Yigiter v Al Haery

[2021] NSWCATCD 125

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Yigiter v Al Haery [2021] NSWCATCD 125

Hearing dates:

13 September 2021

Date of orders:

2 December 2021

Decision date:

02 December 2021

Jurisdiction:

Consumer and Commercial Division

Before:

G Ulman, Senior Member

Decision:

(1) Pursuant to section 72(1)(f)(iii), declare that the respondent is indebted to the applicant for rent arrears in the amount of $65,475.

(2) Pursuant to section 72(1) order that :

(a) Within 28 days the respondent pay to the applicant the sum of $45,975; and

(b) The respondent pay to the applicant the sum of $19,500 by 24 equal and consecutive monthly instalments of $812.50, with the first instalment to be paid within 28 days.

Catchwords:

LEASES AND TENANCIES — Retail leases — Claim for rent arrears and order for possession — Whether the lessor was prohibited by the Retail and Other Commercial Leases (COVID-19) Regulation 2021 from taking action in the Tribunal for payment of outstanding rent and for an order for possession — Whether lease has been validly terminated

Legislation Cited:

Retail Leases Act 1994 (NSW)

Retail and Other Commercial Leases (COVID-19) Regulation 2021

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Yildiz Yigiter (Applicant)
Hasan Al Haery (Respondent)

Representation:

Z Akbazarda (Agent) (Applicant)

Solicitors:
Asad Lawyers (Respondent)

File Number(s):

COM 21/21036

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. The applicant in these proceedings is the owner of a property in Auburn (the property). The ground floor, loft room and toilet within the property (the premises) have been occupied by the respondent for approximately 22 years. At the present time he occupies the premises under a registered five year lease that commenced on 21 March 2018 and ends on 20 March 2023 (the lease).

2. The applicant is seeking an order that the respondent pay outstanding rent and an order for possession of the premises.

3. The respondent, a barber, claims to have had his business adversely affected by the COVID-19 pandemic (the pandemic). He is defending the proceedings on the basis that the applicant has failed to comply with the Retail and Other Commercial Leases (COVID – 19) Regulation 2021 (the Regulation) and the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles During COVID-19 (the Code) and because, he says, the respondent agreed to accept a reduced rent of $4,000 per month.

Jurisdiction

4. The lease defines the “permitted use” of the premises as “Barber”. It is a use that falls within the retail shop business referred to as “hairdressers” found in schedule 1 of the Retail Leases Act (the Act). The lease is therefore a “retail shop lease” as defined under the Act, the applicant’s claim is a “retail tenancy claim” under section 70, and the Tribunal has jurisdiction to make any one or more of the orders set out in section 72 of the Act.

Relevant provisions of the lease

5. Clause 5 and 6 of the lease require the respondent to pay the annual rent, including GST, by monthly instalments on the 21^st day of each calendar month. Clause 8 requires the respondent to pay 50% of the water rates and 50% of water used. There is one option to renew for a period of five years.

6. Clause 25.2.2 of the lease permits the applicant to terminate the lease if rent or any other money due under this lease is 14 days overdue irrespective of whether or not the applicant has made any formal demand for it. By clause 25.5.1, payment of rent within 14 days of the due date (even if the respondent accepts late payment) is an essential term of the lease.

Relevant background facts

7. By late June 2020, which was a few months after the first wave of the pandemic hit Sydney, the respondent had fallen behind in his rental payments. The evidence picks up from 24 June 2020 with an email from the respondent’s solicitor, Mr Al-Shadidi, to a person at Hamson Real Estate Pty Ltd trading as National Property, the applicant’s managing agent (the agent). The email reads as follows:

We refer to the above and to the arrears left on lease of the above premise.

We note that the agent has threatened closure of the shop by close of business today.

We are advised that the above-intended threat of terminating the lease and or locking up the premise remains UNLAWFUL.

We intend to take this matter to Office of Small Business Commissioner for a mediation. An application will be prepared and lodged in due course.

We ask that you refrain to do anything that is adverse to the above tenant until 5:00 p.m. this coming Friday to allow us time to lodge this application.

All our client's rights are reserved.

8. Mr Al-Shadidi followed this up with an email on 29 June 2020 to a person by the name of Danielle at the agent. This email reads as follows:

We are further advised that no proper notice of termination was given to the Tenant.

And the lady that attended his shop to give him the attached document on or about 20th June 2020 handed the said letter of 9th June 2020 almost 11 days later. We are concerned with this type of tactics.

As advised earlier, our office intends to prepare an application to Office of Small Business Commissioner for a mediation.

We will send a copy of this application to your office in due course.

9. There is no evidence of Mr Al-Shadidi or the respondent having applied to the Office of Small Business Commissioner for a mediation. The document said to be attached to this last email is not in evidence.

10. On 8 July 2020, Ms Serah Jebara, the agent’s office manager, sent an email to Mr Al-Shadidi. In relevant part it reads as follows:

In order to establish a rental reduction, can you please request for Hasan to complete the attached financial hardship form that we have already supplied him with.

Once completed, please email back to our agency with supporting documents and evidence of loss of income accordingly.

Please provide these documents by close of business Friday the 10th of July 2020.

We have sought advice regarding this matter and as you may be aware, this is now a breach of contract given that the arrears are pre covid-19 and as there was no loss of income established.

This will leave the landlord no other choice but to take this matter further.

We thank you in advance for your cooperation and we look forward to hearing from you.

11. Mr Al-Shadidi replied by email on 10 July 2020. In relevant part it reads:

See attached signed form.

Tenant instructed us to advise the lessor that he is happy to pay reduced rent of $4,000.00 effective from 1st October 2020.

12. The form attached is on the agent’s letterhead with a subheading “Statement of Financial Position”. It is dated 8 July 2020 and contains the respondent’s handwritten responses and signature. The form asks for an outline of the assistance being requested by the respondent and its duration, the steps taken by the respondent to obtain assistance from alternative sources of funds (the examples given are a small business loan, superannuation or parents), and the respondent’s current position. The form also contains a request to attach the following supporting documentation:

Most recent payslip

Letter of termination

Statements for all bank accounts for the past 30-60 days

Current proof of income

Any other relevant documents

Proof of income prior to COVID-l 9

Centrelink Correspondence

13. In response to the request for an outline of assistance the respondent was expecting from the applicant and the duration, he wrote in the form:

From 1/10/20 and on - $4000 monthly

Happy to pay monthly rent of $4000 from October 2020 onwards.

14. In response to the question what steps have been taken by the respondent to obtain financial assistance from alternative sources he wrote:

Nothing/Nil

No business/No money

15. As for his current situation the respondent wrote:

Not good

No business

16. No supporting documents were attached to the form that was returned to the agent by the respondent’s solicitor.

17. Danielle from the agent’s office sent an email to Mr Al-Shadidi on 10 July 2020. In it she pointed out that page 2 of the form required the supporting documents and said that without them the form was invalid. After setting out in the email the list of the documents that were required (being the same list that was in the form), Danielle said this:

I have also attached for your reference your clients status report and ledger as they are owing a large amount of rent, please confirm with your client when this will be paid.

Please be mindful, the owner was and still is willing to grant the tenant a 20% deferred payment discount for 3 months.

18. On 13 July 2020, Daniel sent this email to Mr Al-Shadidi:

Kindly respond to the email below at your earliest convenience.

Also to correct myself, it is a 20% off rental payment for 3 months not a deferred payment. (Emphasis added by Danielle)

Please advise.

19. There being no response from Mr Al-Shadidi, Danielle sent him a follow-up email on 28 July 2020 which, in relevant part reads as follows:

I have emailed you twice regarding the below matter, this is your final notice.

Please send the relevant documentation so I can assist your client further.

20. On 6 October 2020, Ms Serah Jebara from the agent’s office, sent an email to Mr Al-Shadidi which reads as follows:

As per my telephone conversation with the landlord (Yildiz) earlier she has strictly emphasised on the fact that NO agreement of $4000.00 was made and she in fact DISAGREED to this proposal.

It is quite absurd as to how a conversation can be turned around given that nothing was placed in writing. Yildiz advised Hassan that she will contact yourself today to discuss a deferred payment option.

Once again, I cannot stress enough the fact that Yildiz DID NOT and WILL NOT agree to a discount rent.

21. This email appears to have been in response to an email sent earlier the same day by Mr Al-Shadidi. His email is not in evidence. There is then a gap in the chronology of events until March 2021.

22. There are four documents on the Tribunal’s file which all bear a filing stamp dated 16 June 2021. They consist of the first page of the Tribunal’s notice of order dated 18 June 2021, a letter and a notice of termination both dated 22 March 2021, a five-page document dated 18 June 2021 consisting of a Tenant Status Report and Rental Ledger both dated 18 June 2021. There is no covering letter to indicate who filed them and why but the Tribunal’s document report records that they were filed over the counter and the party they were attributed to was Hamson Real Estate Pty Ltd. The agent had originally been named as the applicant but this was later corrected by the Tribunal.

23. The 22 March 2021 letter is on the agent’s letterhead and reads as follows:

FINAL RENTAL ARREARS PAYMENT DEMAND!

Hasan Al Aeiry

[Address of the premises]

Dear Hasan,

RE: RENTAL ARREARS - 32 AUBURN ROAD. AUBURN NSW 2144 Our records show that your rent is paid to 21/06/2020. This makes you «$59,600.00» in arrears for rent.

As discussed with myself via telephone conversation, the landlord has granted a 20% off rent discount for 3 months (April 2020, May 2020, June 2020) due to the covid pandemic. However, it has been made clear to you In correspondence, you have still not paid your monthly rent in full!

We have granted you till no later than the 29th of March 2021 to pay your rent arrears amount of $59,600.00.

Your urgency on this matter is appreciated.

24. The notice of termination of lease in relevant part reads as follows:

NOTICE OF TERMINATION OF LEASE

(under the Commercial Lease Agreement)

To: (Tenant's Names and Address)

Hasan Al Aeiry

[Address of the premises]

Item Schedule

Item

1. TENANT/S

Name/s of Tenant/s shown on Commercial Lease Agreement:

HASAN AL AEIRY

2. LANDLORD / AGENT

Hamson Real Estate Pty Ltd T/as National Property

3. LEASE DETAILS

Premises Address: [Address of premises]

Lease Commencement Date: 21 / 03 / 2018 Lease End Date: 20 / 03 / 2023

4. REASON FOR NOTICE

Whereas you as Tenant are in breach of covenant with respect to the Commercial Lease Agreement in that you have failed:

To comply with a notice served on you under Section 129 of the Conveyancing Act 1919

√ To make payment of rent in accordance with the Rent provisions of the Commercial Lease Agreement

IMPORTANT (COVID-19 Impacted Lease):

Regulation: means Retail and Other Commercial Leases (COViD-19) Regulation (No 3) 2020.

Impacted Lease: has the same meaning as impacted lease in the Regulation.

Continuing Protection: despite the repeal of the Regulation, Section 88 of the Retail Leases Act 1994 provides that the Regulation continues to apply to impacted leases in relation to anything which occurred while the lease was an Impacted lease.

Important Warning: before issuing a notice of termination, the Landlord/Agent should first review the Regulation to determine whether they are issuing the notice for anything which occurred while the Tenant was under an Impacted Lease

The aforementioned Commercial Lease Agreement is hereby terminated forthwith upon service of this Notice, except where this Notice is being served in respect of the Premises being permanently unfit to occupy, in which case the aforementioned Commercial Lease Agreement is hereby terminated 14 days / months after service of this Notice.

Landlord/Agent: [illegible signature]      Date: 22 / 03 / 2021

25. The tenant status report dated 18 June 2021 is a one page document that records the total outstanding to be $60,757.13. The trust ledger is a four page document that records, amongst other things. the rent paid by the respondent, the rent payable and the amount due from November 2016 to June 2021. It also contains this notation: “ 2/6/20 Landlord granted 25% rent reduction for 3 months”. The ledger also records that from April 2019 up to and including February 2020 the respondent had been paying the full rent of $6,500 per month. In May 2020 he paid two amounts of $2000 and a further $2000 in each of July, August and September. He then paid $4000 per month from October 2020 up to and including 11 June 2021.

26. On 23 March 2021, Mr Al-Shadidi sent a lengthy letter to the agent which reads as follows:

We refer to the above & wish to confirm that we continue to act for Mr Al Haery in this matter. In reference to your email and letter of demand dated 22^nd March 2021 (copy attached), we have instructions to advise as below:

The NSW Government has implemented the Code of Conduct announced by the Prime Minister on 7 April 2020 to support commercial lessees in financial distress due to the impacts of COVID-19. On 24 April 2020, the NSW Government enacted the Retail and Other Commercial Leases (COViD-19) Regulation 2020 to implement the Code of Conduct. The Regulation initially applied for a period of six-months. On 24 October 2020, the NSW Government extended the protections under the Regulation for eligible lessees to 31 December 2020. The NSW Government has then announced a further extension to 28 March 2021.

We hereby further submit that our client is an eligible tenant who has found it difficult to meet its lease commitments due to the COVID-19 pandemic and loss of business and Income by 90%. Indeed, we are advised that the lessee has made request to negotiate rent relief on few occasions but the lessor; unlawfully and or unreasonably refused to give the tenant such relief.

Negotiations between lessee and lessor must be in good faith and have regard to:

The economic impact of the COVID-19 pandemic.

The leasing principles in the Code of Conduct. These include principles 3,4 and 5 that refer to rent reduction and apply a case-by-case basis:

Principle 3: Lessors must offer reductions in rent (in the form of deferrals and waivers) proportionate to the lessee’s decline in turnover

Principle 4: Rent waivers (as apposed to deferrals) must constitute at least 50 per cent of the rent reduction

Principle 5: Any deferred rent must be paid back over the balance of the lease term or for a period of no less than 24 months, whichever is greater.

Clearly the lessor is in breach of her obligations to give the tenant the said 50% reduction/waiver and or any other 50% deferral. We hold the lessor accountable for the above outlined breaches & ask the lessor to immediately attend to rectification of such breaches (the current demand- based on the above and the wrong figures provided thereof- is unlawful).

Lessors of eligible commercial lessees cannot take certain actions due to COVID-19 unless they first comply with their obligations to renegotiate rent and mediate disputes. These actions include;

Evicting a lessee for non-payment of rent or outgoings.

Evicting a lessee because the business is not open during the hours specified in the lease,

Recovering a security bond or guarantee for non-payment of rent or outgoings.

Increasing a lessee’s rent

Charging interest or fees on any unpaid rent.

The Tenant is shocked with your letter of demand dated 22^nd March 2021 & find it unlawful/invalid and void. Please stop making unlawful demands and or stop threatening our client unlawfully.

Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period if extended beyond 28/03/2021).

Landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals of up to 100 per cent of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant’s trade during the COVID-19 pandemic period and a subsequent reasonable recovery period.

Rental waivers must constitute no less than 50 per cent of the total reduction In rent payable under principle #3 above over the COVID19 pandemic period and should constitute a greater proportion of the total reduction in rent payable in cases where failure to do so would compromise the tenant’s capacity to fulfil their ongoing obligations under the lease agreement. Regard must also be had to the Landlord’s financial ability to provide such additional waivers.

Payment of rental deferrals by the tenant must be amortised over the balance of the lease term and for a period of no less than 24 months, whichever is the greater, unless otherwise agreed by the parties.

Landlords should where appropriate; seek to waive recovery of any other expense (or outgoing payable) by a tenant, under lease terms, during the period the tenant is not able to trade.

The NSW Government extended the protections under the Regulation to 28 March 2021 for eligible lessees. We again draw your attention to the Retail and Other Commercial Leases (OOVID19) Regulation (No 3) 2020 which commences 1 January 2021.

Under the leasing principles, lessors must reduce rent In proportion to the lessee's decline in turnover. This means If a lessee has experienced a 40 per cent decline in turnover due to COVID-19, then the lessor must provide a 40 per cent reduction in rent As a default position, at least 50 per cent of any rent reduction must be in the form of a rent waiver with the remainder a rent deferral. Any deferred rent must be paid back over the balance of the lease term or for a period of no less than 24 months, whichever is greater.

In light of the above, we accordingly & strongly believe that your demand for payment of $59,600.00 is unlawful and too expensive for you. Our client reserves its right to make urgent application to the Court or NCAT should the lessor acts (sic) unlawfully and in breach of the above regulations & laws.

We finally suggest that lessor seeks independent legal advice from a qualified independent solicitor, as to her rights and obligations in this matter.

All future correspondence concerning this matter should be directed to our office only. Should you wish to discuss the matter further or need more information please do not hesitate to contact the undersigned [phone numbers provided].

Thank you again and remain.

27. There is a further gap in the history of this matter until 28 April 2021 when the Deputy Registrar, Retail Tenancy Disputes issued a certificate under section 68 of the Act, that a mediation has not taken place. The schedule to that certificate reads:

The Registrar has made an offer of mediation to the lessee using contact details provided by the lessor. The Registrar has received no response from lessee to the offer of mediation.

Mediation can still be arranged on a future date agreed to by both parties

28. There is no evidence as to when the application for mediation was made, what were the respondent’s contact details provided by the applicant or what steps were taken by the Registrar to contact the respondent about participating in a mediation.

29. The applicant’s agent filed the retail lease application with the Tribunal on 11 May 2021. In it the applicant seeks an order that the respondent pay $62,100. The application sets out the following reasons for seeking the order:

Tenant refusing to pay rent in full without evidence of financial hardship. We would like owing rent paid & for the tenant to vacate premises immediately.

30. On 18 June 2021, Senior Member Goldstein made a number of interlocutory orders including:

By consent, the name of the applicant is changed to Ms Yildiz Yigiter.

The application is amended to include a claim for possession of the premises.

31. Orders were also made by the Senior Member for the filing of any further documents the parties intended to rely upon.

Applicant’s evidence

32. No witness statements filed on behalf of the applicant.

33. The applicant’s evidence consists of:

1. the documents attached to the retail lease application (which included the lease and also some of the correspondence to which I have referred);

2. the documents filed with the Tribunal’s Registry on 18 June 2021 which included the notice of termination and letter both dated 22 March 2021;

3. a letter dated 22 July 2021 from Mr Akbarzada to the Registrar that was filed with the Tribunal the same day. Attached to the letter is another copy of the original application and lease, a tenant status report and tenant trust ledger report both dated 22 July 2021, the respondent’s statement of financial position previously provided to the agent, a bankruptcy search in the name of “Hasan Al Haeiry”, some of the email correspondence already referred to, a photocopy extract from the Code of the application of the principle of proportionality, and an email dated 22 July 2021 from a Mr Zabi Akbarzada (Mr Akbarzada), a real estate agent also with National Property, to Mr Al-Shadidi.

34. The 22 July 2021 letter refers to what is described as the “update copy of the tenant’s rental ledger along with their status report” and then says this:

Further to the above, unfortunately we were not aware of the 12 months’ rent reduction from April 2020 - March 2021 so therefore we have updated our records and have made the correct amendments on the rental ledger as well…

Though, we did request Mr Al Shadidi, who is Mr Al Haeiry's lawyer in several emails dated on 8 July, 10 July & 28 July 2020 to ask Mr Al Haeiry to supply us with the supporting documents and evidence of loss of income but he failed to do so. Nevertheless, Ms Yigiter has still agreed to give Mr Al Haeiry the 50% (25% waived & 25% deferral) reduction out of good faith…

35. Mr Akbarzada goes on to say in his letter that the respondent’s failure to notify the applicant or the agent that he was bankrupt was a breach of the lease and therefore the applicant was seeking an order that the respondent deliver up vacant possession immediately and pay all arrears in full up until the date the premises are vacated and the keys returned. Finally the letter refers to the assertion in the respondent’s 8 July 2021 statement that an agreement had been reached between the parties that no action would be taken against the respondent and the applicant was happy for him to pay reduced monthly rent $4000. In response to this assertion, Mr Akbarzada refers to the email sent to Mr Al-Shadidi on 6 October 2020.

36. The bankruptcy search shows that the person named was discharged by law on 18 April 2017.

37. The tenant status report records a total outstanding of $59,132.14. The report identifies rent of $39,475.01, an additional amount of $157.13 said to be an invoice that was 90 days overdue, and an outstanding invoice of $19,500. That last invoice, which accompanies the report, describes the amount owing as “25% deferral payment from April 2020 – March 2021.

38. The 22 July 2021 email from Mr Akbarzada to Mr Al-Shadidi set out calculations showing how he arrived at $39,475 in current outstanding rent and $19,500 in deferred rent. The relevant parts of that email are as follows:

Please advise Mr Al Haeiry that we have reduced his rent from April 2020 - March 2021 by 50% (25% waived & 25% deferred). I've attached an updated copy of his rental ledger for you.

Below is the calculation:

Current Rental Arrears: $73,600 including GST (as of 21/07/2021)

Annual Rent: $78,000 including GST

Monthly Rent: $6,500 including GST

50% of $78,000 = $39,000

25% (waived) = $19,500 (25% was already waived off in June 2020 from 22/01/2020 - 22/04/2020 so therefore remaining amount of the 12 months = $14,625)

25% (deferred) = $19,500

$6,500 x 25% = $1,625

$1,625 X 3 = $4875 (3 months of 25% waiver-already granted from 22/01/2020-22/04/2020)

$1,625 X 3 = $19,500 (12 months of 25% waiver)*

$19,500- $4875 = $14,625 (Remaining of the 25% waiver-9 months)

$39,000 - $4875 (3 months of 25% waiver) = $34,125

$73,600 - $34,125 = $39,475 (current rental arrears)

Please advise Mr Al Haeiry that he will be required to pay back the other 25% ($19,500 - deferral payment) ASAP as Miss Yigiter is seeking an eviction from NCAT. Otherwise, he will be required to make a payment of $812.50 per month for the next 24 months.

P.S. The last payment that we received from Mr Al Haeiry was $4000 and that was made on the 11/06/2021. No other payments have been made since.

39. The calculation marked with an asterisk appears to be a typographical error and should read “$1,625 X 12 = $19,500 (12 months of 25% waiver)”.

40. At the outset of the hearing Mr Akbarzada advised that the applicant was claiming rent arrears $45,975.00 and an order for possession. That amount comprised the following:

1. Rent arrears - $39,475.00

2. An additional month’s rent - $6,500 (inclusive of GST)

He reiterated that deferred rent of $19,500 was also said to be owing to the applicant.

Respondent’s evidence

41. The respondent’s solicitor filed three statements. Two statements were made by the respondent and dated 1 June 2021 (June statement) and 8 July 2021 (July statement). The third statement, also dated 8 July 2021, was made by Mr Salam El Sunbuli (Mr. El Sunbuli)

42. In the June statement, the respondent says that at no stage has he received any request or invitation, either from the applicant or the Office of Small Business Commissioner, to attend the mediation, he has not seen any evidence of any attempt by the applicant to have a mediation and he is willing to attend the mediation with the applicant. He says the respondent failed to provide any formal response to Mr Al-Shadidi’s 23 March 2021 letter. The letter is attached to the statement. The respondent also says that he is seeking the following orders from the Tribunal:

1. the applicant’s application be dismissed.

2. The applicant redirected to apply for mediation with the Office of Small Business Commissioner.

3. Legal costs of $440 payable to his lawyers.

4. Any other order consistent with the above orders as the Tribunal sees fit and proper.

43. In the July statement, the respondent says the applicant failed to comply with the orders made by the Tribunal on 18 June 2021 in failing to furnish admissible evidence and has failed to provide any formal response to his solicitors 23 March 2021 letter. He says the applicant is in breach of the Code and any purported notice of termination based on those figures, according to his solicitor, is invalid.

44. At the hearing I gave the applicant leave to rely on the evidence provided under cover of the 22 July 2021 letter. In relation to the admissibility of the applicant’s evidence, the rules of evidence do not apply in proceedings in the Tribunal’s Consumer and Commercial Division, where these proceedings are being heard.

45. Attached to the July statement are a number of financial documents which the respondent says reflect what he describes in the statement as the adverse or negative impact of the pandemic on his income and business, which he says is continuing. The respondent says the applicant did not apply 50% reductions prescribed by the Code and there is no evidence of the applicant having complied with the Code. He then says this:

The lessor (not long ago & after issuance of the invalid notice of the termination) attended the shop in person and said to me: “I will not take any legal action against you - you can stay in the shop - you are a brother to me & I don’t want you to leave the shop. I am only happy that you & your family are healthy during this pandemic & it is fine that you pay this reduced monthly rent of $4,000.00". I have a witness who was present during this conversation. Accordingly, I was shocked with this NCAT application.

46. The respondent then goes on to say in his statement that he is seeking to have the application dismissed and for the applicant to pay his legal costs of $2750 GST inclusive up to that point in time.

47. The financial documents attached to the July statement consist of tax returns for the financial years 2019 and 2020 and GST activity statements. There is also a jobkeeper transaction summary from 14 June 2020 to 15 April 2021 which records a series of jobkeeper payments having been made during that period.

48. The financial documents are in the name of Hasan Al Haeiry. It is assumed that Hasan Al Haeiry and the respondent are one and the same.

49. In his statement, Mr El Sunbuli says that he gets his haircut at the respondent’s shop. He then, relevantly, says this:

I witnessed an old lady (aged in her 60/70s) attended the Tenant's shop and words to effect of below were exchanged between Hasan and her: Hasan Said: "I am leaving the shop as there is no (sic) enough income/business — I only can pay $4,000 rent". She said: "You are like a brother to me. I don't want you to leave the shop. Pay as much as you can".

Hearing

50. At the hearing, Mr Akbarzada, appeared for the applicant and Mr Al-Shadidi appeared for the respondent. The hearing was conducted by telephone. The respondent and Mr El Sunbuli were not cross examined.

51. Mr Akbarzada said that the applicant relied on the documents that had been filed on her behalf, the last rental payment made by the respondent was $4000 in June 2021 and that he was always in arrears. Further, the first occasion that any financial information was received regarding the respondent’s circumstances was when the respondent’s July statement was served, after the proceedings had been commenced.

52. Mr Akbarzada also complained about the respondent having previously been made bankrupt. I pointed out to Mr Akbarzada that the bankruptcy search disclosed that the respondent had been discharged from bankruptcy and, in any event, I did not consider the fact that he had been made bankrupt relevant in the context of these proceedings.

53. Mr Al-Shadidi did not dispute the calculation of the $45,975 claimed by the respondent but submitted that the applicant had not complied with the Code. He said there were no monies outstanding because the respondent was paying $4000 a month as had been agreed with the applicant, and he was happy to continue to pay that amount.

54. Mr Al-Shadidi also submitted that the applicant had not complied with section 129 of the Conveyancing Act although this submission was withdrawn when it was pointed out to him that the section does not apply where demand is only made for outstanding rent.

55. It was accepted by Mr Al-Shadidi that the respondent had not provided any financial information until his July statement was filed.

The COVID-19 Regulations

56. The Code was adopted by the Federal Government on 7 April 2020. The Code does not of itself regulate parties to a retail lease to address the consequences or impact of the pandemic. In New South Wales that regulatory power is found in section 87 of the Act which came into force on 27 March 2020. According to the section, the aim of that power is to make regulations that respond to the public health emergency caused by the pandemic and, depending upon the particular circumstances, this includes the prohibition of recovery of possession of premises by a lessor, the termination of a lease by a lessor, and regulating or preventing the exercise of enforcement or other rights of the lessor.

57. Since 24 April 2020, the New South Wales Government has made regulations to provide certain protection for retail tenants impacted by the pandemic, provide a process by which the parties to the lease can negotiate temporary relief arrangements, and prescribe how retail landlords can exercise certain rights under retail shop leases during the pandemic. The regulations are:

1. Retail and Other Commercial Leases (COVID-19) Regulation 2020 (Regulation No.1) which commenced on 24 April 2020. The regulation was amended on 3 July 2020.

2. Regulation 1 was repealed and replaced by the Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 (Regulation No.2) which commenced on 24 October 2020.

3. Regulation No.2 was replaced by the Retail and Other Commercial Leases (COVID-19) Regulation (No 3) 2020 (Regulation No.3) which commenced on 1 January 2021 and ended on 28 March 2021.

4. The Retail and Other Commercial Leases (COVID-19) Regulation 2021 (Regulation No.4) commenced on 13 July 2021 and continues until repealed on 13 January 2022.

58. The first three regulations are the relevant regulations for the purposes of these proceedings. Unless the context otherwise requires, I will simply refer to them together from now on as “the Regulations”.

59. Section 88 of the act contains the savings of protection granted during the pandemic. Subsection (1) provides that:

The Retail and Other Commercial Leases (COVID-19 Regulation (No 3) 2020 continues to apply, despite the repeal of that regulation, to anything occurring in relation to a lease while the lease was an impacted lease within the meaning of that regulation.

60. The Regulations specify a “prescribed period” during which a lessor under a retail shop lease entered into prior to 24 April 2020 is prohibited or restricted from taking “prescribed action” under an “impacted lease” against a lessee, who is by definition an “impacted lessee”, for a failure to pay rent or outgoings, or the business not being opened for business during hours specified in the lease. The combined prescribed period across all three regulations is 24 April 2020 until 28 March 2021

61. Under the Regulations, an impacted lease is defined to mean “a commercial lease to which an impacted lessee is a party”.

62. To be an “impacted lessee” for the purposes of the Regulations, the lessee must be eligible for the Commonwealth Government’s jobkeeper scheme. For the period 24 April to 31 December 2020 it was also an eligibility requirement for the lessee’s business to have had a turnover in the 2018-2019 financial year of less than $50 million and, for the period 1 January to 28 March 2021, a turnover of less than $5 million in 2018-2019.

63. There is no dispute that the respondent is an impacted lessee and the lease is an impacted lease as defined under the Regulations. I would add that on the evidence presented I am, in any event, comfortably satisfied that the respondent did qualify for jobkeeper, the turnover of his business for the financial period 2018 – 2019 was less than the threshold amounts specified in the Regulations and, therefore, he was at all relevant times an impacted lessee and the subject lease was therefore an impacted lease for the purpose Regulations.

64. The Regulations specifically prohibit a lessor during the prescribed period from taking “prescribed action” against an impacted lessee for breach of an impacted lease that is either a failure to pay rent or outgoings, or not opening for business during the hours specified in the lease. Relevant for the purposes of these proceedings is that the definition of “prescribed action” includes taking action under the provisions of a commercial lease (which is, by definition, a retail shop lease) in a court or tribunal for:

1. the eviction of the lessee from premises the subject of the commercial lease;

2. termination of the commercial lease;

3. possession; and

4. any other remedy otherwise available to a lessor against the lessee at common law or under the law of New South Wales.

65. The Regulations also impose an obligation on a lessor to renegotiate rent and other terms of the lease before taking prescribed action. These obligations are found in clause 7 of the Regulations. That clause has undergone some changes since Regulation No. 1 was made so it is necessary to look at what it relevantly provided for during the period 24 June to 6 October 2020

66. From 24 April 2 to July 2020 clause 7 prohibited a lessor from taking or continuing prescribed action against an impacted lessee for breach of the lease that consisted of a failure to pay rent during the prescribed period unless the lessor complied with the clause. The clause required that if an impacted lessee was party to a commercial lease, then any party to the lease may request the other party to renegotiate the rent payable and other terms of the lease. If a party to a lease receives such a request, it must renegotiate in good faith the rent payable and other terms of the lease. Those renegotiations must have regard to the economic impacts of the pandemic and the principles in the Code.

67. Clause 7 was amended with effect from 3 July 2020 with the addition of the following subclauses:

(3A) An impacted lessee must give the lessor the following in respect of the impacted lease –

a statement to the effect that the lessee is an impacted lessee,

evidence that the lessee is an impacted lessee.

(3B) If the impacted lessee does not comply with subclause (3A), the lessor is taken to have complied with this clause.

68. Regulation (No.2) added the requirement that a party to the impacted lease may make a second or subsequent request to renegotiate the rent payable and other terms of the impacted lease. That second or subsequent request had to be made during the prescribed period and cannot relate to rent for a period for which the rent has already been reduced, waived or deferred following renegotiation. The parties are also required by the clause to commence renegotiations within 14 days of receiving the request or another period agreed by the parties. Regulations No.2 continued to require an impacted lessee to give the lessor a statement to the effect that the lessee is an impacted lessee and evidence that the lessee is an impacted lessee. There was also no change to the provision which released the lessor from complying with clause 7 if the impacted lessee did not comply with the requirements just mentioned.

69. When Regulation (No.3) came into effect, there were no material changes to clause 7.

70. Clause 8 of the regulations provides that Part 8 (Dispute Resolution) of the Act extends to an impacted commercial lease as if it were a retail tenancy dispute within the meaning of that Part. The clause goes on to define “impacted commercial lease dispute” as including:

…any dispute concerning the liabilities or obligations (including any obligation to pay money) under a commercial lease to which an impacted lessee is a party, being liabilities or obligations which arose under the commercial lease concerning circumstances occurring during the prescribed period…”

71. Part 8 of the Act includes section 68 which provides, in subsection (1) that a retail tenancy dispute must not be the subject of proceedings until the Registrar has certified in writing that mediation under this part has failed to resolve the dispute. The section also requires the Registrar to certify that the mediation under Part 8 has failed to resolve the dispute if satisfied that any one or more of the parties to the dispute has refused to take part in or has withdrawn from mediation of the dispute or matter.

71. By clause 9 of the Regulations, the Tribunal is required to have regard to the Code when making a decision in relation to the recovery of possession of premises from an impacted lessee, termination of an impacted lease by the lessor, or the exercise of any other right of a lessor under an impacted lease.

72. The following leasing principles in the Code are relevant to this dispute:

1. Principal 1: Landlords must not terminate leases due to non-payment of rent during Covid – 19 pandemic period (or reasonable subsequent recovery period).

2. Principle 3: landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals (as outlined under “definitions” below) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant’s trade during COVID-19 pandemic period and a subsequent reasonable recovery period.

3. Principal 4: Rental waivers must constitute no less than 50% of the total reduction in rent payable under principle #3 above over the COVID-19 pandemic period and should constitute a greater proportion of the total reduction in rent payable in cases where failure to do so would compromise the tenant’s capacity to fulfil their ongoing obligations under the lease agreement. Regard must also be had to the Landlord’s financial ability to provide such additional waivers. Tenants may waive the requirement for a 50% minimum waiver by agreement.

4. Principle 5: Payment of rental deferrals by the tenant must be amortised over the balance of the lease term and for a period of no less than 24 months, whichever is the greater, unless otherwise agreed by the parties.

74. The Code also makes provision for mediation where parties to a lease are unable to renegotiate arrangements under the lease. In this regard the Code provides as follows:

Where landlords and tenants cannot reach agreement on leasing arrangements (as a direct result of the COVID-19 pandemic), the matter should be referred and subjected (by either party) to applicable state or territory retail/commercial leasing dispute resolution processes for binding mediation, including Small Business Commissioners/Champions/Ombudsmen where applicable. Landlords and tenants must not use mediation processes to prolong or frustrate the facilitation of amicable resolution outcomes.

Issues

75. The following are the issues to be determined in these proceedings:

1. Was the applicant prohibited by the Regulations from taking action in the Tribunal for an order that the respondent pay rent owing under the lease, and an order for possession?

2. Did the parties enter into an agreement for the respondent to pay the sum of $4,000 per month rent during the pandemic?

3. Subject to the determination of the preceding issues, is the applicant entitled to the relief she is seeking?   

Consideration

76. The first issue for determination is whether the applicant was prohibited by the Regulations from taking action in the Tribunal for an order that the respondent pay rent owing under the lease, and an order for possession.

77. The respondent’s defence to the applicant’s claim, as I understand it, is based on what is said to be a failure on the part of the applicant to renegotiate the rent payable under the lease in breach of the Regulations and, therefore, the respondent was prohibited by the Regulations from taking any prescribed action. For the following reasons I reject that defence.

1. By 24 June 2020, when the evidence revealed an attempt by the applicant’s agent to first terminate the lease, the impact of the pandemic had well and truly unfolded and the Regulations had been made to address that impact on retail tenants. The agent’s Ms Jebara, no doubt mindful of the requirements of the Regulations, on 8 July 2020 sent an email to Mr Al-Shadidi requesting the respondent to complete the financial hardship form attached in order to, as she put it, establish a rent reduction. Her email strongly suggests that this may not have been the first request made to the respondent for that information. In addition to requiring answers to some very specific questions about his financial circumstances, the respondent was also asked to provide supporting documents. A list of those documents was included in the form. Ms Jebara stated in the email that the applicant was already in breach of the lease and no loss of income had been established. She foreshadowed the possibility of further action.

2. It should have been obvious to Mr Al-Shadidi, a solicitor, that it was critical if the respondent was going to be able to renegotiate the rent payable under the lease in accordance with the Regulations, for the information requested in the form sent to him to be provided otherwise the respondent risked the prospect of another attempt by the agent to terminate the lease, as it was permitted by the Regulations to do, in certain circumstances.

3. Mr Al-Shadidi returned the form two days later, that is on 10 July 2020. The answers given by the respondent were blunt including – “no business/no money”. The form contained an offer by the respondent to pay $4,000 per month but the supporting documents requested were not provided nor was a statement made to the effect that the respondent was an impacted lessee.

4. Also on 10 July 2020 the agent, by email sent to Mr Al-Shadidi, requested that the supporting documents be provided. The email repeated the list of documents required. Mr Al-Shadidi was also informed that the form was invalid without the supporting documents. The email contained a copy of the tenant status report and tenant ledger. Mr Al-Shadidi was told that a large amount of rent was owing by the respondent. The agent’s message to Mr Al-Shadidi that there were consequences for not providing the information could not have been clearer.

5. Follow-up emails were sent by the agent to Mr Al-Shadidi on 13 and again on 28 July 2020 requesting the supporting documentation be provided. There is no evidence that Mr Al-Shadidi ever responded to the emails or provided the requested information. Why this occurred has not been explained by the respondent. It is obvious from the financial information attached to his July 2021statement that he was in receipt of jobkeeper payments from 14 June 2020 to 15 April 2021. There is no doubt that his income was well below the threshold for satisfying the eligibility criteria for the respondent to be considered an impacted lessee under the Regulations. With the benefit of hindsight, it is evident that the lease was also an impacted lease.

6. From 3 July 2020 until 28 March 2021, clause 7 of the Regulations very specifically prescribed a process for the parties to an impacted lease to renegotiate rent payable under the lease. Relevantly, clauses 7(4)-(7), inclusive, provide as follows:

(4) A party to an impacted lease must, if requested under this clause—

(a) renegotiate in good faith the rent payable under, and other terms of, the impacted lease, and

(b) commence renegotiations within—

(i) 14 days of receiving the request, or

(ii) another period agreed to by the parties.

(5) An impacted lessee must give the lessor the following in respect of the impacted lease—

(a) a statement to the effect that the lessee is an impacted lessee,

(b) evidence that the lessee is an impacted lessee.

(6) The parties are to renegotiate the rent payable under, and other terms of, the impacted lease having regard to—

(a) the economic impacts of the COVID-19 pandemic, and

(b) the leasing principles set out in the National Code of Conduct.

(7) If the impacted lessee does not comply with subclauses (4)—(6), the lessor is taken to have complied with this clause.

7. There is no evidence of the respondent ever making any request to renegotiate the rent payable under the lease prior to 8 July 2020. However, on the basis of the agent’s emails dated 8, 10, 13, and 28 July 2020, I am comfortably satisfied that the applicant’s agent, during the prescribed period, was endeavouring to initiate negotiations over the rent payable under the lease, and doing so with proper regard to the economic impacts of the pandemic and the leasing principles set out in the Code, as required by clause 7(4) and (6) of the Regulations.

8. As a consequence of those attempts by the by the agent to initiate negotiations, it was incumbent on the respondent, in order to gain the benefits of the protections afforded impacted lessees by the Regulations, to also renegotiate in good faith the rent payable under the lease, to provide a statement to the effect that he was an impacted lessee, and also provide evidence that he is an impacted lessee. I am comfortably satisfied that he failed to comply in that regard. The absence of any good faith negotiations on the part of the respondent or any proper regard by him to the leasing principles in the Code is, in my view, self-evident from the answers he gave in the statement of financial information returned to the agent via his solicitor, and the fact that his solicitor failed to respond to 3 emails from the agent requesting specific documents. Furthermore, the respondent’s statement of financial information Mr Al-Shadidi sent to the agent on 10 July 2020, did not comply with the requirements of clause 7(5). This is because it did not contain the required statement that the respondent was an impacted lessee and no documentary evidence was provided to show that the respondent was, in fact, an impacted lessee.

9. I would add that the provision of financial information with the respondent’s July 2021 statement does not, in my view, operate to retrospectively satisfy the respondent’s obligations under clause 7(4)-(6) of the Regulations.

10. It follows, in my view, from these findings that the respondent, failed to comply with clause 7(4)-(6), and consequently, the applicant was deemed, by clause 7(7) of then Regulations to have complied with the clause.

11. Compliance with clause 7 was not the only requirement the applicant had to comply with in order to take any of the prescribed action.

12. Clause 7(1) prohibited a lessor from taking prescribed action during the prescribed period unless the lessor has also complied with any obligations imposed on the lessor by clause 8 for, amongst other things, a failure to pay rent.

13. As already mentioned, Clause 8 of the Regulations provides that Part 8 of the Act extends to an impacted commercial lease dispute as if it were a retail tenancy dispute within the meaning of that Part. The clause goes on to define “impacted commercial lease dispute” as follows:

a dispute concerning the liabilities or obligations, including any obligation to pay money, under an impacted lease, being liabilities or obligations which arose under the impacted lease concerning circumstances occurring during the prescribed period and includes a dispute regarding a renegotiation, or a failure to take part in a renegotiation, of rent payable under the impacted lease under clause 7.

14. The effect of this clause, in my view, is that as the dispute between the parties involved an obligation to pay rent under an impacted lease, it was a dispute that had to be resolved in accordance with Part 8. Section 68(1) requires retail tenancy disputes to be mediated before proceedings are commenced or until the Registrar has certified in writing that mediation under Part 8 has failed to resolve the dispute or matter or the court is otherwise satisfied that the mediation is unlikely to resolve the dispute or matter.

15. The parties did not participate in a mediation

16. With the applicant’s retail lease application filed with the Tribunal is a certificate dated 28 April 2021 issued by the Registrar under section 68(1). The certificate states that an offer was made by the Registrar to the respondent to mediate but no response was received by the Registrar using contact details provided by the applicant. What those contact details were is not in evidence.

17. In his June statement, the respondent asserts that he was never aware of any request for a mediation, and that he was willing and ready to attend the mediation.

18. In my view, the section 68(1) certificate is prima facie evidence of the applicant having attempted to mediate the dispute and also of the applicant having satisfied the additional requirement of clause 7(1) of the Regulations. The onus was then on the respondent to make inquiries of the Registrar to ascertain how the mediation offer was made, and to adduce evidence to show that he was not, in fact, contacted about mediating the dispute or made aware of the offer to mediate. The respondent has failed to discharge the onus.

19. For completeness, I would add that in applying to have the dispute mediated, I am also comfortably satisfied that the applicant did what the Code required in referring the matter to the Office of Small Business Commissioner to mediate the dispute.

20. Accordingly, having complied with the requirements of clause 7 (1), I find that the applicant was permitted to take action that is prescribed action as defined under the Regulations, and to seek an order for payment of rent owing under the lease and an order for possession.

21. An action for possession is specifically referred to in subclause (j) of the definition of prescribed action found in clause 3. There is no express reference to an action for recovery of unpaid rent. I am though of the opinion that “any other remedy otherwise available to a lessor against the lessee at common law or under the law of this State” found in subclause (l) of the definition includes the right to take action for recovery of unpaid rent.

78. The next issue for consideration is whether the parties entered into an oral agreement for the respondent to pay reduced rent of $4,000 per month rent. The monthly rent at all relevant times was $6500 inclusive of GST For the following reasons I have come to the conclusion that the parties did not enter into any such agreement.

79. The first mention of an offer to pay $4000 a month in rent is to be found in the respondent’s statement of financial information form when he said that he was “happy to pay monthly rent of $4000 from October 2020 onwards”.. The offer was repeated in Mr Al-Shadidi’s covering 10 July 2020 email when he sent the completed form to the agent. Ms Jebara, in her 6 October 2020 email to Mr Al-Shadidi, informed him that no agreement to pay AUD4000 was made with the applicant. What prompted that email is not immediately obvious from the evidence. At the foot of the email is the top section of an email sent earlier that day from Mr Al-Shadidi to the agent. The body of the email is not in either party’s evidence but most probably Ms Jebara’s email was in response to something Mr Al-Shadidi said about an agreement to pay a reduced amount of rent of $4000 per month.

80. It is, in my view, telling that in the respondent’s June statement, the first of two statements he filed in these proceedings, that no mention is made of any agreement to pay reduced rental. It is not until the July statement that there is any mention of such an agreement where he asserts that the respondent said to him that “…it is fine that you pay this reduced monthly rent of $4000”. This conversation, according to the respondent’s statement occurred “not long ago & after issuance of the invalid notice of the termination”.

81. It is not clear whether this conversation is said to have occurred sometime after 22 March 2021, the date of the notice of termination in evidence, or sometime shortly after an earlier notice of termination that was apparently served in June 2020. The reference to “not long ago” in a statement dated 8 July 2021 suggests the respondent is asserting that the conversation took place sometime after 22 March 2021.

82. The respondent relies on Mr El Sunbuli’s statement to corroborate his version of the conversation. Mr El Sunbuli does not, however, say when it was that he was having a haircut at the premises when claims to have overheard an exchange between the applicant and the respondent.

83. The conclusion I have come to is that the applicant and respondent did have a conversation about rent just prior to Ms Jebara sending her 6 October 2020 email to Mr Al-Shadidi and not after 22 March 2021. This is because, as a contemporaneous document, the email is, in my view, the best evidence of when the conversation about rent took place. The evidence given by the respondent as to the timing of the conversation in the respondent’s July statement is sufficiently vague and ambiguous for it not to be accepted. Mr El Sunbuli’s statement does not assist in pinpointing the date of the conversation as he does not say when it was that he claims to have overheard the conversation.

84. I am not, however, persuaded on the evidence that the parties concluded a binding oral agreement as asserted by the respondent. Having regard again to Ms Jebara’s email, it seems to me that she made it clear that there was no agreement to pay the reduced rent. I am also persuaded to the conclusion by the fact that there is no correspondence from Mr Al-Shadidi, who appears to have represented the respondent throughout the relevant period, or from the respondent, contending that there was or confirming the existence of an agreement. Even in Mr Al-Shadidi’s 23 March 2021 letter, there is no mention of any agreement to pay reduced rent. Furthermore, it was not until the July statement that the respondent asserted the existence of the agreement. One would have thought that had there been an agreement as asserted by the respondent, that would have been mentioned at the first opportunity to put on his evidence. The fact that he did not mention it is, in my view, significant.

85. Accordingly, I find that there was no agreement between the parties for the respondent to pay reduced rent of $4000 per month during the prescribed period.

86. The next issue for consideration is whether the applicant is entitled to the relief she is seeking.

87. Turning first to the claim for outstanding rent, by the time the matter came on for hearing, the applicant was claiming rent arrears $65,475. This comprised $39,475 in what were said to be current arrears as at 22 July 2021 and $19,500 representing 25% deferred rent, as set out in Mr Akbarzada’s 22 July 2021 email to Mr Al-Shadidi. These figures are also found in the updated rental ledger that was attached to the email. There is no dispute that the applicant has already waived 25% of the outstanding rent. An additional month’s rent of $6500, which fell due by the time the matter came on for hearing, was added to the claim by Mr Akbarzada at the outset of the hearing. This was also not in dispute.

88. The calculation of these amounts is not the subject of any objection by the respondent other than the assertion that rent relief should be provided in accordance with the Regulations and Code, and there was an agreement to pay reduced rent of $4000 per month. The first assertion has not been the subject of any submission on the part of the respondent as to what that amount should be. The second assertion has been rejected by me.

89. I am satisfied on the basis of the evidence presented or behalf of the applicant that rent arrears under the lease up to and including the hearing amount to $65,475. I do not, however, propose to order that the entire amount be paid immediately by the respondent.

90. Despite the repeal of Regulation No.3, by section 88 of the Act it continues to apply to anything occurring in relation to a lease while the lease was an impacted lease within the meaning of that Regulation. Having regard to the financial information attached to his July statement, I am comfortably satisfied that throughout the period the Regulations have been in force, that is from 24 April 2020 to 28 March 2021, the applicant was an impacted lessee and the lease and impacted lease.

91. Clause 9 of Regulation requires the Tribunal to have regard to the leasing principles in the Code when considering making a decision in relation to the recovery of possession of premises, the termination of impacted lease and the exercise or enforcement of any other right of the lessor under an impacted lease. In doing so, and in the exercise of my discretion under section 72 of the Act I have decided to order the respondent to repay the sum of $45,975, inclusive of GST, within 28 days, and to pay the additional amount AUD19,500 by 24 equal monthly instalments with the first instalment commencing in 28 days. The second order is made having regard to leasing principle 5 and because the lease term ends on 20 March 2023. Despite there being an option to renew for five years, it is by no means certain that the option will be exercised.

78. Turning finally to the applicant’s claim for possession. Clause 25.2.2 of the lease permits the applicant to terminate the lease if rent or any other money due under this lease is 14 days overdue irrespective of whether or not the applicant has made any formal demand for it.

79. The applicant relies on the notice of termination dated 22 March 2021 as evidence of the lease having been terminated. The applicant has not, however, adduced any evidence to show that the notice was actually served on or came to the respondent’s attention. The filing of a copy of the notice with the Tribunal is not evidence of service.

80. There is also no evidence before the Tribunal that would allow me to be comfortably satisfied that the notice was served. The letter sent to the agent by the respondent’s solicitor on 23 March 2021 while explicitly mentioning the letter of demand, and voicing vigorous objection to it, makes no mention of the notice. If the notice had been served I would have expected the applicant’s decision to terminate the lease to have been as much the focus of attention in the letter as the agent’s letter of demand. That it was not mentioned at all persuades me to the view that there is insufficient evidence to become fully satisfied that it was in fact served or came to the respondent’s attention.

81. It is also relevant to note that while the 22 March 2021 letter from the agent is annexed to the respondent’s 8 July 2021 statement, the notice is not annexed either to that statement or the June statement.

82. For those reasons alone I would conclude that the lease has not been validly terminated.

83. Even if there was evidence of the notice of termination having been served or that it came to the respondent’s attention, I am not comfortably satisfied that it was a valid notice. In my view for a notice to be valid it must specify the correct name of the party upon whom it is to be served, it must also specify the name of the lessor and it must specify the amount said to be owing if the notice is served as a consequence of a lessee’s failure to pay rent in accordance with the lease. It is to be observed in relation to the notice that

1. it is addressed to “Hasan Al Aeiry”, which is not the respondent’s name;

2. nowhere in the notice is and the name of the respondent, as landlord, mentioned; and

3. it does not specify the amount owing.

98. While each of these reasons on their own is not necessarily sufficient to invalidate the notice, when considered together I am of the view that the combined effect does render the notice invalid.

99. Accordingly, I reject the applicant’s claim for an order for possession of the premises

Costs

100. Throughout these proceedings the agent has been representing the applicant. There is no evidence of the applicant incurring legal costs and no costs order has been sought by the applicant. Accordingly no costs order will be made in these proceedings.

Orders

101. These are the orders of the Tribunal:

1. Pursuant to section 72(1)(f)(iii), declare that the respondent is indebted to the applicant for rent arrears in the amount of $65,475.

2. Pursuant to section 72(1) order that :

1. Within 28 days the respondent pay to the applicant the sum of $45,975; and

2. The respondent pay to the applicant the sum of $19,500 by 24 equal and consecutive monthly instalments of $812.50, with the first instalment to be paid within 28 days.

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

Registrar

Decision last updated: 10 February 2022