Rai v Farah

[2022] NSWCATCD 153

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Rai v Farah [2022] NSWCATCD 153

Hearing dates:

27 July 2022

Date of orders:

17 August 2022

Decision date:

17 August 2022

Jurisdiction:

Consumer and Commercial Division

Before:

H Woods, Senior Member

Decision:

1. Mouda Laser Skin Clinic Pty Ltd is to pay Dhan Pat Rai $7830.00 within 28 days;

2. The application is otherwise dismissed.

3. If either party wishes to make an application for costs, they are to file submissions in support of that application including the costs order sought and whether the question of costs can be determined on the papers without the need for a further hearing and within 14 days.

4. Any submissions in reply, are to be filed and served within a further 14 days thereafter.

Catchwords:

LEASES AND TENANCIES — Retail leases — Retail shop lease

LEASES AND TENANCIES — Default and termination — Damages

Legislation Cited:

Retail Leases Act 1994 (NSW)

Category:

Principal judgment

Parties:

Dhan Pat Rai (Applicant)
Roxanne Farah and Joseph Farah (First Respondent)
Mouda Laser Skin Clinic Pty Ltd (Second Respondent)
FoxArt 1 Family Trust Pty Ltd (Third Respondent)

Representation:

Applicant (Self represented)
First Respondent (Self represented)
J Farah, First Respondent (Second Respondent)
J Farah, First Respondent (Third Respondent)

File Number(s):

COM 22/22562

Publication restriction:

Nil

REASONS FOR DECISION

INTRODUCTION

1. The proceedings concern a claim by the applicant landlord (Applicant) for unpaid rent, two months lost rent, the cost to remove tenant’s fixtures following vacation of the premises, and unpaid electricity in respect of a retail shop premises at 1A, 52 Dunmore Street, Wentworthville, New South Wales (the Premises).

2. Following a hearing and the making of orders by the Tribunal on 15 February 2022, the matter was appealed. The Appeal Panel quashed the orders made on 15 February 2022 and remitted the matter for hearing and made directions for the Applicant to file and serve all further documents relied on and for the Respondents to file and serve all documents relied on.

3. The Appeal Panel also noted that the issues for consideration were:

1. Who were the parties to the lease?;

2. What, if any, arrears of rent and outgoings are owed; and

3. What, if any, is the cost of restoring the premises at the end of the tenancy?

THE HEARING

4. At the hearing, I granted leave for the Applicant to be represented by his daughter, Gurleen Rai. The Respondents were represented by Mr Joseph Farah. Roxanne Farah also attended the hearing.

5. The Applicant relied on a bundle of documents dated 14 June 2022 which included a company extract of Mouda Laser and Skin Clinic Pty Ltd ACN 624 218 131 (Mouda) and a statement of the Applicant filed on 22 June 2022 together with the invoices and other documents filed with that statement. An updated version of the statement with amendments marked up was handed up at the hearing and marked Exhibit B. The Applicant also relied on a document headed “The Applicant’s Outline of Submissions” which was marked Exhibit A.

6. The Respondents relied on a bundle of documents filed 22 July 2022 that included statements of Roxanne and Joseph Farah dated 21 July 2022 and the documents referred in those statements. The Respondents also relied on a document headed “Respondents’ Outline of Arguments” which was marked exhibit 1.

7. At the commencement of the hearing, the Applicant informed the Tribunal that:

1. the Applicant was claiming unpaid rent of $21,408.05, not the $37,572.00 stated at paragraph 54 of the Applicant’s statement and identified in Exhibit A;

2. the Applicant was no longer making a claim for unpaid electricity;

3. the Applicant was claiming $15,070.00 for the cost to remove tenant’s fixtures to restore the Premises at the end of the tenancy; and

4. the Applicant was claiming $6,162.00 for lost rent.

8. The Applicant and Mr Farah gave supplementary evidence at the hearing.

WHO WERE THE PARTIES TO THE LEASE?

9. The parties were in general agreement and the evidence established that Mr and Mrs Farah informed the Applicant that the business to be operated from the Premises was operated by Mouda Laser and Skin Clinic Pty Ltd as trustee for FoxArt1 Family Trust (Mouda), that in fact a laser clinic business owned by Mouda operated from the Premises, that tax invoices for rent in respect of the Premises were issued by the Applicant to “Mouda Laser Clinic” and the Applicant’s bank statements record the receipt of “Mouda rent”.

10. Although it appears that there had previously been a formal written lease, it identified the lessee as “Laser and Beauty Clinic”. It did not identify a corporate entity or a person as the lessee. In any event it appears to have expired, and at the time the tenant vacated the premises in December 2021 there was no written lease.

11. I am satisfied that there was an agreement between the Applicant and Mouda which was negotiated between the Applicant and Mr and Mrs Farah pursuant to which the Applicant granted Mouda a right of occupation of the Premises as a retail shop. I am therefore satisfied that there was a retail shop lease (the Lease) between the Applicant and Mouda as tenant (the Tenant).

12. That leaves the following matters for consideration. First, the amount of unpaid rent if any. Second, whether the Applicant was entitled to lost rent for January and February 2022 of $6,162.00. Third, whether the Applicant was entitled to an amount of $15,070.00 or some other amount for the cost to remove of the tenant’s fixtures from the Premises so as to restore the Premises at the end of the Lease.

UNPAID RENT

13. During submissions in respect of the claim for unpaid rent, the parties reached agreement for the Tribunal to order that the tenant pay the Applicant the sum of $4,500.00 in respect of unpaid rent.

14. That left the Applicant’s claims for lost rent for January and February 2022 of $6,162.00 and a claim for $15,070.00 to restore the Premises.

CLAIMS FOR LOSS OF RENT AND COST TO REMOVE FIXTURES

15. The parties agree that the tenant vacated the premises in December 2021. The Applicant says that the tenant did not vacate until the end of December 2021, whereas the Respondents say that the tenant vacated the Premises on about 13 December 2021.

16. The Applicant says it agreed for the Tenant to vacate by 31 December and to leave the Premises in the state they were in at the time the Premises were leased, and that the tenant operated the business from Premises until December 2020. The Respondents say to the effect that that they informed the Applicant that they would vacate on about 13 December but may need another week to remove fixtures and fittings.

17. Having regard to the evidence, I make the following findings and determinations.

18. Having regard to text messages at Annexure E to Ms Farah’s statement, the Tenant vacated the Premises and returned the keys on or about 13 December but had not removed all its fixtures and fittings nor returned the Premises to the state it was in at the time it took possession.

19. Having regard to the photos marked K to the Applicant’s statement, I am satisfied that work had to be performed by the Applicant to remove fixtures or fittings including partitioning walls that had been installed by the Tenant.

20. Having found that the Premises were not left in the state that they were in at the time that the Tenant took possession and that some work was required to be performed by the Applicant to remove fixtures and fittings, primarily consisting of wall partitions, I am satisfied that the Applicant is entitled to an amount for the reasonable cost to restore the Premises

21. Although Applicant’s evidence included a quote dated 17 December 2021 to perform work which included stripping out gyprock walls and other work, the evidence did not include an invoice for work performed or evidence of a business record of payment for the work performed. Further, there was little if any evidence of the actual work performed.

22. Because of the lack of any evidence of the actual payment of money for the removal of the partitioning, and any other fixtures and fittings, and that having regard to the photos, the removal appears primarily to involve the removal of partitioning walls, I am not satisfied that the Applicant has suffered a loss of $15,070.00 to restore the Premises at the end of the tenancy.

23. I propose to allow the amount of $2,880.00 based on the calculations given by Mr Farah, whose evidence that he has experience in the building industry I accept, of three labourers for two days at eight hours a day at $50.00 per hour and $480.00 for a skip bin, being $2,880.00. I therefore find that the Applicant is entitled to the sum of $2880.00 as the reasonable cost to restore the Premises.

24. Because the lack of evidence of potential tenants who, but for work being performed to restore the Premises would have been able to move in in January and February 2022 and as to when the restoration work was performed and completed by and why it was not able to be done any earlier, I am not satisfied that the Applicant has suffered any loss of rent as a consequence of the conduct of the tenant and the claim for loss of rent is rejected.

ORDERS

25. Accordingly, the Tribunal’s order will be:

1. that Mouda pay the amounts of $4500.00 for unpaid rent and $2,880.00 for the cost to restore the Premises, being a total of $7830.00 within 28 days; and

2. the application be otherwise dismissed.

26. Both parties raised claim costs. Neither party was represented in the proceedings and my provisional view is that each party should pay their own costs. If either party wishes to make an application for costs, they are to file submissions in support of that application for costs which are to include submissions as to the costs order sought and whether the matter can be determined on the papers without the need for a further hearing within 14 days. Any submissions in reply, are to be filed and served within a further 14 days thereafter.

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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

Amendments

21 September 2023 - Formatting amendments.

Decision last updated: 21 September 2023