PIETRZAK and PITASSI
[2005] WASAT 155
•7 JULY 2005
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
CITATION: PIETRZAK and PITASSI [2005] WASAT 155
MEMBER: MR C RAYMOND (SENIOR MEMBER)
HEARD: 22 MARCH 2005
DELIVERED : 7 JULY 2005
FILE NO/S: CC 483 of 2004
BETWEEN: MARIOLA MALENA PIETRZAK
Applicant
AND
ANTHONY PITASSI
Respondent
Catchwords:
Commercial tenancy Transfer of proceedings from Commercial Tribunal Questions for determination relating to operating expenses Determination in absence of applicant Interest claimed
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 16, s 26
State Administrative Tribunal Act 2004 (WA), s 11, s 39(d), s 87(3)
State Administrative Tribunal Regulations 2004 (WA), reg 28
Supreme Court Act 1935 (WA), s 32
Result:
Application successful
Category: B
Representation:
Counsel:
Applicant: No appearance
Respondent: Mr A Antonas (as Agent)
Solicitors:
Applicant:
Respondent:
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Issue
Determination of questions referred to commercial registrar in relation to strata levies, operating expenses, the provision of an audit statement and the assignment of the applicant's lease.
The commercial tenancy lease
On or about 7 March 2002, the respondent, as landlord, entered into a deed of lease with the applicant and Teresa Margaret Collins, together as the tenant, in respect of premises described as Unit 2, 4 Gugeri Street, Claremont.
It was at all material times common cause that the premises were retail shop premises subject to the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) ("the Act").
The applicant advised that on 20 December 2003, Teresa Margaret Collins passed away following the assignment of her interest in the partnership under which business at the premises was conducted, to the applicant.
There was no formal assignment of the lease evidenced in the papers but no issue was taken as to the applicant's entitlement to pursue the questions raised.
Transfer of proceedings
Application was made to the commercial registrar of the Commercial Tribunal under s 19 of the Act as it then stood. On 1 January 2005, the State Administrative Tribunal Act 2004 (WA) ("SAT Act") came into force. By virtue of s 167 of the SAT Act, this matter was transferred to the State Administrative Tribunal ("SAT"). I have been nominated to constitute the Tribunal pursuant to s 11 of the SAT Act.
In accordance with the transitional provisions of the State Administrative Tribunal Regulations 2004 (WA) (reg 28), the matter is taken to have commenced in SAT. However, SAT may have regard to any record of the former adjudicator, and I have had regard to the record in relation to this matter.
Background
The applicant's application to the commercial registrar was lodged on 28 April 2004.
In accordance with s 16 of the Act as it then stood, the matter was referred to mediation. The mediation was adjourned on a number of occasions.
As will appear further below, the mediation resulted in all but one issue being resolved, and that was an issue relating to the overpayment by the applicant of strata title levies. It was common cause that such overpayment had occurred but the amount of a credit to be given to the applicant remained in issue.
In this regard, the question referred to the registrar for determination in relation to the strata title levies asserted that an overpayment of $1839 had occurred and that the matter should be resolved by repayment of that amount plus interest claimed at 18 per cent, although not stated, presumably per annum.
On 11 November 2004, the Commercial Tribunal issued a direction that the matter be set down for a full tribunal hearing as soon as possible after 16 January 2005.
Subsequent to the transferral of the matter to SAT, a directions order was made on 10 February 2005, that the matter be set down for hearing on the merits on a date to be arranged.
On 18 February 2005, written notice of hearing was given to the parties setting the matter down for hearing on 22 March 2005 at 10 am.
The applicant had failed to attend the directions hearing on 10 February 2005. The applicant had also not responded to a letter from SAT dated 7 January 2005 requesting to be advised of the applicant's unavailable dates. The applicant was therein advised that, if contact was not made with SAT within 14 days, the matter would be listed at the discretion of the Tribunal.
The hearing
At the hearing on 22 March 2005, Mr Antonas sought leave to represent the applicant, which application was granted pursuant to s 39(d) of the SAT Act by reason of Mr Antonas' role with Blackburn Real Estate, the agents appointed to manage the leased premises.
There was no appearance on behalf of the applicant.
Mr Antonas confirmed that the only matter remaining in issue, as a result of the mediation, was the extent of a credit to which it was conceded the applicant was entitled in consequence of overpayment of strata title levies.
Mr Antonas conceded that, as alleged by the applicant, the disclosure statement represented that the strata title levy, being part of the operating expenses payable by the applicant under the lease, was $1350 per annum.
The applicant's contention, as reflected in the application, was that the levy was to be $1352 per annum for the first three years of the lease. This was disputed by the respondent, through Mr Antonas. He asserted that the levy was capable of being adjusted.
The disclosure statement under the heading "Operating Expenses" identifies an annual contribution in respect of the premises of $1352 per annum below which the words "strata levies" has been written by hand.
Clause 5.1 of the lease provides that the tenant must promptly pay, either to the supplier concerned or to the landlord, all charges for electric light, power, water and gas used or consumed and rent of electricity, water and gas meters and sewerage, garbage, waste disposal, telephone and all other utilities and services used in or charged against or in respect of the leased premises including all meter installation costs, telephone connection charges and rents.
It is under this clause of the lease that the strata levies are claimed. No issue has been raised by the applicant that the strata levies do not fall within or cover expenses of the type referred to above.
Mr Antonas stated that the strata levies had increased each year of the lease and that the respondent was entitled to recover the increased levy; that is, the respondent was not bound to charge only the amount disclosed for the three‑year term of the lease.
The lease was for a term of three years commencing on 11 March 2002 and expiring on 10 March 2005, subject to an option to renew.
Mr Antonas referred to a strata levy reconciliation statement prepared by Blackburn Real Estate. It appears therein that the strata levy had been understated in the disclosure statement. The amount of $1352 per annum may have been the correct charge to that date on a pro rata basis within the financial year, but in fact, the total strata levy for the full calendar year from 1 January 2002 was $1890.90 and it increased for each of the following years to $2182.95 and $2475, respectively.
In the circumstances, Mr Antonas advised that the respondent was prepared to calculate the strata levy payable by the applicant as if the amount disclosed was correct for the first year. However, it was asserted that that amount should be increased by the same percentage increases as were, in fact, thereafter experienced for each of the two following years. Those increases amounted to a percentage increase in 2002/03 over and above the base year of 15.445 per cent and for the following year an increase of 13.379 per cent over and above the prior year.
The reconciliation reflects the following table:
Reconciliation Table
| Strata Levy Period | Actual Amount | Actual Received | Pro Rata + Escalation | Refund or Balance Due |
| 11/3/02 30/06/02 | $580.76 | $529.40 | $415.24 | $114.16 (Ref Due) |
| 01/07/02- 31/12/02 | $946.33 | $946.33 | $676.63 | $269.70 (Ref Due) |
| 01/01/03- 30/06/03 | $1201.10 | $1201.10 | $780.41 | $420.69 (Ref Due) |
| 01/07/03- 31/12/03 | $1201.10 | $1201.10 | $780.41 | $420.69 (Ref Due) |
| 01/01/04- 30/06/04 | $1237.50 | $ --------- | $884.82 | $884.82 (Bal Due) |
| $5166.79 | $3877.93 | $3537.51 | $340.42 (Ref) |
Considerations
The disclosure statement read with cl 5.1 and cl 5.2 of the lease entitles the respondent to recover from the applicant the actual costs charged in respect of the itemised utilities, rates and taxes. I also accept, as no issue has been taken, that the strata title levies provide for the recovery of like expenses.
The SAT has power, pursuant to s 26 of the Act, to make orders for payment of, and to require a party to do, or to refrain from doing, anything specified in the order. Further, that last power is stated to include the power to require a retail shop lease to be varied if the tenant was, before entering into the lease, misled by the landlord as to the meaning or effect of a term or condition of the lease.
I accept that the applicant was misled into believing that the base operating expenses for the premises were $1352 per annum at the time of entering into the lease. There was, however, nothing to suggest that the expenses payable under the lease were to be fixed and I reject the applicant's contentions to that effect. As the lease term has expired and it has not been renewed, no purpose would be served in requiring any amendment to be made to the lease, but it is open to make an order regarding payment of monies overcharged, or to make an order in the nature of a declaration answering the question posed for determination.
I accept the reconciliation as presented on behalf of the respondent. In terms thereof, there remained as at 30 June 2004 an amount of $340.42 repayable by the respondent to the applicant. Prior to January 2004, a greater amount had been paid in advance as reflected in the above schedule.
There is no basis advanced on which interest at that rate, or any other rate, is recoverable.
Interest could be awarded under s 32 of the Supreme Court Act1935 (WA) ("Supreme Court Act") if the Tribunal is a court pursuant to that section. The applicable rate of interest applied thereunder is six per cent per annum.
Whether or not the Tribunal, in the exercise of its jurisdiction under the commercial tenancy legislation is a court, is a question which would be better determined with the benefit of submissions. It is, however, not necessary for the Tribunal to determine the question because it is open to the Tribunal to award an amount to compensate for loss under s 87(3) of the SAT Act. That power is expressed to be included with the power to make an order of payment by a party of the costs of another party.
Although the applicant has not succeeded with her argument that the strata levy was to be kept fixed throughout the term of the lease, the fact of the matter is that proceedings were commenced alleging an over payment, which had not previously been conceded, and to which the applicant is entitled. To that extent the applicant has succeeded and I consider it to be appropriate, in all the circumstances, that she be awarded compensation for being kept out of her money at the same rate at which interest would have been awarded under s 32 of the Supreme Court Act. To the extent that this may be regarded as an award of costs, I exercise the discretion in favour of the applicant, by reason that costs were usually awarded to the successful party by the Commercial Tribunal and it results in the applicant being compensated in an amount which she would have been able to recover if the proceedings had been initiated in a court.
For the purposes of calculating the compensation I have taken the various balances shown in the above schedule and assumed that one half of the amount should accrue interest over the full period shown in respect of each line entry. I have done this because it is not clear as to when the obligation to pay the strata levy arose. As the calculation is approximate in nature I have rounded the amounts to convenient figures. The calculation is therefore as follows:
1.for the period 11 March 2002 to 30 June 2002;
$60 x 6/100 x 4/12 = $1.20
2.for the period 1 July 2002 to 31 December 2002 I have brought forward the balance of $114 and added it to one half of the refund due accruing over the period;
$250 x 6/100 x 6/12 = $7.50
3.for the period 1 January 2003 to 30 June 2003 I have brought forward $250 and added it to one half of the refund accrued over the period;
$460 x 6/100 x 6/12 = $13.80
4.for the period 1 July 2003 to 31 December 2003 I have brought forward $460 and added that to one half of the accrued refund;
$670 x 6/100 x 6/12 = $20.10
5.for the period to 30 June 2004 there was an amount of $340.42 owing throughout the full period and I have taken one half of the balance due which accrued and calculated interest on that sum of the two amounts;
$760 x 6/100 x 6/12 = $22.80
6.for the period calculated to 30 June 2005 the calculation is;
$340 x 6/100 x 6/12 = $10.20.
The total compensation awarded is the sum of $75.60.
It is accordingly ordered as follows:
1.Within twenty‑eight days of the date of this order the respondent is ordered to pay to the applicant:
a)the sum of $340.42; and
b)compensation in the sum of $75.60.
I certify that this and the preceding 39 paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER
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