Van Der Feltz v Rispoli - [2024] WADC 20

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   VAN DER FELTZ -v- RISPOLI [2024] WADC 20
CORAM:   TOVEY DCJ
HEARD:   20 JULY 2023
DELIVERED          :   15 APRIL 2024
FILE NO/S:   APP 3 of 2023
BETWEEN:   RIC VAN DER FELTZ
First Appellant
STEPHAN MATTHAUS
Second Appellant
AND
ROSA RISPOLI
Respondent

ON APPEAL FROM:
Jurisdiction              :   MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram:   MAGISTRATE WARD
File Number            :   PER/GCLM/7277/2021

Catchwords:

Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

First Appellant	:	Mr C S Williams
Second Appellant	:	Mr C S Williams
Respondent	:	Mr A M Houghton

Solicitors:

First Appellant	:	Solomon Brothers
Second Appellant	:	Solomon Brothers
Respondent	:	Arns & Associates

Case(s) referred to in decision(s):

Broken Hill Cobalt Project Pty Ltd v Lord [2022] NSWCA 271
Browne v Dunn (1893) 6 R 67
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22
Moyes v ENSCO Australia Pty Ltd [2022] WASCA 104
NCH v The State of Western Australia [2013] WASCA 29
Paroz v Paroz [2010] QCA 362
Smart v Power [2019] WASCA 106
Thomas v Van Den Yssel (1976) 14 SASR 205
Tonner v Delaporte [2018] WASCA 115
Van der Feltz v City of Stirling [2009] WASC 142

TOVEY DCJ:

This is an appeal against orders made in the Magistrates Court of Western Australia dismissing the appellants' claim against the respondent.

Factual background

A chronological statement of the agreed facts, and relevant findings of fact made by the learned magistrate, is set out below.

The parties

At all material times, the appellants, Ric Van der Feltz and Stephan Matthaus, were in partnership with each other.[1] The respondent, Rosa Rispoli, was the registered proprietor of the land at 42 King Edward Road, corner Guthrie Street, Osbourne Park.[2]
[1] Statement of Agreed Facts, par 4.
[2] Statement of Agreed Facts, par 5.
There was no mains sewerage connection to the lot, so that onsite disposal of waste water was required. The onsite waste water disposal on the lot included a septic tank, a leach drain and several soak wells at the rear of the lot.[3]

Lease in April 2006

[3] Transcript of Reasons for Decision dated 9 December 2022, page 3.

On or about 11 April 2006, Mrs Rispoli, as lessor, and the partnership, as lessee, entered into a lease ('the Lease') of the property located on the corner of 3 Guthrie Street and 42 King Edward Road ('the Premises')[4]. As at 11 April 2006, the plumbing system at the Premises was in working order and, to each party's knowledge, compliant with all applicable laws and regulations of the City of Stirling ('the City').[5]
[4] Statement of Agreed Facts, par 6.
[5] Statement of Agreed Facts, pars 6 and 7.
At this time, the 2,800 square metre lot had three distinct parts, namely a yard, a workshop and a showroom.[6]
[6] Transcript of Reasons for Decision dated 9 December 2022, page 7.
In April 2006, the coffee drive through ('CDT') did not exist on the Premises. At that time, Mr Matthaus was operating a furniture business at the Premises. The Lease was drafted by Mr Van der Feltz on behalf of the partnership.[7] Clause 2.2 of the Lease restricted the use of the Premises by the partnership for any purpose other than as specified in item 5 of the Schedule to the Lease. Item 5 referred to various uses, including 'other uses permitted within the zoning', but made no reference to the CDT being a permitted use of the Premises.[8]
[7] Transcript of Reasons for Decision dated 9 December 2022, page 11.
[8] Transcript of Reasons for Decision dated 9 December 2022, pages 11 ‑ 12.
The learned magistrate did not accept Mr Van der Feltz's evidence that he informed Mr Enrico Rispoli, the son of the respondent, in early 2006, prior to entering into the Lease, the partnership intended to use part of the Premises as a CDT. Her Honour accepted Mr Rispoli's evidence the first he knew the partnership had created a CDT on part of the Premises was when Mrs Rispoli showed him a letter from the City which he thought was dated 3 January 2007.[9]

Plumbing modifications to the Premises after the Lease

[9] Transcript of Reasons for Decision dated 9 December 2022, pages 12 ‑ 13.

Sometime later in 2006, the partnership converted a kitchenette in the showroom on the Premises into a CDT. Mr Van der Feltz installed a small sink, a cold water tap and pipe to existing plumbing. He installed new pipes around the side of the building to pipe water to the coffee machine and to drain waste through the existing drainage. He also replaced the hot water system.[10]

Sub‑lease of the CDT portion in 2007

[10] Transcript of Reasons for Decision dated 9 December 2022, pages 13 ‑ 14.

In or around 2007, the partnership sub‑let part of the Premises ('the CDT Portion') to two other people for the purpose of operating the CDT from the CDT Portion.[11]

City inspection and plumbing works in 2010

[11] Statement of Agreed Facts, par 8; Transcript of Reasons for Decision dated 9 December 2022, page 7.

On 3 March 2010, City health and compliance officers attended the Premises in response to a complaint of open sewer pipes onsite. Mr Van der Feltz informed the inspector he had removed a toilet block at the rear of the Premises and did not use a licensed plumber to perform the disconnection of the pipework.[12]
[12] Transcript of Reasons for Decision dated 9 December 2022, page 14.
On or about 12 April 2010, Mrs Rispoli engaged Mr Sutherland who identified illegal plumbing at the rear of the ablution block. He traced the sewer back to the main connection, removed pipework and capped the sewer connection underground to comply with Australian standards. This was necessitated by Mr Van der Feltz's removal of the toilet. Mr Van der Feltz did not make any mention of defective plumbing or any waste water issues on the Premises at this time.[13]
[13] Transcript of Reasons for Decision dated 9 December 2022, pages 14 ‑ 15.
In 2010 a 72 litre bin was placed in a dug out hole. Waste water from the CDT flowed into that soak well and was pumped out into the street.[14]

Lease Variation in 2013

[14] Transcript of Reasons for Decision dated 9 December 2022, pages 15 ‑ 16.

On or about 11 April 2013, the partnership and Mrs Rispoli entered into a deed of settlement which varied the Lease ('First Variation Deed').[15]

Sub-lease of the CDT Portion in 2013

[15] Statement of Agreed Facts, par 9.

On 21 August 2013, the partnership sub-let the CDT Portion to the two sub‑tenants by a written sub-lease agreement ('the Sub‑lease').[16]
[16] Statement of Agreed Facts, par 10.
When the new sub-tenants moved in, waste water from the CDT was drained into a green domestic 72 litre bin with no lid that was in the dug out hole behind the fence at the back of the CDT. Mr Van der Feltz supplied the new sub-tenants with a bilge pump for the bin and told them to turn on the tap every day and it would pump out the water. The waste water would run down the driveway onto the street.[17]

Plumbing issues in 2017

[17] Transcript of Reasons for Decision dated 9 December 2022, page 16.

On 14 July 2017, the City informed the CDT, for the first time, that water discharged from it was to be retained onsite or collected by a licensed liquid waste contractor.[18]
[18] Transcript of Reasons for Decision dated 9 December 2022, page 17.
On 5 October 2017, Mr Spinella, the respondent's property manager, emailed Mr Rispoli, stating there were reports from other tenants, namely Timber West, that they were having problems due to their drains not being able to drain properly. The CDT drain issues were not raised by the partnership at this time.[19]
[19] Transcript of Reasons for Decision dated 9 December 2022, page 17.
On 22 December 2017, responding to an email from Mr Van der Feltz, Mr Spinella advised Mr Van der Feltz he should deal with him in regard to the plumbing issue and said there was currently a delay with the City.[20]

Discussions in January 2018

[20] Transcript of Reasons for Decision dated 9 December 2022, page 17.

On 8 January 2018, Mr Van der Feltz responded to Mr Spinella and queried why the City were involved and how the plumbing issues were to be resolved. Mr Van der Feltz suggested the septic tanks, at the rear of the Premises and some distance from the CDT, be emptied to relieve the immediate urgency of the plumbing issues.[21]
[21] Transcript of Reasons for Decision dated 9 December 2022, page 17.
On 17 January 2018, Mr Spinella responded to Mr Van der Feltz, stating:[22]
We have had advice from two plumbers that have attended the site and raised concerns about the issue of drainage is a result of the unauthorised and non-standard drainage from the café sub-tenancy. Please rectify this as soon as possible so that we may attend to any other issues if they persist.
[22] Transcript of Reasons for Decision dated 9 December 2022, pages 17 ‑ 18.
Mr Van der Feltz responded on the same day, disputing the advice provided to Mr Spinella and stated the drainage at the CDT was not connected to the septic. Mr Van der Feltz offered to pay for items if the lease was renewed.[23]
[23] Transcript of Reasons for Decision dated 9 December 2022, page 18.
Mr Van der Feltz met with Mr Spinella on 22 January 2017. During the discussion, Mr Van der Feltz said they had been pumping waste water onto the street but the City would not allow that anymore.[24]
[24] Transcript of Reasons for Decision dated 9 December 2022, page 18.
On 30 January 2018 Mr Spinella emailed Mr Van der Feltz and stated the landlord would get a plumber onsite to investigate.[25]

Meeting at the Premises on 1 February 2018

[25] Transcript of Reasons for Decision dated 9 December 2022, page 19.

Mr Rispoli asked Mr Fimognari, a drainage contractor, who was not a registered plumber, to attend the Premises on 1 February 2018. On that day, Mr Fimognari met Mr Van der Feltz and Mr Spinella at the Premises. Mr Rispoli was not involved in that meeting. Mr Van der Feltz told Mr Fimognari the water draining into what looked like a partly buried bin with no lid was clean water. Mr Fimognari said the bin could be replaced with a soak well if what was draining into it was water only and not sullage or any grey water. Mr Fimognari said that if the water was sullage or grey water, a grease trap was required. Mr Fimognari found the water did not smell when he visited, and this was consistent with it being clean water as Mr Van der Feltz had told him.[26]

City inspection and correspondence in February 2018

[26] Transcript of Reasons for Decision dated 9 December 2022, pages 5 ‑ 6, 19 ‑ 20.

On 2 February 2018, the City inspected the CDT. On 5 February 2018, the City wrote a letter to the sub-tenant, stating, relevantly:[27]
As previously advised, water discharges are to be retained onsite or collected by a licensed liquid waste contractor. Please advise of any works that have been conducted or planned for the future.
[27] Transcript of Reasons for Decision dated 9 December 2022, pages 20 ‑ 21.
Mr Van der Feltz responded to the City by email dated 19 February 2018. In his email he advised, 'we are continuing to work on a solution', the 'water remains onsite' and he hoped to 'resolve the issue before the winter rains'.[28]

Quotes for work in February and March 2018

[28] Transcript of Reasons for Decision dated 9 December 2022, page 21.

On or around 19 February 2018, Mr Fimognari provided a quote to Mrs Rispoli's son, Mr Rispoli, in the sum of $6,875. This quote included work related to drainage at the CDT as well as for drainage works elsewhere at the Premises.[29]
[29] Statement of Agreed Facts, par 12.
On or around 26 March 2018, Mr Fimognari provided a quote to Mr Rispoli in the sum of $2,850. This quote was provided at Mr Rispoli's request. At 11.55 am on 26 March 2018, Mr Spinella sent an email to Mr Van der Feltz attaching the quote in the sum of $2,850.[30]
[30] Statement of Agreed Facts, par 13; Transcript of Decision dated 9 December 2022, page 21.
There followed a number of emails between Mr Spinella and Mr Van der Feltz regarding who was responsible for the work to be done at the CDT. Ultimately, Mr Van der Feltz agreed to pay the $2,850 for Mr Fimognari's work but reserved the partnership's rights in relation to the payment.[31]

Works in May 2018

[31] Transcript of Reasons for Decision dated 9 December 2022, page 21.

On or around 5 May 2018, Mr Fimognari undertook works including the installation of a soak well ('the CDT soak well') in front of the CDT portion.[32] He also installed at least one other soak well at the rear of the Premises, separate to the CDT.[33]
[32] Statement of Agreed Facts, par 14.
[33] Transcript of Reasons for Decision dated 9 December 2022, pages 6 ‑ 7; TB 34.
On 12 May 2018, Mr Fimognari sent an invoice to 'Rick' care of Mr Spinella for $2,850 for 'work carried out on the coffee shop'[34].
[34] Transcript of Reasons for Decision dated 9 December 2022, page 21.
On 23 May 2018, Mr Spinella emailed Mr Rispoli copies of two invoices stating, 'We will invoice Mr Van der Feltz $2850'. On 11 July 2018, Mr Spinella emailed the invoice for the plumbing works to Mr Van der Feltz.[35]
[35] Transcript of Reasons for Decision dated 9 December 2022, page 22.
On or about 23 July 2018, by email from Mr Spinella, Mrs Rispoli requested the partnership pay for the CDT soak well.[36]
[36] Statement of Agreed Facts, par 15.
Ultimately, the partnership paid the property manager the $2,850 invoice on 27 July 2018. Also on 27 July 2018, Mr Van der Feltz advised the City by email, 'We have indeed sorted plumbing'. The City responded and stated it would check during the next inspection.[37]

City inspections in 2020

[37] Transcript of Reasons for Decision dated 9 December 2022, pages 21 - 22.

The next inspection by the City was on 6 January 2020. On 7 January 2020, one of the sub-tenants emailed Mr Van der Feltz indicating the City had raised an issue regarding to the soak well permits and where the waste water went. A further inspection took place on 6 April 2020, after which the City health officer assessed the CDT to be compliant but noted 'no scheme, sewerage available - issues with waste water disposal due to height water table. No recent issues'.[38]

Lease variation in June 2020

[38] Transcript of Reasons for Decision dated 9 December 2022, page 22.

On or about 30 June 2020, the partnership and Mrs Rispoli entered into a further deed of settlement ('Second Variation Deed') which further varied the First Variation Deed.[39]

Determination of Sub-lease on 9 October 2020

[39] Statement of Agreed Facts, par 11.

On 1 October 2020, the sub-tenants notified the City their business had been sold and it was ceasing to trade from the CDT from 8 October 2020.[40]
[40] Transcript of Reasons for Decision dated 9 December 2022, page 22.
The Sub-lease determined on 9 October 2020 by order of the State Administrative Tribunal.[41]
[41] Statement of Agreed Facts, par 16; Transcript of Reasons for Decision dated 9 December 2022, page 23.
Also on 9 October 2020, Mr Van der Feltz met with a possible purchaser of the business and subsequently sent him an unsigned proposed sale agreement for the CDT business. The purchase price was $5,000. A proposed sub-lease of the CDT was emailed to the possible purchaser on 10 October 2020. However, discussions were only as to the possibility of the CDT business being purchased from the former tenants. The discussions did not reach an agreement to purchase the business.[42]

Correspondence in October and November 2020

[42] Transcript of Reasons for Decision dated 9 December 2022, page 10.

On 12 October 2020, Mr Van der Feltz telephoned a health officer at the City requesting a certificate from the City's health department. During this telephone conversation the health officer advised Mr Van der Feltz the waste water situation was not approved and no business would be able to operate from the CDT. This advice was confirmed in writing on the same day.[43]
[43] Transcript of Reasons for Decision dated 9 December 2022, page 23.
On 19 October 2020, Mr Van der Feltz emailed Mr Spinella requesting Mrs Rispoli resolve the plumbing issues immediately. Mr Spinella responded and declined to do so.[44]
[44] Transcript of Reasons for Decision dated 9 December 2022, page 23.
On 29 October 2020, the City wrote to Mr Rispoli in relation to the onsite effluent disposal arrangements in place at the CDT. The letter stated:[45]
[I]n August 2018 a soakwell was installed to accommodate wastewater discharge from the drive thru coffee tenancy at the property. This arrangement was not approved by the City and is in breach of the Health (Treatment of Sewerage and Disposal of Effluent and Liquid Waste) Regulations 1974. … The direct discharge of any wastewater into a soakwell without primary treatment is insufficient and would not be approved.
[T]he City has informed the lessor of the currently vacant coffee drive thru that a new Food Act registration for this site cannot be approved until the discharge of wastewater from the site is resolved and compliant.
[45] Transcript of Reasons for Decision dated 9 December 2022, pages 23 - 24; TB 73.
The City also wrote to Mr Van der Feltz on 2 November 2020 and 10 November 2020. The later correspondence suggested an alternative solution of connecting the CDT waste water discharge to the septic system on site.[46]

November, December 2020 work and inspection and January 2021 invoice

[46] Transcript of Reasons for Decision dated 9 December 2022, page 24.

Between 23 November 2020 and 16 December 2020, the partnership engaged a licenced plumber, Mr Venter, to undertake, and Mr Venter undertook, plumbing work at the Premises.[47] The work involved, inter alia¸ the supply and install of pipework from the café to the septic tank.[48]
[47] Statement of Agreed Facts, par 18.
[48] Transcript of Reasons for Decision dated 9 December 2022, page 24.
On 17 December 2020, the City inspected the CTD and confirmed compliance with the plumbing requirements. At that time the only matters requiring attention before the CDT could commence operations was the submission of a compliant food notification form and for all gaps within the food business to be sealed.[49]
[49] Transcript of Reasons for Decision dated 9 December 2022, page 24.
On 19 January 2021, Mr Venter issued Mr Van der Feltz an invoice for $6,341.50 for the plumbing work he had performed.[50]

Sub-lease on 15 January 2021

[50] Transcript of Reasons for Decision dated 9 December 2022, page 24.

On or about 15 January 2021, the partnership signed a new sub‑lease for the CDT Portion.[51]
[51] Statement of Agreed Facts, par 20.

Magistrates Court claim

In the Magistrates Court, the appellants pleaded that, in or about 1 February 2018, Mrs Rispoli engaged Mr Fimognari to install a soak well (defined in the pleadings as 'the Soak Well') at the Premises (par 12). The appellants further pleaded that, on or about 5 May 2018, Mr Fimognari installed the Soak Well at the premises (par 13). This was alleged to be in contravention of various regulations of the Health (Treatment of Sewerage and Disposal of Effluent and Liquid Waste) Regulations 1974 (WA) ('Sewerage Regulations'). The appellants pleaded, by reason of Mr Fimognari's installation of the Soak Well, the Premises could not lawfully be used for any purpose (par 14).
The appellants pleaded Mrs Rispoli's demand for payment of Mr Fimognari's services. The appellants paid the respondent in July 2018 for Mr Fimognari's services, whilst reserving its rights to recover that payment at a later time (pars 15 and 16).
The appellants pleaded that, on 10 October 2020, the sub-lease of the CDT ended and the appellants secured new sub-tenants, who agreed to enter a sub-lease of the premises commencing on 12 October 2020 and to purchase the CDT from the appellants (par 17). The appellants pleaded the City's advice that the waste water disposal was non‑compliant on 12 and 13 October 2020 (pars 18 - 20). The appellants pleaded the proposed sub-lease and purchase of the CDT as between the appellants and the proposed new sub-lessee could not proceed (par 21).

The appellants pleaded that, despite requests, Mrs Rispoli declined to remedy the waste water system on the Premises (par 22). The appellants pleaded that, on or about 17 December 2020, they caused the waste water system to be remedied at their own expense (par 23). The appellants pleaded they were unable to trade or secure a further sub‑lease of the CDT until 1 February 2021 (par 24). They also pleaded, by reason of the CDT's inability to trade between 12 October 2020 and 1 February 2021, the value of the CDT was diminished (par 25).
The appellants pleaded the conduct referred to above was a breach of various provisions of the Lease, as it was varied. They claimed loss or damages of not less than $33,951.50, comprising:
(a)the $2,850 paid for Mr Fimognari's services;
(b) the $6,341.50 cost of Mr Venter's remedial plumbing works;
(c)16 weeks loss of rental income in an amount of $19,760; and
(d)loss of value of the CDT, being not less than $5,000.
(Paragraphs 26 and 27).
The appellants pleaded Mrs Rispoli owed them a duty of care to maintain the plumbing at the Premises and breached that duty by reason of the matters referred to above. They claimed to have suffered loss or damages of $33,951.50, calculated as above, by reason of the breach of the duty of care (pars 28 - 30).
The appellants also claimed a right to restitution of the $2,850 paid to Mrs Rispoli for the work undertaken by Mr Fimognari (par 31).

Reasons for decision of the learned magistrate

Credibility findings

The magistrate heard oral evidence from three witnesses who were subjected to cross-examination, namely Mr Van der Feltz, Mr Rispoli and Mr Fimognari. The magistrate also received written statements from Mr Matthaus and one of the sub‑tenants.
The magistrate found all witnesses to be generally truthful, with the exception of Mr Van der Feltz's evidence as to what he told Mr Fimognari about water egressing the CDT. Her Honour found some reliability issues with Mr Van der Feltz's evidence and, less so, with Mr Rispoli's evidence.[52] Her Honour was of the view that while Mr Rispoli's evidence in relation to administrative matters concerning the supply of quotes was vague and somewhat unreliable, that evidence was not critical to the disposition of the proceedings.[53] The learned magistrate preferred and accepted Mr Fimognari's evidence that Mr Van der Feltz told him clean water went into the point where the CDT soak well was installed.[54]

Alleged breach of the Sewerage Regulations

[52] Transcript of Reasons for Decision dated 9 December 2022, page 4.

[53] Transcript of Reasons for Decision dated 9 December 2022, page 6.

[54] Transcript of Reasons for Decision dated 9 December 2022, page 6.

The learned magistrate found, in essence, that the Sewerage Regulations would require approval from the City for the installation of the CDT soak well, and for the installation to be by a licensed plumber, unless only clean water was to be discharged into the soak well. The learned magistrate found the appellants' claim that Mrs Rispoli breached the Sewerage Regulations was not made out on the basis that it was the tenant who created and operated the CDT in a manner that breached the regulations.[55]
[55] Transcript of Reasons for Decision dated 9 December 2022, page 25.
The learned magistrate found Mr Van der Feltz knew waste water from the kitchen was to egress from the CDT to the soak well. The learned magistrate also found it was the appellants who created and operated the CDT in such a manner. The learned magistrate found the appellants breached their obligation under cl 2.3 of the Lease to comply with all legislation affecting the use or cleanliness of the Premises.[56]

Claim of breach of Lease terms

[56] Transcript of Reasons for Decision dated 9 December 2022, pages 25 ‑ 26.

As I have noted, the appellants claimed Mrs Rispoli had breached a number of provisions of the Lease. It is to these issues that I now turn.

Clause 2.1(b)(iv) of the First Variation Deed

Clause 2.1(b)(iv) of the First Variation Deed relevantly provided that Mrs Rispoli would be liable for maintenance of any improvements which existed at the commencement of the Lease.
The learned magistrate held the owner's obligation to maintain the Premises under this clause only extended to improvements in situ in April 2006 when the Lease commenced. Her Honour found Mrs Rispoli did not consent to the significant alterations to the plumbing undertaken at the Premises and could not be liable to maintain the items in these circumstances. The learned magistrate identified this plumbing as including the appellants' removal of the toilet in 2010 and, at the CDT, the installation of pipe connections, another sink, a soak well and bilge pump. Her Honour stated:[57]
The aspects of the plumbing which were found by the City to be non‑compliant were entirely, I find, of the tenants own making. The tenant has clearly intervened and altered the CDT plumbing and how waste water is disposed of such that they cannot subsequently sheet home liability to the owner.

Clause 3.2 of the Lease - quiet enjoyment

[57] Transcript of Reasons for Decision dated 9 December 2022, page 26.

Clause 3.2 of the Lease stated:
That Lessee paying the rent and all other monies due hereunder and complying with and observing the provisions of the Lease on the part of the Lessee to be complied with and observed the Lessor shall allow the Lessee quietly to enjoy the Leased Premises without any interruption from the Lessor or any person lawfully claiming under or in trust for the Lessor.
The learned magistrate noted the appellants claimed their quiet enjoyment was breached as Mrs Rispoli did not allow liquid to move from the CDT. As to this, her Honour stated:[58]
However, as I have found, I am not persuaded that the owner is responsible for any of the tenants alterations to the plumbing or use thereof at the CDT. I am not persuaded there is any breach of the tenants right of quiet enjoyment under the lease. I am not persuaded that the owner has substantially interfered with the tenants lawful enjoyment of the CDT.

Alleged implied term of the Lease

[58] Transcript of Reasons for Decision dated 9 December 2022, page 26.

By par 10 of their statement of claim, the appellants pleaded it was an implied term of the lease, as varied, that:
10.1(Mrs Rispoli) was obliged to take reasonable steps to maintain operation of the services necessary to carry on the business that (Mrs Rispoli) knew the (appellants) to operate from the Premises, to a standard compliant with any relevant regulatory authority; and
10.2(Mrs Rispoli) would perform any necessary maintenance and repair of the plumbing to the Premises.
The learned magistrate found, as a matter of law, there was no basis to imply a term into the lease on the basis of what is referred to as the business efficacy rule. In doing so, her Honour referred to Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.
Her Honour stated:[59]
I have found as a fact that Mr Van der Feltz did not disclose to the owner his intention to convert the showroom to the CDT at the time the lease was entered into.
[59] Transcript of Reasons for Decision dated 9 December 2022, pages 26 ‑ 27.
The learned magistrate also stated:[60]
Even if a term was to be implied, I find it is a fact that the owner has not interfered with the supply and disposal of waste water on the premises.
The obligation was always on the tenant to comply with the relevant legislation at the tenants cost. Costs incurred by the tenant with respect to the installation of a semi-flow pump and riser by Mr Venter were costs which were always to be borne by the tenant as they had, I find, modified and altered the plumbing at the CDT. I find Mr Venter's plumbing work was not maintenance of improvements. The CDT and the CDT soak well did not exist as of April 2016. (sic 2006)

Negligence claim

[60] Transcript of Reasons for Decision dated 9 December 2022, page 27.

As to the appellants' negligence claim, the learned magistrate stated:[61]
(T)he tenants claim that the owner owed the tenants a duty of care to maintain the plumbing to the premises. I accept this is the case unless of course the plumbing is significantly altered, as I find it was by the tenant of the CDT. However, the tenant submitted that the … duty was to prevent injury to the partnership arising from the owner contracting with Mr Fimognari to do the work at the CDT.
I am not persuaded that the owner engaged Mr Fimognari in May 2018 for the reasons I have already given. I have found that Mr Fimognari was engaged directly by the tenant, nor am I persuaded that the (indistinct) cause of any alleged harm to the tenant. The non-compliant plumbing situation at the CDT I find was created by the tenant through (its) removal of the toilet in 2010 and the different method of waste water disposal which occurred with the tenants knowledge - with the owner's knowledge.
I find that, as a result, no duty is owed by the owner to the tenant as claimed and, if I am wrong about that, I find that even if a duty is owed, the owner has not breached it.
[61] Transcript of Reasons for Decision dated 9 December 2022, page 27.
The learned magistrate had previously found it was the tenant who instructed and engaged Mr Fimognari to install the CDT soak well and therefore it was the tenants' obligation to pay him.[62]

Restitutionary claim

[62] Transcript of Reasons for Decision dated 9 December 2022, page 11.

The learned magistrate noted the restitutionary claim for unjust enrichment required some injustice in the form of a qualifying or vitiating factor such as mistake, duress, illegality or failure of consideration by reason of which the enrichment of the defendant is treated by law as unjust.[63] Her Honour was not persuaded any of those factors were present in the case where the appellants contracted Mr Fimognari to do work at the CDT, which work was performed by Mr Fimognari, and paid for by the appellants.[64] As I have noted, her Honour was of the view it was the appellants who instructed Mr Fimognari to install the CDT soak well and therefore it was their obligation to pay him.[65]

Assessment of damages

[63] Transcript of Reasons for Decision dated 9 December 2022, page 11, citing Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22 [150].

[64] Transcript of Reasons for Decision dated 9 December 2022, pages 11, 27.

[65] Transcript of Reasons for Decision dated 9 December 2022, page 11.

The learned magistrate also held that, even if she was wrong about whether Mrs Rispoli was liable, she was not persuaded the appellants had suffered any loss.
The learned magistrate found, under cl 2.3 of the Lease, the costs associated with disposing of waste water from the CDT were properly borne by the appellants. Her Honour took the view the fees paid to Mr Fimognari and Mr Venter were properly for the appellants to bear.[66]
[66] Transcript of Reasons for Decision dated 9 December 2022, page 28.
In relation to the claim for lost rental, the learned magistrate stated:[67]
In relation to the loss of 16 weeks of rent, there is, at best, insufficient evidence before me to support a finding of fact that [a possible purchaser] or the new third sub-tenant or any other possible sub-tenant would have rented the shop sooner but for the City requiring the tenant to address the waste water disposal issues.
[67] Transcript of Reasons for Decision dated 9 December 2022, page 11.
Her Honour was of the view there was 'no evidence to support the claim that' the appellants would have rented the CDT portion sooner but for the need to comply with the requirement to dispose of waste water from the CDT appropriately.[68]
[68] Transcript of Reasons for Decision dated 9 December 2022, page 28.
In relation to the claim for loss of value of the CDT, the learned magistrate stated:[69]
… there is no independent valuation evidence has been provided to the Court evidencing the tenants loss arising from the sale, that is, that the tenants CDT business was worth $5,000 or lost $5,000 as claimed. This aspect of the tenants damages claim must, I find in any case, fail. Obviously the asking price in the sale agreement and the actual value of the business are not necessarily the same. There is no, as I've said, expert evidence in relation to the loss of value before me.
[69] Transcript of Reasons for Decision dated 9 December 2022, pages 10 ‑ 11.
The learned magistrate concluded there was no valuation evidence to support the value of the business or the lease.[70]

Conclusion

[70] Transcript of Reasons for Decision dated 9 December 2022, page 28.

The learned magistrate concluded her reasons, as follows:[71]
In conclusion, I find that the city informing the CDT on 12 October 2020 of the changes to its waste water disposal had to be made to ensure compliance with the relevant legislation arises from the manner in which the claimant tenant arranged for the disposal of waste water from the coffee drive-through business that it created on the lot, that is, from at least 2010 the tenant elected for the waste water of the CDT to be directed into a soak well without any prior treatment and then pumped outside.

Orders

[71] Transcript of Reasons for Decision dated 9 December 2022, page 28.

The learned magistrate made orders entering judgement for Mrs Rispoli against the appellants, dismissing the proceedings and ordering the appellants to pay Mrs Rispoli's costs of the proceedings, to be assessed if not agreed.

Grounds of appeal

The appellants' appeal against the orders of the learned magistrate on the following grounds:
1. The learned Magistrate erred in fact and law in finding that there were reliability issues with evidence of Mr Van der Feltz was overstated in parts and not supported by documentary evidence when no such overstatements or lack of support are identified. Ts 4.6
2. The learned Magistrate erred in fact and law in finding that there were reliability issues with the evidence of Mr Van der Feltz because he had professed opinions about plumbing matters in his emails and letters, in circumstances where such matters had no bearing upon the reliability of the evidence given by Mr Van der Feltz. Ts 4.8
3. The learned Magistrate erred in fact and law in finding that the evidence of Mr Van der Feltz was less reliable than other witnesses by the circular reasoning of preferring the evidence of other witnesses, Enrico Rispoli (Mr Rispoli) and Vincent Fimognari (Mr Fimognari), to that of Mr Van der Feltz. Ts 4.9 and 5.5
4. The learned Magistrate erred in fact and law in finding that the evidence of Mr Van der Feltz was in some parts inconsistent, including by example the evidence given at paragraph 22 and 33 of Mr Van der Feltz's statement of intended evidence dated 18 February 2022 (exhibit 3), and denied procedural fairness to the claimants, in circumstances where:
a. properly construed, there were no such inconsistencies;
b. Mr Van der Feltz was not cross-examined about such inconsistencies or questioned by the Magistrate; and
c. no other notice or possibility of such a finding was given to Mr Van der Feltz. Ts 4.9-5.2
5. The learned Magistrate erred in fact and law in finding that Mr Rispoli was generally a more reliable witness than Mr Van der Feltz without having any regard to inconsistencies between Mr Rispoli's statement of intended evidence of a witness dated March 2022 (exhibit 5) and Mr Rispoli's oral evidence, and Mr Rispoli's incredible evidence of knowing the interior of a building, given in circumstances where Mr Rispoli's evidence was that he had not entered the building. Ts 5.10
6. The learned Magistrate erred in fact and law in finding that the written lease dated 11 April 2006 (the Lease) did not permit use of part of the leased premises as a coffee drive through (CDT), in circumstances where the defendant did not plead that such use was not permitted by the Lease and the Magistrate ought to have found that the permitted use of Other uses permitted within the zoning set out in item 5 of the schedule to the Lease resulted in the use of part of the leased premises as a CDT not breaching the use restriction imposed by clause 2.2 of the Lease. Ts 7.7
7. By reason of the errors set out in grounds 1 to 6 above, the learned Magistrate erred in fact and law in making findings contrary to the evidence of Mr Van der Feltz based on the evidence of Mr Rispoli and Mr Fimognari, including findings to the effect that:
a. the claimants did not make the defendant aware of their intention to utilise part of the leased premises as a CDT prior to the execution of the Lease, nor obtain the agreement of Mr Rispoli to that use; and Ts 7.8, 12.4‑12.6, 12.10-13.1
b. utilisation of part of the leased premises for the purposes of a CDT did not involve any changes to the plumbing. Ts 13.8, 14.2, 27.3
8. By reason of the errors set out in grounds 1 to 6 above, and the inconsistent contemporaneous statements made by Mr Van der Feltz in trial book document 24, the learned Magistrate erred in fact and law in making findings contrary to the evidence of Mr Van der Feltz to the effect that:
a. Mr Fimognari was not aware that waste water would be flowing into the CDT soak well; and Ts 6.5, 8.8, 19.8‑20.8
b. Mr Van der Feltz told Mr Fimognari that only clean water would flow into the CDT soak well; Ts 20.8, 25.10, 26.1
9. The learned Magistrate erred in fact and law in finding that the defendant had not admitted in paragraph 7.1 of the amended statement of defence to general procedure claim dated 3 December 2021 (the Defence) that the defendant had engaged Mr Fimognari to install the CDT soak well. Ts 6.6- 7.5
10. The learned Magistrate erred in fact and law in finding that the claimants engaged Mr Fimognari to install the CDT soak well in circumstances where:
a. such finding was not open because the defendant admitted having so engaged Mr Fimognari in paragraph 7.1 of the Defence; Ts 7.1, 19.3, 27.6
b. the Magistrate erroneously found that quotations given by Mr Fimognari were not relevant to the issue; and Ts 6.3
c. the Magistrate had no regard to the terms of Mr Fimognari's quotation and invoice (trial book documents 27 and 34 respectively) which were inconsistent with such finding.
11. The learned Magistrate erred in fact and law in finding that the claimants had not established a breach of regulation 50 of the Health (Treatment of Sewage and Disposal of Effluent and Liquid Waste) Regulations 1974 by addressing the question on the basis of what the Magistrate found Mr Van der Feltz told Mr Fimognari, not on the basis of what actually occurred. Ts 25.8
12. The learned Magistrate erred in fact and law in finding that there had been no:
a. breach by the defendant of clause 3.2 of the Lease; Ts 26.7-26.9
b. breach by the defendant of clause 2.1(b)(iv) of the Lease; Ts 26.5
c. duty of care owed by the defendant or breach of such duty; and Ts 27.8
d. loss suffered by the claimants as consequence of incurring the expense of having David Venter undertake plumbing works, Ts 28.1
as a consequence of the errors identified in grounds 1 to 11 above.
13. The learned Magistrate erred in fact and law in finding that there was no evidence to support the claim that a tenant would have rented the CDT, and of the value of the CDT business, in circumstances where paragraphs 95, 96, 120 and 122 of exhibit 3 and trial book documents 64, 67 and 84 constituted such evidence. Ts 28.3
14. The learned Magistrate erred in fact and law in finding that the requirement imposed by the City of Stirling for changes to be made to the waste water system at the leased premises was a consequence of the claimants in 2010 electing to direct waste water of the CDT into a soak well, as a consequence of the errors identified in grounds 1 to 11 above. Ts 28.5

Grounds 1 ‑ 5: Challenges to assessment of reliability of evidence

Grounds 1 ‑ 5 challenge findings made by the learned magistrate in relation to the reliability of various witnesses. Counsel for the appellants began his oral submissions by accepting his clients were in the class of 'brave' appellants who embark on the task of trying to convince an appellate court the primary court erred in the fact-finding process. Counsel accepted that, unless factual errors were established, the appellants cannot challenge the magistrate's conclusions of law. Counsel also accepted, if the appellants were successful in the appeal, there would be no alternative but to remit the matter for rehearing.[72]

Appeals from credibility based findings of fact

[72] Appeal transcript, page 3.

In Smart v Power [2019] WASCA 106 [101] - [105], the Court of Appeal stated:
An appellate court, in an appeal by way of rehearing, is obliged to conduct a 'real review' of the trial and of the judge's reasons, and 'cannot excuse itself from the task of weighing conflicting evidence and drawing its own inferences and conclusions.'
In conducting its review of the case, the appellate court must observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record. The law recognises that, compared to the trial judge, an appellate court has disadvantages that include, but are not limited to, not having seen and heard the witnesses. In Fox v Percy, Gleeson CJ, Gummow and Kirby JJ observed that the limitations of the appellate court, in proceeding on the record, include:
[T]he disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
(footnotes omitted)
Because of this, the discernment of appellable error requires attention, at the outset, to the nature of the findings said by an appellant to be erroneous. The nature of the finding, and the reasoning by which it was made, affects what is required in order to demonstrate appellable error. The nature and extent of the trial judge's advantage(s) informs what is required in order to reach, and the extent of any appellate restraint in reaching, a conclusion of error. In this respect, as the appellants acknowledge, it is necessary to distinguish between the reasoning of a trial judge which is based on a credibility determination, and the reasoning of a trial judge based on inferences drawn from facts that were undisputed or found. This distinction, and its significance, has long been recognised.
In the case of a finding that is based, at least to any substantial degree, on an assessment of the credibility of one or more witnesses, an appellate court will not interfere with the finding unless it is demonstrated to be wrong by reference to incontrovertible facts or uncontested testimony, or because the finding is glaringly improbable or contrary to compelling inferences, or because the trial judge failed to use, or has palpably misused, their advantage as trial judge.
By contrast, an appellate court is, in general, in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding the proper inference to be drawn, the appellate court gives respect and weight to the conclusion of the trial judge. However, if it reaches a different conclusion, in other words, it concludes that error is shown because the trial judge was wrong as to the inference drawn, it must give effect to that conclusion.

Grounds 1 and 2: Reliability of the evidence of Mr Van der Feltz

Grounds 1 and 2 challenge the learned magistrate's reasons that:[73]
I have some reliability issues with respect to some aspects, as I have said, of Mr Van der Feltz's evidence …
Mr Van der Feltz's evidence, as I will outline shortly, was somewhat overstated in some parts and I find was not supported by documentary evidence in other parts and this is in the context where the majority of communications from Mr Van der Feltz are by email. I also note that Mr Van der Feltz, as I have said, is not a plumber and yet he frequently attempted to proffer his non-expert opinion with respect to plumbing matters in his emails and letters.
[73] Transcript of Reasons for Decision dated 9 December 2022, page 4.
Ground 1 challenges the finding that Mr Van der Feltz's evidence was overstated in parts and not supported by documentary evidence in other parts. The appellants submit the magistrate did not identify any such overstatements or lack of support. This was submitted to be an error by the learned magistrate.[74] The appellants rely on what Ward P (Mitchelmore and Kirk JJA agreeing) said in Broken Hill Cobalt Project Pty Ltd v Lord [2022] NSWCA 271 [102] ‑ [109] in support of the proposition that the magistrate's reasons were inadequate.[75]
[74] Appellants written outline of submissions, pars 13 ‑ 15.
[75] Appellants written outline of submissions, par 12.
In oral submissions, the appellants' counsel conceded ground 1 turned on whether this aspect of the magistrate's reasons was properly characterised merely as a summary of what followed, or whether it constituted an independent ground for rejecting aspects of Mr Van der Feltz's evidence. Counsel accepted that, in the former case, ground 1 fell away.[76]
[76] Appeal transcript, pages 5 ‑ 6.
In my view, ground 1 is not established. As Ward P noted in Broken Hill Cobalt Project Pty Ltd v Lord, the obligation to give reasons does not require lengthy or elaborate reasons ([103]). The obligation requires only a basic explanation of the fundamental reasons which led to the conclusion ([107]). As noted in that case, the function of the appellate court is to determine the minimum acceptable standard of reasons rather than the optimal level of detail required in reasons for decision ([106]).
In this case, the learned magistrate explained the fundamental reasons why she made an adverse assessment of the reliability of aspects of Mr Van der Feltz's evidence. Her Honour gave examples of inconsistencies between Mr Van der Feltz's evidence and the documentary evidence.[77] It was not necessary for the magistrate to set out a complete list of all the reasons why she found Mr Van der Feltz's evidence to be unsatisfactory. Further, when the magistrate later came to make specific factual findings, the learned magistrate gave reasons for doing so.[78] The learned magistrate was not required to do more in giving reasons for her general assessment of the reliability of Mr Van der Feltz's evidence.
[77] Transcript of Reasons for Decision dated 9 December 2022, pages 4 ‑ 5, 14 ‑ 15, 18 ‑ 19.
[78] Transcript of Reasons for Decision dated 9 December 2022, pages 11 ‑ 25.
Ground 2 asserts the magistrate erred in finding Mr Van der Feltz's opinion about plumbing matters affected the reliability of his evidence when those opinions had no bearing on the reliability of his evidence. The appellants submit it does not follow from Mr Van der Feltz offering opinions about plumbing matters in emails and letters that the evidence he gave at trial was in any way unreliable. The appellants further submit the learned magistrate's criticism of Mr Van der Feltz's evidence was unfair and constituted error. Counsel for the appellants submitted, when the learned magistrate's reasons are properly construed, the expression of opinion about plumbing matters was one of the reasons why her Honour preferred the evidence of other witnesses to that of Mr Van der Feltz.[79]
[79] Appeal transcript, pages 8 ‑ 9.
In my view, the appellants' submissions in support of ground 2 misconstrue the learned magistrate's reasons. Mr Van der Feltz's expression of opinions about plumbing matters was said to be something which the magistrate also noted, rather than a reason for finding his evidence to be generally less reliable than that of other witnesses. In that regard, the learned magistrate also said that 'aspects of Mr Van der Feltz's evidence which I found to be less reliable than other witnesses included' four matters. Mr Van der Feltz's expression of opinion about plumbing matters was not one of those four matters.[80] Later in her Honour's reasons, her Honour rejected various contentions advanced by Mr Van der Feltz as to plumbing matters on the basis he has no plumbing qualifications. These include a contention the CDT did not require any 'usage specific plumbing', and that Mr Van der Feltz's removal of the toilet block at the rear of the Premises had no impact on the plumbing of the CDT.[81] In my view, the learned magistrate did not conclude Mr Van der Feltz's observations about plumbing matters affected the reliability of his evidence generally. Rather, her Honour used his lack of plumbing qualifications as a reason for not accepting statements Mr Van der Feltz has made about plumbing matters. There is no error in that approach. Ground 2 is not established.

Ground 3: Alleged circular reasoning in assessing reliability of evidence

[80] Transcript of Reasons for Decision dated 9 December 2022, pages 4 ‑ 5.

[81] Transcript of Reasons for Decision dated 9 December 2022, pages 13 ‑ 14.

Ground 3 asserts the learned magistrate erred by finding Mr Van der Feltz's evidence to be less reliable than other witnesses by circular reasoning.
The learned magistrate expressly found Mr Van der Feltz's evidence to be less reliable than other witnesses in four respects:[82]
(a)Mr Van der Feltz did not tell Mr Rispoli, before the Lease was entered into in 2006, that he intended to convert the showroom on the Premises into a CDT.
(b)Mr Van der Feltz's evidence was inconsistent in some parts.
(c)Mr Van der Feltz's failure to raise with the owners any waste water issues which he claims arose in 2010 at the CDT until 2018.
(d)The magistrate was persuaded by Mr Fimognari's evidence that, when they met at the Premises in early 2018, Mr Van der Feltz said the water going into the soak well from the CDT was clean water, and rejected Mr Van der Feltz's suggestion Mr Fimognari was lying.
[82] Transcript of Reasons for Decision dated 9 December 2022, pages 4 ‑ 5.
The magistrate also found Mr Rispoli to be generally a more reliable witness than Mr Van der Feltz, subject to findings that the magistrate subsequently stated.[83]
[83] Transcript of Reasons for Decision dated 9 December 2022, page 5.
The appellants submit this involves circular reasoning. It was submitted the only reason Mr Van der Feltz's evidence was found to be less reliable was the magistrate preferred the evidence of Mr Rispoli and the evidence of Mr Fimognari. However, the only reason why their evidence would be preferred was because Mr Van der Feltz's evidence was less reliable. The appellants submit the adoption of such circular reasoning, without any further reasoning being provided, constitutes an error by the magistrate.[84]
[84] Appellants' written outline of submissions, pars 20 ‑ 23; Appeal transcript, page 9.
For the following reasons, I do not accept these submissions.
Two of the matters referred to by the learned magistrate, as I have noted above, did not concern the evidence of Mr Fimognari or Mr Rispoli.
In relation to Mr Fimognari, the magistrate indicated she would give reasons for preferring his evidence. The magistrate later found aspects of Mr Fimognari's evidence as to administrative matters such as the giving of quotes were vague and unreliable. However, her Honour found Mr Fimognari to be very clear in his evidence that Mr Van der Feltz told him that clean water went into the soak well. The magistrate found that aspect of Mr Fimognari's evidence to be consistent with par 6 of his written statement.[85]
[85] Transcript of Reasons for Decision dated 9 December 2022, page 6.
The learned magistrate later stated she accepted Mr Fimognari's evidence he told Mr Van der Feltz that if the water was sullage or grey water, a grease trap was required. Her Honour also accepted Mr Fimognari's evidence that he found the water did not smell when he visited and this was consistent with it being clean water. The learned magistrate found this evidence, and Mr Fimognari's evidence as to what Mr Van der Feltz told him about the water, was consistent with Mr Fimognari being a drainage contractor rather than a registered plumber.[86]
[86] Transcript of Reasons for Decision dated 9 December 2022, pages 19 ‑ 20.
The learned magistrate also referred to the unchallenged evidence of one of the sub‑tenants that Mr Van der Feltz said he would deal with the illegal disposal of waste water if he was caught.[87]
[87] Transcript of Reasons for Decision dated 9 December 2022, page 20.
The learned magistrate also indicated she preferred Mr Fimognari's evidence as to what Mr Van der Feltz said about the water as he was very firm in this regard and this aspect of his evidence was not undermined by cross-examination.[88]
[88] Transcript of Reasons for Decision dated 9 December 2022, page 20.
The learned magistrate found Mr Van der Feltz at best misled Mr Fimognari with respect to the type of water that was going out of the CDT when he told him it was clean water.[89]
[89] Transcript of Reasons for Decision dated 9 December 2022, page 20.
In my view, the magistrate's approach in relation to Mr Fimognari's evidence about what Mr Van der Feltz said about the water discharged into the soak well did not involve circular reasoning. In essence, there were three aspects to the learned magistrate's preference of Mr Fimognari's evidence. First, it was inherently less probable Mr Fimognari, who was not a registered plumber, would have done the work if he had not been told clean water was being discharged into the soak well. Secondly, Mr Fimognari's account was consistent with the attitude of Mr Van der Feltz reflected in his statement to one of the sub‑tenants that he would deal with the illegal disposal of waste water if he was caught. Thirdly, Mr Fimognari was firm and clear in his evidence of his conversation with Mr Van der Feltz regarding clean water and that aspect of his evidence was not undermined by cross‑examination. It was open to the learned magistrate to prefer the evidence of Mr Fimognari by virtue of these matters as well as the general impression her Honour formed of the witnesses when the witnesses gave their evidence.
The significant aspect of Mr Rispoli's evidence which the learned magistrate preferred over the evidence of Mr Van der Feltz concerned whether Mr Van der Feltz informed Mr Rispoli, in early 2006, before entry into the Lease, that he intended to use part of the premises as a CDT. The magistrate noted Mr Rispoli's evidence that he was first aware of the CDT when his mother showed him a letter from the City in January 2007. Mr Rispoli confirmed this in an email to Mr Spinella on 5 October 2017 that the CDT was put in by Mr Van der Feltz and was not part of the initial lease.[90] It was not until 6 November 2020, so over 14 years after the Lease commenced, that Mr Van der Feltz mentioned in an email to the owner's agent his claim that Mr Rispoli knew of the planned CDT.[91] In this regard, the learned magistrate stated:[92]
This email sent by Mr Van der Feltz is far from contemporaneously the event he claims to be reporting on which occurred in early 2006 and accordingly I attach little weight to it.
That is the claim that Mr Van der Feltz makes. Overall I accept and prefer Mr Rispoli's evidence in this regard. It is consistent with the documents created closer in time to the commencement of the lease. I am not persuaded by Mr Van der Feltz's oral evidence that he informed Mr Rispoli in early 2006 that he intended converting the showroom to a CDT. Mr Van der Feltz's claim is not reflected in the contemporaneous documents which he drafted, namely the lease, and news of the change in use did not surface until the letter from the city to the owner in January 2007. By that time the showroom had been converted by the tenants to a CDT and was about to be sublet by the tenants …
(my emphasis)
[90] TB 87; Transcript of Reasons for Decision dated 9 December 2022, page 12.
[91] TB 363.
[92] Transcript of Reasons for Decision dated 9 December 2022, pages 12 ‑ 13.
The learned magistrate preferred the evidence of Mr Rispoli he had not been told of the proposed CDT before the Lease was entered into because that evidence was more consistent with the documentary evidence. This did not involve circular reasoning.

Ground 4: Inconsistencies in the evidence of Mr Van der Feltz

Ground 4 asserts the learned magistrate erred in finding some parts of the evidence of Mr Van der Feltz to be inconsistent. The appellants submit the learned magistrate's finding was incorrect, that Mr Van der Feltz's evidence was not inconsistent, and further submitted there was a denial of procedural fairness. The denial of procedural fairness was said to arise because Mr Van der Feltz was not cross‑examined or questioned by the magistrate about such inconsistencies and no notice of such a finding was given to Mr Van der Feltz.
In this regard, the appellants refer to the rule in Browne v Dunn (1893) 6 R 67 which they submit requires, as a matter of procedural fairness, a party who relies upon a version of events different to that given by the witness is to put that version to the witness. The appellants submit the rule in Brown v Dunn is infringed when the tribunal of fact makes a finding which a party could not have contended for without breaching the rule, and, in support of that submission, cited Tonner v Delaporte [2018] WASCA 115 [88] ‑ [89]. The appellants submit without the inconsistency having been put to Mr Van der Feltz, and Mr Van der Feltz being given an opportunity to explain the apparent inconsistency, the rule in Browne v Dunn was breached.[93]
[93] Appellants' written outline of submissions, pars 26 ‑ 28.
The example of internal inconsistency given in the learned magistrate's reasons arise out of pars 21 - 22 and 33 of Mr Van der Feltz's written statement. In par 21, Mr Van der Feltz referred to work done on the Premises in 2006, including the installation of a small sink and cold water tap connected to the existing plumbing, the laying of new pipes and the replacement of a hot water system. At par 22 of his statement, Mr Van der Feltz stated:
Beyond this, I did not undertake, or cause the undertaking of, any alterations to the plumbing in the Premises.
Paragraph 3 of the witness statement defined the 'Premises' to be 42 King Edward Road, Osborne Park.
In par 30 of his statement, Mr Van der Feltz referred to replacing a new kitchen setup without alteration of the plumbing connection to the outside in 2010.
He also stated, at par 33, that:
We removed a toilet block at the back of the Premises which did not impact on the plumbing of the CDT.
In my view, it was open to the learned magistrate to regard pars 22 and 33 of Mr Van der Feltz's witness statement as internally inconsistent. The removal of a toilet block necessarily involves an alteration of plumbing at the Premises irrespective of whether or not it affected the plumbing of the CDT. I do not accept the appellants' submission the two paragraphs are necessarily referring to work done at different times. It was open to the learned magistrate to view the way in which these aspects of Mr Van der Feltz's evidence was expressed as reflecting adversely on her Honour's assessment of the reliability of his evidence.

I also do not accept the appellants' submission that the learned magistrate's approach involved either a denial of procedural fairness or a breach of the rule in Browne v Dunn.
The principles concerning the rule in Browne v Dunn were summarised in NCH v The State of Western Australia [2013] WASCA 29 [98] ‑ [100] as follows:
The rule in Browne v Dunn comprises two limbs. The first limb is that, unless notice has already clearly been given of the party's or cross‑examiner's intention to rely upon such matters, a party or cross‑examiner who intends to invite the court to disbelieve an opposing witness must put to the witness in cross-examination the grounds upon which the evidence is to be disbelieved. The second limb is that, unless notice has already clearly been given of the party's or cross-examiner's intention to rely upon such matters, a party or cross‑examiner must put to an opposing witness in cross-examination the nature of the case upon which it is intended to rely in contradiction of the witness's evidence, especially where that case relies upon inferences to be drawn from other evidence …
The policy rationale that underpins the rule in Browne v Dunn is the securing of fairness in the conduct of adversarial proceedings … The first limb is concerned with achieving fairness to witnesses and a fair trial between the parties. The second limb is concerned with the weight or cogency of evidence … The rule facilitates a court's assessment of the reliability and accuracy of the witnesses …
The rule in Browne v Dunn is not absolute. It must be applied with flexibility. In R v Birks, Gleeson CJ emphasised:
It is plain that their Lordships [in Browne v Dunn], whilst recognising and affirming a rule of practice in the terms in which they expressed themselves, also recognised the need for flexibility in its application. That need arises from the very nature of the subject matter which it concerns. The central purpose of the rule is to secure fairness in the conduct of adversary proceedings. That consideration provides the best guide, both to the practical requirements of the rule in a given case, and to the consequences which may properly flow from its non-observance, including the remedies that are available to deal with a problem so created…
That summary is consistent with the statement of principle in Paroz v Paroz [2010] QCA 362 [28], which counsel for the appellants relied on in oral submissions.[94]
[94] Appeal transcript, page 11.
However, I note in Moyes v ENSCO Australia Pty Ltd [2022] WASCA 104 [108], the Court of Appeal referred, with approval, to Thomas v Van Den Yssel (1976) 14 SASR 205, and the observations of Bray CJ in that case at (207), that the rule in Browne v Dunn cannot be applied without qualification to a challenge to a witness's credibility generally.
I accept, in some circumstances, a failure to give notice that an adverse finding, which has not been put to a witness in accordance with the rule in Browne v Dunn, may amount to a failure by the tribunal of fact to accord procedural fairness.
However, in my view, no practical unfairness or breach of the rule in Browne v Dunn occurred in the circumstances of this case. In this regard, it was not suggested the appellants and Mr Van der Feltz were not on notice that the reliability of certain parts of Mr Van der Feltz's evidence was being challenged. Further, the inconsistency in Mr Van der Feltz's witness statement was not relied on by the learned magistrate as a particular reason for rejecting part of Mr Van der Feltz's evidence. Rather, the learned magistrate had regard to the internal consistency, or lack of consistency, in Mr Van der Feltz's evidence as informing her Honour's general assessment of the reliability of the witness's evidence. In these particular circumstances, fairness did not require each internal inconsistency in Mr Van der Feltz's witness statement be put to him before the magistrate could conclude that internal inconsistencies adversely affected her assessment of the reliability of the witness's evidence in a general sense.
The assessment of the internal consistency, or lack of consistency, of Mr Van der Feltz's evidence was an inherent part of the learned magistrate's assessment of the general reliability of his evidence, and ought to have been anticipated by the appellants.
For these reasons, in my view, ground 4 is not established.

Ground 5: Alleged failure to have regard to matters affecting the credibility of the evidence of Mr Rispoli

Ground 5 asserts the learned magistrate erred in failing to have regard to two matters in finding Mr Rispoli was generally a more reliable witness than Mr Van der Feltz. The first matter is an alleged inconsistency between Mr Rispoli's witness statement and his oral evidence. The second matter is a part of Mr Rispoli's evidence which was submitted to be inherently incredible concerning knowledge of the interior of a building.
The appellants' ground of appeal, written submissions and oral submission do not identify the parts of Mr Rispoli's witness statement and evidence which are said to be inconsistent. The written and oral submissions deal only with an alleged inherent implausibility of an aspect of Mr Rispoli's evidence.
In the passage of Mr Rispoli's evidence to which ground 5 relates, he was cross-examined as to evidence given in his witness statement that, at the commencement of the Lease, the office did not have a tap with both hot and cold water, a sink and waste water plumbing with piping. Mr Rispoli accepted he had not been in the building at the commencement of the Lease, but said he 'knew' there was no water available in the office.[95]
[95] Transcript dated 23 February 2022, pages 107 ‑ 108.
The appellants submit Mr Rispoli could not have known there was no water available in the office, which later became the CDT, at the commencement of the Lease if he had never been in the building. The appellants submit this aspect of Mr Rispoli's evidence, and his refusal to acknowledge he could not have known what was in a room he had never been in, was inherently incredible. The appellants do not suggest this meant none of Mr Rispoli's evidence could be accepted. However, it was submitted it was a material factor in assessing the reliability of Mr Rispoli's evidence and the magistrate erred by failing to refer to this aspect of Mr Rispoli's evidence in making that assessment.[96]
[96] Appellants' written outline of submissions, pars 32 ‑ 35; Appeal transcript, page 13.
The fact that her Honour did not mention this aspect of Mr Rispoli's evidence when assessing his general reliability does not mean her Honour did not have regard to the evidence. I do not accept the learned magistrate erred in failing to deal specifically with this aspect of Mr Rispoli's evidence in her reasons. The error in relation to the plumbing present at the commencement of the Lease was a relatively minor and peripheral issue which had no necessary bearing on the acceptance of other evidence given by Mr Rispoli.

Ground 6: Was the CDT a permitted use under the Lease?

By ground 6, the appellants assert the learned magistrate erred in fact and law in finding the Lease did not permit use of part of the Premises as a CDT.
Ground 6 challenges the learned magistrate's reasons that:[97]
In summary, I am not persuaded by the tenant that the owner was aware of the tenants intention to create the CDT in the showroom when the lease was entered into in 2006. I reject Mr Van der Feltz's evidence in this regard. Such a use is not listed as a permitted use in the contemporaneous lease document and is inconsistent with Mr Rispoli's clear evidence on this point which I accept and prefer. (my emphasis)
[97] Transcript of Reasons for Decision dated 9 December 2022, page 7.
Clause 2.2 of the Lease was headed 'Use Restriction' and stated:[98]
Not to use or permit to be used the Leased Premises or any part thereof for any purpose or purposes other than that specified in Item 5 of the Schedule without the written consent of the Lessor.
[98] TB 1691.
Item 5 of the Schedule to the Lease identified the following permitted use as:
Production and sale of timber, steel and other products
Storage
Parking
Goods transfer
Other uses permitted within the zoning
Ground 6 asserts the magistrate erred in making this finding in circumstances where the respondent did not plead that use of the Premises as a CDT was not permitted under the Lease. The appellants submit the magistrate ought to have found the CDT was a permitted use under item 5 of the schedule to the Lease, being 'Other uses permitted within the zoning'. The appellants submit there is no evidence the CDT was not a use permitted within the zoning, and point to the previous determination of the Supreme Court that the use was permitted under the zoning: Van der Feltz v City of Stirling [2009] WASC 142 [125].
The respondent submits, and I accept, that ground 6 proceeds on a misunderstanding of the magistrate's reasons. The learned magistrate did not find the Lease did not permit part of the Premises to be used as a CDT. Rather, the learned magistrate was concerned with the significance of the fact that the Lease, which Mr Van der Feltz prepared himself,[99] did not specifically mention the use of the CDT which Mr Van der Feltz says was proposed and disclosed to Mr Rispoli. In determining whether Mr Van der Feltz had disclosed to Mr Rispoli he intended to operate a CDT, it was open to the learned magistrate to have regard to the absence of any reference to a CDT in a contemporaneous document prepared by Mr Van der Feltz which listed the permitted uses.
[99] Transcript dated 23 March 2022, page 35.
In oral submissions, counsel for the appellants accepted that ground 6 fails if the respondent's construction of the magistrate's reasons is accepted.[100] As I accept the respondent's construction of the learned magistrate's reasons, ground 6 is not established.
[100] Appeal transcript, page 15.

Grounds 7 and 8: Consequential factual errors

Grounds 7 and 8 assert factual errors by the magistrate by 'reason of the errors set out in grounds 1 to 6'. As none of grounds 1 to 6 have been established, grounds 7 and 8 fail.
Counsel for the appellants accepted this to be the case for ground 7. Counsel also submitted ground 8 raised an issue in relation to the magistrate not referring to contemporaneous documents in determining the question of who engaged Mr Fimognari to carry out work on the CDT.[101] In my view, although that issue is raised by ground 10 and will be considered in the context of ground 10, it falls outside the scope of ground 8.
[101] Appeal transcript, pages 15 ‑ 16, 19.
Even if one of more of grounds 1 ‑ 6 had been established, it would not follow that the factual findings referred to in grounds 7 and 8 would be set aside. The factual findings referred to in grounds 7 and 8 are, relevantly, that:
(a)The appellants did not make the respondent aware of the intention to use part of the Premises as a CDT prior to execution of the Lease.
(b)Use of the Premises as a CDT involved changes to plumbing.
(c)Mr Fimognari was not aware that waste water would be flowing into the CDT soak well.
(d)Mr Van der Feltz told Mr Fimognari that only clean water would flow into the CDT soak well.
These were all findings based on credibility. None of the findings have been shown to be wrong by reference to incontrovertible facts or uncontested testimony, or to be glaringly improbable or contrary to compelling inferences. The limitations on review of factual findings on appeal, as stated in Smart v Power, apply.
The appellants cannot avoid the limitations on review merely by submitting the magistrate ought to have made different findings as to the reliability of the witnesses. To overcome those findings, the appellants must demonstrate the learned magistrate failed to use, or has palpably misused, her advantage as the tribunal of fact. The appellants have not demonstrated this.

Grounds 9 and 10: Who engaged Mr Fimognari to install the CDT soak well?

Grounds 9 and 10 challenge the learned magistrate's finding that it was the appellants rather than the respondent who engaged Mr Fimognari to install the CDT soak well. The grounds submit the finding was in error for three reasons. First, the appellants submit the respondent admitted in the defence she had engaged Mr Fimognari to install the CDT soak well. Secondly, the appellants submit the magistrate erred in finding the quotes given by Mr Fimognari were not relevant to the issue. Thirdly, the appellants submit the magistrate erred by having no regard to the terms of Mr Fimognari's quote and invoice.

Pleadings in the Magistrates Court

Paragraph 12 of the appellants' amended statement of claim pleaded that:
On or about 1 February 2018, in contravention of section 10 of the Plumbers Licensing and Plumbing Standards Regulations 2000, the defendant engaged Vince Fimognari, an unlicensed person, to install a soak well at the premises ('the Soak Well')
Paragraph 7 of the respondent's defence pleaded that:
As to paragraph 12 of the Statement of Claim:
7.1The Defendant admits that she engaged Vince Fimognari to install a soak well at the premises for the purposes of dealing with water overflow
The defence denied installation of the soak well was plumbing work as defined in the Plumbers Licensing and Plumbing Standards Regulations 2000 (WA). The defence also denied engaging Mr Fimognari involved a contravention of those regulations, or the respondent knew this to be the case.
Paragraph 13 of the appellants' amended statement of claim pleaded that:
On or about 5 May 2018, without obtaining written approval or permission from either the City or the Chief Health Officer, Mr Fimognari installed the Soak Well at the Premises in contravention of regulations 4, 4A, 9, 15, 17 and/or 50 of the Health (Treatment of Sewage and Disposal of Effluent and Liquid Waste) Regulations 1974 ('the Sewage Regulations') and s107 of the Health (Miscellaneous Provisions) Act 1911 ('the Act'), further, and alternatively, the defendant authorised and permitted the installation of the Soak Well in contravention of regulations 4, 4A, 9, 15, 17 and/or 50 of the Sewage Regulations and s107 of the Act.
Paragraph 8 of the respondent's defence pleaded that:
As to paragraph 13 of the Statement of Claim, the Defendant:
8.1admits that Mr Fimognari installed a soak well at the Premises;
8.2denies that Mr Fimognari installed a soak well in contravention of the Health (Treatment of Sewage and Disposal of Effluent and Liquid Waste) Regulations 1974;
8.3 denies that Mr Fimognari installed a soak well at the premises through which waste water was to be discharged;
8.4Says that if waste water from the Premises was discharged into the soak well, the Defendant did not request or authorise any plumbing work which caused that to occur
The defence further pleaded that it was the appellants, or alternatively, the sub-tenants who caused the waste water, or effluent, to be discharged from the CDT from the Premises in breach of reg 50 of the Health (Treatment of Sewage and Disposal of Effluent and Liquid Waste) Regulations 1974.

Evidence relating to the engagement of Mr Fimognari

On 22 December 2017, Mr Van der Feltz emailed Mr Spinella and asked whether Mr Spinella would resolve the plumbing issues or whether he should address those with the owner. Mr Spinella responded by stating 'you can deal through us in regard to the plumbing issues' and there was 'currently a delay with' the City.[102]
[102] TB 1821 ‑ TB 1822.
On 8 January 2018, Mr Van der Feltz emailed Mr Spinella asking why the City of Stirling was involved and asking how Mr Spinella was planning to resolve the plumbing issues.[103] On 17 January 2018, Mr Spinella responded[104] as follows:
We have had advice from 2 plumbers that have attended the site and also the Health department of City of Stirling advise that the issue of drainage is the result of unauthorised and non standard draining from the café sub tenancy.
Please rectify this issue as soon as possible so that we may attend to any other issues if they persist.
[103] TB 1821.
[104] TB 1820.
On 17 January 2018, Mr Van der Feltz responded to Mr Spinella denying responsibility for any plumbing issues.[105] His email relevantly stated:
We have offered to contribute to maintenance if the owner formalises the new lease now and our offer still stands. We are willing to pay or contribute towards resolving the plumbing issues if the owner formalises the pledged new lease now.
… If the plumbing issues are not resolved at the owner's expense soon we will ask our Lawyer to include the plumbing issue in our correspondence with Mrs Rosa Rispoli and we will include it in any legal proceedings if the owner lets it come to that.
[105] TB 1819 ‑ TB 1820.
On 30 January 2018, Mr Spinella and Mr Van der Feltz exchanged emails indicating the plumber would be onsite on 1 February 2018 and that both of them would attend on that date.[106]
[106] TB 1818 ‑ TB 1819.
On 9 February 2018, Mr Van der Feltz emailed Mr Spinella indicating he had received another email from the City and asking about progress on resolving the plumbing issues. Mr Spinella responded indicating he was still waiting for Mr Fimognari to send through the quote. Mr Spinella indicated he would follow this up with Mr Fimognari again.
On 15 February 2018, Mr Van der Feltz emailed Mr Spinella asking whether there was any word about the plumbing from Mr Fimognari or the owner.[107]
[107] TB 1817 ‑ TB 1818.
Mr Fimognari's evidence was that, in early 2018, he received a call from Mr Rispoli who asked him to look at some issues with soak wells and drainage from storm-water run-off at the Premises. He attended the Premises in February 2018 and walked around it with Mr Spinella. Mr Spinella took Mr Fimognari through issues they were having with storm-water run-off, which Mr Fimognari said could be rectified. After this, Mr Van der Feltz approached Mr Fimognari and said he was having some issues with waste water from the CDT. Mr Van der Feltz showed Mr Fimognari water draining into what appeared to be a partly buried bin with no lid and said this was pumped out every day.[108]
[108] Witness statement of Mr Fimognari, pars 2 - 5.
Mr Fimognari gave the following account of the conversation which, although it was inconsistent with Mr Van der Feltz's evidence, was accepted by the learned magistrate:[109]
I said to him that we could replace the bin with a soakwell. I also said to him that that would only be ok if what was draining into the soakwell was water only. I specifically said that if there was any sullage or grey water leaving the premises this solution would not be acceptable.
Mr Van der Feltz said to me that it was just water that was draining out the pipes. On that basis, I said he could put in a soakwell.
[109] Witness statement of Mr Fimognari, pars 6 ‑ 7.
On 19 February 2018, Mr Fimognari prepared a quote, which was not addressed to any specific person, in the following terms:[110]
[110] TB 1764.
Quotation for job in Guthrie St Osbourn Park
Supply all material for completion of job =
Tanks + lids
Pipes
Cut Concrete
Conect (sic) down pipes
Connect sink waste
Supply Skip Bin
Remove concrete and relay
Total $6,875.00
Mr Fimognari's evidence-in-chief was this quote included the work at the rear of the premises and the work requested by Mr Van der Feltz.[111] However, in cross-examination Mr Fimognari accepted the quoted work did not involve any works in relation to the CDT.[112]
[111] Witness statement of Mr Fimognari, par 8.
[112] Transcript dated 23 March 2022, page 122.
It was an agreed fact that, on or about 19 February 2018, Mr Fimognari provided this quote to Mr Rispoli.[113]
[113] Statement of Agreed Facts, par 12.
Mr Rispoli's evidence was that he arranged for Mr Fimognari to attend the Premises in February 2018 and provide a quote to rectify drainage issues at the rear of the Premises. He received the quote on 19 February 2018, emailed the quote to Mr Spinella and showed it to Mrs Rispoli.[114]
[114] Witness statement of Mr Rispoli, pars 16 ‑ 17.

On 20 February 2018, Mr Rispoli emailed this quote to Mr Spinella and asked for his thoughts. Mr Spinella responded by writing this was 'cheaper by approx. $2k on our plumber quote'. Mr Rispoli replied this was good news and he would let Mrs Rispoli know and get back to Mr Spinella with a decision.[115]
[115] TB 1763.
On 21 February 2018, Mr Spinella emailed Mr Van der Feltz[116], and stated:
Apologies for the delay in response. We only received the quote late yesterday from Vince [Fimognari] the plumber and we have forwarded same to Rosa Rispoli for her consideration. We spoke on the telephone late in the day and she will confirm her outcome in the next couple of days.
[116] TB 1816.
Mr Rispoli's evidence was that on reviewing the quote, he noted it included allowances for connecting sink waste. He discussed the issue with Mrs Rispoli who said she did not think anything to do with the CDT was her responsibility and she did not want to pay for that. Mrs Rispoli asked Mr Rispoli to request a separate quote from Mr Fimognari for work relating to the CDT. Mr Rispoli then contacted Mr Fimognari and asked him to provide a separate quote for work related to the CDT.[117]
[117] Witness statement of Mr Rispoli, par 18.
Mr Fimognari's evidence was Mr Rispoli asked for a separate quote for the work requested by Mr Van der Feltz.[118]
[118] Witness statement of Mr Fimognari, par 9.
Mr Van der Feltz emailed Mr Spinella on 21 February 2018, 27 February 2018 and 15 March 2018 asking for an update and requesting a copy of the quote.[119]
[119] TB 1815 ‑ TB 1816.
On 15 March 2018, Mr Spinella responded, as follows:[120]
Apologies I have received your messages but I have been away overseas for business.
The plumbing quote has been received but the owner has requested a breakdown of the quote from the plumber and is still awaiting that breakdown. I checked with the owner yesterday and they advised they are still awaiting the plumber's further information.
Once we have the updated quote to hand, we will be in a position to move forward.
[120] TB 1814.
On 26 March 2018, Mr Fimognari prepared the following quote on a tax invoice/statement addressed to 'Rick'[121], as follows:
Quote for plumbing work at drive through coffee shop
Supply all materials
Convert sink to P.trap
Install vent
Total $2850.00
[121] TB 1766 ‑ TB 1767.
It was an agreed fact that Mr Fimognari provided this quote to Mr Rispoli on or about 26 March 2018.[122] At 9.58 am on 26 March 2018, Mr Rispoli emailed the quote to Mr Spinella, stating:[123]
Attached is the quote for plumbing work at Guthrie Street Osborne Park
The amount of $2,850.00 need to be deducted of the original quote.
[122] Statement of Agreed Facts, par 13.
[123] TB 1765.
At 10.18 am on 26 March 2018, Mr Van der Feltz emailed Mr Spinella, as follows:[124]
It has been 11 days since your last email and the rains have returned making the plumbing issues even more urgent. We have obtained advice from our Lawyer.
If no works to resolve the plumbing issues are undertaken within two weeks from now we will be left with no choice but to get the works performed at our expense and charge the Owner.
We repeat our offer to contribute to, or pay for, maintenance and improvements but only after the further lease has been formalized so that we are certain to enjoy the return on our investment.
[124] TB 1813.
At 11.55 am on 26 March 2018, Mr Spinella emailed Mr Van der Feltz and stated:[125]
Please find attached a quote for the coffee shop plumbing works required that was only received today.
As this is a tenant issue, it is the owner expectation that this invoice is paid by the tenant.
Please confirm that you will pay for these works and we shall instruct the plumber to proceed.
The owner has received a separate quote for other plumbing works required which they are happy to proceed with in due course.
Your obligation to pay for these works is not any admission from this office or the landlord in regard to a new lease negotiation and is treated as a separate matter.
[125] TB 1812 ‑ TB 1813.
At 1.39 pm on 26 March 2018, Mr Van der Feltz responded to Mr Spinella, as follows:[126]
Thank you for your quick response and the attached quotation for plumbing works at the Coffee Drive Through. The quote is very vague but it is presumed that the works (including a large soak well with pump‑out facility, connections and site works) will be performed as discussed during the site visit on 1/2/18 with Vince Fimognari, you and I.
As may be obvious from earlier communications about this we do not agree that this is a tenant issue. The problems with the Coffee Drive Through's plumbing began after the Owner had plumbing works done without our knowledge while the Owner has to provide adequate plumbing anyway. Normal plumbing would easily cope with the use of the Coffee Drive Through. We expect the owner to pay for this.
We are glad that the owner agrees to perform the other plumbing works but the term 'due course' is too vague. It is our expectation that the works begin within 2 weeks.
We look forward to your earliest response.
[126] TB 1812.
On 3 April 2018, Mr Van der Feltz emailed Mr Spinella asking for a response to his email of 26 March 2018.[127] Mr Van der Feltz responded:
As a gesture of goodwill we are willing to advance the payment for these works up to the quoted amount of $2850.00 to have these considered at the time of the new lease negotiations and to have these reimbursed if no agreement on the new lease can be reached.
Please ask the plumber to consult with us before undertaking any works.
When will the owner order the other plumbing works?
[127] TB 1811.
On 4 April 2018, Mr Spinella responded by email[128] and stated:
Please note the payment of the tenant works is your cost without any conditions or obligations attached.
Please confirm you would like the plumber to attend to these works at the same time as the landlord works and we will confirm with Vince (Fimognari) the plumber the required works and the timeframe for the works.
[128] TB 1810 ‑ TB 1811.
Later on 4 April 2018, Mr Van der Feltz emailed Mr Spinella[129], and stated:
Please get the works performed as soon as possible.
[129] TB 1810.
Mr Rispoli's evidence was he then asked Mr Fimognari to do the work.[130]
[130] Witness statement of Mr Rispoli, par 21.
At 10.34 am on 5 April 2018, Mr Spinella emailed Mr Van der Feltz, indicating that Mr Fimognari had advised he would do the work on the weekend of 14 ‑ 15 April 2018 or 21 ‑ 22 April 2018 and would require access to the Premises[131]. Mr Spinella stated:
We confirm that all works will be completed and that you will be invoiced $2,850.00 for the tenant portion of the works and that you will be responsible for payment of this account.
[131] TB 1809.
At 10.59 am on 5 April 2018, Mr Van der Feltz responded to Mr Spinella by email and stated:
I note that you have not agreed to accept our condition that the $2850 be repaid to us if a satisfactory lease for the five years commencing April 2021 is not agreed.
We will still pay the $2,850, but we do not believe that this should be our cost. We pay it under protest and reserve our rights in respect of the payment.
If at all possible please have the works performed on the weekend of 14/15 April. I will not be available on the weekend 21/22 April.
Mr Spinella responded by email at 11.26am on 5 April 2018, indicating the 'landlord has consistently maintained that this cost is a tenant cost' and he would advise the plumber of Mr Van der Feltz's weekend preference[132].
[132] TB 1808.
On 9 April 2018, Mr Van der Feltz emailed Mr Spinella indicating he had met with Mr Fimognari who would do the work on the weekend of 28 ‑ 29 April 2018[133]. Mr Van der Feltz also gave evidence he met Mr Fimognari on that date.[134]
[133] TB 1807.
[134] Witness statement of Mr Van der Feltz, par 68.
Between 20 April 2018 and 1 May 2018, Mr Van der Feltz and Mr Spinella exchanged emails in relation to the plumbing work to be done by Mr Fimognari. The focus of Mr Van der Feltz's concern was making sure the septic tank was emptied[135]. Mr Van der Feltz also gave evidence that the CDT was not connected to the septic tank at the rear of the premises, and this was a separate issue to the CDT soak well.[136]
[135] TB 1803 ‑ TB 1806.
[136] Transcript dated 22 March 2022, pages 48 ‑ 50.
It was an agreed fact that, on or around 5 May 2018, Mr Fimognari undertook works including the installation of a soak well in front of the CDT Portion.[137] Mr Van der Feltz gave evidence in cross-examination that Mr Fimognari also installed a second and third soak well on the Premises at this time.[138]
[137] Statement of Agreed Facts, par 14.
[138] Transcript dated 22 March 2022, pages 64 ‑ 65.
At 3.36 pm on 8 May 2018, Mr Van der Feltz emailed Mr Spinella in relation to plumbing work being performed by Mr Fimognari including the septic tank and the installation of two soak wells.[139]
[139] TB 1802 ‑ TB1803.
On 12 May 2018, Mr Fimognari prepared an invoice addressed to 'Rick c/o A. Spinella' for $2,850 for the 'Price for work carried out to coffee shop'[140]. Mr Rispoli's evidence in cross-examination was Mr Fimognari sent this invoice to him and he had never provided Mr Van der Feltz's contact details to Mr Fimognari.[141]
[140] TB 1827.
[141] Transcript dated 23 February 2022, page 116.
On 23 May 2018, Mr Spinella emailed Mr Rispoli attaching copies of invoices received from Mr Fimognari and stated[142]:
Would you like to pay these accounts direct to Vince (Fimognari) or would you like to pay Vince from the rent collected next month and then pay your mum the balance?
Obviously, we will invoice Ric (Van der Feltz) for his invoice of $2,850.00.
[142] TB 1828.
Later on 23 May 2018, Mr Rispoli responded[143], as follows:
I did tell Vince (Fimognari) to deal with Ric (Van der Feltz) directly, if he has a problem getting paid that will be Vince's problem to work out, we will not pay for it.
Mr Rispoli agreed that his mother's portion of the costs of plumbing works should be deducted from next months' rent.
[143] TB 1828.
On 23 May 2018, an officer of Mr Spinella's commercial property group sent an invoice to Mr Van der Feltz which she requested be paid directly to the contractor[144].
[144] TB 1855; Statement of Agreed Facts, par 15.
On 27 July 2018, Mr Van der Feltz responded indicating the payment had been made[145], and stated that:
We paid under protest and reserve our rights in relation to this payment.

Grounds 9 and 10(a): Alleged admission

[145] TB 1856.

The learned magistrate did not regard the pleadings to involve an admission by the respondent that she engaged Mr Fimognari to install the CDT soak well. Her Honour found Mr Fimognari installed three soak wells at the Premises in May 2018. Her Honour also found par 12 of the defence admitted only that the respondent engaged Mr Fimognari to install an undefined soak well on the Premises for the purposes of dealing with water overflow. This was not an admission that the respondent engaged Mr Fimognari to install the CDT soak well.[146]
[146] Transcript of Reasons for Decision dated 9 December 2022, pages 6 ‑ 7.
Grounds 9 and 10(a) challenge this finding. The appellants submit the CDT soak well was the only soak well which either party suggested was installed within the bounds of the Premises, and that the admission must be understood as an admission the respondent engaged Mr Fimognari to install the CDT soak well.[147]
[147] Appellants' written outline of submissions, pars 49 ‑ 50; Appeal transcript, page 18.
I do not accept that submission. The evidence, referred to above, was that Mr Fimognari installed three soak wells and the CDT soak well was not the only soak well installed at the Premises which was the subject of the Lease. The difficulty for the appellants is that the admission is the respondent engaged Mr Fimognari to install a soak well at the Premises rather than at the sub-leased CDT Portion of the Premises. In my view the learned magistrate was correct to reject the appellants' submission that the respondent had admitted engaging Mr Fimognari to install the CDT soak well.

Ground 10(b): Relevance of the quotes

Ground 10(b) asserts the learned magistrate erred in finding that quotations given by Mr Fimognari were irrelevant to the issue of who engaged him to install the CDT soak well. The appellants submit this finding was made in the learned magistrate's reasons which followed her finding that Mr Fimognari's evidence as to who he physically gave the quotes to was unreliable. In this regard, the learned magistrate stated:[148]
However his evidence on these points I find was not critical to the disposition of the proceedings and related to what I would call administrative matters surrounding the provision of the quotes …
[148] Transcript of Reasons for Decision dated 9 December 2022, page 6.
In my view, this is not a finding that the quotes given by Mr Fimognari were irrelevant to the determination of who engaged Mr Fimognari to install the CDT soak well. Rather, it is a finding that Mr Fimognari's evidence as to who he physically gave the quotes to was not critical to the disposition of the proceedings. That was correct in the context where it was an agreed fact that the quotes were provided to Mr Rispoli.[149] In this part of her Honour's reasons the learned magistrate is simply identifying part of Mr Fimognari's evidence which her Honour found to be unreliable but that she did not regard as critical. The learned magistrate was not at this point resolving the question of who engaged Mr Fimognari to install the CDT soak well.
[149] Statement of Agreed Facts, pars 12 and 13.
It follows that ground 10(b) is not established on the basis that it proceeds on a misconstruction of the learned magistrate's reasons.

Ground 10(c): Regard to quotes and invoice

By ground 10(c), the appellants assert the learned magistrate erred by having 'no regard' to the terms of Mr Fimognari's quotation and invoice which were inconsistent with a finding the appellants engaged Mr Fimognari to install the CDT soak well.
I do not accept the learned magistrate had no regard to the quotation and invoice. The magistrate made express reference to those documents and payment of the invoice.[150] The learned magistrate later said she was not persuaded the respondent engaged Mr Fimognari 'for the reasons I have already given',[151] which must include the findings about the quote and invoice.
[150] Transcript of Reasons for Decision dated 9 December 2022, pages 21 ‑ 22.
[151] Transcript of Reasons for Decision dated 9 December 2022, page 27.
Further, ground 10(c) would not provide a basis for setting aside the magistrate's orders dismissing the appellants' claim. The finding was not a basis for the learned magistrate's rejection of the claims for breach of the Sewerage Regulations or breach of the Lease terms. While the magistrate relied on the finding in rejecting the negligence claim, the negligence claim could not be established given the finding, which has not been successfully challenged in this appeal, that Mr Fimognari acted on Mr Van der Feltz's advice that only clean water flowed into the soak well.
Further, while the conclusion the appellants engaged Mr Fimognari was the basis on which the magistrate rejected the restitutionary claim, that claim could not be established given the finding that the responsibility for the discharge of the waste water from the CDT laid with the appellants under the Lease. Even if the learned magistrate erred in concluding the appellants engaged Mr Fimognari to install the CDT soak well, the error would not have been material to the dismissal of the appellants' claim.
For these reasons, ground 10(c) is not established.

Ground 11: Regulation 50 of the Sewerage Regulations

Ground 11 asserts the learned magistrate erred in finding the appellants had not established a breach of reg 50 of the Sewerage Regulations.
Regulation 50 provided that all 'effluent and liquid wastes from premises shall be conducted by means of' a drain to certain material as set out by the regulation. 'Liquid wastes' was defined in reg 3 of the regulations to include 'wastewater', and 'wastewater' was defined to mean 'greywater and blackwater'. 'Greywater' was defined, relevantly, to mean water containing kitchen, laundry or bathroom waste.
In relation to the alleged breach of reg 50, the learned magistrate stated:[152]
I find that Mr Van der Feltz knew the liquid waste from (indistinct) kitchen was to egress from the CDT by part to a soak well, however this is not what he told Mr Fimognari. I find that it was the tenant who created and operated the CDT in such a manner.
[152] Transcript of Reasons for Decision dated 9 December 2022, page 25.
The appellants submit this is a finding that reg 50 was not breached by reason of what Mr Van der Feltz told Mr Fimognari. The appellants submit the magistrate erred in this approach as to whether there was a breach of reg 50 turns on the actual state of affairs rather than what Mr Van der Feltz told Mr Fimognari.[153]
[153] Appellants' written outline of submissions, pars 57 ‑ 60; Appeal transcript, page 23.
I do not accept the appellants' characterisation of the learned magistrate's reasons. Under reg 50, it is the disposal of liquid wastes which is regulated. Any breach of reg 50 is by the operator of the CDT allowing liquid waste to flow into apparatus which is not specified in reg 50 of the Sewerage Regulations. Regulation 50 was not breached by the installation of the soak well. Any breach of reg 50 was by the conduct of the appellants and their sub-tenants rather than the respondent. Ground 11 is not established.

Grounds 12 and 14: Consequential errors

Grounds 12 and 14 assert the magistrate's ultimate conclusions as to aspects of the appellants' claim were in error 'as a consequence of the error identified in grounds 1 to 11'. Counsel for the appellants accepted these grounds stood or fell with my findings on other grounds.[154] As none of grounds 1 to 11 are established, grounds 12 and 14 are also not established.
[154] Appeal transcript, page 24.

Ground 13: Error in damages assessment

Ground 13 challenges part of the learned magistrate's conclusion that the appellants had not suffered any damage.
As the other grounds of appeal challenging the learned magistrate's conclusion that the respondent was not liable in any event have failed, success on ground 13 could not provide a basis for setting aside the magistrate's orders. It is therefore unnecessary for me to resolve ground 13.

Conclusion

For the above reasons, the appeal should be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
SF
Associate to the Judge
15 APRIL 2024