Sazzi (SA) Pty Ltd v Chang - [2013] SADC 178

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SAZZI (SA) PTY LTD v CHANG AND ORS
[2013] SADC 178
Judgment of His Honour Judge Slattery
20 December 2013
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - CROSS-CLAIMS: SET-OFF AND COUNTERCLAIM
LANDLORD AND TENANT - TERMINATION OF THE TENANCY - FORFEITURE - NOTICE AND DEMAND BEFORE RE-ENTRY
Lease of restaurant premises – payment by the plaintiff lessee from assets belonging to a prior lessee of the same premises of amounts claimed to be due to the lessors by the prior lessee – whether payment was a premium or was otherwise a breach of s13 or s15 of the Retail and Commercial Leases Act 1995.
Distraint – whether the defendant lessors properly distrained for rent on 20 February 2007 – whether a distraint actually occurred and if so whether the plaintiff is liable to pay the costs of the distraint under its lease – whether the plaintiff agreed to pay the costs of the distrant – whether the defendants have proved on the balance of probabilities the cost of the February distraint.
Plaintiff lessee makes agreement with a third party for assignment of lease – whether plaintiff in default of rent payable under the lease at the time of seeking the consent of lessors for assignment – whether the defendants as lessors expressly or impliedly consented to the assignment and whether the defendant lessors are confined to a claim against a third party for breaches of the lease.
The plaintiff left the leased premises on 12 or 13 May 2007 to commence a new venture elsewhere – whether at that time or subsequently the plaintiff was in default in payment of rent or outgoings under the lease.
The defendants re-entered the premises on 15 June 2007 and then purported to distrain for rent a second time.
Whether the plaintiff was in default in the payment of rent to the defendants at the time of the second distraint – whether it was necessary to make a demand for the payment of rent before re-entry under the lease or pursuant to the requirements of the Landlord and Tenant Act 1936 – whether rent was owed.
Whether the defendants were in a position to distrain after having re-entered the premises – whether the plaintiff has any entitlement to double damages after the second distraint.
Whether the re-entry or the second distraint or both are wrongful and in breach of a lease – whether and if so to what extent the plaintiff is entitled to claim damages in this respect from the defendants.
Competing cross claims as between plaintiff lessee and defendant lessors in respect of monies allegedly due and owing by the plaintiff under the lease – whether equitable set-off is available as between the plaintiff and the defendants.
After re-entry on 15 June 2007, defendants seized plant and equipment left in the premises by the plaintiff for use by the third party under the purported assignment – defendants refused to allow plaintiff to re-enter the premises to collect…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] SADC 178
Decision Date: 20 December 2013

CaseChat Overview and Summary

The case of Sazzi (SA) Pty Ltd v Chang involved a dispute between the plaintiff, a lessee of commercial premises, and the defendant, the lessors of the premises. The primary issues revolved around the payment of sums due by a previous lessee to the defendants, the legality of a distraint for rent, and the validity of an assignment of the lease to a third party. The dispute also included questions regarding the plaintiff's default on rent payments and the consequences of the plaintiff vacating the premises.

The legal issues addressed by the court included whether the plaintiff's payment from the assets of a prior lessee constituted a premium or a breach of the lease's terms, specifically sections 13 and 15 of the Retail and Commercial Leases Act 1995. Another significant issue was whether the distraint carried out by the defendants was properly executed and if the plaintiff was liable for the costs associated with it. The court also needed to determine if the plaintiff had agreed to cover these costs and whether the defendants could prove the costs on the balance of probabilities. Additionally, the court had to decide if the plaintiff was in default when seeking consent for the lease assignment and whether the defendants' consent to the assignment limited their ability to pursue the plaintiff for lease breaches.

The court ruled that the plaintiff's payment from the prior lessee's assets did not breach the lease terms. It was held that the distraint was properly executed, and the plaintiff was liable for the associated costs, as evidenced by the lease agreement. The court found that the plaintiff was not in default when seeking consent for the lease assignment, and the defendants' consent did limit their ability to pursue the plaintiff for lease breaches. The court also determined that the plaintiff vacated the premises in May 2007 and was not in default at that time or subsequently.

Orders