs replacing, but everyone, including Nicole, is on holidays at the moment. You'll have to wait until they get back. Trust me, they'll sort it out and put in another one.
Giovanni: I trust you Mark. I know you are someone who is true to their word and will not let me down.
35. I then arranged for Ken Brooke ('Ken'), a refrigeration mechanic, to come and inspect the air conditioning unit.
39. We had in fact been forced to cover up our equipment, as water was dripping from the ceiling and from the air conditioning unit. It was occasionally falling right onto the food. As water was falling onto the food, we did not think this was hygienic.
42. I then contacted Mark and we had the following conversation:
Giovanni: We've had an expert in. The air conditioner is not fit for a gelato shop. It's not working properly and it needs to be on the outside. Mark, a new one needs to be installed.
Mark: I'm sure they'll put on a new unit because it's a small shop and any new unit won't cost a lot.
Giovannni: You think they'll sort it?
Mark: I'm sure that they'll fix it for you.
Giovanni: When by?
Mark: I can't give you a time frame. The person in charge is Nicole (Chapman) and she's not here at the moment.
43. Nothing was done and we had to keep the shop open without a properly functioning air conditioning system.
44. Conditions in the shop were impossible in the warm months of January, February, and March, as the sun came from the north came straight into the shop.
45. It was too hot in the shop and customers would not stay.
46. Water was dripping onto the food and onto the staff. Our poor staff were getting too hot. On very hot days, we could not operate in the shop at all because the air conditioning was not working properly and was spewing water.
47. I recall that Leean Logan, who was the manager in the Gelato Shop after it had got running, informed me that it was occasionally 28 to 30 degrees in the Gelato Shop.
48. If the weather was overcast, working conditions were bearable. If it was sunny and hot, however, it was often not possible to work at all.
49. We took counter-sun measures to try and stop sun coming in.
50. In or around February, at Ken's suggestion, we purchased an awning and installed this on the front of the shop. Unfortunately, when the sun was high in the sky at around 2pm, the awning did not stop it coming in.
51. We tried putting advertising material on windows to stop the sun coming in, and keeping the doors shut as possible. We had bi-fold doors and had to keep them open at all times, so customers could get in, but we closed them half over to stop the heat.
52. Whatever we tried, however, did not succeed. The sun had the better of us all the time.
53. We then got onto Mark to see if he could do something about the air conditioning in the interim. He called more technicians in and they gave instructions as to what to do. They said to run it in a particular way. We were told to run it at 20, then 24 and then at 18.
54. Whatever temperature we put it on, however, it would not work. The unit simply could not cope with the shop.
55. Nothing happened until July, when Nicole sent people to inspect the air conditioning. After the inspection occurred, Nicole and I had the following conversation:
Nicole: It's going to cost $10,000 for a cheap job to repair it. For a quality one it'll be $16,000.
Giovanni: Okay. Well can you get the ball rolling.
Nicole Well if you put the money out to pay.
Giovanni: What? I can't believe you're suggesting that. Are you serious?
Nicole: Sure I am. You have to pay.
Giovanni: How dare you try and offload your responsibilities to us.
Nicole: That's the way it is Giovanni. Either you pay for a new system or nothing will happen. It won't be fixed.
Giovanni: This is immoral. You promised a working air conditioning system and we've been delivered a trashy one that is not appropriate for a gelato shop.
Nicole: Giovanni, you either pay the money or nothing will be fixed.
At about that time it seems that Mr Di Francesca realized that his Air Conditioning Unit was stand alone. He had a further telephone conversation with Ms Chapman:
Giovanni: Look Nicole. We don't need to go all the way to installing a new one.
Nicole: What do you mean?
Giovanni: All that needs to happen is the two pipes from the existing shopping centre system be extended into the gelato shop. For $2,500-3000 we can get the job done.
Nicole: Okay I'll think about it.
58. Nicole then got back to me and we had the following conversation:
Nicole: Look we'll fix it in summer. Your idea is a good one. Extending the existing system will be cheaper and it shall be done.
Giovanni: Nicole, I thank you. We can survive in Winter. So long as it is done by summer that is fine.
According to Mr Di Francesca by the following summer nothing had been done to alleviate the air conditioning problem. He contacted Mr Davis and had this conversation with him:
Giovanni: Paul, the air conditioning is not working. We cannot operate a gelato shop in these conditions.
Paul: Just get up and leave mate. You're entitled to do that if they're not going to fix what they said was working properly.
Mr Di Francesca said that about November 2010 he had a conversation with Ms Chapman:
Giovanni: If this is not fixed, we'll have to leave.
Nicole: Rest assured Giovanni, it shall be done.
Despite Ms Chapman's assurance he said that nothing was done and the air conditioning unit remained inadequate for the purposes of the business. In January 2011 there occurred the interference to Gelato's tenancy to which I made earlier reference. Mr Di Francesca described it in these terms:
69. In or around the second week of January 2011, the Centre caused works to be carried out on the street in front of the shop. This resulted in our shop being shut off to any pedestrian thoroughfare. Such works were carried out without any notice to us at all.
70. Due to the work, traffic was deviated away and fences were erected out front of the gelato shop. There was little if any custom coming through and there was no point being there.
71. Dust and detritus was also coming into the shop and causing the staff to suffer.
73. I tried to contact Nicole, but she was not available as she was on holidays.
74. On her return in February we had the following conversation:
Giovanni: Have you seen the shopping centre? Have you seen how we have got shut off?
Nicole: I didn't know.
Giovanni: I don't believe that! You have a shopping centre under construction and you don't know. We cannot pay rent while the construction goes on. We've been given no notice of it. You have shut us down.
Mr Di Francesca contacted Ms Chapman again in February 2011. There was this conversation:
Giovanni: Are you going to fix the air conditioning? Your promises have been hollow.
Nicole: Don't worry we're on to that, it'll get fixed. We're working on that now.
The moment you pay the rent we'll do it.
Giovanni: We're not going to pay you any more rent when the shop is shut down. You've put us out of business, go and have a look at what's going on over there.
Nicole: If you're not going to pay rent we won't do anything.
Giovanni: This is unbelievable.
On 4 March 2011 Mr Di Francesca sent Ms Chapman an email:
Dear Nicole
04-03-11
Re: Our telephone conversation on the 3rd of Feb 2011.
We are here to confirm it has been 12 months since we have reported to you the airconditioning failure in the shop and the disability it has created in terms of trading in our shop, the shop in these conditions is not operable by not being able to operate in a proper manner due to airconditioning failure we have lost 75% of trade and products and yet even though we have complained to you on pretty much a daily bases you have done nothing about rectifying your airconditioning problem in addition for the months of January and february (school holiday period) when we were supposed to have an increase in takings your construction workers by erecting and scaffolding in front of our shop have totally deviated foot traffic from the front of our shop and created a total disability and completely destroyed our trade we paid staff wages out of our own pockets.
You have broken every term of the lease by not having provided a workable premises for the purpose to which the lease was issued for 'Gelato retail outlet' fully airconditioned. As you have not supplied us with goods for the purpose to which the lease was issued for you are not entitled to any rent at all until you supply and meet the terms and the purpose of the lease and shop.
Further more a detailed account of all the losses will be prepared and sent to you for reimbursement. As your way of dealing with this matter has been totally un proper we are not to stay in the premises creating further losses for us and you we have come up with a solution and giving you notice, atleast rectification starts immediately you leave us no option but to rescind the lease, close the shop and vacate the premises by the end of this month.
As we have heard from you in the last 12 months nothing but bulldust, no further bulldust will be heard anymore you either fix it or we walk.
Yours Faithfully
G. Di Francesca
Director
At this point the parties were at a stalemate as evidenced by this exchange of emails.
Dear Giovanni,
As discussed yesterday you are currently in breach of your lease due to non payment of arrears. I will proceed to issue a breach notice to include January, February and March rent as payment was not received by COB today. If payment is not received by the nominated date the landlord will act on it through our solicitors.
Also as previously discussed the air conditioning supplied to the tenancy is as per Charter Hall's fitout guide, any requirement above that specification is at the Lessees expense and this is the same with any Lessee. As an act of good faith the landlord is installing ducts in the ceiling and will install an additional air conditioning system however this will not be completed until outstanding rent is paid.
The scaffolding mentioned in the below email is a separate issue and should have been addressed to the Centre Management office at the time, the lease stipulates tenants cannot offset any rent.
Regards,
Nicole Chapman ׀ Acting Centre Manager
From: "Robert DiFrancesca"‹[email protected]›
To: "Nicole Chapman" ‹[email protected]›
Sent: Saturday, 5 March 2011 10:30 AM
Subject: Re: Arrears
Received yours in reply to yesterdays email
As you have been and still are dealing with nonsence and not giving us a certain date to which the airconditioning will be installed to a proper manner to suit the shop requirements no rent will be paid until the job has been completed.
As for the balance we are still standing to yesterdays email
Please rectify your faults and produce a shop worthy of the rent as in the last 12 month it has not been, perhaps your solicitor may be able to explain your situation prior to commence any legal action as it could be a very expensive way of reasoning and you are going to lose.
Giovanni Di Francesca
G.I.M.A
As a result of this stalemate Mr Di Francesca said that Gelato vacated the premises on 24 March 2011. He claimed that the moving out process cost about $6,000.00 and that he was only able to sell his plant and equipment at a greatly depreciated price.
He also claimed loss arising from the interference to the tenancy in January 2011 on the following basis.
80. I note that our takings in 2010 as compared to 2011 when the works were occurring, were as follows:
78. 1January 2010 - $22,724; January 2011 - $11,073 (being 48.7%).
78.2 February 2010- $13,209; February 2011 - $3,660 (being 27.7%).
78.3 March 2010 - $11,347; March 2011 - $2165 (being 10%).
78.4 1-20 March 2010 - $8,014.90; 1-20 March 2011 - $2165 (being 27%).
Mr Di Francesca in his affidavit was less than precise as to the nature of his interference complaint. However photographs tendered in evidence reveal that a rectangular steel fence or barricade was erected outside the street frontage of the premises. Ms Chapman in her second affidavit of 30 January 2013 gave this description:
70. When barricading was erected on the street at the time the Centre works were carried out, access to the Premises and the main entrance to the Centre, which is adjacent to the Premises, was still available. The barricading re-directed pedestrian traffic to the front entrance of the Premises. At this time the Premises and Gelato signage was still visible.
What Ms Chapman said is undoubtedly true and passers by if they looked closely could have seen that there remained pedestrians access to the premises. However to my mind the fence was likely to have been a serious deterrent to prospective customers of Gelato and in my opinion it was outrageous to erect it in the position it was erected let alone without notice to Gelato as required by the lease. I would regard erection of the fence or barricade as a serious breach of the covenant for quiet enjoyment and note that the breach apparently continued for some weeks.
Mr Robert Di Francesca substantially corroborated the evidence of his Father including his evidence as to the first inspection of the premises and the conversation with Mark Swan.
It is appropriate that I state at this stage that I reject any suggestion that Perpetual was bound by anything Mr Swan said. His relationship with Perpetual was that he on request performed formal or minor tasks from time to time and his company had the cleaning contract for the Centre. I am satisfied that taking the initial conversation at its highest in favour of Gelato Mr Swan did not hold himself out as entitled to make representations binding Perpetual. But in any event I reject the notion that either of the Messrs Di Francesca relied on or could reasonably have relied on anything Mr Swan said. Any observation he made in respect of the air conditioning could only have been made as a layman in the context of the business previously carried on in the premises a very different business from that proposed by Gelato.
Mr Robert Di Francesca said that when the Gelato Shop opened for business he was the manager virtually working full time:
26. When I started working, it was really hot in the shop, to the point of being unbearable. The air conditioning would be on and was completely ineffective at keeping the place cool. I recall trying to do a few different things, including closing the bi-folds over part of the way. This, however, did not keep the shop cool.
27. I recall that in the first week of operation, I realised that there was water coming from the roof and dripping onto the biscuits and the coffee machine, as the coffee machine and biscuits were positioned right under the air conditioning unit. There was also water flowing over the sides of the air conditioning vent.
29. I telephoned Nicole (Chapman), who was the Retail Manager, and we had the following conversation:
Robert: Our new ceiling is bubbling up. Water is coming through.
Nicole: Okay, we'll send the technician to look at it.
30. The technician attended and inspected the air conditioning. I recall that his name was Andrew and he was from a company known as Hastie Services.
31. After inspecting the system, we had the following conversation:
Andrew: The evaporation tray is overflowing in the ceiling and that's where the water is coming from. It's pouring out over it and onto the ceiling and is dripping down through the ceiling. It's also pouring out over the sides.
Robert: Okay. What do we do about that? How can it be fixed?
Andrew: The shop is too hot and that's creating all this moisture. I reckon just keep the air conditioning on a certain temperature. Don't leave it on 18, put it on 22. I reckon these machines are causing the problem.
32. We tried the air conditioning at 22 degrees, but this made no difference at all.
33. When we received our first electricity bill from country energy, I was surprised to note that it was so high. I had been under the impression that air conditioning would be charged as part of the outgoings. I contacted Nicole to complain and we had the following conversation:
Robert: Nicole, our bill is huge. Why is this so? What's going on? Shouldn't this be included as part of outgoings?
Nicole: No Robert. The gelato shop and the OPSM store have their own air conditioning units. You're not part of the ducted system that does the rest of the centre. You've got separate units. You get charged for them separately by country energy. But a portion of your outgoings are at a discounted rate.
34. I recall that a couple of weeks after Andrew had visited, the ceiling became very bad. It was bubbling away all day and water was dripping down onto the coffee machine and biscuits and annoying customers as this is where customers would pay. The biscuits were getting soaked and I literally had to put buckets down on the bench.
35. I telephoned Nicole again and we had the following conversation:
Robert: Nicole, there are major problems. The ceiling is still bubbling and water is pouring down and ruining our food. We've had to put buckets out it's just so bad.
Nicole: Okay. Well I'll send Alistair Robinson, the centre manager, to have a look.
36. Alistair then came to Parkes and inspected the unit. We had the following conversation:
Robert: As you can see, it's pretty bad. We need to get it fixed.
Alistair: Rest assured Robert, we'll get if fixed.
37. Andrew the technician was then sent again. Unfortunately, he continued to claim that we simply had to turn the temperature of the air conditioning up and that our heat emitting equipment was responsible for these issues. We had the following conversation:
Andrew: Your fridges and cabinets are emitting too much heat. That's causing the air conditioning to work too hard. It's these machines that are to blame.
Robert: Well, we're leaving the machines off at night. We're not keeping them on. Both gelato display cabinets are turned off so the only freezers that stay on are the storage freezer and a display freezer and drink fridge.
On 23 January 2010 Robert Di Francesca received an email from Ms Chapman:
As for the air conditioning issue, I have been advised by our Facilities Manager that both Air Conditioning technician and plumber have been on site. The issue with the unit was condensation as you know and a drip tray was installed. The a/c should not continuously run below 22 degrees and should be turned off after hours. It may be running too cold for too long therefore freezing the unit and causing a lot of condensation.
Could you please turn the unit off after hours and leave at a set point of 22 degrees and see how you go. If you continue to have issues please let me know.
Following further exchanges of emails with Ms Chapman, Robert Di Francesca arranged for Mr Brooke to check the air conditioning system. He then had a conversation with Ms Chapman.
Robert: We've had a specialist come and look at the air conditioning unit. His name is Ken Brooke. He's told us that the unit is wrong. It has to be on the outside. There isn't adequate ventilation and not enough fresh air. The unit has been wrong from the start. It's not appropriate.
Nicole: Okay, we'll look into it
He then obtained verbal quotations to the effect that it would cost about $2,500.00 to connect the premises to the Centre's air conditioning system and conveyed them to Ms Chapman. According to his affidavit "No action was taken."
In the meantime in April 2010 a Ms Janice Willet was appointed manager of the shop and Robert Di Francesca ceased to attend every day. He recounted a telephone conversation with her wherein she complained that the heat in the shop was unbearable.
The problem with the air conditioning remained unresolved. Ms Chapman on 22 October 2010 sent an email which made rather unhelpful suggestions and did not address the previously discussed option of connecting to the Centre's system:
Hi Robert,
Please see attached recommendations below from our Mechanical Services Contractor (Hastie Services) to assist and improve current AC Services within the Out Back Gelato tenancy at our Parkes Centre.
All three options are sound recommendations by our Mechanical Services contractor (Hastie Services) in relation to resolving the current heat load issue within this tenancy area.
These excessive heat loads are being generated from the tenant's fridges & freeze condensers within your tenancy area which are running 24hr / 7 days.
This above heat load coupled with the current open shop front dictates that optimum AC conditions within this tenancy will be hard to maintain but these recommendations will provide a more efficient service on site given the current fit out design.
Unfortunately the current issues of poor air conditioning services is largely due to your tenancy fit out and the equipment that has been installed which is significantly contributing to the current AC system not providing optimum or consistent temperature control.
Should you feel this is not correct please contact me to discuss.
The current issues with Outback Gelato Tenancy are with the A/C system not holding temperature due to the way the tenancy has been set out. Main problems are with the entry bi-fold door & the amount of refrigeration units contributing to a high heat load on the A/C for the store.
Option 1
I have included a quote for the install of a roof mount Exhaust fan to remove heat from refrigeration units in tenancy area.
Option 2
We recommend installing evaporative cooler in the tenancy, which will result in minimal changes to the tenancies Current setup. Estimate cost for evaporative cooler $9500.00.
Option 3
We recommend remove of the condenser units from the tenancy area & installing one roof mount condenser capable of an estimated 5kw refrigeration capacity. If you gohead with this option we need to check refrigeration capacity on site. The estimate cost for a 5kw R404a refrigeration unit $ 15,500.0. But the door way needs to change to back to a Standard door opening.
Mr Di Francesca deposed to the fact that the bi-fold door referred to in the email reproduced above was not installed by Gelato but was in place before its tenancy began.
Although there continued to be communications between the parties during which Perpetual maintained that a satisfactorily operating air conditioning unit was the responsibility of the lessee and Gelato maintained that it was the responsibility of the lessor nothing else seems to have been done by either party prior to the emails of early 2011 and the termination of the lease in the circumstances earlier related.
In January 2011 Robert Di Francesca was alerted by Ms Willet to the erection of steel barricades outside the premises. He went to the scene and described what he saw:
54. I then drove to the shop and saw a fence had been erected in front of the shop and people were being diverted round the shop. The entrance to Woolworths next to the shop had also been closed off.
55. The pedestrian crossing was also taken out and passers-by were in fact diverted from the gelato shop.
Mr Di Giovanni said that no notice was given of an intention to erect the barricade and Perpetual has not taken issue with this statement.
In her affidavit sworn 30 January 2013 in reply to the affidavits of Mr Di Francesca and his son, Ms Chapman recounted a conversation on or about 3 March 2011:
Myself: "Giovanni, rent is payable on the first day of each month regardless of any issues Gelato may be experiencing"
Giovanni: "What about the air conditioning?"
Myself: "The air conditioning supplied to the shop is as per Charter Hall's fitout guide and any requirement above that is at Gelato's expense. This is the same for all lessees".
Giovanni: "What the scaffold out the front of the shop?"
Myself: "You did not tell me at the time about how that was affecting Gelato. If you had told me about that earlier, I may have been able to assist you with that. It is now too late for me to help you resolve that matter. In any event, access to the shop was still available. You can not raise this as an excuse for non-payment of rent. You did not communicate the issues affecting Gelato at the time so it is too late to resolve them now. Access was still available to the tenancy.
Giovanni: "If you don't take action regarding the air conditioning, we are going to hand back the keys and walk".
Myself: "Giovanni, it's not that easy. If you break the lease, the Centre will recover all of the rent owing to the end of the lease term. As a way forward on this, please put your concerns in writing and I will work on getting the air conditioning works approved provided the rent is paid"
As to whether Air Conditioning was operating in the premises at the first inspection by Mr Di Francesca, Ms Chapman said:
59. When a tenant enters into occupation of a premises at Parkes it is the tenant's responsibility to connect the power in the Premises. Tenants do this by organising power directly with the electricity supplier. Perpetual only pays for electricity supplied to the common arrears of the Centre. So when premises at Parkes are unoccupied there is usually no power in the premises.
60. I recall that after Ispa Kebab vacated the Premises and while the Premises were unoccupied the power was not on in the Premises.
Ms Chapman denied that she ever indicated that Perpetual accepted liability for overcoming the air conditioning problem. She also denied that she took leave in the Christmas / New Year period 2010 / 2011.
In my opinion all lay witnesses in the case did their best to tell the truth and assist the Tribunal. Any discrepancies I believe were due to unwitting imperfections of recollection. For the most part in any event the documentary evidence speaks for itself. I am satisfied that Ms Chapman never acknowledged a liability on the part of Perpetual to be responsible for any alleged deficiency in the air conditioning and I am also satisfied that no notice was given to Gelato pursuant to cl 14.2 of the lease of the intention to erect barricades outside the premises.
I now turn to expert evidence given in the case from Mr Brooke on behalf of Gelato and Mr Martin on behalf of Perpetual.
Mr Brooke testified that he is an accredited refrigeration mechanic and has worked as such for about 30 years. He had completed stages 1 and 2 of the trade course conducted by TAFE at Orange and the Teacher of Refrigeration spoke highly of his reputation in the refrigeration industry. He conducts a refrigeration business known as "Snooze Easy Ice" and I accept that he is a person with specialised knowledge of air conditioning within S 79 of the Evidence Act.
At the request of Mr Di Francesca he attended the premises in January 2010. As he entered them shop he noticed that at their entrance were concertina or bi fold doors which faced the street and had necessarily to be kept open. He related a conversation with Mr Robert Di Francesca:
18. Giovanni and his son Robert DeFrancesca ('Robert') informed me that they had had difficulties with the air conditioning. We had the following conversation:
Giovanni: The air conditioning keeps turning on and off and it doesn't keep the place cool. This is not good for the staff or the customers. It's hard to work and people don't want to stay in the shop. There's also water dripping from the unit, and from the ceiling near the air conditioning unit, into the shop. We're worried that this could infect the food.
Mr Brooke then proceeded to state his findings and conclusions:
20. In my experience, such a unit works well in climates where temperatures reach a maximum of 32 degrees, but are completely unsatisfactory for places like Parkes, where the maximum temperature in summer can rise to 40-42 degrees.
22. I note that located in the Gelato Shop was the following equipment:
22.1. A drink display fridge.
22.2. Two refrigerated cabinets of differing sizes.
22.3. Two gelato display cabinets of differing sizes.
22.4. Two fridge displays.
22.5. A coffee machine.
22.6. Benches with stool seating.
22.7. A kitchen including a hot water tank, a mop wash basin and a hand wash basin.
23. On the basis of my study, training and experience, such equipment, when turned on, would have emitted a substantial amount of heat, potentially increasing the temperature in the Gelato Shop by up to fifteen (15) degrees. If human beings, including staff and patrons, are also considered, a significant amount of additional heat would have been present in the shop. Whilst attending the shop, I observed between two (2) to eight (8) people in the shop at any one time.
24. I noted that the air conditioning unit was a cassette air conditioning unit, that is, it was located in the roof of the Gelato Shop. A cassette air conditioning system sucks in air and conditions it and returned to the conditioned space. This meant that the air conditioning unit was regurgitating air already in the shop. It was not sucking in fresh air from an external source, but was re-cooling and recycling air already present in the shop. Additionally, there was no exhaust of air out of the shop. With the exception of air coming through the concertina/bi-fold doors at the front of the Gelato Shop, no other air entered the shop.
25. Hence, the air conditioning unit did not suck in from an external source, and there was no ventilation of air from inside premises, out of the premises.
26. I further noted that during warm periods of the year, it would have been extremely difficult for air to escape from the shop. Hot air is necessarily thinner than colder air, moves at a more rapid pace, and rises. Cold air is denser and falls. Some cold air would have leaked out of the shop, but the majority of air coming through the concertina/bi-fold doors would have been hot air. Hence there was no adequate ventilation of air.
27. This caused me concern as to possible hygiene consequences. The air in the shop would have effectively been stagnant.
28.I inspected the air conditioning unit and noted that there was a significant amount of fat built up in the coil. I washed this out with a coil cleaner. The fat build up was the result of the nature of the cassette air conditioning system, meaning that the air, which comes up and lands on the coil and is conditioned by the coil, is then returned to the conditioned space. This means that fat and other substances stick onto the coil.
29. There was a breathing gauze in the cassette. This was for the purpose of filtering the air. I replaced this as it had holes in it. I recall that it started falling apart when I removed it.
30. As noted above, there was in adequate ventilation in the Gelato Shop, with the same air being regurgitated. I was informed by Giovanni and Robert that Gelato Shop premises were previously used for a kebab shop. If a shop was making, for instance, kebabs and other fatty type products, air infused with fatty residues would circulate in the shop, and would build up in the air conditioning system and in other areas. This, in my opinion, explained why there was fat in the air conditioning system.
31. In order to keep the Gelato Shop cooler, I recommended that the concertina/ bi-fold doors be closed half-way over. This would prevent at least some heat coming into the Gelato Shop in summer and also eliminate dust coming in off the street. Furthermore, I recommended that the awning on the front of the shop be lowered, to reduce heat entering the shop.
32. These prescriptions would have gone but a small way towards reducing the heat entering the shop, but they would have been insufficient to overcome the inherent problems noted above.
33. The doors for the Gelato Shop should have been sliding type doors, or doors that could be closed all the way over.
34. A further consequence of the concertina/bi-fold doors, as noted as above, was that there was an excess of hot air coming into the shop. This meant that the air conditioning unit had to work harder still.
35. I observed that the air conditioning unit had coils which cooled the air.
36. Such coils produce condensation, which in turn creates water. Such water drips into the troughs located on the air conditioning unit, which capture it. The dripping of water, which I note was experienced in the Gelato Shop, was the result of these troughs overflowing and leaking either through the roof or spilling out of the air conditioning unit itself.
37. Water that accumulates in such troughs will heat up, particularly in warm temperatures. The Plaintiff, via an email from one of its employees, Ms Nicole (Chapman), suggested the air conditioning unit be turned off at night, to ensure its effective operation.
38. If this occurred during summer, the shop would necessarily have heated up. Given that there were numerous machines in the shop which contributed, in my view, a further 15 degrees to the temperature (approximately), the Gelato Shop would have heated up significantly at night. The ecology of Legionella has been found to result in legionella growing between 20-45 degrees. I note that legionella bacteria do not multiply below 20 degrees and cannot survive above 60 degrees.
39. Given the excessive temperature in the Gelato Shop on hot summer days, coupled with the fact heat necessarily rises, there was a risk that the water situate in the troughs could have come close to reaching, if not actually reaching, 38 degrees Celsius, and thus exposing those present to legionnaires disease.
40. In summation it is my opinion, based on my study, training and experience, that:
40.1. The air conditioning unit located in the Gelato Shop was not appropriate for a food distribution/manufacture premises.
40.2. The air conditioning unit was suitable for climates where the maximum temperature was around 32 degrees, not 40-42 degrees.
40.3. The air conditioning unit was placed under even more stress by operation of the various pieces of heat emitting equipment in the Gelato Shop, and fact up to 8 people could be present at any one time. This would have resulted, in my view, in the addition of a further 15 degrees to the temperature.
40.4. Additional heat was added to the shop because of the presence of the concertina/bi-fold doors.
40.5. The heat in the shop created a risk of legionnaires disease.
Mr Brooke was cross examined by Mr Mobellan but was not significantly challenged upon his conclusions.
Mr Martin who has professional engineering qualifications has had 25 years experience in the Professional Consulting Engineering field. His expertise extends to Air Conditioning and I am satisfied that he too has specialised knowledge relevant to the matters raised in this litigation.
He inspected the premises on October 5 2012 and summarised his findings:
1. The air conditioning system installed in the Premises has more than adequate capacity to meet the obligations nominated under the Fit-Out Briefing Manual.
2. The alleged excessive temperatures were likely attributable to excessive heat producing equipment installed by the Lessee and mass hot air infiltration through the open shop front.
3. Water leakage from the air conditioning unit appears to be the result of a blocked drain and is symptomatic of poor or no maintenance of the unit.
4 .The unit is fit for purpose and appropriate for a food premises.
Although Mr Martin takes issue with many of the findings made by Mr Brooke there is to my mind not a great deal in issue between them. As I understand the evidence. Mr Brooke was of the opinion that given the configuration of the premises and the equipment installed in them by Gelato the air conditioning unit was inadequate. Mr Martin on the other hand approaching the matter from the other direction says that the air conditioning unit complied with the lessor's obligation under the contractual arrangements and would have been adequate but for the lessee's equipment. To the extent that there is disagreement between Mr Brooke and Mr Martin I give greater weight to the latter's professional qualifications despite Mr Brookes' extensive practical experience.
The issues raised by evidence to which I have referred are not without complexity involving as they do a number of legal matters. In addressing these issues as a layman Mr Di Francesca was undoubtedly at a disadvantage.
It is convenient first to deal with Gelatos allegations regarding the air conditioning. On this issue Gelato in its Application relied on representations allegedly made by Mr Swan. For reasons given above I reject the proposition that Mr Swan was or held himself out to be a person whose representations would bind Perpetual. But even if I be wrong in that view the only relevant representation pleaded is Mr Swan allegedly saying "A gelato shops will work well. The Air Conditioning works so no need to worry." Even if Mr Swan said those words it would be unreal to accept that Mr Di Francesca relied on them. It was obvious that Mr Swan was unlikely to have any specialized knowledge let alone of the exigencies of a gelato shop.
Although Perpetual was undoubtedly aware of Gelato's proposed use of the premises there was no evidence that other than in the contractual documents Perpetual made any representations as to the adequacy of the air conditioning unit in the premises. The one representation it made was that it would provide air conditioning to suit open plan and for lighting and equipment heat load up to 55 Watts/m² and occupancy of 7.7m²/ person. The evidence of Mr Martin was the Unit was capable of so doing. Mr Brooke did not seem to address that specific question.
In the result I am satisfied that Perpetual performed its contractual obligation regarding the air conditioning. I am also satisfied that as a result of the equipment installed by Gelato the air conditioning unit was incapable of providing a suitable environment for Gelato's business. The responsibility for this under the lease fell upon the lessee and in my opinion such action taken by and such statements made on behalf of Perpetual were not intended to and did not create a legal obligation but simply evidenced an intermittent desire not particularly diligently pursued to assist its lessee. Regrettably Gelato at an early stage did not accept its own responsibility and in particular did not pursue at relatively small expense what seems to have been the sensible option of connecting to the Centre's central air conditioning system.
In light of the express provision in the lease regarding air conditioning there is no room to imply a term as alleged in Gelatos Application. It may well be that the lease required the air conditioning unit provided by the lessor to be and remain in good condition but in my view apart from fat deposits needing to be cleaned there was no evidence that it was not in good condition and capable of performing according to its specifications. The equipment installed by Gelato was in my opinion the sole reason for the air conditioning unit failing to provide a satisfactory outcome. Under the lease this became the responsibility of the lessee.
It follows from the above conclusions that there was no breach of any obligation by Perpetual in relation to air conditioning let alone one which would entitle Gelato to repudiate the lease. However as I have indicated in my opinion the barricades erected by Perpetual early in 2011 were so erected in breach of cl 14.2 of the lease and constituted a breach of the lessor's covenant for quiet enjoyment. In my view however such breach sounded in damages only and was not such as to constitute a repudiation of the lease by Perpetual.
As a result of these findings Gelato is entitled to damages for Perpetual's breach of the Covenant for quiet enjoyment and Perpetual is entitled to damages flowing from Gelatos unlawful repudiation.
As to the former Gelato quantified its loss by comparing its takings for the period in January, February and March 2011 while the barricades were in place to its takings for the same period in 2010. I would have expected that the barricades illustrated by photographs in evidence caused considerable loss to Gelato and the amount claimed by it of $26,659.00 seems reasonable and well justified. I will allow it. No other loss seems to flow from the lessor's breach.
The claim for damages by Perpetual is put on a number of bases of which the first is $6,046.83 arrears of rent and outgoings as at the date the repudiation was accepted by the lessor viz 31 March 2011. That sum should be allowed.
The next claim of Perpetual relies upon cl 4.9 of the lease (reproduced above). The claim is for 80% of the Fit Out Contribution on the basis that a Purchase Event occurred during the first five years of the term namely during the second year.
As I have found, a Purchase Event did occur in March 2011 and therefore according to the terms of the clause Gelato is to purchase the Nominated Items namely "shop front ceiling lighting air conditioning unit and flooring" for the sum of $16,000.00.
Perpetual claimed $16,000.00 under cl 4.9 of the lease in paras 15 to 22 inclusive of its Statement of Claim in the District Court. The only defence pleaded to that particular claim was a denial of any breach of the lease. It seems to me arguable that cl 4.9 of the lease constitutes a penalty and is unenforceable. However as this was not pleaded and no submissions were made on the subject I have not considered the question further. I will allow the claim.
I turn to the claim by Perpetual for damages flowing from the loss of its bargain. This arises under cl 12.3 of the lease. Gelato contended that this clause constituted in terms a penalty. However there is clear law to the contrary: See for example Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 57 ALR 609. In my opinion it is well established that following repudiation of a lease by a lessee the lessor is entitled to recover the loss he suffers which may include rent up to the expiration of the lease appropriately discounted to take account of accelerated payment. There are two qualifications to this proposition namely the lessor must give credit for rent received or to be received from a third party and must take reasonable steps to mitigate his loss.
Failure to mitigate loss was relied upon by Gelato in this case. The relevant principle is summarised by Giles JA (with whom Handley JA and Stein JA agreed) in Karacominakis v Big Country Developments Pty Ltd [2000] NSW CA 313 at paras 187 and 188:
[187] A plaintiff who acts unreasonably in failing to minimise his loss from the defendant's breach of contract will have his damages reduced to the extent to which, had he acted reasonably, his loss would have been less. This is often misleadingly referred to as a duty to mitigate, although the plaintiff is not under a positive duty. The plaintiff does not have to show that he has fulfilled his so-called duty, and the onus is on the defendant to show that he has not and the extent to which he has not (TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130). Since the defendant is a wrongdoer, in determining whether the plaintiff has acted unreasonably a high standard of conduct will not be required, and the plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct if it was reasonable for the plaintiff to do what he did (Banco de Portugal v Waterlow and Sons Ltd (1932) AC 452; Pilkington v Wood (1953) Ch 770; Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd (1976) 1 NSWLR 5).
[188] Whether the plaintiff acted unreasonably is a question of fact. It is possible that a plaintiff will be held to have acted unreasonably in failing to enter into a new contract with the defendant, following breach of contract by the defendant and termination of the contract (Bracer v Calder (1895) 2 QB 253; Houndsditch Warehouse Co Ltd v Waltex Limited (1944) KB 579). But the fact of the breach and its effect on the relationship between the parties may be material to reasonableness: for example, in Shindler v Northern Raincoat Co Ltd (1960) 1 WLR 1038 an employee's rejection of an offer to re-employ him was not unreasonable when the new employment would have involved him in being answerable to the persons with whom he had disagreed over his dismissal.
The lease as earlier stated was for a term of 5 years terminating 6 December 2014. At the hearing before me I was informed that the premises had not been re let and Perpetuals' Claim is based upon loss of the rent stipulated in the lease up to 6 December 2014.
It is to my mind startling an affront to common sense that a small shop in a shopping centre containing a Woolworths store cannot be relet for almost three years. Particularly when as I infer Perpetual has available to it staff and advisers extremely experienced and competent in the matter of leasing shopping centre premises.
The evidence on the subject from Perpetual comes mainly from Mr Kelly and Ms Turton.
Mr Kelly in his affidavit of 20 December 2012 deposed that since 1 September 2010 he has held the role of Leasing Executive for Perpetual. In that capacity he is responsible "for leasing of vacancies and lease renewals within Perpetuals' New South Wales shopping centre portfolio including Parkes". In relation to the premises he said:
6. From the date of the lease termination of 31 March 2011, Perpetual has attempted to find a replacement tenant for the Premises.
7. The current business practice of Perpetual is for Perpetual's representatives to find tenants or other occupants for the Centre from time to time as they may be required.
8. Perpetual's standard practice includes contacting local retailers, canvassing potential national retailers in the retail marketplace, erecting "For Lease" signage on the front of premises or in the premises' windows and advertising vacancies on the Perpetual's website. In addition, discussions are also held with prospective tenants when specific enquiries are received and inspections of the vacant premises conducted.
9. In respect of the Premises, Perpetual has undertaken the following specific efforts to re-lease the Premises:
(a) Contacting numerous retailers currently trading on Clarinda Street, Parkes Clarinda Street is the main street in Parkes. From time to time I walked up and down Clarinda Street and made enquiries with Harvey World Travel, Free Choice Tobacco, Silver Brim Café, various other coffee shops and various fashion retailers to taking a lease of the Premises;
(b) Canvassing national retailers able to take form a 48 square meter site. Commonwealth Bank of Australia (CBA) and Prouds Jewellers are moving in to the Centre in 2013 with CBA occupying a 72 square meter site. Typically, only particular types of retailers can operate from a 48 square meter site, for example, food operators, travel agents or tobacconists. I approached the following national food retailers in relation to taking a lease of the premises, Subway, Eagle Boys Pizza and Domino's Pizza;
(c) Erecting "For Lease" signage in the windows of the Premises. Annexed hereto and marked "NJK-2" is a copy of the For Lease sign.
(d) Offering incentives equivalent to twelve (12) months rent free to prospective tenants. Charter Hall do not advertise the offer of a rent free incentive, however Charter Hall have parameters within which to negotiate a rent free incentive as part of the leases offer. In relation to the Premises Charter Hall is offering incentives equivalent to twelve (12) months rent free;
(e) Conducting multiple retailer inspections. I recall the following retails inspected the Premises, Harvey World Travel, Flight Centre, Free Choice Tobacco, Silver Brim Café, Prouds Jewellers and Domino's Pizzas. Harvey World Travel and Domino's Pizza did not proceed with a lease of the Premises. Free Choice Tobacco and Silver Brim Café continue to lease premises previously occupied by them and Prouds Jewellers leased another site in the Centre;
(f) Engaging in discussions about the site with Ray White Real Estate, Parkes (Ray White), I discussed with Ray White that the Premises were vacant and for lease and if a prospective tenant approached Ray White looking to lease retail premises Ray White should inform me. I communicated verbally to Ray White that Charter Hall would agree to pay an agency fee to Ray White on the letting of the Premises; and
(g) Furnishing my contact details as the Leasing Executive to contact for lease enquiries and vacancies in relation to the Centre on Perpetaul's website. Annexed herto and marked "NJK-3" are copies of those webpages obtained from Perpetual's website maintained in relation to the Centre.
10. In addition to conducting these steps, Perpetual has entered into formal negotiations with three prospective retailers, being Absolutely Hair, Right Centre and Harvey World Travel in relation to leasing the Premises*
11. Perpetual sent formal Invitations to Lease to those parties respectively on the following dates:
(i) Absolutely Hair, on 24 January 2012;
(ii) Harvey World Travel, on 20 September 2012;
(iii) Flight Centre, on 5 October 2012.
Absolutely Hair moved further down Clarinda Street in Parkes to be located in closer proximity to coffee shops.
Lease negotiations have ceased with Harvey World Travel with Harvey World Travel deciding not to proceed with a lease of the Premises and riegoimitans are continuing with Flight Centre.
12. The current rental market in general has slowed in recent times due to difficult economic global conditions, fn addition to these factors, the current rental market in Parkes has slowed in recent times due to difficult local economic conditions clue to drought
13. However, with mining picking up In the surrounding regions we are finding that retail conditions are improving and the interest of national tenant's such as Commonwealth Bank of Australia and Prouds Jewellers has increased
14. The proposed rental being sought by Perpetual to lease the Premises is $25,000 per annum plus outgoings, which is subject to further negotiation. Charter Hall feels this is reflective of current market conditions. This is equivalent to approximately $520.00 per square metre. Factors relied on by Charter Hail to establish the proposed rental for the Premises include:
i the high visibility of the Premises which is a street front premises on Clarinda Street, Parkes and which is adjacent to the Centre's main entrance;
ii. the customer traffic flow generated by the Centre's anchor tenant, Woolworths;
iii. and the net rental payable by the other specialty retailers leasing sites In the Centre.
15. Perpetual is continuing efforts to re-lease the Premises.
Mr Kelly gave oral evidence to the effect that the premises remain vacant. In cross examination he said that his instructions were to lease the premises on a long term basis. Shown a photograph of the front window of the premises he conceded that it did not contain a "For Lease" sign and explained "it may have fallen down".
Ms Turton became the Leasing Executive responsible for re letting the premises in August 2013 following the resignation of Mr Kelly. Her responsibilities were considerable:
(a) That since 22 April 2013, I have been employed in the position of Leasing Executive with Charter Hall.
(b) In this capacity, I have been and continue to be responsible for leasing of vacancies and lease renewals within Charter Hall's Australian Capital Territory, South Australia and Victorian shopping centre portfolios.
(c) On around 2 August 2013 I also became responsible for leasing of vacancies and lease renewals for 7 centres within Charter Hall's New South Wales shopping centre portfolio, including Parkes. Other centres include Bathurst Chase (Bathurst), Dubbo Square (Dubbo), Highlands Marketplace (Mittagong), Mudgee Metroplaza (Mudgee), Parkes, Keirath's Shopping Square (Narromine) and Tamworth City Plaza (Tamworth).
Specifically in relation to the premises Ms Turton said:
8. In respect of the Premises, Charter Hall has, since 20 December 2012, undertaken the following specific efforts to re-lease the Premises:
(a) In my role as a Leasing Executive I deal regularly with national retailers in respect of the Centres I am responsible for within Charter Hall's interstate shopping centre portfolio. Since 2 August 2013 I have, in the course of my dealings with national retailers canvassed with those retailers whether they have any requirements to lease premises in regional New South Wales, including Parkes. To date, the national retailers I have dealt with since 2 August 2013 have not conveyed that they have such a requirement.
(b) I have discussions with several national retailers each week. In particular, I have had formal discussions with Sanity Music Group Pty Ltd (Sanity) and Bakers Delight. Discussions with Sanity are continuing, the terms of which are commercial in confidence. I can confirm discussions with Bakers Delight have been unsuccessful.
(c) Regular canvassing by Charter Half (and in particular Mr Kelly) in relation to other drawcard or anchor tenants which would assist any prospective tenant. In particular, I am informed that Prouds, a recent tenant, is trading well I am also informed that Commonwealth Bank of Australia, who recently relocated to Charter Hail's Centre in Parkes, is a major attraction for the Centre.
(d) Offering leasing incentives to prospective retailers in the form of a cash based Leasing Contribution towards the retailers cost of fitting out the Premises.
(e) Charter Hail has budgeted for as an incentive for a prospective tenant an amount up to $20,000 plus GST in relation to the Premises with an additional amount of $15,000 if the tenant agrees that there is to be no obligation on Perpetual to undertake any lessor's works.
(f) Whilst Charter Hall does not publicly advertise the offer of the Leasing Contribution, based on my experience, retailers, particularly in the current retail market and particularly in relation to a shop in a regional shopping centre, are aware of and normally expect that an incentive will be offered,
(g) Whilst Charter Hall has parameters within which to negotiate a Leasing Contribution as part of the lease offer, depending on the retailer and other circumstances of an offer, for example the take up of additional sites in other centres, if a retailer sought a larger incentive outside of these parameters, Charter Hal! can go back to the landlord to consider a revised incentive.
(h) As a matter of course, when I meet with retailers, I provide them with a list of centres in New South Wales, including Parkes.
(i) I am informed by the NSW Regional Manager, Mr Doug Manning, and the Centre Manager for Parkes, that the Premises is offered to prospective tenants as a vacant site for an expansion of their business when they meet other retailers on other matters.
(j) Furnishing my contact details as the Leasing Executive to contact for lease enquiries and vacancies in relation to Parkes on Charter Hall's website, which by default would include the Premises. Annexed hereto and marked "MAT-2" are copies of those webpages obtained from Charter Hail's website maintained in relation to the Centre.
9. In addition to conducting these steps, Charter Hall has continued negotiations entered into on around 22 July 2013 with Sanity, a prospective national music retailer in relation to leasing the Premises and Shop 4 jointly at Parkes, which is also presently unoccupied.
10. I am informed that representatives of Sanity inspected the site on 31 July 2013. Otherwise, those continuing negotiations are commercial in confidence.
11. In relation to other potential tenants of the Premises, based on my review of the Charter Hal! files, Mr Kelly provided an invitation to Lease to Flight Centre which was sent on 5th November 2012. However, negotiations with Flight Centre were unsuccessful. The content of those negotiations were commercial in confidence.
12. Additionally, based on my review of the Charter Hall files, Mr Kelly was discussing the site with another business, Wang's Massage, and an offer was sent on 18 March 2013. However, based on my review of these records, Wang's Massage did not take up the tenancy,
13. The current rental market in genera! has slowed over the past twelve (12) to eighteen (18) months. For example, in Regional Western Australia it is difficult to lease shops unless an incentive equivalent to six (6) to twelve (12) months rent free is negotiated with the retailer.
14. The rental being sought by Charter Hall to lease the Premises is $18,000 per annum plus marketing and outgoings and GST. Subject to negotiation, this rent will be reviewable annually on a fixed basis of 5%. Any leasing agreement is always subject to negotiation depending upon the tenant*s type of business and particular needs,
15. Charter Hall's rental amount of $18,000 per annum plus marketing and outgoings and GST for the Premises is the minimum acceptable rental.
16. Comparatively, the fourth anniversary of the Starting Date of Gelato's lease would be 7 December 2013, At that date, allowing for fixed annual net rent review increases at the rate of 4% pursuant to the lease, rent payable under Gelato's lease, would be $17,547,88 per annum plus GST.
17. Factors relied on by Charter Hall to establish the proposed rental for the Premises
include:
i. the high visibility of the Premises which is a street front premises on Clarinda Street, Parkes and which is adjacent to the Centre's main entrance;
ii. the customer traffic flow generated by the Centre\anchor tenant, Woolworths;
iii. and the net rental payable by the other specialty retailers leasing sites in the Centre.
18. The proposed rental for the premises of $18,000 per annum equates to $375 per square metre. Comparatively, CBA and OPSM, which are also Clarinda Street facing tenancies are leased at substantially higher rentals per square metre. In particular, I note that CBA commenced operating in the Centre relatively recently in March 2013. Both these tenancies are considerably larger than the Premises and ordinarily would command lower rental per square metre than a smaller tenancy (such as the Premises) which traditionally would attract a higher rate per metre squared.
19. I also note from Charter Hail's files that Prouds Jewellers commenced operating in the Centre in around August 2012. Prouds tenancy is also larger than Shop 3 and is leased at a higher rent per square metre.
20. Based on the above I think that the proposed rental being sought by Charter Hall to lease the Premises is reflective of the current rental market in Parkes.
21. Charter Hall feels the combination of the Leasing incentive and contribution to Lessor's Works provides a substantial opportunity for an incoming tenant
22. Charter Hall is continuing the abovermentioned efforts to re-lease the Premises.
Ms Turton was cross examined by Mr Di Francesca. She said that current negotiations with Sanity Music Group involve both shop 3 and 4 the latter becoming vacant earlier in 2013. Asked whether the size of shop 3 was an issue she replied "No as we are looking to let with shop 4".
Although I accept that the onus to prove failure to mitigate lies upon the lessee and is an onus not lightly discharged to my mind it stretches credulity that Perpetual acting reasonably has been unable to derive any income from the premises for a period of nearly three years. Moreover it is significant I think that for most of the time the premises according to Mr Kelly were being offered at $25,000.00 pa when the rent payable under the lease in March 2011 was $15,600.00. I accept Mr Kelly's evidence that he was willing to negotiate but I have formed the distinct impression that he was not really trying to mitigate his employers loss.
In the result I am satisfied that it has been established that Perpetual did fail to take reasonable steps to mitigate its loss. Having regard to the matters I have mentioned and the fact that Gelato was found as a lessee within a few weeks of the departure of the previous tenant I propose to quantify Perpetuals damages for loss of its bargain at $12,000.00 which represents a loss of income for approximately six months.
In relation to claims made by Perpetual under other heads I will allow the sum of $335.61 claimed for the services of a locksmith.
A claim is made for legal costs on a Solicitor and own client basis quantified by Ms Chapman at $13,673.01 in her affidavit sworn 1 May 2012. Annexed to her affidavit is a summary of accounts rendered by RAJ lawyers in respect of this matter. There are no details of the work done and most of the work post-dates the repudiation of the lease.
The claim for legal costs relies on cl 8.3(e) of the lease. The obligation of the lessee is to pay legal costs on a full indemnity basis "incurred as a result of any default under or breach of this lease by the tenant." In my opinion the tender of a summary of accounts rendered by a solicitor does not constitute sufficient evidence to establish the liability in the absence of some proof of the nature of the Solicitors instructions and of the work actually performed in furtherance of those instructions. On the evidence adduced I am unable to make a positive finding that the work related to default or breach by the lessee of its obligations. Accordingly I reject this part of Perpetuals claim.
There remains the question of interest. I have found that Perpetual is liable to pay Gelato $26,659.00 and I have found that Gelato is liable to pay Perpetual $34,382.44 less the proceeds of a Bank Guarantee $5,882.45 namely $28,499.99 rounded up to $28,500.00. In the circumstances including the circumstance that Perpetual had since April 2011 the benefit of the bank guarantee I do not think it appropriate to award interest.
It was suggested that Mr Di Francesca as guarantor is not liable for any sum payable by Gelato.
My provisional view is that there should be no order as to costs. I give all parties leave to make written submissions regarding costs within 21 days in which case the matter will be decided on the papers. Otherwise there will be no order as to costs.
Orders
1. That Perpetual pay Gelato $26,659.00.
2. That Gelato and Mr Di Francesca pay Perpetual $28,500.00.
3. Subject to paragraph 90 above no order as to costs.
D Patten
Principal Member
Civil and Administrative Tribunal of New South Wales
14 March 2014
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
Decision last updated: 21 May 2014
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