The Organiser Pty Ltd t/as Five Dock Internet Café v Criniti

[2016] NSWCATCD 5

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	The Organiser Pty Ltd t/as Five Dock Internet Café v Criniti [2016] NSWCATCD 5
Hearing dates:	11 December 2015
Decision date:	15 January 2016
Jurisdiction:	Consumer and Commercial Division
Before:	D Bluth, Senior Member
Decision:	The respondent is to pay to the applicant within 7 days of the publication of these Reasons the sum of $1,397.00
Catchwords:	Cost of repair to switchboard, clause 7.4 of the Law Society Commercial Lease
Legislation Cited:	Electricity (Consumer Safety) Act 2004
Category:	Principal judgment
Parties:	The Organiser Pty Ltd (applicant) Nicolas Francesco Criniti, Kathy Criniti, Francesco Nicola Criniti and Maria Criniti (respondents)
Representation:	Representatives/Agent: Self (applicant) Time Realty (respondent)
File Number(s):	COM 15/14576COM 15/42689
Publication restriction:	Nil

REASONS FOR DECISION

The Lease

1. This is a dispute between a lessor and a lessee concerning the costs of repair to an electricity switchboard.

2. The applicant and the respondent are parties to a lease for premises at 241 Great North Road, Five Dock for a term of 2 years (although the lease says one year) from 1 January 2015 to 31 December 2016 (the Lease).

3. The applicant is the lessee under the Lease and the lessee is stated in the Lease as The Organiser Pty Ltd t/as Five Dock Internet Café. The form of the Lease is the NSW Law Society Commercial Lease. The permitted use is stated as internet café.

4. Relevant clauses from Annexure B of the Lease are as follows:

7.1.3   The lessor must maintain essential services.

7.4   If an authority requires work to be done on the property and it is structural work or work needed to make the property safe to use then the lessor must do the work unless it is required only because of the way the lessee uses the property. But if it is any other work or is required only because of the way the lessee uses the property then the lessee must do the work.

5. Relevant additional clauses from Annexure A of the Lease are as follows:

9.   The lessee shall at his own expense fit out the property with the equipment fittings and fixtures necessary for the conduct of the lessee's business and will keep such equipment, fittings and fixtures in good repair and condition. The lessee shall not … bring into the premises any equipment, furniture or fittings which may cause damage to the premises.

14.   The lessor does not warrant the suitability of the premises for any purpose.

What happened

6. Ms Carolina Bellavia, the principal of the lessee, in a written report in the form of a submission stated:

‘I started to organise what was necessary to open the internet café. I called Energy Australia to organise the electricity to be connected, they sent Ausgrid technicians out on 28 November 2014. Two technicians came to the shop and asked me what I had planned for the shop.

I told them and with this information I showed them to the powerboard. They turned it on and stated that with the powerboard being as is, I could not even power one computer from it. They verbally advised that possibly the last tenants had had someone fix it but poorly. They then advised me that until this was fixed by the landlord, I was not able to open my café.

This upset me greatly as I had purchased $300 worth of food, they felt bad for me so instead of shutting me down completely, they told me in front of my daughter, I had to get the powerboard to Ausgrid safety standards as soon as possible. I promised that I would.

I called the electrician, Ferris that was two doors down from the café, telling him I needed work done. I booked him to come give me a quote, and when he arrived I told him I wanted to have at least 20 computers for now and maybe more later depending on the demands. I showed him the powerboard and left him to do his quote.

He also stated the same thing as the Ausgrid technicians that it was not up to safety standards as it didn't have a safety switch installed. He wanted to know why the landlord had not checked it before he put it up for lease as it was a fire hazard as well, he said it would have caused a fire and would also burn his place which is two doors away.

I got the quote from Ferris. I then forwarded it to Lambros via email; I stated the issue and attached the quote.

About two weeks later, I get a call from the electrician advising me that his last day of work before the Christmas break was the 22 of December, if I needed to get it done before that I would have to wait for one month before he would come and do the work.

So I paid a deposit of $558.80 with my credit card and said that I should be hearing from the realtor soon. Unfortunately I still had no reply and this was around the 17 of December, so I went ahead with the job and paid by cheque the remainder of the total cost. I then sent the invoice via email to Lambros saying that I waited long enough and because time was against me I had the powerboard fixed. Instead of Lambros replying to me, I get an email from someone I did not know of, her name Daniela, who tells me I had not been given approval for the work and that they were not going to reimburse me the money I spent on the shop.

I replied that I did send Lambros the quote and he never got back to me at all. Not even a phone call.’

7. Ms Bellavia provided a copy of the quote from the electrician, Active Spark, which stated "Quote description, switchboard upgrade supply of circuit breakers, technician installation $950 and test all GPOS in shop $320. The total being $1,270 plus GST $127 total sum is $1,397." The subsequent tax invoice dated 10 December 2014 describes the details as "switchboard upgrade".

8. Ms Bellavia also annexed copies of another quote from Active Spark for supplying cabling and additional electrical services to fit out the premises as an internet café. Ms Bellavia also produced an email from Ausgrid confirming that the power board (meter box) is the property of the building owner and any repairs are the responsibility of the owner.

9. The contention that the owner is responsible for the power board is supported by consideration of s32 of the Electricity (Consumer Safety) Act 2004 which states:

s32 ‑ Responsibilities Of Persons Concerning The Safety Of Electrical Installations

(1)   a responsible person for an electrical installation in a place must, to the best of the person's ability and knowledge, ensure that such parts of the electrical installation as may be prescribed by the regulations are maintained in accordance with the regulations while the electrical installation remains connected to the source of the supply of electricity.

(2)   Responsible person in relation to an electrical installation in place, means:

(a) the occupier of the place, or

(b) if there is no occupier, any owner of the place.

10. Regulation 37 of the Electricity (Consumer Safety) Regulations 2015 (the Regulations), states as follows:

37   Maintenance of electrically installations

For the purposes of s32(1) of the Act:

(a)    all or parts of the installation are prescribed, and

(b)   the following requirements apply to the maintenance of all parts of an electrical installation, that is, they must be maintained so as to ensure that:

(i)   the safe and satisfactory operation of the installation is not impaired but interference, damage, ageing or wear;

(ii)   the live parts of the installation remain properly insulated, or protected, against inadvertent contact with any person;

(iii)    the earthing system for the installation operates effectively;

(iv)    the installation is not used in a manner that exceeds the operating limits posed by its design or installation;

(v)   the installation does not become a significant potential cause of fire for the environment surrounding the insulation.

11. Time Realty, on behalf of the respondent, submitted that the work undertaken was an upgrade of the power board and had nothing to do with any faults (which were not admitted) in the power board itself. However, no evidence was provided other than a copy of the tax invoice from the electrician Active Spark. In correspondence with the applicant, Time Realty pointed out to the applicant clause 9 of Annexure A of the Lease that the lessee was responsible for the fitout. That appears to be the reason why the relevant manager at Time Realty, Lambros, did not respond to the enquiry by Ms Bellavia at the time when the power board was being attended to by Ausgrid and the need for an electrician became apparent and urgent.

Resolution

12. The resolution of this dispute is found within the terms of the Lease and on the facts as provided to the Tribunal by the parties. Clause 7.4 of the Lease is quite clear. If work needs to be done on the premises to make the premises safe to use than it is the responsibility of the lessor, namely the respondent.

13. The respondent appears to contend that the second sentence in clause 7.4 covers the facts of this case, that is, if the works are required only because of the way the lessee, namely the applicant, used the premises, then the lessee was liable for these expenses. This is because the work undertaken by Active Spark was an upgrade required to accommodate the lessee's business, being an internet café.

14. Unfortunately, there is no evidence as to whether the power board was faulty or not. The respondent is relying on the wording within the quote/invoice 'switchboard upgrade'. It is only the words of Ms Bellavia, on behalf of the applicant, from her statement that the servicemen of Ausgrid suggested that the power board was faulty and needed to be fixed immediately.

15. The question then for the Tribunal to determine is who bears the onus of proof in this matter? The Tribunal is mindful of clause 7.1.3 of the Lease which states that the lessor must maintain essential services. Provision of power is an essential service. Further, the lessor, pursuant to s32 of the Electricity (Consumer Safety) Act, is to maintain the power board in a safe and responsible manner. There is a contention from the applicant that the respondent failed to do this based on the advice that was received from Ausgrid.

16. The Tribunal is further persuaded that the costs of Active Spark were not for an upgrade despite the wording at the beginning of the tax invoice because further in the tax invoice it is indicated 'circuit breakers' were supplied. These are an essential safety element and appear to be necessary for the respondent to comply with its obligations under Regulation 37 of the Regulations.

17. Accordingly, the Tribunal is of the view that the onus is on the respondent to produce evidence that the power board was, at the relevant time that the applicant took possession, safe and did not require any rectification. No such evidence has been provided.

18. The Tribunal determines that the cost of Active Spark in the tax invoice dated 10 December 2014 for the sum of $1,397.00 is the responsibility of the respondent.

Order

1. The respondent is to pay to the applicant within 7 days of the publication of these Reasons the sum of $1,397.00.

D Bluth

Senior Member

Civil and Administrative Tribunal of New South Wales

15 January 2016

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 04 March 2016