Rowen v Pastars No. Scgrg-97-675 Judgment No. S6469

[1997] SASC 6469

ROWEN -v- PASTARS

Action 675 of 1997

The plaintiff in this action is Patrick Francis Rowen, who I shall refer to throughout as “Rowen”.  In March 1995, Rowen lived at 41A Rose Street, Mile End, as a tenant of Adelaide Workmen's Homes Incorporated.  He had lived at that property for several years.  He said “I had a large number of poultry;  I also bred cattle dogs.  I was quite privileged that I lived there for several years and had a yard that was 200 feet long.”

Rowen received a letter from Adelaide Workmen’s Homes Incorporated dated 10 March 1995, giving notice that it intended to subdivide various properties in Rose Street, and construct six semi-detached dwellings.  Rowen accepted that this would happen and would have the effect of depriving him of anywhere to raise his poultry and dogs.

Rowen therefore subscribed to Australasian Select Homes Listings.  This organisation listed properties available for purchase or rental.  Rowen decided that he would move to the hills.  He stated that he looked at several properties over the months.  He apparently used to go down daily to check on the listings.  On one occasion, he saw a listing which is contained in Exhibit P2.  The listing reads:

“Suburb: Kersbrook.  Type: Farm house.  Rent: $350 neg.  Occupancy date: 29/05/95.  # Bedrooms: 2.  # Bathrooms: 1.  Extra Rooms:

Furn status: P/furn.  Level:  Grd.  Condition: Avg.  Structure: Timber.  Amenities: 1, 8, 9, 10, 11, 15, 16, 18, 19, 21.  Fenced?:  -  Age of property: 20 yrs.  Period: Ongoing.  Bond: Neg.  Advance: Neg.  Tenant preference: Couple; … singles; … Property address: Kersbrook UBD reference: R.  Contact: Mr Pastars.  Tel: 316816.  General: 30 acres; … dams; … garden shed; … all gas; … laundry; …Comments: Fully equipped fish farm; … ** Pet OK**.  Currency: “

Rowen said:

“I contacted Mr Pastars in regards to the property.  It wasn’t my intention to take over a rural property.  I was, at the time, looking for merely a residential property in a rural setting.  However, I’d been involved with a friend of mine on Kangaroo Island in relation to a Marron production over there in the early stages, and I had in mind that this property may, in fact, be useful in the production of marron.  I contacted Mr Pastars, he gave me a bit of background in relation to the property.  It was, as the ad ran, that the lease would be ongoing.”

“I contacted Mr Pastars initially by telephone.  In the discussions, he confirmed that the place was a fully equipped fish farm, that the lease was ongoing, and that the rent was $350 a week, negotiable, and other amenities there.”

I will refer to Mr Pastars throughout as “Pastars”.

Rowen arranged to inspect the property with Pastars.  However, at the last moment the arrangement was cancelled and Rowen attended with a casual caretaker, employed by Pastars.  Rowen said that, at the time of his first inspection, the property was grossly neglected, but had basic or usuable facilities by way of holding tanks, dams and things like that “which would seem to me to be maybe ideal for marron production.”

On his return, he contacted John Trent McDonnell, who I shall refer to as “McDonnell”.  He advised McDonnell of the property and asked whether he would be interested in coming into it with Rowen as a partnership deal.  McDonnell was obviously interested and went up to the property with Rowen.  When they returned, they contacted Pastars by telephone and Rowen wrote a letter dated 4th May 1995 which reads:

“With reference to our recent conversation, we are pleased to confirm a genuine interest in the leasing of the Kersbrook Trout Farm, subject to the normal terms and conditions of a lease agreement.

In addition to this agreement, we desire an option to purchase the said property in the future.

It is our intention to utilise and upgrade the current facilities with the primary aim of developing the property in a tourism venture, details of which we are prepared to deliberate on at a later stage.

We would be most pleased to be contacted soon with a view to discuss the proposals further.”

Pastars did not respond in writing to the letter, but advised Rowen, verbally, that he had no intention of selling the property.

Thereafter, Rowen had several telephone conversations with Pastars.  They arranged to meet at the property on Saturday 14th May 1995.  The meeting did take place at the property on 14th May.  Rowen said:

“We viewed the property, the three of us viewed the property, and discussed with Mr Pastars and worked out the basic framework of the lease that we required.”

Pastars contends that, on that occasion, he presented to Rowen and McDonnell a blank form of Memorandum of Lease, which Pastars had completed so far as the details of the lessors and the description of the property.  He contends that that form is, in fact, Exhibit D12, and that the second page was completed by Rowen and or McDonnell and signed and dated 14th June 1995.  At the same time, Pastars claims that he also gave to Rowen and McDonnell copies of covenants which should be included in a lease to be prepared for the proposed tenancy.  Those proposed convenants are Exhibit D13.  Pastars contends that it was his understanding that Rowen and McDonnell would consult a solicitor or accountant with a view to having an appropriate lease prepared, including the material contained in the lease form and the covenants.

Rowen and McDonnell, for their part, contend that they expected Pastars to have the appropriate lease drawn up and to contact them regarding the execution of the lease.  When they had not heard from Pastars by 24 May,. Rowen wrote to Pastars on behalf of himself and McDonnell in the following terms:

“Set out below is an outline of our agreement in principle as discussed at the Kersbrook Trout Farm on Saturday 14/5/95.

1.      The primary purpose of the lease is to establish a commercial marron farm on the said property.

2.      The initial lease is to run for one year at a weekly rental of $300 per week to establish whether our proposed project is a viable concern, both practically and financially.

3.      If the venture proves to be viable then we would wish to be given further extensions to the lease on the said property.

4.      We agree to purchase or lease your plant and equipment for the sum of $10,000 subject to condition of equipment to be paid in instalments as can be agreed.

5.      We agree that we will carry out all repairs and upgrading of the property and plant at our own expense to enable us to operate.

6.      We agree to sharing the bore but not to the detriment of our primary project.

7.      We agree that you can collect the rent personally, monthly from the said property.

8.      We agree in principle of the covenant of the property lease as given to us Saturday 14/5/95.

......... We would like to know what price indexing your rent rises will be structured to in future lease agreement. We also wish an inventory of the plant for sale, including a statement of the current condition of repair of each item.

Secondary activities to be conducted on or from the property

1.      Catering and providing venue for social functions.

2.      Camping and horse trail rides.

3.      Breeding of poultry.

4.      Breeding for sale and show of Australian Cattle Dogs.

Sources Of Income (for initial 12 month lease)

(Patrick Rowen)

1.      Permanent casual employment at the Mile End Hotel.

2.      Joint garden maintenance round with Trent McDonnell.

3.      Sale of show poultry.

4.      Sale of pedigree Cattle Dogs.

5.      Sale and marketing of bush barbecues.

6.      Sale of farm produce.

(Trent McDonnell)

1.      Payment by instalments from sale of landscape and garden maintenance business.

2.      Joint garden maintenance round with Patrick Rowen.

3.      Production, sale and distribution of shade tents.

4.      Sale of farm produce.

Future Financing

If our first year of operation proves the marron project to be commercially sound and viable, then we will be seeking to raise finance for expansion of the marron farm through private investors.

Plant in Possession (relevant to operation and maintenance of proposed marron farm)

1.      Bedford truck tray back.

2.      Diahatsu 4x4 Diesel.

3.      Heavy duty 8x5 trailer.

4.      Brush cutters, ride on mower, chainsaw, power tools.

5.      Complete carpentry tool set.

6.      Bricklayers tools.

We believe we can make the trout farm once again a viable commercial concern through marron farming to our mutual benefit and look forward to the challenge.”

After sending the letter of 24th May, Rowen contacted Pastars by telephone.  Rowen said:

“He was raising all sorts of issues, mainly about how much money we had and what our finances were and whatever.  I was quite open with Mr Pastars that I basically had no finances, but I had the ability to get the place up and running.  The finances that we would need would be generated from private investment.  What the proposal was that the initial lease would run for a year, if the marron was successful up there, because the place may or may not have been successful.  If they were successful up there and marron were established on the property, then we would be able to use the marron to underpin investor financing, and that the ongoing financing would be carried by investors.  We had done our sums and had enough finances to carry the rent for the first year and means of income for the first year.”

Rowen claims that, as a result of a telephone conversation with Pastars, he understood that Rowen and McDonnell should attend at Pastars’ home on 22nd of June 1995 to sign a lease document, which would be prepared by or on behalf of Pastars.  Pastars contends that the arrangement was for Rowen and McDonnell to attend at Pastars’ home on 22nd June to execute a lease, which was being prepared on or behalf of Pastars and McDonnell.

It is probably convenient at this point to indicate my view as to the reliability of Rowen and Pastars as witnesses.  It is abundantly clear that there has been a great deal of disharmony and animosity between the parties, virtually from the commencement of the lease.  It is also clear that all parties have, from time to time, sought advice with regard to discrete parts of the overall transaction and have subsequently endeavoured to interpret the advice and apply it themselves.  I do not accept the evidence given by either party to be complete and accurate.  I am not suggesting that either party is deliberately lying, but their attitudes and beliefs are, I believe, coloured by the animosity between them.  Despite the difficulties, which are compounded by the parties lack of legal expertise, it is possible to glean an overall picture, but this necessitates my accepting parts and rejecting parts of the evidence of both of them.

It is acknowledged by both parties that on Saturday 22nd June 1995, Rowen and McDonnell attended at the home of Pastars and the Memorandum of Lease, Exhibit P5, was signed by Mr and Mrs Pastars and by Rowen and McDonnell.  There is some discrepancy between Pastars and Rowen as to when the document was completed, but in the long term I do not think that that is of any significance.  Rowen contends that, when he and McDonnell arrived, the lease, apart from the signatures, was completed and that it contained terms and conditions which had not previously been negotiated.  However, he accepts that it was signed and is accepted by both parties as the document applicable to their transaction.

The lease is a standard Memorandum of Lease form, which gives the title reference of Volume 4062 Folio 927 and describes the property at Bagshaw Road, Kersbrook, SA, 5231.  The lessors are Mr and Mrs Pastars and the lessees Rowen and McDonnell.  The term of the lease reads:

“For a term of 12 months from 1 July 1995 with option of further lease for five years commencing on 1st day of July 1995.”

The rental is set out as “yearly rental of fifteen thousand and six hundred dollars ($15,600) per annum paid four weeks in advance from 1st July 1995”.

On the second page of the document, there is a paragraph which has a margin note “define land being leased incorporating the required easement(s) etc where appropriate”  That paragraph reads:

“Known as Kersbrook Fish Yabby and Tourist Park being approximately 33 acres of land including 5 dams and buildings as inspected situated at Bagshaw Road, Kersbrook, SA.

The property is to be used for primary purpose to establish to a commercial marron farm and breeding of poultry and Australian Cattle Dogs as outlined in the letter from Patrick Rowen to Antons Pastars on 24th May 1995.

Lessees to pay 2/3rds of rates to Gumeracha Council when due.

To maintain yabby and fish stocks in the 5 dams at the same level as 1st July 1995.  Any existing stock of yabbies, redfin perch or trout in 5 dams caught by lessees and sold gross proceeds of sale to be shared with lessors 50/50 bases.  The equipment on farm is to remain on property to be purchased by the lessees within 12 months for $10,000.  The lessees to carry out all repairs to buildings, pumps and plant at their own expense as per commercial lease.  The owners to retain the use of inground cement tanks and three small adjoining tanks for his own use and first two trays in hatchery for fish breeding purposes.  The lessors to retain use of land approx 5 acres as per plan marked “A” and have use of water from dam number 5 and use of boatshed and caravan and conviences (sic) also to pump water from bore and harvesting trees and undertakes not to engage in other activities to the detriment of proposed activities of the lessees.”

The lease is dated 22nd June 1995 and signed by Mr and Mrs Pastars and by Rowen and McDonnell.  None of the signatures are witnessed.

However, as I have stated, it is accepted by both parties that the lease, a copy of which is Exhibit P5 and the original of which is D21, is the lease which applies to this transaction.

It is not mentioned in any of the documentation relating to the lease, but it is acknowledged by the parties that, at the time when the lease was granted and for sometime thereafter, Pastars had a horse which was located in a paddock being part of the property.  It was agreed that he should be allowed to keep the horse there and to attend to it.  The lease refers to a plan marked “A”, but there is no plan attached to the lease.  It is acknowledged that the plan was submitted, but Rowen and McDonnell would not accept the plan because they contended that the line shown on the plan did not follow the actual fence line to the paddock.

It is not clear from the evidence, or documentation presented in this matter, when Rowen took up residence of the property.  On 8th August 1995, Pastars signed a letter addressed to “Primary Industries, SA Fisheries” which reads:

“I, Antons Pastars, of 67 Tusmore Avenue, Tusmore, South Australia 5065, owner and lessor of property Section 50, Hundred of Para Wirra, grant permission and approval to the lessees Patrick Francis Rowen and John Trent McDonnell to apply for a licence to conduct a commercial marron farming operation on the aforesaid property.”

Subsequently, the Department issued a registration which reads:

“Patrick F Rowen and John T McDonnell of PO Box 61, Torrensville 5031, SA are registered pursuant to the Fisheries Act 1982, and Regulations to operate as a fish farmer at Section 50 in the Hundred of Para Wirra for the following species of fish:

·....... marron cherax tenuimanus”

Rowen has also produced documentation which supports his contention that he obtained and established brood stock for the marron farm.  I accept that this occurred and that the stock purchased was released into one or more of the dams on the subject property.  I also accept that juvenile marron were produced and found to be in the dams.  Apart from this, however, there is no evidence that a commercial marron farming operation has been established at any time since 1st July 1995.

The 1st July 1995 was a Saturday.  It would seem that McDonnell went into occupation of the property on that day.  It had also been agreed that Pastars could attend on that day to collect the first month’s rent in advance.  McDonnell had access to his children at the weekend at that time.  It would seem that his boys were on the property when Pastars arrived.  Relations between Pastars and McDonnell and his children appear to have been cordial on that occasion, with Pastars giving permission to McDonnell’s children to ride the horse “Dandy”.  Pastars also claims to have agreed to McDonnell and his children having access to a room, or rooms, in the house property which Pastars had been intending to reserve for himself.  Pastars claims to have left in the early afternoon and McDonnell is unable to remember what time of the day Pastars left.  McDonnell claims, however, that when he returned to the property later that evening, he found the stop cock on one of the pipes from one of the tanks to be open and water to be escaping.  He suggested that this might have been the doing of Mr Pastars, but was unable to produce any evidence to substantiate that suggestion. 

McDonnell also gave evidence e that on another occasion, after Mr Pastars had attended at the property, the bedroom in which McDonnell’s children were located was flooded.  Again, the inference was that this had occurred because of action of Mr Pastars, but there was no other evidence to support this.  In fact, there is no evidence that Pastars attended the property again whilst McDonnell was in occupation.

Pastars claims that he did not obtain access to the property again until July 1996.  Apart from the matters raised by McDonnell, there is no evidence to show that Pastars did obtain access to the property between 1st July 1995 and a date early in July 1996.

Mr Pastars has tendered a document, Exhibit D14, which sets out his summary of the payments of rent made by Rowen and McDonnell.  It indicates that, in the first year, four monthly payments of $1,200 were made on 1st July, 1st August and 1st September 1995 and 6th January 1996.  Apart from these payments, the payments were made either at the rate of $300 per week or$600 per fortnight.  But in any event, it is acknowledged that the rent for the first year up to 6 July 1996, a total of $15,900, was paid.  During that period, Rowen also paid the rates of the District Council of Gumeracha.  Rowen asserts that Pastars did not make any reimbursement as to his 1/3rd share of the rates for that year.  Pastars contends that he was never asked for it.

The partnership between Rowen and McDonnell was dissolved in April or May of 1996.  The partnership was never a formal partnership in the sense of having any written agreement.  As Mr McDonnell said “It has always been done on a handshake and friendship and trust”.  The evidence of Rowen and McDonnell agrees on this point.  It is not clear, however, when McDonnell left the property.  It would seem that some of his personal effects are still on the property, and that for some purposes he uses that address as his residential address, even to this time.  It is acknowledged that at no time has Rowen sought and assignment of the lease, which he and McDonnell had from Pastars, to him individually.  Rowen has simply assumed the role of lessee on his own. 

It is obvious that some time prior to June 1996 there were discussions regarding the extension of the lease.  Rowen relies on a document, Exhibit P8, to which Pastars admits to being the author, apart from the date “31.3.96” which appears on the top line.  The document, which was tendered, is in fact a photostat copy.  It is not possible, therefore, to tell whether the date which appears on that document is part of the original document or whether it was put on subsequently.  By comparing the figures in that document with the figures on Exhibit D14, which are in Mr Pastars’ handwriting, they would appear, to the uninformed eye, not to be Mr Pastars’ figures.

The document reads:

......... “To extend the lease on farm

Tenants must purchase all equipment.

Must purchase all yabbies and fish in dams

Pay 1 mnths bond and (“guarantee regular”) rent payments 1 month in advance at all times.

Rent to be adjusted with CPI every year on 1 July.

Just provide plough for development of the farm and give monthly review of work done re weed destruction, fire protection, etc.

Must insure buildings and farm fencing and pay Council rates on due dates.

Repair and keep buildings and fencing in reasonable cond.

Not to cut any trees without owner’s permission.

Owners retain right to thin out up to ¼ of trees and have right to enter and use designated areas and caravan when required.”

By a document dated 29 June 1996, which is Exhibit P11, Rowen wrote to Mr and Mrs Pastars:

“I wish to inform you that I intend to take up the additional five year lease option on the trout farm with the same terms and conditions as per lease signed 22nd June 1995.”

On 28th June 1996, solicitors on behalf of Rowen lodged a caveat in relation to the Certificate of Title 4062 Folio 927, which reads:

“The caveator claiming to be beneficially entitled to an estate or interest as lessee of the land pursuant to unregistered lease (“the lease”) dated 22 June 1995 made between the caveator as lessee and caveatee as lessor, the initial term of the lease being one year commencing on 1 July 1995 and expiring on 30 June 1996 together with a right of renewal for five years as from 1 July 1996.  The caveator has exercised the right of renewal by notice dated 28 June 1996.  The current rental under the lease is $15,600 per annum forbids the registration of any dealing with the estate or interest of the abovenamed caveatee in the said land unless such dealing is expressed to be subject to the estate or interest of the caveator and is consented to in writing by the caveator.”

The caveat also contains the following declaration:

“I Geoffrey William Forbes care of Bonnins, Level 14, 100 King William Street Adelaide SA 5000 solicitors as agents for and on behalf of the caveator declare that the allegations in the above caveat are true in substance and in fact.

Declared and subscribed at Adelaide by the said Geoffrey William Forbes

this 28th day of June 1996.”

In fact, the solicitors had prepared a notice dated 28th June 1996 and understood that Rowen would serve the document on the Pastars on 28th June 1996.  However, Rowen did not serve the document on that day, but had the document retyped and dated 29th June 1996 and served the document on the Pastars late on that day.  It reads:

“I wish to inform you that I intend to take up the additional five year lease option on the trout farm with the same terms and conditions as per lease signed 22nd June 1995.”

Rowen remained on in the property and made the following payments of rent - 18/7/96 $1,500 for period 6/7 to 98/98, 16/8/96 $1,200 for period 9/8 to 6/9/96, 16/9/96 $1,200 for the period 4/10 to 1/11/96, 11/11 $1,200 for the period 1/11 to 29/11/96, 9/12 $900 for the period 29/11 to 20/12/96, 9/1/97 $600 for the period 20/12/96 to 3/1/97, 20/1/97 $600 for the period 7/1/97 to 18/1/97, 3/2/97 $600 for the period 18/1/ to 1/2/97, 8/2/97 $300 for the period 1/ 2 to 8/2/97, 4/3/97 $1,200 for the period 8/2 to 8/3/97, 16/3/97 $900 for the period 8/3 to 29/3/97, 9/4/97 $1,200 for the period 29/3 to 26/4/97, 3/6/97 $1,500 for the period 26/4 to 31/5/97, 14/7/97 $800, 6/8/97 $400, combined payments for the period 31/5 to 28/6/97.

Thereafter, it would seem that payments have been made at the rate of $400 per month.

By a document signed and witnessed on 14th June 1996, which is included in Exhibit D16, McDonnell provided a ride on mower as security in lieu of a security bond.  The document reads:

“I, J T McDonnell, co leese of Kersbrook Trout Farm agree to Tony Pastars to provide a ride on lawnmower Bollen’s 2028 current value app $2,000 as security in luie of paying security bond.

If in the event we decide to pay security bond this agreement will be immediately cancelled.

(signed) J T McDonnell, T Pastars, 14/6/96

(witness) Pat Rowen, 14/6/96”

On 25th July 1996, Pastars wrote to Rowen and McDonnell in the following terms:

“As per verbal notice on several occasions, I wish to inform you that we would not accept your offer delivered to us on 29/6/96 to extend your lease on Kersbrook Fish and Yabby Tourist Park for following reasons:

1You have breached the lease on many occasions by failing to pay the rent four weeks in advance on due dates and last payment by cheque (yours) were over two weeks in arrears (5 days to clear cheque).

2Refusing landlord to visit the farm and collect rent every four weeks and even when given seven days notice and arranging to inspect the farm in the presence of two witnesses on 29/6/96 and collect the rent due on 6/7/96 you rudely ordered off the property because I took video pictures of grossly neglected farm and in presence of police witness told lies re our arrangements to inspect the property and refused to pay the rent when requested by me.

3You have illegally removed my breeding stock yabbies from my inground tanks and top dam after draining and several tons of cut firewood belonging to us.

4You have illegally registered caveat on my property on 28/6/96 before delivering your intention to renew the lease on 29/6/97 making false statements.  Unless caveat number 8137349 is removed forthwith damages and costs will be claimed against you for any losses stopping me dealing with our property.”

That letter is also included in the Exhibit D16, which is in fact a collection of letters spanning the period from July 1996 up to October 1997 and expressing Pastars unwillingness to accept the proposals put by Rowen and drawing attention to the various breaches of the lease.  The documents contained in D16 are carbon copies and photostat copies of varying quality.  The originals of these documents, of course, were sent to Rowen and McDonnell.  Rowen indicated that he did not have any such documents.  He did not deny having received them, but indicated that they were unintelligible and that he probably consigned them to the waste paper bin.  Whilst Pastars’ English is far from perfect, it is quite easy to understand the intention of the various letters.  So far as Rowen’s contention that they were unintelligible is concerned, it seems to me it is a case of “there being none so blind as those who will not see”.

I also point out that Pastars claimed that he was not aware of McDonnell having left the property, or the business, until the case arose.  This would seem to be not an unreasonable view in the light of the document of 14th June 1996 when the ride on mower was offered as security.  Also, there does not appear to be any document which indicates to Pastars that McDonnell is no longer involved with the property, or the project.

Pastars claims that before he would consider any extension or renewal of the lease he wished to inspect the property.  He claims that he advised Rowen of this on 29th June 1996, when Rowen delivered the letter purporting to exercise his option.  Rowen concedes that the matter of inspection and attending at the farm was mentioned on that night.  At all events, Pastars attended at the farm on 6 July 1996.  Pastars drove on to the property and parked his motorcar near the caravan.  He then put a yabby net into dam number 2 and then proceeded to walk around the property taking video film of various locations.  Pastars claims that he asked Rowen to bring cutters so that he could cut back blackberries between two dams.  Rowen does not deny this, but does not recall it.  Pastars also claimed to be inspecting the property to see whether there was Salvation Jane sprouting and again, Rowen does not dispute this.  Rowen maintains that he had no objection to the inspection, but that he was concerned that the commentary, which Pastars was giving in respect of the video film, because it was implying that Rowen was responsible for the run down condition of the property.  He therefore ordered Pastars to leave the property.  Rowen called the police.  A constable of police attended at the property and, ultimately, Pastars left without any further negotiation having been engaged in or, more importantly, resolved.

Mr Rowen agreed that at all time since then, the gate to the property had been locked.  Rowen has refused to give a key to Pastars and has not agreed to Pastars coming on to the property again.

Rowen argues that the lease dated 22nd June 1995 is a lease for six years and that there is therefore no need for him to have exercised any option to renew or extend the lease.  That clearly is not the case.  I have set out the description of the term of the lease.  Furthermore, both Rowen and McDonnell maintain and agree that the term negotiated gave them the right, if their marron venture was not successful, to walk off the property at the end of the first year or, alternatively, if the venture was successful, to be able to stay on the property for a further five years.  If the lease was as Rowen contends, it would have been a lease for six years with an option to cancel the lease after 12 months after 1st July 1995.

The lease clearly states that the lessees are to pay 2/3rd of the rates of the Gumeracha Council.  That arrangement is not said to be subject to any particular condition. 

The lease also clearly states that the lessees are to repair buildings, pumps, and plant.  By inference, this acknowledges that some of the equipment and buildings were not fully operational or complete at the time when the lease was entered into.  This was accepted by the lessees.  The lease also clearly states that the lessors are to have the use of a certain portion of the land and to have the use of certain parts of the property and the equipment.  This, by inference, means that the lessors would have to have access and be able to come on to the property for these purposes.

It is not suggested that the lessees, Rowen and McDonnell, have jointly attempted to exercise the option to renew the lease.  Indeed, it is freely acknowledged and accepted by both Rowen and McDonnell that their partnership and the joint venture ceased by May 1996. 

Until the issue of these proceedings, there was no attempt to disabuse Pastars of his impression that both Rowen and McDonnell were the lessees.  The assigning of the ride on mower in lieu of a security bond by McDonnell on 14th June 1996 and the various letters written to Rowen and McDonnell from that time virtually to the present time, which have not been responded to, all support this finding.  I therefore find that there has been no renewal by the lessees of the lease dated 22nd June 1995.

Rowen argues on the basis that he alone, even in the absence of any formal assignment of the lease, is entitled to the rights and benefits of the lease. He also contends that the lease is one to which the provisions of the Retail and Commercial Leases Act 1995 apply. Section 4(1) of that Act reads:

“This Act applies to a retail shop lease if the premises to which the lease applies consist of a retail shop or a retail shop together with an adjacent dwelling.”

Section 3 of the Act defines “retail shop” as follows:

“Means -

(a) business premises -

(i)    at which goods are sold to the public by retail;  or

(ii)   at which services are provided to the public, or to which the public is invited to negotiate for the supply of services;  or

(b) business premises classified by regulation as premises to which this Act applies,

but does not include business premises of a class excluded by regulation from the ambit of this definition.”

On no consideration of the premises, the subject of this lease, could it be said that they came within this definition. I therefore find that the Retail and Commercial Leases Act 1995 does not apply to this matter. In any event, the provisions of the Retail and Commercial Leases Act, except for Sections 63 to 66 inclusive, came into operation on 30th June 1995 and Section 63 to 66 came into operation on 16th September 1996. Both of these dates are after the date of the lease in this matter. Section 81 of the Retail and Commercial Leases Act 1995 provides, inter alia:

“81(1) Part IV of the Landlords and Tenant Act 1936 (the `former legislation’) is repealed.

(2) However -

(a)    the former legislation continues to apply, subject to modifications prescribed by Regulation, to retail shop leases entered into before the commencement of this Act (including such a lease that is renewed after the commencement of this Act under a right or option of renewal conferred before the commencement of this Act);  but

(b)   if the retail shop lease creates a periodic tenancy, this Act applies to the lease as from the beginning of the first period after the first anniversary of the commencement of this Act as if there were a novation of the lease on that date.”

Rowen also argued that Part 4 of the Landlord and Tenant Act 1936 applied. Section 54 of that Act defines “commercial tenancy agreement” as “means an agreement under which a person grants to another for valuable consideration a right to occupy, whether exclusively or otherwise, premises for the purpose of carrying on a business;”. The same section defines “premises” as “includes -

(a)    any part of premises;  and

(b)   land and appertances appertainment to premises;  and

(c)   unimproved land;”.

The same section also defines “business” as “means an undertaking (whether or not carried on with a view to profit) involving the manufacture, sale or supply of goods or services;”.

Section 62 of the Landlord and Tenant Act, in subsections (1) to (7) inclusive requires a landlord to take certain actions in relation to a commercial tenancy agreement. Subsection (8) provides that

“a landlord who fails to comply with the provision of this section is guilty of an offence

Penalty; Division 9 fine.”

The section goes on, however, from subsection (9) to read as follows:

(9) Subject to subsection (10), non compliance with this section does not affect the validity of a commercial tenancy agreement.

(1) If -

(a)    a landlord -

(i) fails to provide a written statement to a tenant under subsection (2);  or

(ii) provides a written statement that is not true and correct in a material respect;  or

(iii) fails to provide a copy of a document to a tenant under subsection (4);  and

(b)   on the application of the tenant, the Tribunal is satisfied that, in the circumstances, an order under this subsection is justified,

the Tribunal may, by order, to such extent as may be appropriate and fair in the circumstances -

(c)   avoid the commercial tenancy agreement, in whole or part;

(a)    vary the commercial tenancy agreement;

(b)   direct the landlord to refund money paid under the commercial tenancy agreement;

(c)   require the landlord to pay compensation to the tenant;

(d)   deal with any ancillary or other matter.

(11) The Tribunal should, in considering an application under subsection (10), take into account -

(a)    the gravity of and the circumstances surrounding, the

landlord’s action;

(b)   the conduct of both the landlord and the tenant in relation to the commercial tenancy agreement and any negotiations surrounding the making of the agreement;

(c)   the extent of any loss suffered, or likely to be suffered, by the tenant as a result of the landlord’s action;

(d)   the effect that making an order, or not making an order, would have on each party, and make take into account such other matters as the Tribunal thinks fit.”

It is on the basis of this section that Rowen seeks the orders in paragraphs 3, 4, 5 and 6 of his application filed on 26 August 1997.

Even if I considered that Rowen was the lessee of a valid lease resulting from the proper exercise of the option to renew or extend the lease, I do not consider that, taking into consideration the matters set out in Section 62(11) of the Landlord and Tenant Act, that Rowen is entitled to the relief sought in those paragraphs of his application.

Section 67 of the Landlord and Tenant Act 1936 provides:

“Where -

(a)    a commercial tenancy agreement makes provision for extension or renewal of the term of the tenancy upon its expiration (other than provision for the case where a tenant holds over after its expiration);

(b)   the tenant gives written notice to the landlord within the period provided in the agreement, or, if so such period is provided, not later than three months before the expiration of the terms of the tenancy, that he desires an extension or renewal of the term of the tenancy; but

(c)   at the expiration of the term agreement has not been reached between the parties in relation to an extension or renewal,

the tenancy shall be deemed to continue upon the same terms and conditions until the matter is resolved by the parties or by determination of the Tribunal having regard to the terms of the agreement.

(2) Where an extension or renewal of a commercial tenancy agreement that is continued after its expiration under subsection (1), there is a variation in the rent that is payable under the agreement, that variation shall be deemed to have applied from the date of expiration of the agreement and, where the rent is increased, the amount of the increase shall be payable by the tenant to the landlord and, where the rent is decreased, the landlord shall refund to the tenant any amount overpaid.”

Even if Rowen alone were the tenant, he would not be assisted by Section 67. The lease does provide for extension of the lease, but does not provide a time for the giving of notice. The provisions of Section 67(1)(b) would apply. The only written notice given by Rowen was that dated and given on 29th June 1996. That is later than three months before the expiration of the term of the tenancy. The notice therefore would not, in any event, comply with the requirements of the Act.

On 2nd October 1997, Judge Kelly ordered the withdrawal of the caveat number 8137349 lodged in the Lands Titles Registration Office by the plaintiff.  On that date, Judge Kelly also made an order “that until further order the defendant be restrained from dealing with his interest at the proprietor of an interest in fee simple in Certificate of Title Registration Volume 5350 Folio 815 unless such dealings be expressed to be subject to the claim of the plaintiff to an interest in the land as lessee under the terms and conditions of a certain lease made between the plaintiff and the defendant dated 22 June 1995.”  That order has not been drawn up.  In any event, I consider that that order should now be discharged.

When making his order on 2nd October 1997, Judge Kelly noted “that the plaintiff advises that he will pay $100 per week regularly in respect of rental until trial.  Whether this is or is not a breach of his lease is not a matter for me in this action.  I simply note the fact.”  It is not clear to me whether, in fact, the plaintiff has made payment for that period as he undertook.  Indeed, it is not clear to me what payments have been made in respect of the period from July of this year onwards.  However, this does not concern me at this time.  It is a matter which may well have to be considered by some other court in the future if a sensible resolution of this matter cannot be effected. 

Orders:

1. I dismiss the plaintiff’s action.

1. There will be no order as to costs.

1. I discharge the injunctive order made by Judge Kelly on 2 October 1997.