Tour Creative Agency Australia Pty Ltd v Payman - [2004] NSWADT 284

No judgment structure available for this case.

CITATION: Tour Creative Agency Australia Pty Ltd v Payman & Anor [2004] NSWADT 284

DIVISION: Retail Leases Division

PARTIES: APPLICANT
Tour Creative Agency Australia Pty Ltd
RESPONDENT
Farid Payman and Ruhangiz Payman

FILE NUMBER: 045104

HEARING DATES: 18/11/2004

SUBMISSIONS CLOSED: 11/18/2004

DATE OF DECISION:
12/03/2004

BEFORE: Higgins S - Judicial Member

APPLICATION: Claim for payment of money - Costs

MATTER FOR DECISION: Principal matter

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Consumer Claims Act 1998
Conveyancing Act 1919
Retail Leases Act 1994

CASES CITED: Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310
Commonwealth of Australian v Amaun Aviation Pty Ltd (1991) 174 CLR 64
Rejtek v McElroy (1996) 112 CLR 517

REPRESENTATION: APPLICANT
T Shirado, agent
RESPONDENT
G Campbell, solicitor

ORDERS: 1. In the event the respondents, Mr and Mrs Payman, seek to pursue their claim for orders in respect of rent that is outstanding and owing by the applicant, Tour Creative Agency Australia Pty Ltd, the respondents to file and serve an application under s.71 of the Retail Leases Act 1994 within 14 days of this decision; 2. In the event the respondents file an application in accordance with the abovementioned order, the applicant to file and serve any submissions in reply within 14 days after being served with a copy of the respondents’ application; 3.The matter is stood over to 27 January 2005 at 10 am for further hearing.

Background

1 On 14 September 2004, Mr Shirado, the sole director of the applicant lessee, Tour Creative Agencies Australia Pty Limited (“TCA”), filed an application with the Tribunal seeking orders that the respondent lessors, Mr and Mrs Payman, repair and prevent water leakage to the leased premises and for orders compensating the applicant lessee for disturbance of quiet enjoyment, loss of business and damage to equipment. The leased premises were at 568 Willoughby Road, Willoughby (“the premises”), and they were used as a photographic studio.

2 On the same day that Mr Shirado lodged the abovementioned application, he also lodged an application for an urgent interim order to prevent the respondent lessors from locking the applicant out of the leased premises. This application came before the Tribunal on 17 September 2004. The Tribunal made no orders on this application, however it gave the parties leave to re-list the application on 7 days notice.

3 The basis of the threatened lock out was a letter, dated 2 September 2004, to TCA from the lessor’s agent, Everest Realty Pty Ltd (“Everest Realty”). That letter demanded that the applicant pay outstanding rent in the sum of $20,085.60 by bank cheque before 5.00pm that day. The letter went on to state that the landlord would proceed to take possession of the property before 12.00 noon on 3 September 2004 if the outstanding rent was not paid as requested.

4 On 28 September 2004, TCA was locked out from the premises.

5 When the matter came before the Tribunal on 7 October 2004, Mr Shirado sought the Tribunal’s assistance in making interim orders that directed Mr and Mrs Payman’s agents to allow him access to the leased premises so that he could remove his personal belongings and TCA’s equipment so that TCA could continue with its business and mitigate its losses. It was unnecessary to make any orders in this regard as the representatives of Mr and Mrs Payman agreed to Mr Shirado’s request for access.

6 Accordingly, at the hearing of this matter, TCA only sought orders in respect of loss of business and damage to equipment. It should be noted that the claim for loss of business related to the period during which Mr Shirado was denied access to the premises, namely 28 September to 8 October 2004.

The Lease

7 As mentioned above, TCA entered into a lease with Mr and Mrs Payman in respect of the premises, on or about 1 October 2001 (“the lease”). That lease was for a period of 5 years with an option to renew for a further 5 year period.

8 At the time the lease was entered into, the rent was $2,780.95 plus GST. It was not disputed that during the relevant period, the rent was $3,066.00 plus GST of $306.60.

9 Clause 12 of the lease provided for forfeiture and the termination of the lease. That clause, so far as is relevant, provided as follows:

12.1.2 if the landlord lawfully enters and takes possession of any part of the property; or

12.1.3 if the landlord lawfully demands possession of the property.

12.2.2 rent or any other money due under this lease is 14 days overdue for payment; or

12.2.3 the tenant has failed to comply with a landlord’s notice under section 129 of the Conveyancing Act 1919; or

12.2.4 the tenant has not complied with any term of this lease where the landlord’s notice is not required under s.129 of the Conveyancing Act 1919 and the landlord has given at least 14 days written notice of the landlord’s intention to end this lease.

12.3.2 have removed any goods and anything that the tenant fixed to the property and have made good any damage caused by the removal.

Anything not removed becomes the property of the landlord who can keep it or remove and dispose of it and charge to the tenant the cost of removal making good and disposal”

10 Clause 7 of the lease provided for repairs to the premises. That clause, so far as is relevant, provided as follows:

7.1.2 maintain the property in a structurally sound condition; and

7.1.3 maintain essential services.

7.2.2 fix structural defects; or

7.2.3 repair fair wear and tear

11 Clause 8.2 of the lease related to the tenants liability to pay rent and outgoings when the premises are wholly or partially unusable or inaccessible due to damage to the premises. As it has not been contended by Mr Shirado that the premises were either unusable or inaccessible I have not considered this any further.

Evidence

12 At the hearing Mr Shirado appeared on behalf of TCA. Throughout the course of the hearing, Mr Shirado was assisted by a Japanese interpreter.

13 Mr Shirado relied on 3 affidavits sworn by him. These were affidavits sworn on 6 October 2004, 18 October 2004 and 17 November 2004. The affidavits were all written in English and Mr Shirado explained that, on his instructions, these had been prepared by a solicitor. That solicitor had also translated to him the contents of his affidavits prior to him signing them. He also went on to explain that he did not have sufficient funds to have this solicitor represent him before the Tribunal.

14 In addition to this, Mr Shirado tendered into evidence a copy of a video recording that he made on 18 August 2004 between 12.00 noon and 1.00pm. He also tendered into evidence a document that recorded the daily temperature and rainfall for the Sydney Metropolitan area for the month of August 2004. According to that record it was raining in Sydney on 18 August 2004.

15 During the course of the hearing, Mr Shirado also gave oral evidence and he was cross-examined by Mr Campbell, who appeared on behalf of Mr and Mrs Payman.

16 In his affidavits and oral evidence, Mr Shirado said the following:

(b) since 1 October 2001, there had been an ongoing water leak in the ceiling of the room that was located upstairs and on the front of the premises. The water leak came from the corner in the ceiling and seeped down through the wall;

(c) he verbally notified Everest Realty of this leak on about 1 October 2001. During the period 2001 to December 2003, Everest Realty had sent a plumber on 4 occasions to inspect and fix the leak. After each inspection, Everest Realty advised him that the problem was fixed, but the water continued to leak from the ceiling. In August 2004 the water leak became even more severe, and Mr Shirado took a video recording and photographs of the leak. He showed that video to Ms Chan and Mr Wong of Everest Realty. He also showed the video to the plumber at a time he came to inspect the premises. At no stage was the water leakage problem rectified;

(d) the water leakage had caused the following damage to TCA’s photographic equipment:

- the Bowens flash unit for studio photographic kit – it was contended that the water caused damage to the generator of this unit and it was not possible to repair, and the replacement cost was contended to be around $12,000. Annexed to Mr Shirado’s affidavit of 18 October 2004 were copies of invoices for the repair to this flash. These were dated 25 September 2001 and 12 May and 22 July 2004;

- stains to the backdrop canvass - with a replacement cost of around $2,000;

- a Compaq 20 inch monitor – with a replacement cost of around $1,500;

- a Takamine electric guitar – with a replacement cost of around $1,500. Annexed to Mr Shirado’s affidavit of 18 October 2004 were photographs of a guitar case, which Mr Shirado contended were water marks from the leak in the ceiling;

(f) as a result of being locked out of the premises from 28 September to 8 October 2004, TCA was unable to respond to orders received by fax from the Japan Travel Bureau, JTA Oceania, JALTAK and Transorbit Tour Groups. Having regard to these orders and his experience of 20 years in the photography business for Japanese tourists, he estimated that his loss of profit was about $7,986 and $1,600. Attached to Mr Shirado’s affidavit of 18 October 2004 were copies of the orders that had been faxed to him during the lockout period;

(g) as a result of the lockout, Mr Shirado was also unable to undertake the regular maintenance required for TCA’s photographic processing machine. This machine was removed from the premises on 18 October 2004 and Mr Shirado was required to replace the chemicals at a total cost of $1,348.18.

17 Mr Campbell, on behalf of Mr and Mrs Payman, relied on an affidavit sworn, on 28 October 2004, by Clara Kwok Ha Chan, and an affidavit sworn on the same day by Shing Ching Pius Wong. Ms Chan the licensee and principal of Everest Reality, said the following:

(b) according to the records kept by Everest Realty, the first time that Mr Shirado notified Everest Realty of a water leak in the premises was on or about 29 April 2003. In response to this report, Everest Realty immediately sent a plumber to the premises to repair the leak. Attached to Ms Chan’s affidavit was an invoice from the plumber dated 29 April 2003, which recorded the work that had been carried out as being “resealing the roof areas where the water was leaking through the ceiling in the upstairs front room”. Following further complaints received from Mr Shirado, Everest Realty arranged for the plumber to attend the premises on 3 or 4 occasions between August 2003 and September 2004. When the plumber attended the premises on 3 September 2004, Ms Chan spoke to him and as a result of their conversation, he furnished her with a further report of what work had been carried out. That report is attached to the affidavit of Ms Chan and states:

“Have made 4 or 5 visits in the last twelve months for same problem. Have re-sealed all flashings on little roof to make sure water wasn’t getting in through the roof. Have just recently been… Had a look in the roof space where water has been coming through to find no sign of water damage at all. Installation was bone dry and there was no water stains on timber. Told tenant to ring me when water is coming through so I can see where it is coming from cos every time I have been there I have seen no sign of water problem. Note roof is in very good condition”.

18 On 2 July 2004, Everest Realty sent a letter of demand to TCA demanding payment of $13,390, in unpaid rent before the end of July. Ms Chan, together with Mr Wong, went to see Mr Shirado and asked him for the payment of this amount of overdue rent. Mr Shirado gave Ms Chan a cheque for this amount, however that cheque was subsequently dishonoured. Mr Shirado gave Everest Realty a further cheque at the end of August for an amount of $3,372.60. Again, this cheque was subsequently dishonoured.

19 On 2 September 2004, Everest Realty sent another letter of demand to Mr Shirado. A copy of that letter was attached to Ms Chan’s affidavit and as mentioned in paragraph 3 above it demanded that TCA pay the outstanding rent before 12 noon the following day and if it was not paid the landlord would proceed to take possession of the premises. The letter also expressly referred to clause 12.2.2 of the lease.

20 In early September 2004, Ms Chan telephoned Mr Shirado to ask him when he would be paying the overdue rent. Mr Shirado responded by saying that he would not be paying the rent because he had suffered damage as a result of the water leak. Ms Chan states that this was the first time that he had mentioned to her that the water leak had caused damage. Ms Chan then went and inspected the premises. During her inspection she did not find any evidence of any water leaks but did notice that there was evidence that someone was residing in the premises. It was Ms Chan’s contention that this was contrary to the terms of the lease. Mr Shirado at the same time contended that Ms Chan and Everest Realty were at all times aware that he resided at the premises. As no notice had been issued in respect of this alleged breach, as required under s. 129 of the Conveyancing Act 1919 I have not considered this matter any further. In any event this was no longer an issues as the lease was terminated and there is no evidence of any loss suffered by Mr and Mrs Payman even if they were successful in establishing this breach.

21 On 28 September 2004, on instructions from Mr and Mrs Payman, Ms Chan arranged for a locksmith and a security guard to change the locks to the premises. She said that they spent two hours at the property to enable Mr Shirado to remove his personal belongings. Later that evening, Mr Shirado telephoned Ms Chan and asked whether he could regain access to the property to remove some further personal belongings. Ms Chan refused access and suggested that Mr Shirado call Mr and Mrs Payman’s lawyers.

22 On 8 October 2004, after receiving advice from Mr and Mrs Payman’s lawyers that Mr Shirado be given access to the premises, Mr Shirado forwarded to Ms Chan a list of times and days that were suitable to him to access the premises and remove TCA’s equipment and machinery and to clean the premises. A copy of that list was attached to the affidavit of Ms Chan. That fax also had handwriting on it which Ms Chan said was a record of the dates that Mr Shirado was given access to the premises. In his affidavit of 18 October 2004, Mr Shirado stated that he had been given access on 8 October 2004 so that he could take any material that he needed to support his claim before the Tribunal. However, he was not permitted to remove any further items until he made a payment towards the outstanding rent.

23 Mr Wong in his affidavit gave similar evidence to that of Ms Chan. In addition to this, he said that in September 2004 he inspected the premises for a water leak. He said that he asked Mr Shirado to show him the water damage and in response Mr Shirado showed him a photographic backdrop, which had a small mark in one corner that appeared to him to be a watermark. He also said that the backdrop was torn. He also asked Mr Shirado what else had been damaged, to which Mr Shirado responded that he was not going to tell him and that he had to wait until the Tribunal proceedings. In his affidavit in reply of 17 November 2004, Mr Shirado denied that he said this.

24 Mr Wong also said that on 15 October 2004, Everest Realty received a cheque from Mr Shirado for the sum of $800.00 in respect of outstanding rent. According to the list annexed to the affidavit of Ms Chan and as referred to in paragraph 22 above, this was the first day after 8 October 2004 that Mr Shirado was given access to the premises.

25 In addition to this, Mr Campbell tendered into evidence a copy of a letter dated 2 September 2004, from Rutlands Law Firm on behalf of TCA to Everest Realty. In that letter, it is stated that TCA intended to pay the outstanding rent, but that it needed some time to pay. It also made mention of the fact that TCA alleged that it had suffered loss because of the water leakage problem, which had damaged machinery and affected the business of TCA. The letter also said that clause 12.2.4 provided that the landlord could only re-enter after giving 14 days notice. In this regard it was pointed out that Everest Realty’s letter of 2 September 2004 failed to comply with this requirement as it did not give 14 days notice. The Tribunal was advised that following this letter, there was an agreement between the parties that TCA had 14 days to pay the outstanding rent.

26 Attached to the letter from Rutlands Law Firm was a copy of the letter dated 2 September 2004 that is referred to in paragraph 3 above, a letter dated 1 September 2004 from Everest Realty to TCA and Everest Realty’s tenant rent ledger record for TCA. The letter of 1 September 2004 demanded payment of $20,085.60 by bank cheque by Friday 3 September 2004 and a failure to do so would result in the commencement of legal proceedings and the premises being locked up.

Findings and decision

27 As stated above, Mr Shirado is claiming damages for loss that TCA is alleged to have suffered as a result of the water leaking through the ceiling and as a result of the lockout from 28 September to 8 October 2004.

28 In respect of the water leak, TCA must first establish that this leak was as a result of Mr and Mrs Paymans’ breach of clause 7.1.1 of the lease in that they failed to maintain in a state of good condition and serviceable repair the roof and the ceiling of the upstairs front room of the premises. If this is established then TCA must establish that the loss it claims to have suffered was in fact caused by this breach.

29 TCA’s claim in respect of the lockout raises two issues. The first issue is whether Mr and Mrs Payman are liable under the terms of the lease in respect of denying Mr Shirado access to the premises to gather his photographic equipment so that he could continue to operate TCA’s business. The second issue only arises if there is such a liability and TCA is able to establish that the loss that it claims that it suffered was in fact caused by the actions of Mr and Mrs Payman’s agents.

(a) Loss and Damage from Water Leak

30 Mr and Mrs Payman did not call the plumber, who had come to inspect the premises, to give oral evidence or to be cross-examined. Yet they were aware of the photographs and the video taken by Mr Shirado. Nor was it challenged that Mr Shirado showed these to Ms Chan, Mr Wong and the plumber. The authenticity of the photos and the video and what they recorded was also not challenged at the hearing. The video in particular showed a constant drip of water through a hole and a crack in the ceiling. There was also some staining on the ceiling which was consistent with being a water mark. There were two holes in the ceiling, which Mr Shirado explained as being holes made by the plumber when he came to see if he could see where the water was coming from. On the basis of this video and the photographs, I find that in August 2004 the condition of the premises was such that when it rained water leaked through the ceiling of the upstairs front room of the premises.

31 In his invoice of 29 April 2003, the plumber stated that he had re-sealed the roof area where water was leaking through the ceiling. Accordingly, I also find that this leak was an ongoing leak from about April 2003. This leak only occurring when it rained.

32 As stated above, in his invoice of 3 September 2004, the plumber makes reference to having re-sealed all flashings on the metal roof during the previous 12 months and that on his last visit he had a look in the roof space and could not see any of water damage. He also said that the roof was in good condition. What he means by this is not explained. It is clear that the plumber, Ms Chan and Mr Wong did not at any time inspect the premises when it was raining. In light of the repeated complaints by Mr Shirado this is surprising.

33 In light of my findings that when it rained there was an ongoing water leak in the ceiling of the upstairs front room of the premises I find that Mr and Mrs Payman breached clause 7.1.1 of the lease in that they failed to maintain in a state of good condition and serviceable repair the roof and the ceiling of the upstairs front room of the premises.

34 However, with the exception of the backdrop, on the material before the Tribunal I am not satisfied that the evidence before the Tribunal establishes that the water leak caused the damage that is the subject of TCA’s claim (Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310). .

35 Of the invoices attached to Mr Shirado’s affidavit of 18 October 2004, which relate to repairs of TCA’s equipment, the only relevant invoices are those dated from April 2003, which is the date from which I have found that there was a water leak. There are eight such invoices that relate to TCA’s photographic equipment, however not one invoice makes any mention of a repair being as a result of water damage. In his oral evidence, Mr Shirado explained that the water leak had damaged TCA’s Bowen Traveller flash pack. He said he had a platform in the middle of the upstairs front room for the purpose of photographing small objects and the flash pack was located at the corner of this room. After it rained, the water leaked through the ceiling and onto the flash, which he said stopped functioning.

36 In respect of the Bowen Traveller flash pack there are two invoices from C.R. Kennedy Company Pty Ltd, trading as Cash Repairs (“Cash Repairs”) and a quote for further repairs. The first invoice is dated 12 May 2004 and states the following:

“Disassemble replace R/F socket, eyelet, 9x diodes, 2x zever diodes, 1x fuse, 9x SCR, 1x cap, all PCB. Reassemble and tested. Note: please do not unplug flash head while flash pack is still on”

37 The other invoice is dated 22 July 2004 and relates to the cost of preparing a quotation for the repair of the Bowen Traveller flash pack. The job description number on this invoice is the same as the job description on the quote that is included in the material annexed to Mr Shirado’s affidavit. That quote states as follows:

“This repair un-related to previous repair. Unit still operational at low power, but at high power capacitators draw more power than is allowed, hence fuse blows. To resolve the problem all capacitators must be replaced…”

38 In my opinion, the terms of these invoices and quotes do not establish that the repairs of the Bowen Traveller flash pack were due to water damage as the descriptions of the repairs appear to be as a result of normal wear and tear on the use of such equipment. Accordingly, Mr Shirado has failed to put before the Tribunal evidence that demonstrates that these repairs were as a result of water in the Bowen Traveller flash pack.

39 In respect of the back drop canvas, as mentioned above Mr Wong acknowledged that he saw a water mark on the back drop. While he also said that it was torn, there was no challenge to Mr Shirado’s evidence that it required replacement after water had fallen on it from the leak in the ceiling, nor was it challenged that the cost of replacing the backdrop was around $2,000.00. However, in his affidavit of 18 November 2004, Mr Shirado stated that he would obtain a quotation in respect of the replacement prior to the hearing. No such quote was provided. Accordingly, I find that the back drop was damaged as a result of the leak in the ceiling. However, I can make no findings in respect of the amount of the loss.

40 The only other items, which TCA claims were damaged by the water leak was a Compaq 20in. monitor and the Takamine electric guitar. What is claimed is the replacement cost of these items. However, as with the back drop, Mr Shirado failed to produce any quotations in this regard. Notwithstanding this failure, in my opinion it is difficult to see how TCA can make a claim in respect of the guitar, as this would appear to be a personal item of Mr Shirado. Even if TCA were able to make a claim in respect of this item, there is no evidence before the Tribunal that establishes that the guitar was damaged by the water leak. The photos produced by Mr Shirado evidence water on a solid guitar case. There is no evidence of there being any water on the guitar itself. In respect of the Compaq monitor, there is no evidence to support Mr Shirado’s contention that this was damaged as a result of the water leak.

41 Accordingly, while I accept Mr Shirado’s evidence that when it rained water leaked through the ceiling of the premises and that Mr and Mrs Payman breached a condition of the lease by failing to keep the premises in a state of good condition, I find that TCA has either failed to establish that the loss it has claimed in respect of the photographic equipment was caused by this breach and in the case of the back drop, has failed to establish the amount of that loss.

(b) Loss Due to Lockout

42 As mentioned above, there are two issues, which arise from TCA’s claim in respect of loss suffered as a result of the lockout. I will first deal with the issue of liability.

43 As mentioned above, sub clause 12.1 of the lease sets out the circumstances where a lease is terminated. This includes those circumstances where the landlord has lawfully entered and taken possession of the property or where the landlord has lawfully demanded possession of the property (see sub paragraph12.1.2). The basis on which a landlord is able to lawfully re-enter the property or demand possession of the property are set out in sub clause 12.2 of the lease. In this case, the basis on which Everest Realty locked TCA out of the premises was the fact that TCA was more that 14 days overdue in paying its rent as per the terms of the lease. This fact is not disputed and under sub paragraph 12.2.2 of the lease, Mr and Mrs Payman were entitled to enter the premises and take possession or demand possession of the premises.

44 The question is whether they were also required to give 14 days written notice as set out in sub paragraph 12.2.4 of the lease. In my opinion, on a proper construction of sub clause 12.2 of the lease, the answer is yes. On a literal interpretation of this sub clause, by using the word “or” at the end of each sub paragraph in this sub clause each sub paragraph is a separate ground on which the landlord is entitled to lawfully end the lease. However, the contents of each sub paragraph together with the terms of s. 129 of the Conveyancing Act 1919, in my opinion, it was not the parties intention that sub paragraph 12.2.4 be regarded as a separate ground on which the lessor was entitled to end the lease.

45 As mentioned above, sub paragraphs 12.2.1 and 12.2.2 relate to the tenant repudiating the lease and rent being outstanding for 14 days and sub paragraphs 12.2.3 and 12.2.4 relate to section 129 of the Conveyancing Act 1919. Sub paragraph 12.2.3 applies where the tenant has failed to comply with a notice as required under section 129 of that Act and sub paragraph 12.2.4 applies where there has been a breach of a term of the lease for no notice is required under section 129.

46 Section 129(1) of the Conveyancing Act 1919 provides that a lessor’s right to re-enter or forfeit property under the terms of a lease can only be exercised if the lessor serves the lessee with a written notice that sets out details of the alleged breach that gives rise to the lessor’s right to re-enter or forfeit the property and if the breach is capable of remedy, requiring the lessee to remedy the breach and giving the lessee reasonable time to remedy it. Sub paragraph 12.2.3 of the lease merely reflects the need to comply with this section.

47 However, sub-section 129(8) of the Conveyancing Act 1919 provides that the notice requirement in sub-section 129(1) does not apply to a lessors right of re-entry or forfeiture or relief in the case of non-payment of rent. So far as the lease, the subject of this application is concerned, the non-payment of rent as required by cl.5.1.1 of the lease is the only breach for which no notice would be required as a result of sub-section 129(8) of the Conveyancing Act 1919. This means that if sub paragraph 12.2.2 and 12.2.4 of the lease were interpreted to operate as separate grounds on which Mr and Mrs Payman were entitled to end the lease, in those circumstances where the rent was outstanding for 14 days, no notice would be required. However, if Mr and Mrs Payman decided to end the lease prior to the 14 days in which the rent was outstanding they were required to give 14 days written notice. That is, where rent is outstanding for 13 days Mr and Mrs Payman would be required to give 14 days notice, yet if the waited another day they would not be required to give notice and would be able to re-enter on that day. In my opinion this cannot be what the parties intended. The inclusion of sub paragraph 12.2.4 of the lease can only have been included for the purpose of over-riding the exception contained in sub-section 129(8) of the Conveyancing Act 1919, namely that 14 days notice be given regardless of how long the rent is outstanding.

48 Accordingly, the question is whether the notice requirement in sub paragraph 12.2.4 has been complied with. In this application, the relevant notice was the letter from Everest Realty to TCA dated 2 September 2004. That letter demanded payment of the outstanding rent and if TCA failed to pay this rent Mr and Mrs Payman would re-enter the premises by changing the locks. However, as was pointed out by TCA’s solicitors in their reply to that notice, it only gave TCA one days notice of Mr and Mrs Payman’s intention to re-enter and take possession of the premises. For the reasons set out above, this was not a valid notice for the purpose of sub paragraph 12.2.4 of the lease as it did not give TCA at least 14 days within which to comply with the demand. Accordingly, the actions of Mr and Mrs Payman’s agents were unlawful and in breach of the lease (see Barclays Bank plc v Bee & Anor [2002] 1 WLR 332 and Denver v Lawson (1950) 81 CLR 631).

49 The fact that the parties subsequently agreed to give TCA 14 days within which to pay the outstanding rent does not make this notice valid. Nor on the evidence before the Tribunal can it be said that TCA waived this defect in the notice (see Morrow v Nadeen [1986] 1 WLR 1381). The letter from Rutland’s law Firm pointed out the discrepancy in the notice and their request that TCA be given time to pay does not amount to a waiver of the discrepancy. Mr and Mrs Payman, through their agent, were required to issue a further notice under sub paragraph 12.2.4 of the lease if they sought to exercise their rights under this clause. This they did not do.

50 As TCA did not seek to regain possession of the premises I have not considered this issue any further. What TCA did seek was damages as a result of that lockout.

51 Even if I am incorrect in my construction of sub clause 12.2 of the lease, I find that the conduct of Mr and Mrs Payman’s agents in refusing to give Mr Shirado access to the premises during the period 28 September to 8 October 2004 so that he could remove TCA’s photographic equipment was also in breach of the lease. There is no express provision in the lease that entitled Mr and Mrs Payman to retain possession of TCA’s photographic equipment after the lease had been terminated. Nor did Mr and Mrs Payman point to any legal right that they had to retain possession of TCA’s equipment and machinery once the lease was terminated. In this case, the act of changing the locks amounted to a termination and sub paragraph 12.3.2 of the lease expressly provided that TCA was to remove its goods from the premises and if it failed to do so they became the property of Mr and Mrs Payman. Implicit from this term of the lease was a term that TCA had a right to have access to the premises so that it could remove its property and continue with its business. The actions of Mr and Mrs Payman’s agents breached this term.

52 The general principles that apply in determining the loss suffered as a result of an unlawful act is to compare the position the applicant would have been in if the wrongful act had not occurred with the position the application was placed in as a result of the unlawful act (Commonwealth of Australian v Amaun Aviation Pty Ltd (1991) 174 CLR 64 at 114).

53 In this case, Mr Shirado has produced copies of orders that were faxed to TCA between 27 September 2004 and 7 October 2004. These orders were from Japan Travel Bureau, J&A Oceania, JALPAK and Trans Orbit Tour Groups. Each order identified tours that were being organised by these organisations for Japanese tourists on the following day. Again each tour order form identified the number of persons on each tour, and in some cases, the place and time where these tourist would be lunching.

54 In his oral evidence, Mr Shirado explained that TCA had an agreement with these tour organisations and the agreement was that TCA would attend to take photos of tourists at the places as designated on the order forms. Mr Shirado also acknowledged that TCA was not the only photographic company that received such orders and that often more than one photographic company would respond in sending a photographer.

55 In his affidavit of 18 October 2004, Mr Shirado stated that he had 20 years of experience in the photography business for Japanese tourists, and from this experience he estimated that around 60% of tourists who have their photographs taken actually purchase a photograph at the cost of $20 or $25 per photo, depending on the size. Of this he estimated his profit to be about $10 per photo. He calculated that there were 1331 tourists in the orders that he missed on these particular days, giving rise to a loss of profit of $7,986.00.

56 Mr Shirado’s expertise and his calculations of loss in respect of profits from selling photographs to Japanese tourists were not questioned at the hearing. Accordingly, I accept Mr Shirado’s evidence, including his evidence that he was denied access to TCA’s photographic equipment during the period of the lockout. This means that even if he had been able to access the abovementioned orders in some other way, he had no camera equipment to take photos or equipment to develop those photos.

57 TCA also made a claim for the loss of the order to prepare a menu for the location where the tourists lunched. These menus requiring a photograph of the location to be included in them. TCA claims $1,600 in respect of this particular loss. However, it has not produced any evidence to support how this amount was calculated. Accordingly, I do not make any findings in this regard.

58 The final aspect of TCA’s claim in respect of the lock out is loss and damage suffered to TCA’s processing machine as a result of being locked out. In this regard, Mr Shirado states that he was not given permission to remove this equipment from the premises until 18 October 2004. This is consistent with the fax Mr Shirado sent to Everest Real Estate on 8 October 2004 listing those days that were convenient to him to collect TCA’s equipment and to clean the premises.

59 Again, Mr Shirado’s evidence in respect of his expertise in maintaining the processing machine was not challenged at the hearing. Nor were the matters that he identified as requiring replacement and the cost thereof. The total cost was $1,348.18. Again, I accept this evidence.

Conclusions

60 For the reasons set out above I find:

(b) The notice issued by Everest Realty on 2 September 2004 to TCA was contrary to sub paragraph 12.2.4 of the lease and invalid.

(c) The re-entering of the premises by Everest Realty, on behalf of Mr and Mrs Payman, on 28 September 2004 was not in accordance with sub clause 12.1 of the lease and unlawful.

(d) In the alternative to (b) and (c) above, the refusal of Everest Realty on behalf of Mr and Mrs Payman, to give Mr Shirado access to the premises, in the period 28 September to 8 October 2004, to collect TCA’s photographic equipment was in breach of the lease and unlawful.

(e) As a result of the unlawful acts by Mr and Mrs Payman’s agents, TCA suffered loss and damage. The amount of that damage being $7,986.00 + $1,348.18 = $9,334.18.

61 After the hearing of this matter on 19 November 2004, Mr Campbell on behalf of Mr and Mrs Payman, sent a facsimile to the Tribunal applying for orders for costs and an order that the applicant pay Mr and Mrs Payman an amount of $17,062.17 in outstanding rent as set out in the tax invoice of 28 October 2004.

(a) Costs

62 I will first deal with the application of costs.

63 Section 77A of the Retail Leases Act 1994 provides that the Tribunal may award costs under s.88 of the Administrative Decisions Tribunal Act 1997 for proceedings such as these.

64 Section 88 of the Administrative Decisions Tribunal Act 1997 provides that the Tribunal is given power to award costs. However, that power can only be exercised where the Tribunal is satisfied that there are “special circumstances” warranting the award of costs.

65 In his facsimile of 19 November 2004, Mr Campbell said the following in support of the orders that were being sought:

“As was my submission during the hearing yesterday, this case was run by the applicant in order to escape liability for the payment of overdue rent. His evidence was clearly fraudulent and designed to mislead the Tribunal. The use of Administrative Decision Tribunal proceedings in this way is an affront to my client and to the Tribunal. His actions in using the Tribunal in this manner have caused my client loss”.

66 The allegations contained in this facsimile are serious and Mr Campbell, as a solicitor, should be well aware that allegations of fraud should not be made unless he or his client have evidence to support their claim: see Rejtek v McElroy (1996) 112 CLR 517. In this case, the video clearly showed water leaking through the ceiling of the premises. The fact that TCA did not produce sufficient evidence to prove that this leak caused the damage to its equipment does not, without further evidence, mean that TCA through Mr Shirado has acted fraudulently. The condition of the premises in respect of water leaking into the upstairs front room when it rained had clearly been a matter of dispute between the parties since April 2003. At the same time, TCA’s failure to pay rent as required under the lease also became a matter of dispute between the parties. Generally, through the process of mediation if necessary, parties are able to resolve such disputes on a commercial basis. However, where parties are unable to resolve the dispute on such a basis, an aggrieved party has the right to bring an application to the Tribunal to have the dispute resolved. The fact that such a party fails to prove its case does not mean that the applicant party has acted fraudulently or in a manner designed to mislead the Tribunal.

67 In my opinion, the evidence in chief given by Mr Shirado and his evidence in response to questions asked of him by Mr Campbell did not disclose any dishonesty on Mr Shirado’s part. Accordingly, in my opinion, in this matter there are no special circumstances, which warrant an order for costs being made on behalf of Mr and Mrs Payman.

(b) Order re payment of outstanding rent

68 In my opinion, without having made an application under s.71(1) of the Retail Leases Act 1994 (“the Act”), the Tribunal has no jurisdiction to make the order sought by Mr and Mrs Payman in respect of outstanding rent. Such an application, if made would be by way of a cross-claim to TCA’s claim.

69 Sub-section 71(1) of the Act provides as follows:

retail tenancy claim

70 The term “retail tenancy claim” is defined in s.70 of the Act and so far as is relevant to this application, that section provides as follows:

retail tenancy claim means any of the following:

(a)a claim for the payment of a specified sum of money;

(b) a claim for relief from payment of a specified sum of money …”

71 Section 72 of the Act sets out the powers of the Tribunal in respect of a “retail tenancy claim”. That section, so far as it is relevant to this application, provides as follows:

(b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings”.

72 In my opinion, having regard to the definition of the term “retail tenancy claim” in s.70 of the Act, s.72 only enables the Tribunal to make orders as sought in a claim by an applicant under s.71 of the Act. Mr and Mrs Payman’s request for an order for the payment of outstanding rent is clearly a retail tenancy claim, however, it is not the subject of an application under s.71 of the Act and an application, to which TCA has had an opportunity to respond to (c.f. s. 8(2) of the Consumer Claims Act 1998 which enables the Consumer Trader and Tenancy Tribunal to make orders in favour of the respondent as well as making orders in favour of the claimant).

73 It is clearly in the interest of the parties that the Tribunal determines this claim, if pressed and not resolved following the publication of these reasons for decision. Accordingly, I propose to allow Mr and Mrs Payman 14 days, from the publication of this decision, to file and serve an application pursuant to s.71 of the Act seeking order for payment of outstanding rent as set out in the Everest Realty tax invoice No 1371 of 28 October 2004 (“October 2004 invoice”)(see paragraph 17(a) above). In this regard, I note that the October 2004 invoice does not specify any charges of rent for that particular month. It merely refers to the amount that was outstanding as at the date of the previous tax invoice No. 1341R that was issued on 28 September 2004 (“September 2004 invoice”). The amount outstanding from the September 2004 invoice was $19,826.64. From this amount an amount of $1,964.47 (representing the bond) and $800.00 (payment made by Mr Shirado on 15 October 2004) were deducted to give the figure of $17,062.17.

74 The September 2004 tax invoice also makes no reference to any charges of rent for that particular month or the following month. However, it refers to rent that was outstanding in the previous invoice No.1318, dated 20 August 2004 (“the August 2004 invoice”). The amount that was outstanding from the August 2004 invoice was $20,085.60. The September 2004 invoice also notes some minor adjustments and the cheque payments made by Mr Shirado and the fact that they were subsequently dishonoured.

75 Although Mr Shirado did not dispute the contents of the October 2004 invoice or any of the other invoices annexed to the affidavit of Ms Chan, in my opinion as TCA was not legally represented at the hearing and at the time of the hearing there was no claim by Mr and Mrs Payman for orders in this regard, TCA should then be given 14 days within which to respond to Mr and Mrs Payment’s claim, if made.

76 This means that final orders cannot be made at this stage. However, for the reasons set out above I find that TCA has established its claim for damages for an amount of $9,334.18.

77 The Tribunal makes the following orders:

Retail Leases Act 1994

(b) In the event the respondents file an application in accordance with the abovementioned order, the applicant to file and serve any submissions in reply within 14 days after being served with a copy of the respondents’ application.

(c) The matter is stood over to 27 January 2005 at 10 am for further hearing.

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Citations

Tour Creative Agency Australia Pty Ltd v Payman [2004] NSWADT 284

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Statutory Material Cited

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Allianz v Waterbrook [2009] NSWCA 224

Dever v Lawson [1950] HCA 58

CITATION:	Tour Creative Agency Australia Pty Ltd v Payman & Anor [2004] NSWADT 284
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Tour Creative Agency Australia Pty Ltd RESPONDENT Farid Payman and Ruhangiz Payman
FILE NUMBER:	045104
HEARING DATES:	18/11/2004
SUBMISSIONS CLOSED:	11/18/2004
DATE OF DECISION:	12/03/2004
BEFORE:	Higgins S - Judicial Member
APPLICATION:	Claim for payment of money - Costs
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Consumer Claims Act 1998 Conveyancing Act 1919 Retail Leases Act 1994
CASES CITED:	Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 Commonwealth of Australian v Amaun Aviation Pty Ltd (1991) 174 CLR 64 Rejtek v McElroy (1996) 112 CLR 517
REPRESENTATION:	APPLICANT T Shirado, agent RESPONDENT G Campbell, solicitor
ORDERS:	1. In the event the respondents, Mr and Mrs Payman, seek to pursue their claim for orders in respect of rent that is outstanding and owing by the applicant, Tour Creative Agency Australia Pty Ltd, the respondents to file and serve an application under s.71 of the Retail Leases Act 1994 within 14 days of this decision; 2. In the event the respondents file an application in accordance with the abovementioned order, the applicant to file and serve any submissions in reply within 14 days after being served with a copy of the respondents’ application; 3.The matter is stood over to 27 January 2005 at 10 am for further hearing.