Sansom Nominees Pty Ltd v Meade
[2001] WASC 124
SANSOM NOMINEES PTY LTD -v- MEADE & ORS [2001] WASC 124
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 124 | |
| Case No: | CIV:1207/2001 | 11 JUNE 2001 | |
| Coram: | ANDERSON J | 15/06/01 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Injunction granted | ||
| PDF Version |
| Parties: | SANSOM NOMINEES PTY LTD (ACN 008 797 948) MAURICE BRUCE MEADE ROSEMARY ADELE MEADE MONTELUSA PTY LTD (ACN 008 779 511) |
Catchwords: | Injunctions Interlocutory Restraining re-entry by landlord for non-payment of rent Tenant arguably entitled to offset damages arising from landlord's default |
Legislation: | Nil |
Case References: | British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063 Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 Autostop Centres Pty Ltd v Ampak Holdings Pty Ltd, unreported; FCt SCt of WA; Library No 8861; 16 May 1991 Bahr v Nicolay (No 2) (1988) 164 CLR 604 Boranga v Flintoff (1997) 19 WAR 1 Bullock v Federated Furnishing Trades Society of Australia (No 1) (1985) 60 ALR 235 Canning v Temby (1905) 3 CLR 419 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168 Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501 Eller v Grovecrest Investments Ltd [1994] 4 All ER 845 Hick v Raymond & Reid [1893] AC 22 Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 MEK Nominees Pty Ltd v Billboard Entertainments Pty Ltd (1993) VConvR 65,462 MEK Nominees Pty Ltd v Secure Parking Pty Ltd [2000] VSC 416 Micromine Pty Ltd v The Triton Group Pty Ltd, unreported; SCt of WA; Library No 970312; 12 June 1997 Re Bank of Credit & Commerce International SA (No 8) [1996] Ch 245 Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scraptrade) [1983] 2 AC 694 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MAURICE BRUCE MEADE
ROSEMARY ADELE MEADE
First Defendants
MONTELUSA PTY LTD (ACN 008 779 511)
Second Defendant
Catchwords:
Injunctions - Interlocutory - Restraining re-entry by landlord for non-payment of rent - Tenant arguably entitled to offset damages arising from landlord's default
Legislation:
Nil
Result:
Injunction granted
(Page 2)
Representation:
Counsel:
Plaintiff : Mr D M Stone
First Defendants : Mr M L Bennett
Second Defendant : Mr M L Bennett
Solicitors:
Plaintiff : Williams & Hughes
First Defendants : Bennett & Co
Second Defendant : Bennett & Co
Case(s) referred to in judgment(s):
British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235
Case(s) also cited:
Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99
Autostop Centres Pty Ltd v Ampak Holdings Pty Ltd, unreported; FCt SCt of WA; Library No 8861; 16 May 1991
Bahr v Nicolay (No 2) (1988) 164 CLR 604
Boranga v Flintoff (1997) 19 WAR 1
Bullock v Federated Furnishing Trades Society of Australia (No 1) (1985) 60 ALR 235
Canning v Temby (1905) 3 CLR 419
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168
Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501
Eller v Grovecrest Investments Ltd [1994] 4 All ER 845
Hick v Raymond & Reid [1893] AC 22
(Page 3)
Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
MEK Nominees Pty Ltd v Billboard Entertainments Pty Ltd (1993) VConvR 65,462
MEK Nominees Pty Ltd v Secure Parking Pty Ltd [2000] VSC 416
Micromine Pty Ltd v The Triton Group Pty Ltd, unreported; SCt of WA; Library No 970312; 12 June 1997
Re Bank of Credit & Commerce International SA (No 8) [1996] Ch 245
Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scraptrade) [1983] 2 AC 694
(Page 4)
1 ANDERSON J: This is an application for an interlocutory injunction to restrain a landlord from re-entering business premises in Hay Street, Perth.
2 The tenants are Mr and Mrs Meade. The premises, which are the ground floor of 847 Hay Street, are presently used as a hair salon under the name "Maurice Meade For Hair".
3 The lease is undated, but the term is for 10 years from 1 April 1998. It contains some special provisions relating to refurbishment and fitting-out.
4 I am satisfied that under the terms of the lease the landlord was obliged to remove the false ceiling and install air-conditioning throughout the premises as soon as practicable after the commencement of the lease and that these obligations were not conditional upon the tenants first coming up with their fit-out plan. Nor was it a condition of the landlord's obligations that the landlord's work be done in conjunction with the tenants' fit-out works.
5 It appears from the affidavit material that for some time after the commencement of the tenancy there were dealings between the landlord and the tenants with a view to co-ordinating the works - that is, the tenants' fit-out and the landlord's refurbishing and air-conditioning installation. Obviously, it would make sense for the landlord's works and the tenants' fit-out to be undertaken as a single joint project and I think for some time the dealings between the parties were such that the landlord reasonably believed that the tenants did not require the landlord's works to be commenced until the tenants had decided when and how to fit the premises out. (They had fitted out a portion of the premises in which a salon operated as from the commencement of the lease. This case concerns the balance of the premises, into which the business was to be expanded).
6 I am satisfied, however, that from mid-2000 it was no longer open to the landlord in light of the tenor of the communication passing between the parties to believe that the tenants did not require the landlord's work to be done. The tenants had ceased to pay rent after May 2000. On 4 August 2000, Mr Cox, on behalf of the tenants, wrote to the landlord saying:
"It must be apparent to you that the only reason that rent remains unpaid is your refusal or neglect to proceed with the obligations incumbent upon you to remove and replace the
(Page 5)
- ceiling and install airconditioning in accordance with the provisions of the lease and immediately you comply with the lease and commence the work the rent will be recommence. Your statement that you will not take steps to proceed until you receive plans and specifications of our proposed refurbishment programme flies in the face of the lease which makes no mention of refurbishment as a pre-condition of you carrying out the work."
7 It is arguable that from that date at least, if not earlier, any acquiescence on the part of the tenant in the non-performance of the landlord's obligations within the time stipulated in the lease had terminated: Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 at 348 - 349; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 at 263.
8 The mere fact that a landlord is in breach of the landlord's obligations under the lease does not entitle the tenant to withhold rent. In this case, the tenants have not paid any rent since May. Arrears, that is, unpaid rent and charges for the period June 2000 to date, presently total about $141,000 plus interest. The landlord wishes to re-enter for non-payment of rent and would have done so had these injunction proceedings not been started.
9 I think the question whether an interlocutory injunction restraining re-entry should be granted depends on whether the tenants have an arguable case that the landlord's failure to do the works in question gives them a claim for damages which may be offset against their rental obligations. Arguably, a tenant who has suffered loss as a result of default by the landlord has a general right of offset with respect to rent: British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063.
10 As to the quantum of damages in this case, the tenants now say that they sublet the premises on the basis that the premises would be air-conditioned and because they have not been air-conditioned the subtenants have refused to pay rent. The tenants say that the rentals due under the subtenancy agreements and which have not been paid due to the failure of the landlord to air-condition the premises are at least equal to the rent payable by the tenants to the landlord. Therefore, the measure of the tenants' loss is equivalent to the amount of rent withheld.
(Page 6)
11 There is some reason to be sceptical of the bona fides of this claim. It is evident from the affidavit material that the two subtenants are companies which are closely associated with Mr and Mrs Meade, giving rise to the suspicion that there is no real refusal on their part to pay rent to Mr and Mrs Meade. It is also possible to get the impression that there has been no great urgency on the part of Mr and Mrs Meade to expand the salon into the balance of the premises. Only a small portion of the premises are presently being used as a hair salon. There is at least some reason to think that it has suited the tenants not to expand into the balance of the premises at this stage - that even if the landlord had completed its refurbishment, the tenants would not have been in any hurry to fit the premises out and use them.
12 However that may be, there is evidence from which it is arguable that a failure to do the landlord's work prevented the tenants from enforcing the subtenants' obligation to pay rent.
13 I am satisfied that there is an arguable case that the tenants have suffered damages by reason of the landlord's failure to carry out the landlord's works and that it is arguable that the quantum of damages is more or less the equivalent of the rent withheld.
14 There is no issue as to the balance of convenience, which plainly is in favour of maintaining the status quo as things presently stand.
15 As there is an arguable case that the rent withheld may be offset against the damages arising from the landlord's breach of covenant, I am prepared to grant the injunction.
16 I invite the parties to send down an agreed minute of orders. If agreement cannot be reached, I will hear counsel.
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