Stanton-Noble v Velimirovic - [2009] SADC 59

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
STANTON-NOBLE v VELIMIROVIC
[2009] SADC 59
Reasons for Decision of His Honour Judge Beazley
29 May 2009
REAL PROPERTY - LICENCES - REAL PROPERTY - TERMINATION
Chattels left on premises - duty of care with respect to such chattels.
Purchaser demands vacant possession following settlement of contract for sale and purchase of real property - vendor fails to give vacant possession - whether enforceable agreement between vendor and purchaser to permit vendor to remain in possession rent-free - purchaser enters and removes chattels remaining on the premises - whether a duty of care owed to vendor in relation to chattels - scope of duty - whether purchaser "voluntarily" in possession of vendor's chattels so as to make him a bailee of the chattels - whether purchaser in breach of duty in having chattels placed in storage - vendor's chattels damaged in storage.
Minor Civil Review - the learned Magistrate concluded that judgment ought be entered for the purchaser for damages consequent upon the failure of the vendor to give vacant possession; and that the vendor’s counterclaim for damage to her chattels ought be dismissed - purpose and objects of Section 38 of the Magistrates Court Act 1991 considered - complaint by applicant that Magistrate erred in failing to give detailed reasons for conclusions reached.
Held: Decision and orders of the Magistrate clearly correct - judgment affirmed - application for review dismissed.
Magistrates Court Act 1991 s38, referred to.
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Haniotis v Dimitriou (1983) 1 VR 498; Martin v King (1996) 7 BPR 14,681 at 14,683; Hemmings v Stokes Poges Golf Club (1920) 1 KB 270; Aglionby v Cohen (1959) 1 QB 558; Curtin v Meadlow Holdings Pty Ltd (2001) QCA 145; Bowden v Lo and Ors (1998) 9 BPR 16,317; Duncan: Commercial Leases in Australia, 5th Ed (2008) Para 13.100; Glebe Island Terminals Pty Ltd v Continental Seagram (1993) 40 NSWLR 206, applied.

STANTON-NOBLE v VELIMIROVIC
[2009] SADC 59
Introduction

This is an application by Portia Stanton‑Noble (“the applicant”) for this Court to review a judgment delivered in a Minor Civil action pursuant to s38 of the Magistrates Court Act 1991. The applicant was the defendant in action number 721 of 2007 in the Magistrates Court in which Zoran Velimirovic was plaintiff (“the respondent”).
On 21 August 2008, a Magistrate entered judgment in favour of the respondent in the total sum of $1,868.00 inclusive of costs and dismissed a counterclaim issued by the applicant.
The application raises some complex questions of law. Amongst them is whether the purchaser of real estate owes a duty of care, and if so, what is the scope of such a duty, to the vendor of the real estate in respect of chattels left on the premises by that vendor, after settlement.
The law with respect to this question in the context of a landlord and tenant relationship has been described as “obscure”[1]; and as “complex and unresolved questions of law”[2].
[1] Beneficial Finance Corporation v Alzden Pty Ltd - unreported decision of Young J NSW Supreme Court, 10/5/93 - BC 9301905
[2] Insurance Manufacturers of Aust v Vandermeer [2007] VSC 28
On the Application for Review, this Court is obliged, pursuant to s38(7) of the Act, to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms. The clear policy in the Act is to provide an efficient and economical means by which small claims can be determined. The decision of this Court is final, and not subject to appeal.
Factual Background
As the learned Magistrate noted in his Reasons, much of the factual basis was not in dispute. The circumstances giving rise to the action can be briefly stated.
The respondent, as purchaser, entered into a contract for the sale and purchase of a residential property at Ottoway in the State from the applicant as vendor. The purchase price of the property was $285,000 and the respondent paid a deposit in the sum of $20,000. Settlement was due on 29 June 2007, pursuant to the terms of the contract.
The contract provided for vacant possession to be given by the vendor at settlement. The settlement date was delayed in consequence of the failure of the respondent to obtain finance on time. The settlement was again fixed for 20 July 2007, however was delayed again until 23 July 2007.
On 19 July 2007, the applicant, by her solicitors, demanded by a letter to the respondent strict compliance with the terms of the contract. The applicant demanded, and the respondent paid, in accordance with the contract, interest for the delay totalling the sum of $1,742.45. Having, however, received the settlement proceeds, including interest, the applicant did not vacate the premises when settlement was completed on 23 July 2007.
Notwithstanding his entitlement to immediate vacant possession of the property, the respondent gave written notice on 23 July 2007 that he required vacant possession by no later than Wednesday, 1 August 2007. This gave the applicant some eight days - apparently rent-free - to remain on the premises. The applicant denied that the respondent was entitled to vacant possession in accordance with the demand; and asserted “an agreement” that she be permitted to reside in the property rent‑free until 31 August 2007. The respondent denied that there had been any such agreement.
The applicant did not give up vacant possession on 1 August 2007. The respondent unsuccessfully attempted to make contact with her. On 9 August 2007, the respondent engaged a commercial agent to enter, replace the locks, and arrange for the applicant’s remaining chattels to be removed to a commercial storage facility.
Proceedings in the Magistrates Court
On 15 October 2007, the respondent instituted proceedings in the Magistrates Court seeking damages in consequence of his inability to obtain possession until 9 August 2007. The total damage claimed of $2,778.65 included the costs of engaging a commercial agent, changing the locks, storage costs, general damages for loss and use of the property and a payment back to him of the default interest which he had previously paid.
The applicant, by her defence, asserted the terms of the alleged agreement permitting her to live rent‑free on the premises until 31 August 2007. She counterclaimed for the alleged loss and damage associated with her recovery of the chattels from the storage depot. She asserted that even if the Court concluded that there was no enforceable agreement, it should find that insufficient notice was given to her. She claimed for the alleged damage to her chattels, and for loss of income and damages for emotional stress and trauma.
The Hearing
At the hearing of the action, the respondent gave evidence in which he denied entering into an agreement with the applicant for her to continue to reside in the property rent‑free until 31 August 2007. He described the nature of the applicant’s remaining chattels left on the premises when the commercial agents attended on 9 August 2007. These included a large piece of furniture described as “a big unit” in the hallway, some pot plants, a bicycle and various small items.
The applicant gave evidence that the negotiation with the respondent had generally been conducted by her agent, Ivana Barancek. Ms Barancek was not called as a witness. The applicant conceded that having received the notice to vacate, she had, by 30 July 2007, already shifted most of her expensive paintings and other items into a storage unit. She said that one of the items in her counterclaim, namely a missing necklace which she asserted was worth $600, had in fact been subsequently found by her. She was asked about the alleged value of other items in her counterclaim, and said that she “probably would have to buy a new bicycle” because her bicycle had been damaged when placed into storage. She said that she had spoken to the storage operator and had been made aware that she had three weekends to collect her items from the storage. She, in fact, waited until 18 August 2007 to collect them. She spoke of a TV unit as having been chipped when she collected it. She said other items, including some artwork, had been either “squashed up or broken in there”. When questioned about the fact that she had earlier deposed to having removed her expensive artwork before 1 August 2007, she said that there were two items left and that of those, one frame was damaged.
The Magistrate’s Reasons - delivered 21 August 2008
The learned Magistrate noted that the applicant had not called her agent as a witness. At page 5 of his reasons, his Honour concluded:
At settlement on 23 July 2007 the plaintiff fulfilled all his obligations under the contract including the payment of interest due to the delay in settlement. On the material before me I am satisfied that the plaintiff agreed to permit the defendant to remain at the premises up until the 1^st of August. By that agreement he in effect delayed taking vacant possession of the property until that date. I am also satisfied that he was entitled therefore to take vacant possession on the 1^st of August.
As to the steps which the applicant took, including engaging a commercial agent and entering the premises, the learned Magistrate concluded that he was entitled to take such reasonable steps to secure vacant possession of his residential property. He found specifically that the arrangements made to store the remaining property of the defendant were reasonable in the circumstances.
When considering the quantum of the respondent’s claim the learned Magistrate properly disallowed the attempt by the respondent to reclaim, as it were, the amount of interest which he had paid at settlement.
Rather than allow a sum representing the loss of opportunity to obtain three weeks rental, he permitted a lesser sum representing the interest paid on the outstanding loan for that period of time. He therefore ordered that the applicant pay to the respondent the sum of $1,514.00 for those damages as assessed by him, plus the solicitor’s costs of $264.00 and a filing fee of $90.00, being a total judgment for the respondent in the sum of $1,868.00.
As to the applicant’s counterclaim, the learned Magistrate did not give detailed reasons for the dismissal of the same. He did, however, say:
In my view the evidence before me does not demonstrate that the actions taken by the plaintiff were other than reasonable in the circumstances. It is regrettable that there was damage to some of the defendant’s property.
He noted that there was an absence of evidence from the applicant as to the value of the repairs asserted by the applicant, however concluded that:
In any event the counterclaim must fail in my view as there is no evidence that the plaintiff’s actions were other than reasonable in the circumstances.
Application for Review
Upon the hearing, Mr Tremaine of counsel applied to represent the applicant pursuant to s38 of the Magistrates Court Act 1991. I concluded that the respondent, who did not oppose the application, would not be prejudiced and that it may be helpful to assess the complex legal issues raised on the pleadings. I therefore gave that limited leave.
The Grounds of Review
In her Notice of Application for Review, the applicant asserted that the learned Magistrate had:
·Failed to make any or any proper findings.
·Erred in basing his judgment on the “material before him”.
·Erred by not making any finding about the agreement, alleged by the defendant to have been made on 23 July 2007 permitting her to remain in occupation until 31 August 2007.
·Erred in finding that the plaintiff, by his letter dated 23 July 2007, was entitled at law to fix 1 August 2007 as the date upon which the defendant had to vacate the premises.
·Erred in failing to find that the plaintiff was required to give the defendant 90 days notice to vacate, or alternatively, notice that was reasonable in the circumstances.
·Having found that the defendant’s property was damaged, erred in failing to enter judgment for the defendant on the counterclaim, or alternatively, at least for the chattel repair costs.
The applicant sought orders that the judgment be set aside and that judgment be entered for the applicant on the counterclaim for the sum of $3,390.00, plus costs.
The Hearing on Review
In the hearing before me, the applicant submitted that the main issue on the Review was the length of time that the applicant ought to have been permitted to remain on the property until vacant possession was taken. The applicant complained that the learned Magistrate had not made any specific findings about the conflict in evidence between the applicant and respondent as to the alleged agreement to permit the applicant to remain on the premises until 31 August 2007.
The applicant’s counsel, who I permitted to make submissions in light of the state of the law as to damage to chattels, acknowledged that even had there been a discussion with respect to the applicant remaining on the premises, there would have been no consideration for such an agreement. There could be no suggestion of a promissory estoppel on the facts before the learned Magistrate. The applicant had, on 30 July 2007, embarked upon the removal of all bar a few chattels.
In my opinion, there is no proper basis for the complaint made by the applicant as to the findings. The learned Magistrate did make the positive finding that the respondent had agreed to permit the defendant to remain at the premises until 1 August 2007 only.
I accept that the learned Magistrate did not detail his reasons for that finding, nor did he positively find that he did not accept the account of the applicant.
As to the question of not giving specific reasons for a finding, McHugh J for the Court of Appeal in NSW in Soulemezis v Dudley (Holdings) Pty Ltd[3] said:
What is decisive is that his Honour’s judgment reveals the ground for, although not the detail reasoning and support of, his finding of fact. That is enough in a case where no appeal lies against the finding of fact. Accordingly, there was no failure to give reasons sufficient to constitute an error of law.
[3] (1987) 10 NSWLR 247 at 282
In my opinion, it was obvious that the learned Magistrate had accepted the evidence of the respondent. Such a finding was inevitable on the evidence. The respondent had written immediately on 23 July 2007 demanding vacant possession and specifying the date. He had been forced to pay interest on the delayed settlement. It defied logic that he would have permitted the applicant to remain rent‑free for a further month. The applicant had not called as a witness her agent who had been in negotiations with the respondent. Indeed, even if there had been such an “agreement” it would not have been enforceable in the circumstances. No consideration was provided for it. There was no basis at all for the applicant to resist vacant possession being given as at 1 August 2007. The applicant did not dispute, nor could she, the reasonableness of the quantum awarded by the learned Magistrate.
Further, and contrary to the submissions of the applicant, the period of eight days notice given to her on 23 July 2007 was, in my opinion, entirely reasonable in the circumstances.
A significant issue, however, arose as to the question of the damage to the applicant’s chattels. The learned Magistrate quite properly noted that there was a dearth of evidence as to the nature and quantum of the alleged damage. Despite that absence of evidence, the learned Magistrate would have been obliged to do his best to assess the damages had the applicant succeeded in her counterclaim. Ultimately, he decided that he did not need to consider the question of quantum because of his finding that the respondent’s actions were reasonable in the circumstances.
The Law As To The Removal of Another’s Chattels
The law as to the rights of the parties when chattels are physically present on another person’s land is, as I have noted, far from clear. Such case law as exists has arisen in the context of a landlord and tenant relationship. In the present case, the relationship as at 23 July 2007 was one of vendor and purchaser in which vacant possession was required at settlement pursuant to contract.
Although there was a dearth of evidence as to the nature of the applicant’s occupancy between 23 July 2007 and 1 August 2007, it may properly be regarded as a mere licence. For the reasons which follow, however, there is no need to classify the nature of the occupancy.
The case law is based upon the category of landlord and tenant. Depending upon the question of whether the landlord voluntarily takes possession of the tenant’s chattels, a landlord may be under a duty as bailee of those chattels.
In Haniotis v Dimitriou[4] Brooking J considered, but did not find it necessary to determine whether a landlord exercising a lawful right of re‑entry was required to exercise any, and if so what degree of care in removing the tenant’s goods from the demised premises. That was a case in which the landlord removed most of the tenant’s commercial equipment and machinery and simply left it at the boundary of the premises. In Martin v King[5], it was said that in such a relationship of Lessor/Lessee it is sufficient to leave the chattels at “the periphery of the premises”. In answer to a submission that the landlord had taken voluntary possession of the chattels and therefore had a duty to take reasonable care of them, Brooking J said:
The defendants did resume possession of the premises and changed the locks. The goods were already on the premises and in my opinion the defendants did not, by taking possession of the premises and changing the locks, voluntarily take possession of the goods. The defendants had no intention of taking possession of the goods; they wanted to be rid of them. Their concern was to recover possession of their premises. The foundation of the plaintiff’s claim for trespass to the goods is that he was still in possession of them.
[4] (1983) 1 VR 498
[5] (1996) 7 BPR 14,681
Although in that case the Court was not satisfied that the equipment was damaged, it concluded that the act of removing the goods from the factory did not give rise to a cause of action against the landlord.
His Honour referred to the cases of Hemmings v Stoke Poges Golf Club[6] and Aglionby v Cohen[7], and approved the principle enunciated in them, namely that in circumstances at least where there is a tenancy, the landlord lawfully re‑entering the premises will not be held liable for such damage as may be done to the tenant’s goods in the course of their removal from the premises, provided that a reasonable degree of care is exercised[8].
[6] (1920) 1 KB 720
[7] (1959) 1 QB 558
[8] see also Hill and Redman's Law of Landlord and Tenant (10th Ed) p482 and Redfern and Cassidy (Australian Tenancy Practice and Precedents) Volume 1 1987 at paragraphs 27,140-27,145; Curtin v Meadlow Holdings Pty Ltd (2001) QCA 145, Bowden v Lo and Ors (1998) 9 BPR 16,317 and Duncan: Commercial Leases in Australia, 5th Ed, (2008) paragraph 13.100
In Bowden v Lo (supra), Hodgson CJ treated a lessor as a bailee for reward on the basis that it held the lessee’s chattels as security for outstanding rent. In Glebe Island Terminals Pty Ltd v Continental Seagram[9], the commercial lease arrangement resulted in the lessor being a bailee who carried the onus of establishing that the damage done to the lessee’s goods was not caused by its servants or agents.
[9] (1993) 40 NSWLR 206

In my opinion, in the subject case the respondent was not a bailee for reward. The arrangement at its highest was a mere licence. In any event, as in the Haniotis case, the respondent did not voluntarily possess the chattels. He clearly did not want them. He did not hold them as security. He simply wanted them removed from his residential property. He arranged for them to be placed in a commercial storage which he reasonably believed would be a safe place. In my opinion, the learned Magistrate was correct in concluding that the respondent acted reasonably in storing the chattels and was not in breach of any duty to the applicant.
I note in passing that the learned Magistrate did find that the chattels were damaged. I have to say that there was a dearth of evidence as to how, when or by whom those chattels were damaged.
The cases to which I have referred involved landlords simply placing items, including extremely valuable items, in the open, on the periphery of the demised premises. Even if in this subject case the respondent had a wider duty of care equivalent to a bailment for reward, in my opinion, the finding of the learned Magistrate that the respondent had acted reasonably in storing the chattels was open to him on the evidence.
The applicant, subsequent to the hearing of the Review, produced documentary evidence as to the quantum of the repair of various items. At the trial there had been little, or no evidence of the same before the Court. Had I concluded that the learned Magistrate had erred, then I would have admitted that evidence to assist in assessing quantum. However, as is clear from these Reasons, I entirely agree with the decision of the learned Magistrate. There is no need to further consider the question of the quantum of the counterclaim.
I also do not need to consider whether the applicant had been contributory negligent in leaving the chattels at the residential property and at the storage premises until 18 August 2007 (cf Bowden v Lo (supra)).
In my opinion, the learned Magistrate was, with respect, correct in dismissing the counterclaim.
Conclusion
In my opinion, the findings and orders made by the learned Magistrate both with respect to the Claim and the Counterclaim ought not be interfered with.
There is no basis for the complaints which have been made by the applicant. Accordingly, pursuant to s38(7)(d) of the Act, I affirm the judgment and orders of the learned Magistrate and dismiss the application for review.
Costs
Pursuant to Rule 6DCR 279A of the Rules of Court, the Court has a general discretion to make an order for the costs of the review. I note also that pursuant to s38(5), the philosophy of Parliament is that in minor civil actions, costs are not to be awarded unless there are special circumstances justifying the award of such costs.
In my opinion, in the present circumstances, there is no proper basis for an order for costs save that each party bear their own costs of the Review.
The formal orders of the Court therefore are:
1.     That the decision of the learned Magistrate is affirmed.
2.     That the Application for Review is dismissed.
3.     That each party bear its own costs of the Application for Review.