Peter a Simon Real Estate Pty. Ltd. v Ghabash and Ors.; Chung and Anor. v Ghabash

In the appeals before the New South Wales Court of Appeal, the primary dispute concerned damage to a tenant's property caused by fire in commercial premises. The tenant, Mr. Ghabash, alleged that the fire was caused by the negligence of the lessor, Peter a Simon Real Estate Pty. Ltd. (PAS), and its managing agents, Mr. and Mrs. Chung. Mr. Ghabash sought damages for the loss of his property, including stock and equipment, which was destroyed in the fire. PAS sought to rely on a lease clause exempting it from liability for damage to tenant's property, unless it failed to act after receiving written notice from the tenant. The Chungs, as managing agents, faced claims of negligence in failing to attend to necessary repairs and in failing to pass on tenant complaints to the lessor.

The court was required to determine several key legal issues. Firstly, it had to construe the exemption clause in the lease to ascertain whether it effectively excluded PAS's liability for damage caused by its own negligence, particularly in light of prior complaints made by the tenant. Secondly, the court needed to consider whether the Chungs, as agents, owed a duty of care to Mr. Ghabash and, if so, whether they breached that duty by failing to act on complaints or to pass them to PAS. Thirdly, the court had to determine the issue of causation, specifically whether any negligence on the part of the Chungs directly led to Mr. Ghabash's loss. Finally, the court was tasked with assessing damages, considering the difficulties presented by the destruction of records and the tenant's unbusiness-like practices.

The Court of Appeal allowed both appeals. It found that the exemption clause in the lease did not protect PAS from liability for damage caused by its negligence, especially given the prior complaints made by Mr. Ghabash. The court also determined that the Chungs were liable in negligence for failing to pass on the tenant's complaints to PAS, and that this failure caused Mr. Ghabash's loss. Consequently, the judgment against PAS was set aside and judgment was entered for PAS in the proceedings. In the appeal concerning the Chungs, the judgment below was set aside, and judgment was entered for Mr. Ghabash against the Chungs for $50,000.00 plus interest and costs. The court also made orders regarding the costs of the appeals.