Speca v Jumpstart Enterprises Pty Ltd
[2009] WADC 58
•16 APRIL 2009
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: SPECA -v- JUMPSTART ENTERPRISES PTY LTD & ORS [2009] WADC 58
CORAM: YEATS DCJ
HEARD: 24 MARCH 2009
DELIVERED : 16 APRIL 2009
FILE NO/S: CIV 2001 of 2008
BETWEEN: RENO SPECA
Plaintiff
AND
JUMPSTART ENTERPRISES PTY LTD
First DefendantLAURENT VINCENT
Second DefendantLOUIS JACQUES JOSIAN PIERRE
Third Defendant
Catchwords:
Contract law - Sub-lease of commercial property - Claim for loss of rent and unpaid invoices - Consent to sub-lease - Construction of contract - Whether the Minister's consent in writing required - Intention of the parties in entering the sub-lease - Sub-lease not void
Legislation:
Land Administration Act 1997
Main Roads Act 1930
Result:
Judgment for plaintiff in the amount of $65,885.66
Representation:
Counsel:
Plaintiff: Mr A Prentice
First Defendant : Mr D MacLean
Second Defendant : Mr D MacLean
Third Defendant : Mr D MacLean
Solicitors:
Plaintiff: Mossensons
First Defendant : Arvind C Pillay
Second Defendant : Arvind C Pillay
Third Defendant : Arvind C Pillay
Case(s) referred to in judgment(s):
Greg David Smith v Desmond Joseph Maloney (18 May 1998) (unreported) Full Court Supreme Court of Western Australia Lib No 980266
Massart v Blight (1951) 82 CLR 423
Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264
Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268
Sutherland Shire Council v James (1963) NSWR 1573
Water Authority of WA v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233
Willoughby v Barrett-Lennard [1979] WAR 167
YEATS DCJ: The plaintiff claims for loss of rent and unpaid electricity invoices due and payable under a sub‑lease of commercial property located at 1038 Albany Highway, St James. His claim is against the first defendant as sub‑lessee and the second and third defendants as guarantors of the sub‑lease.
The issues
The defendants contend that the sub‑lease is void because the plaintiff sub‑lessor failed to obtain the prior consent in writing of the Minister. The defendants also contend that the letter of 2 July 2007 (Exhibit 6) countersigned by Richard Moore does not constitute a consent in writing to the sub-lease by the Commissioner of Main Roads, the lessor.
Background to the dispute
The Commissioner of Main Roads ("the Commissioner") is the registered proprietor of all the property at 1038 Albany Highway, St James (see certificate of title, volume 2106/folio 596, Exhibit 2). On 1 August 2007 the Commissioner leased the property to the plaintiff. The lease was for a period of five years at an annual rental of $20,715.84 plus GST, payable at $1726.32 plus GST per month (Exhibit 3).
Clause 8.1 of the lease provided:
"8.1Lessee Not to Assign, etc
The Lessee shall not without the prior consent in writing of the Lessor and the Minister assign, sub-let or part with possession or occupation of the Leased Premises or any part thereof of this Lease or any estate or interest therein but in the event of the Lessee wishing to assign or sub-let the whole of the Leased Premises the Lessor shall not unreasonably withhold its consent to such assignment or sub-letting if:
(a)the proposed assignee or sub-lessee is a person of good financial standing and with at least equal trading potential as the Lessee and conducting a business in keeping with the overall nature of the occupancy of the Leased Premises the onus of proving which facts shall be upon the Lessee to the satisfaction of the Lessor;
(b)the Lessee has procured the execution by such assignee or sub-lease of an assignment of this Lease or a sub‑lease (as the case may be) to which the Lessor is a party and which is in a form approved of by the Lessor and its solicitors and delivered such assignment or sub-lease to the Lessor;
(c)all rent then owing shall have been paid and there shall not then be any existing unremedied breach of the covenants, conditions and stipulations herein contained (PROVIDED THAT breaches which have been waived by the Lessor shall not be deemed to be unremedied breaches for the purpose of this paragraph);
(d)the Lessee has paid to the Lessor all costs, charges and expenses incurred by the Lessor of and incidental to any enquiries which may be made by or on behalf of the Lessor as to the responsibility, solvency, fitness and suitability of any proposed assignee or sub‑lessee and of and incidental to the preparation and approval of the form of assignment or sub‑lease and shall in addition pay all costs, charges and expenses incurred in transferring any lease to the proposed Assignee."
The plaintiff had held a lease of this property under earlier leases with the Commissioner since about 1993. On 15 July 2007, the plaintiff as lessee, entered into a five year sub-lease of half of the leased property at a rent of $84,000 per annum plus GST payable monthly from 1 August 2007 in payments of $7,700 inclusive of GST. The first defendant was the sub‑lessee. That rental included all outgoings, bar the electricity bill, telephone bill and maintenance which were the responsibility of the sub-lessee.
The sub-lessee took possession of the premises on 15 July 2007 and paid the monthly rental on 1 August, 1 September and 1 October. The sub-lessee left at the end of October after paying rent due on 1 November. After that, the only payment was a payment of $4,000 made in February 2008. Besides the outstanding monthly rental payments, the plaintiff tendered two unpaid invoices for power bills totalling $585.66.
On 20 January 2009, the plaintiff was able to sub-let that half of the property to Said Sadat (Exhibit 5) who went into possession on 1 February 2009 paying a monthly rental of $5,083.33 plus GST. That sub-lease runs from 1 February 2009 until 30 July 2012, the date on which the five year term of the head lease between the Commissioner of Main Roads and the plaintiff ends.
Evidence at trial
The plaintiff gave evidence. He is a used car dealer who operates his business from the other half of the leased premises at 1038 Albany Highway, St James. He has been leasing the land from the Commissioner for some years since 1993. In 2007, the plaintiff decided to sub-lease half the property and appointed Spiro Agapitos from Platinum Commercial to take care of all the arrangements. The plaintiff admitted he knew he needed the consent of the landlord, the Commissioner, for the sub-lease and that was done by his agent. The plaintiff said he personally did nothing about the consent of the Commissioner. No one ever mentioned the need for the consent of the Minister.
The plaintiff confirmed he had received four rental payments under the five year lease and the payment of $4,000 in February 2008. The plaintiff said the $4,000 payment was made after he had threatened legal action. He said the defendants told him they could not afford to pay the full amount but could pay $4,000 at that stage. According to the plaintiff, the defendant undertook to catch up and pay the balance. But that never happened. No further payments were made by the defendants and the plaintiff eventually issued the writ in this action on 21 August 2008.
The only outgoings the plaintiff issued invoices for that have not been paid are the electricity bills (part of Exhibit 10) for a total of $585.66. Before the defendants moved out, the plaintiff's evidence was that the defendants undertook to keep paying the rent until they could find new tenants.
According to the plaintiff, he never heard anything about the need for the Minister's consent until he attended a mediation conference in the District Court after the court proceedings were underway.
The plaintiff was cross-examined about his rental under the main lease with the Commissioner, paying an amount of $1,726.32 a month. The plaintiff denied the sub-lease gave him a monthly profit of $5,284. He relied on the improvements he had made to the leased land over the years, including a building, sealed concrete, fencing, and lighting amounting to about $250,000 in improvements. The plaintiff admitted those improvements ran with the land and were not his property.
The only other witness called by the plaintiff was Richard Moore, who had held the position of Property Manager, employed by Main Roads Western Australia. Mr Moore's evidence was received in the form of a signed statement. The defence accepted the statement and did not require the witness for cross-examination. Mr Moore's evidence was:
"1.I am employed by the Main Roads Western Australia in the position of Property Manager and have held that position since 2001.
2.On 21 March 2003, the Commissioner of Main Roads ("the Commissioner"), in accordance with section 10B(1) of the Main Roads Act 1930 delegated (in writing) to my position the power to approve, amongst other things, property leases of commercial and vacant land.
3.Since that time I have approved many leases and Sub‑Leases on behalf of the Commissioner.
4.I am familiar with the part of 1038 (Lot 11) Albany Highway, St James ("the Premises") which is the subject of a Sub-Lease dated 10 July 2007 between Reno Speca, Jumpstart Enterprises Pty Ltd and others.
5.The Premises are commercial land used for the retail sale of motor vehicles.
6.The land upon which the Premises are situated is freehold land held in the name of the Commissioner.
7.I understand that all material times Minister for Lands was responsible for the administration of the Land Administration Act 1997 with the assistance of the Department for Planning and Infrastructure. I am advised and understand that the Land Administration Act 1997 applies to the Commissioner of Main Roads as section 4 of the Land Administration Act 1997 provides that the Land Administration Act 1997 applies to the Crown.
8.I understand that section 18 of the Land Administration Act 1997 requires that many transactions involving Crown Land must be approved by the Minister of Lands. I am informed and believe that the requirements for Ministerial approval in section 18 do not apply to freehold land because:
i)the definition of "Crown Land" for the purposes of that section is provided in section 4 of the Land Administration Act 1997 and specifically excludes "alienated land"; and
ii)the definition of "alienated land" for the purposes of that section is provided in section 4 of the Land Administration Act1997 and provides that "alienated land" means 'land held in freehold.'
9.I am informed and believe that there are no provisions in the Land Administration Act 1997 requiring Ministerial approval for leases of freehold land. After making inquiries within Main Roads Property Branch, I am not aware of any legislation which requires the approval of the Minister for Lands or any other Minister for the lease of Sub-Lease of commercial premises on freehold land.
10.The Commissioner leased the Premises (together with other adjoining land) to Reno Speca pursuant to a lease dated on or about 1 August, 2007. Reno Speca had been the Lessee of the Premises (but not the other adjoining land) immediately prior to this under a different lease.
11.The lease contained a clause (8.1) which required the Lessee to obtain the consent of the Commissioner and the Minister before assign or sub-letting. As there was no requirement to obtain the Minister's consent to the Sub‑Leasing of freehold as opposed to Crown Land, it was unnecessary for the Minister's consent to have been included in clause 8.1 of the Lease. I have never sought the consent of the Minister to Sub-Leasing of freehold land in the name of the Commissioner.
12.In or about July 2007 the agents of the Lessee, namely Platinum Commercial, approached me by letter dated 2 July 2007 and requested that the Commissioner consent to a Sub-Lease of the Premises to Jumpstart Enterprises Pty Ltd.
13.On behalf of the Commissioner and pursuant to the authority granted to me referred to in paragraph 2 of this Statement, I consented in writing to the Sub-Lease by affixing my stamp and signing my name on the letter.
14.For the reasons stated in paragraph 11, I did not require Speca to obtain the Minister's consent over and above the Commissioner's consent . I waived that requirement and would not attempt on behalf of the Commissioner to terminate the lease on the basis that Speca did not seek Minster's consent to the sublease."
The defendants did not call any evidence.
Defendant's submissions
The defendants rely on clause 8.1 of the lease agreement (Exhibit 3) between the Commissioner and the plaintiff prohibiting the plaintiff lessor from sub-letting any part of the leased premises "without the prior consent in writing of the Lessor and the Minister" (my emphasis). The defendants refer to portions of the sub-lease between the plaintiff and the defendant (Exhibit 4) referring to "consent". Recital C provides:
"Subject to the consent of the Head Lessor and at the request of the Guarantors, the Sub-Lessor has agreed to sub-lease to the Sub‑Lessee the Sub-Leased Premises on the terms and conditions in this Deed."
Clause 2.1 and 2.2 of the sub-lease provides:
"2.1Subject to the consent of the Head Lessor, the Sub‑Lessor sub-leases to the Sub-Lessee the Sub-Leased Premises for the Term, on the terms and conditions contained in this Deed.
2.2The Head Lessor has consented to this sub-lease."
The defendants submit that the term "consent" where used in the sub‑lease means a consent in accordance with the terms of clause 8.1 of the head lease. Because of the express prohibition in clause 8.1 the defendants submit the plaintiff lacked the capacity to enter into the sub‑lease and that the sub‑lease is void. The defendants contend that the tenancy of the defendants was a tenancy at will, terminated lawfully by notification to the plaintiff and payment of one month's rent in advance. In support of their submission, the defendants rely on the "purported" grant to the sub-lessor of a right to quiet enjoyment under clause 4.1 of the sub-lease and they rely on the purported five year term of the sub-lease and contend that without the written consent of the Minister, the plaintiff could not grant these terms to the first defendant. Therefore, the defendants contend that no sub-lease came into existence.
To support their submissions, the defendants rely on the judgment of Buss JA in Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268 at [84] ‑ [92] setting out the principles of construction of written contracts and, in particular, [87]:
"Where a commercial transaction is implemented by several contracts or documents, all of the contracts or documents may be read together for the purpose of ascertaining their proper construction and legal effect, at least where the contracts or documents are executed contemporaneously or within a short period. See Smith v Chadwick (1882) 20 Ch D 27, 62 (Jessel MR) and, on appeal, (1884) 9 App Cas 187. Also, see the discussion in Lewison, The Interpretation of Contracts, 3rd ed, par 3.03."
The defendants contend that the "consent" referred to in the sub‑lease must be construed to mean a true consent, that is, a consent in writing by both the lessor and the Minister. Therefore, without the Minister's consent the sub‑lease is void. The defendants contend the plaintiff lacked the capacity to sub-lease without the consent of the Minister. The defendants relied on Sutherland Shire Council v James (1963) NSWR 1573. In that case, the majority of the New South Wales Full Court (Sugarman and Manning JJ) held that where the leasing power of a statutory corporation is subject to a condition requiring the written consent of the Minister, any exercise of that power without the written consent of the Minister, is ultra vires and void. The validity of the lease is:
"...not merely a question of the absence of title in the lessor. It is also a question of absence of power..." (Sutherland Shire Council at 1576)
The plaintiff's submissions
The plaintiff concedes that he did not obtain the consent in writing of the Minister before entering into the sub-lease with the defendant. But the plaintiff denies the sub-lease is void. He relies on the position of the Commissioner as a body corporate under s 9 of the Main Roads Act 1930 with the power to acquire real property and the power to deal with that property. The certificate of title (Exhibit 2) shows that the Commissioner held the freehold title to the land at 1038 Albany Highway, St James. Therefore, the plaintiff submitted that the land in question is not Crown land as defined in s 3 of the Land Administration Act 1997. Whereas the leasing of Crown land requires the prior approval in writing of the Minister for Lands (s 18(2) and (7) Land Administration Act) no such approval or consent of the Minister is required when the Commissioner leases land it holds under freehold title. Further, the plaintiff submits that the Minister for Lands is not mentioned in the sub-lease and is not a party to either the lease or the sub-lease. In these circumstances, the plaintiff relies on the rule applied in Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264 per Le Miere J at [91]:
"An assignment is created when the lessee transfers the existing lease, that is the whole of its term, to the assignee. In this case, the first defendant's right to assign was qualified by a covenant not to assign or part with possession without the consent of the second defendant. Notwithstanding such a covenant, an assignment by the lessee in breach of the covenant not to assign is effective to pass the estate. However, if there is a forfeiture clause in the lease the landlord has the right to re-enter for the breach depriving the assignee of the estate, or the landlord may sue for damages: ... Furthermore, unless the landlord elects to enforce such a right of re-entry, the assignment remains effective. ..."
This principle has been discussed in earlier Full Court decisions in Willoughby v Barrett-Lennard [1979] WAR 167 in the judgement of Burt CJ at 171:
"And there is, I think, another reason for reaching the same conclusion. Regulation 17 is incorporated into the terms of the perpetual lease. A settler who enters into a contract of sale contrary to reg 17(3) does not expose himself to any form of punishment. He does not commit an offence. The stated consequence of his breaching that regulation is that 'the holding may be forfeited by the Minister'. That would not suggest to me that the contract of sales so entered into was illegal and void: see Stein v Pope [1902] 1 KB 595. Rather it seems that the intention was that the regulation would operate as if it were a term of the lease a breach of which would not be 'nugatory' but which would expose the lease to forfeiture: Massart v Blight (1951) 82 CLR 423 at 440."
That principle was discussed more recently in the case of Greg David Smith v Desmond Joseph Maloney (18 May 1998) (unreported) Full Court Supreme Court of Western Australia Lib No 980266 per Malcolm CJ.
In Massart v Blight (1951) 82 CLR 423 at 440 the Court (Dixon, McTiernan, Williams, Webb, Fullagar JJ) said:
"A probable explanation of sub-s.(10) is that the draftsman believed that if an assignment was made in breach of condition the assignment was void and the assignee took nothing, but that is an error. The breach of condition does not make the assignment nugatory. It merely exposes the lease to forfeiture, a forfeiture which of course would at common law, considered independently of the Landlord and Tenant (Amendment) Act 1948-1949, deprive the assignee of his estate or interest."
The plaintiff contends that despite his failure to obtain the written consent of the Minister before entering into the sub-lease, the sub-lease was effective and was not void.
Furthermore, the plaintiff contends that clause 8.1 of the head lease was enacted for the benefit of the Commissioner so that any breach of clause 8.1 would enable the Commissioner to take action to re-enter the sub-leased land. That is provided for in clause 11.1 of the lease, provided there is notice given to the sub-lessor. Because clause 8.1 was enacted for the benefit of the Commissioner, the plaintiff submits Richard Moore as agent for the Commissioner could waive the requirement that the Minister give prior written consent and can rely on Mr Moore's evidence that the Commissioner would not re-enter the sub-leased land pursuant to clause 11.1 of the lease.
The plaintiff further contends that even in the theoretical event that the Commissioner exercised its powers under clause 11.1 of the lease, the defendants remedy would be an action against the plaintiff. The sub-lease would not for that reason be void.
The plaintiff referred to the terms of the sub-lease in recital C, clause 2 and clause 3.10. The plaintiff submits there is no mention in any of those clauses of the need for the prior written consent of the Minister. All references in the sub-lease to "consent" are references to the consent of the lessor under the main lease (the Commissioner). The plaintiff submits that so far as the parties are concerned, they entered into the sub‑lease on the basis of the Commissioner's consent – not the Minister's consent.
The plaintiff referred to clause 5.1 of the sub-lease dealing with "incorporation":
"The Sub-Lessor and the Sub-Lessee agree that subject to the provisions of this Deed, all the rights granted to and obligations imposed on the Head Lessor and the Sub-Lessor respectively in the Head Lease apply as between the Sub-Lessor and the Sub‑Lessee, subject to the necessary changes, as if the terms covenants and conditions conferring those rights and imposing those obligations were expressly set out in this Deed as covenants made between the Sub-Lessor and the Sub-Lessee including in particular the rights of the Sub-Lessor upon any default by the Sub-Lessee."
Because the incorporation of the head lease provisions is made "subject to the provisions of this Deed" and "this Deed" – the sub-lease – contains no mention of the Minister's consent, the plaintiff contends that the requirements of clause 8.1 cannot be relied on in the interpretation of the sub-lease. The Minister is not a party to, nor mentioned in the sub‑lease document.
Findings on issue 1: Is the sub-lease void because the plaintiff sub-lessor failed to obtain the prior consent in writing of the Minister?
1.I am satisfied there is no statutory prohibition requiring the consent in writing of the Minister before a lessee of the Commissioner sub-leases any part of the leased premises. That is because the Commissioner held freehold title to the leased premises (see Exhibit 2). The statutory prohibition requiring the consent in writing of the Minister only applies to the sub-lease of Crown land (s 18 Land Administration Act).
2.The decision in Sutherland Shire Council (supra) has no application in this case. In that case, the claimant local authority had acted ultra vires in purporting to grant a lease and the issue was whether, nonetheless, a tenancy had been created. The majority held that where the leasing power of a statutory corporation is subject to a statutory condition requiring the consent of the Minister it is ultra vires the powers of the corporation to create a lease without complying with the condition and such a lease would be void (Sutherland Shire Council at 1579 per Sugerman and Manning JJ). In this case, the plaintiff is not a statutory corporation. His power to sub-let the leased premises is not governed by statute but depends on his title to the leased premises under the lease. The decision in Sutherland Shire Council has no application to those issues.
3.Where, as in this case, the plaintiff sub-lets a portion of the leased land in breach of the condition in clause 8.1 the rule in Massart v Blight (supra) as stated in Secure Parking (WA) [2005] (supra) by Le Miere J [1991] governs the rights of the sub-lessor and the sub-lessee. Despite the breach of the condition, the sub-lease is effective to pass the estate to the defendant but, under clause 11.1, the Commissioner could exercise his right of re-entry after giving proper notice. In such circumstances, the defendant would have a claim against the plaintiff in damages.
4.I accept the plaintiff's submission that clause 8.1 was inserted into the lease for the benefit of the Commissioner and that the Commissioner could waive the benefit in so far as it required the consent in writing of the Minister. Mr Richard Moore purported to waive that requirement in his evidence (at 14) but there is no evidence before me that the Commissioner has delegated anything other then its power of approval to Mr Moore (see Exhibit 7). Therefore, I proceed on the basis the Commissioner has not waived the condition in clause 8.1.
5.The defendants rely on the decision of Buss JA in Secure Parking (WA) [2008] (supra) at [84] to [92] in support of the contention that on its proper construction the term "consent" when used in the sub‑lease means a true consent in writing of both the Commissioner and the Minister as required in clause 8.1 of the lease. I do not accept that contention. The clear terms of the sub‑lease refer only to the Commissioner's consent. On its proper construction, I am satisfied the sub-lease shows the intention of the parties to enter into the sub-lease with the consent in writing of the Commissioner. In reaching that conclusion I rely on clause 5.1 of the sub-lease wherein the parties agree that the incorporation of the rights granted and obligations imposed on the Commissioner and the plaintiff under the head lease apply to the sub‑lease but that incorporation is "subject to the provisions of the Deed" (the sub-lease). There is no reference to or mention of the Minister in the sub-lease and therefore the condition in clause 8.1 has not as a matter of construction been incorporated into the sub-lease.
For these reasons, I am satisfied the sub-lease is not void.
Findings on issue 2: Whether the letter of 2 July 2007 (Exhibit 6) countersigned by Richard Moore constitutes a consent in writing to the sub-lease by the Commissioner.
The letter of 2 July 2007 was prepared by Spiro Agapitos, the plaintiff's agent. It refers to the lease between the Commissioner and the plaintiff dated 26 November 2003 and seeks on behalf of the plaintiff the approval of the Commissioner to sub-lease a portion of the leased property to the first defendant for a period of five years. The names and contact details of the Directors of the first defendant are provided.
Richard Moore stamped and signed the letter on behalf of the Commissioner on 6/7/07. I accept that the Commissioner had delegated its power to consent to the sub-lease of commercial land to Mr Moore (see Exhibit 7) but Mr Moore wrote on Exhibit 6 after signing it "subject to conditions of main lease agreement inclusive of 6 month break clause".
The six month break clause is found in the head lease (Exhibit 3) in clause 14.5(a):
"The Lessor may at any time during the term or extension of this Lease terminate this Lease pursuant to this clause by giving to the Lessee 6 MONTHS notice in writing if and only if the reason for the termination is the fulfilment by the Commissioner of any duties or obligations or the exercise of any powers which the Commissioner has under any statutory provisions;"
The sub-lease does not contain the six month break clause. In the sub‑lease (Exhibit 4) a 30 day break clause is found in item 11: Special Conditions (2):
"Either the Sub-Lessee or the Sub-Lessor may terminate the Sub-Lease by giving 30 days written notice of its intention to do so, if either party receives a notice from the local authority or the Head Lessor requiring vacant possession of the Sub-Leased Premises."
The defendants submit that the failure to incorporate the six month break clause into the sub-lease invalidates the consent of the Commissioner.
I do not accept this submission of the defendants. The 30 day break clause in the sub-lease can on its proper construction be seen as incorporating the six month break clause in the lease, because it would allow the sub-lessee to terminate the sub-lease on 30 days written notice of its intention to do so, if the Commissioner required vacant possession within six months. In this way, the shorter period in the sub-lease would allow compliance with the six month break clause and would comply with the condition imposed on the consent of the Commissioner.
If I am wrong about that, it would have no effect on the outcome of this trial as a matter of law. That is because entry into the sub-lease in breach of both conditions in clause 8.1 with no consent would not render the sub-lease void but would have the same legal outcome as discussed above arising from breach of the condition requiring the Minister's consent in writing.
Quantum
Pursuant to the writ dated 21 August 2008 prepared by the plaintiff's solicitors, the plaintiff claims for monthly rent of $7,700 due on 1 December 2007 through to and including the rent due on 1 August 2008 plus the unpaid power bills of $585.66, less the $4,000 paid in February 2008, a total of $65,885.66.
The statement of claim in this action was not drafted by the plaintiff's solicitors but was drafted and signed by the plaintiff himself. It claims "special damages" for rental due and accruing after the date of the writ. Such a claim is not possible under this writ as the cause of action endorsed is a claim for rent and outgoings owing pursuant to the sub‑lease. In such an action it is not possible to amend the writ to include further rent which has fallen due since the issue of this writ.
"Whilst it may be true that the obligation to pay the instalments arose out of the same agreement that the plaintiff arrived upon when the writ was first issued, the failure to make the payment on a date subsequent to the writ being issued is not a fact that forms part of the facts giving rise to the cause of action contained within the writ as originally issued."
(Water Authority of WA v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233 at 235 per Acting Master Hawkins.)
Liability of the defendants
Clause 10.7 of the sub-lease provides:
"(1)Before taking any action against the Guarantor, the Sub‑Lessor agrees to give written notice to the Guarantor (either by delivery or by posting the notice by pre-paid post to the Guarantor at the address of the Guarantor specified in this Deed, or to any other address in Western Australia which the Guarantor specifies to the Sub-Lessor in writing) calling upon the Guarantor to remedy the default of the Sub-Lessee within 7 days of the giving of the notice.
(2)Following the expiration of the 7 day period referred to in clause 10.7(1), the Sub-Lessor:
(a)May regard the Guarantor in all respects as the Sub-Lessee and principal debtor; and
(b)Is not obliged to take action first against the Sub‑Lessee or any security granted to the Sub‑Lessee by the Sub‑Lessor.
(3)The Sub-Lessor may immediately proceed against the Guarantor if the Guarantor fails to comply with a notice issued under clause 10.7(1)."
The plaintiff relies on the letters dated 11 August 2008 to the first, second and third defendants (Exhibit 11) as the written notices required by clause 10.7. The plaintiffs action has therefore proceeded against all three defendants for loss of rent and unpaid electricity invoices due and payable under the sub-lease.
For these reasons, the defendants are liable to pay to the plaintiff the amount of $65,885.66 due and payable under the sub-lease.
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