Zhang v Cheng Yam Nominees Pty Ltd (No 2)
[2004] NSWADT 193
•09/03/2004
CITATION: Zhang v Cheng Yam Nominees Pty Ltd (No 2) [2004] NSWADT 193 DIVISION: Retail Leases Division PARTIES: APPLICANT
Zhi Qiang Zhang
RESPONDENT
Cheng Yam Nominees Pty LtdFILE NUMBER: 045052 HEARING DATES: 07/05/2004, 17/05/2004, 09/06/2004, 09/07/2004, 27/08/2004 SUBMISSIONS CLOSED: 08/27/2004 DATE OF DECISION:
09/03/2004BEFORE: Montgomery S - Judicial Member APPLICATION: Claim for declaration of rights, obligations and liabilities under a lease MATTER FOR DECISION: Costs
Damages
InterestLEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Retail Leases Act 1994CASES CITED: Gizah Pty Ltd v AXA Trustees Ltd (2) [2001] NSWADT 164
Sarip Investment Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27
Stefopoulos v Manikas (No.3) [2004] NSWADT 172REPRESENTATION: APPLICANT
In person
RESPONDENT
A Monzo, barristerORDERS: 1. The Applicant is to pay the Respondent’s costs in relation to the hearings on 7 May 2004 and 17 May 2004 on an indemnity basis ; 2. The Applicant is to pay the Respondent’s costs in relation to the remainder of the proceedings, including the costs of 27 August 2004, to be assessed on party/party basis as set out in Division 6 of Part 11 of the Legal Profession Act 1987; 3. The Applicant is to pay the Respondent the sum of $29,193.24 by way of restitution and damages. This amount is to be paid by 30 September 2004.
1 In the substantive matter, Mr Zhi Qiang Zhang ("the Applicant"), as lessee of for premises located at Basement Level, 67-73 Main Street, Blacktown, ("the Premises") sought certain orders against Cheng Yam Nominees Pty Ltd ("the Respondent") as the lessors of the Premises. The Premises were used for the business of a furniture and footwear-retailing outlet.
2 In determining the substantive matter I made the following orders:
- “1. The application is dismissed.
2. The Respondent has leave to have this matter relisted to argue the issue of damages. Any such application should be brought within 14 days of this decision.
3. In the absence of agreement on the issue of costs, the Respondent is invited to file submissions in relation to the issue within 14 days of this decision. The Applicant is invited to make submissions in reply within a further 14 days. If no application to have the matter relisted for oral argument is received within 14 days of this decision, the issue of costs will be determined on the basis of any written submissions received.
3 Pursuant to Order 2, the Respondent requested that the matter be relisted in relation to the issue of damages. The matter was heard on 27 August 2004. Mr Monzo again appeared on behalf of the Respondent and sought damages. The Respondent has also sought an order for interest on those damages. The Applicant was no longer legally represented however he appeared and made submissions in reply to the Respondent’s application.
4 Pursuant to Order 3, the Respondent has also sought an order for costs. The Respondent provided written submissions in relation to its costs application. No submissions have been filed on behalf of the Applicant. The Applicant made no application to have the matter relisted in relation to the issue of costs. Accordingly, this determination as to the issue of costs is made on the basis of the written submissions without the need for hearing.
Relevant Legislation
5 The Tribunal’s power to award costs in relation to proceedings before it is governed by section 88 of the Administrative Decisions Tribunal Act 1987 (“the ADT Act”). Section 88 of the ADT Act provides:
- “88 Costs
(1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs.
(2) The Tribunal may:
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis.
(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.
(4) In this section, costs includes:
(a) costs of or incidental to proceedings in the Tribunal, and
(b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.”
6 Pursuant to section 88(3) of the ADT Act, the power to award costs does not apply in proceedings for an original decision, such as the present proceedings, unless the enactment conferring jurisdiction provides for the awarding of costs. Section 77A of the Retail Leases Act 1994 (“the Act”), which is the enactment conferring jurisdiction, provides:
- “77A Tribunal may award costs
The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 in respect of proceedings commenced by an application made under this Part.”
7 The Tribunal’s power to award damages is pursuant to section 72 of the Act which provides:
- “72 Powers of Tribunal relating to retail tenancy claims
(1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate:
(a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person,
(b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings,
(c) an order that a party to the proceedings:
- (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of a lease, or
(ii) surrender possession of specified premises to another person, or
(iii) assign his or her or its rights under a lease to a specified person, or
(iv) do or perform, or refrain from doing or performing, any specified act, matter or thing,
(e) an order, by consent of the parties, requiring the parties to the proceedings to rectify a lease,
(f) an order:
- (i) declaring any provision made by a lease to be void for being inconsistent with this Act or the regulations, or
(ii) declaring that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee, or
(iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not,
(2) The Tribunal may make such ancillary orders as it considers necessary for the purpose of enabling an order under this section to have full effect.
(3) The Tribunal may impose such conditions as it considers appropriate when making an order under this section.
(4) The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so.”
8 The Tribunal’s power to award interest is pursuant to section 72A of the Act which provides:
- “72A Power of Tribunal to award interest
(1) When the Tribunal orders on a retail tenancy claim or an unconscionable conduct claim that a person pay money to another person, the Tribunal may order that there is to be included, in the amount ordered to be paid, interest at a specified rate on the whole or any part of that amount for the whole or any part of the period between when the cause of action arose and when the order takes effect.
(2) If the whole or part of an amount claimed under a retail tenancy claim or an unconscionable conduct claim is paid during proceedings in the Tribunal on the claim, prior to or without an order for payment being made in respect of the claim, the Tribunal may order that interest be paid at a specified rate on the whole or any part of the money paid for the whole or any part of the period between when the cause of action arose and the date of the payment.
(3) The rate of interest specified by the Tribunal under this section must not exceed the rate at which interest is payable on a judgment debt of the District Court.
(4) This section does not:
(a) authorise the giving of interest on interest, or
(b) apply in relation to any debt on which interest is payable as of right whether by virtue of any agreement or otherwise, or
(c) affect the damages recoverable for the dishonour of a bill of exchange.
(5) On a claim for the payment of money, the Tribunal may not order the payment of interest under subsection (1) in respect of the period after the date on which an appropriate settlement sum (or the first appropriate settlement sum) has been offered unless the special circumstances of the case warrant the making of such an order.
(6) For the purposes of subsection (5), appropriate settlement sum is a sum offered by a party in settlement of a claim for the payment of money where the amount ordered to be paid (including interest accrued up to and including the date of the offer) does not exceed the sum offered by more than 10 per cent. Subsection (5) does not prevent an award of interest for the period before the settlement offer is made.”
9 The Respondent made written submissions on the issue of costs. It is submitted that the Applicant's applications were ill-prepared and lacking in substance for the following reasons. Firstly, the assertion that the Applicant had exercised the option to renew the lease within the period stipulated in Clause 4 of the Lease was neither credible, persuasive or sufficient to support a finding that the Applicant had in fact exercised the option. Secondly, the Applicant failed to adduce any or any persuasive evidence which was adequate to explain why it did not answer the Respondent's managing agent's letters and correct any misunderstanding between the parties in regard to the option.
10 It is submitted that if any issue is to be seriously argued or contended, cogent supportable evidence in support would need to be led to support the contentions. Mr Monzo referred to the Decision of Judicial Member Molloy in Sarip Investment Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27 (“Sarip”) at 35 where he stated:
- “[I]f the Respondent wishes to agitate an argument that the costs order be restricted in some manner as submitted then I will grant liberty to the Respondent, if so advised, to re-list the matter before me for oral argument limited to this issue only. If it is to be seriously argued then cogent supportable evidence in support would need to be led to support the contentions.”
11 Mr Monzo submitted that while the Judicial Member was referring to the issue of costs, the observation applies to all substantive assertions put to the Tribunal by a party.
12 Mr Monzo further submitted that the Applicant did not adequately prepare his applications as evidenced by the fact that on 7 May 2004, the first occasion the matter was before the Tribunal, the Applicant failed to establish the Tribunal was seized of jurisdiction to hear and determine the matter. The proceedings were adjourned to enable the Applicant to obtain expert evidence in order to overcome the jurisdictional barrier contained in section 5 of the Act. On 17 May 2004 the Applicant sought to tender a report in relation to the jurisdictional issue however the report was inadmissible. The proceedings were again adjourned so that the Applicant could have further time to obtain an expert report in proper and admissible form. The Applicant's expert evidence on the jurisdictional issue was admitted on 9 June 2004 and the urgent interim orders sought were granted. Mr Monzo asserted that the Respondent incurred unnecessary costs as a result of the Applicant's lack of preparation.
13 The application for final relief was heard on 9 July 2004. The Decision in favour of the Respondent and Reasons was published on 14 July 2004.
14 Mr Monzo referred to correspondence from the Respondent prior to the first hearing date attempting to avoid the litigation. A letter dated 4 May 2004 from the Respondent’s solicitors to the Applicant's solicitors was in the following terms:
- "Without Prejudice …
Kindly forward to this office a copy of the letter dated 15 June 2003 referred to in your letter dated 4 May 2004.
We would be pleased if you would also forward to us any further correspondence sent by your client to our client's managing agent at the relevant time, concerning the exercise of the option, before or since 15 June 2003.”
15 The Applicant failed to produce a copy of the alleged letter of 15 June 2003. On 6 May 2004 the Respondent again wrote to the Applicant requesting a copy of the letter of 15 June 2003. The letter dated 6 May 2004 was in the following terms:
- “We refer to our letter dated 4 May 2004 requesting a copy of the 15 June 3003 letter referred to in your lever of 4 May 2004 and note that we have not received a reply from you.
We advise you that should we not receive a copy of the letter dated 15 June 2003 or any other correspondence allegedly 'exercising the option' before close of business today, we hold instructions for reasons, including the non production of the letter dated 15 June 2003 or any other correspondence allegedly 'exercising the option’, to seek costs on an indemnity basis at the hearing tomorrow.
Your urgent response is appreciated.”
16 Mr Monzo referred to comments by Judicial Member Molloy in Sarip at paragraph 33 where he observed:
- “the law now requires (correctly in my view) that all attempts to resolve litigation be taken into account on the question of costs.”
17 The Respondent was ultimately provided a copy of the letter dated 15 June 2003 in the course of the Applicant's solicitor’s opening remarks at the hearing of the application for interim orders on 7 May 2004. Mr Monzo submitted that it should be inferred that it was the Applicant's intention to catch the Respondent by surprise, and to afford it no time in which to deal with its adverse implications. It is further submitted that the Respondent's letters of 4 May 2004 and 6 May 2004 were clearly an attempt on its part to resolve the dispute without litigation. Production of copy of the letter dated 15 June 2003 to the Respondent may well have led to a dialogue between the parties ultimately leading to a resolution of the conflict.
18 On 1 June 2004 the Applicant's solicitors wrote to the Respondent's solicitors in the following terms:
- "We refer to the above matter and advise that our client request to settle this lease dispute as following (sic) terms
Allowing the applicant to close down sale for three months
Rent repayment according to old lease cost.
Each party bears its own legal costs.
We lodge an application to discontinue.”
19 On 4 June 2004 the Respondent's solicitors replied to the Applicant's solicitor's letter of 1 June 2004 in the following terms:
- "Without Prejudice …
We are instructed to advise that our client would agree to your client's discontinuing proceedings upon the following basis:
- Your client forthwith pay our client's legal and incidental costs and disbursement (sic) incurred in responding to your client's applications and for all damages arising out of or caused by your client's trespass to the subject premises on or about 11 May 2004.
20 Mr Monzo submitted that the history of the matter demonstrates that the Applicant did not agree to pay the Respondent's costs and its minimal damages as at that time. Accordingly, he argues, this is a matter sounding in costs since the Applicant failed to seize the opportunity to discontinue his proceedings on favourable terms. Moreover, it is submitted that the Respondent's letter of 4 June 2004, amounts to a "Calderbank letter”. In any event the Respondent in this regard, relies upon the first part of the observations of Judicial Member Molloy in Sarip at paragraph 33 where he observed:
- “This letter was said to be a Calderbank letter. For the purposes of costs it probably does not matter whether it was a Calderbank letter or not because the law now requires (correctly in my view) that all attempts to resolve litigation be taken into account on the question of costs.”
21 Mr Monzo submitted that the categories of what may constitute "special circumstances” for the purposes of section 88 of the ADT Act are not closed and they must depend upon the facts of the particular facts. He relies on Sarip as authority for the principle that special circumstances include "Causing an adjournment” and "attempting to deceive another party or the Tribunal".
22 Although, the Respondent does not contend that there is evidence sufficient to justify the conclusion that the Applicant attempted to deceive the Respondent or the Tribunal by not providing the Respondent with a copy of the letter of 15 June 2003, it is submitted that it may be inferred from the record of proceedings that the Applicant's conduct amounts to an attempt to catch the Respondent by surprise.
23 Mr Monzo referred to the Webster's Dictionary of the English Language Unabridged definition of "deceive” and submits that the Applicant’s conduct could be seen as "misleading" and as to “cause” the Respondent "to err". He argues that the Applicant did not, in that respect act in "good faith either towards the Respondent or the Tribunal. It is further submitted that the Applicant caused adjournments which caused otherwise avoidable delay and resulting in the Respondent incurring unnecessary costs.
24 On 25 August 2004, the Applicant's solicitor wrote to the Respondent's solicitor confirming the Applicant's agreement to pay the Respondent's reasonable costs.
25 It is contended that in the circumstances of this case the Tribunal would be satisfied that the circumstances warrant interference with the position that each party should bear it's own costs.
Damages
26 With respect to the alleged damages suffered by the Respondent it relies on the affidavit dated 27 August 2004 of Mr Gilbert Cheng, a director of the Respondent.
27 It is asserted that the lease expired on 30 November 2003. Consequently, the Applicant became a tenant on a month to month basis. On 23 December 2003, Chesterton International, the Respondent’s then Managing Agent, wrote to the Applicant advising that the amount of rent the Respondent propose to charge was $110,000 per annum plus GST. The Applicant declined to pay the proposed rental.
28 On 19 March 2004, the Respondent instructed its then Managing Agent, Metro Commercial Property Service, to issue a notice of termination. The Applicant was required to vacate the premises by 30 April 2004. On or about 3 May 2004, the Respondent exercised its right to take possession of the premises and engaged J & D Locksmiths to change the locks. Mr Cheng asserts that the Respondent incurred $93.50 for the lock out expenses and annexed a copy of the relevant Tax Invoice.
29 On 11 May 2004, the Applicant reentered the premises without the Respondent’s consent. On 15 May 2004 the Respondent engaged Axcess Locksmiths to change the locks to prevent the Applicant from trespassing the premises. Mr Cheng asserts that the Respondent incurred $561.00 for the lock out expenses and annexed a copy of the relevant Tax Invoice. Also on 15 May 2004, the Respondent engaged H & H Security Guards and Patrols to monitor the premises to prevent the Applicant from further trespass. Mr Cheng asserts that the Respondent incurred $3,092.38 for the security expenses and annexed a copy of the relevant Tax Invoice.
30 Mr Cheng states that the Respondent ceased to use the security guards on or about 21 May 2004, and installed additional locks to enhance security and to prevent trespass by the Applicant. He asserts that the Respondent incurred $396.00 for the lock out expenses and annexed a copy of the relevant Tax Invoice.
31 On or about 4 June 2004, at the request of the Applicant, the Respondent granted access to the Surveyor, Michael Bell & partners. Mr Cheng states that the Respondent incurred $60.50 for the provision of access expenses and annexed a copy of the relevant Tax Invoice.
32 On 9 June 2004, both the Applicant and the Respondent gave undertakings as to damages. The matter was determined on 14 July 2004. The Applicant's access to the premises remained in place until Friday 16 July 2004 however the Applicant failed to vacate the premises by that date 2004 and remained in the premises until 13 August 2004. On 20 July 2004, the Applicant's solicitor wrote to the Respondent's solicitor confirming the Applicant's agreement to pay the Respondent's costs and damages. On 27 July 2004, the Applicant filed Notice of Appeal of the 14 July 2004 decision.
33 Mr Cheng asserts that the Respondent has suffered damages other than those costs incurred as the result of the Applicant's commencement of proceedings at the Tribunal.
34 The Respondent claims loss of rent for the period between 4 May 2004 to 31 July 2004. Mr Cheng asserts that the amount of rent the Respondent should have received is $30,250.00 including. GST. This amount is calculated at the rate of $110,000 per annum plus GST for 13 weeks. From this amount is to be deducted a total of $9,041.32 being the amount of rent received from the Applicant. Consequently the total rent sought is $21,208.68.
35 Mr Cheng states that the Respondent had a Prospective Tenant (“the Prospective Tenant”) who was willing to enter into a lease agreement for the premises with the Respondent from 1 August 2004 at the monthly rent of $8,250.00, inclusive of GST. He annexed a copy of the relevant Heads of Agreement signed by the parties on 27 May 2004.
36 Mr Cheng states that the Respondent suffered loss of rent, calculated at $8,556.40. This comprises $8,250.00 (the amount of rent the Respondent would have received from the Prospective Tenant between 1 August 2004 and 31 August 2004) plus $1,375.00 (the amount of rent the Respondent would have received from the Prospective Tenant between 1 September 2004 and 5 September 2004) less $1,068.60 (rent received from Applicant for possession for 1/8/04 to 13/8/2004).
37 Mr Cheng also states that due to the Applicant's failure to vacate the premises until 13 August 2004, the Respondent was not able to grant vacate possession to the Prospective Tenant and the Prospective Tenant decided to withdraw from the Heads of Agreement. In order to mitigate the damages it sustained, at the request of the Prospective Tenant the Respondent agreed to give the Prospective Tenant an extra month rent free being $8,250.00 (inclusive of GST). The Respondent claims the loss of one month rent, being $8,250.00 from the Applicant.
38 In summary, Mr Cheng states that the total damages suffered by the Respondent is $42,218.46 quantified as following:
- Lock out expenses $93.50
Change lock as the result of trespass $561.00
Security expenses as the result of trespass $3,092.38
Security enhancement lock $396.00
Access to Surveyor requested by the Respondent $60.50
Loss of rent (4/5/04 to 31/7/04) $21,208.68
Loss of rent (1/8/04 to 5/9/04) $8,556.40
Loss of one month rent $8,250.00
39 The Respondent also seek an order for interest on the amount of damages.
40 Mr Zhang made brief submissions. He agreed that an undertaking as to damages was given but he argued that the undertaking was only in relation to damages incurred after that date. He asserts that no damages are payable for events that occurred prior to that date.
41 Mr Zhang also asserts that he had continually refused to accept the proposed rent increase for the premises. He argues that the rent payable should be at the rate provided for by the lease and not that asserted by the Respondent. He further submitted that he should not be liable to pay the rent free period offered by the Respondent to the Prospective Tenant. He submitted that he should only be liable for rent up until the date it vacated the premises.
42 Mr Zhang further asserted that the respective financial resources of the parties should be taken into account, as should the fact that he had lodged an appeal against the 14 July 2004 decision but had discontinued those proceedings because of his financial circumstances.
Findings
43 Pursuant to section 88 of the ADT Act the Tribunal has discretion to order costs if satisfied that there are "special circumstances" which justify the award. In Gizah Pty Ltd v AXA Trustees Ltd (2) [2001] NSWADT 164 the Tribunal defined "special circumstances" as "circumstances that are out of the ordinary, but without having to be extraordinary or exceptional". In that case the Tribunal added:
- "Whereas in the context of appeals from administrative decisions the requirement of "special circumstances" might be interpreted so as not to discourage proceedings by a private individual on account of the risk of an adverse costs order, no such consideration should apply in the context of retail lease disputes. The "commerciality" of the Retail Leases Division calls for an interpretation quite different from that which might be adopted in any other Division of the Tribunal".
44 Those observations from Gizah do not, however, mean that costs should simply follow the event but they do mean that "special circumstances" might more readily be found in a retail tenancy dispute. These issues have been considered in numerous cases, most recently by myself in Stefopoulos v Manikas (No.3) [2004] NSWADT 172. I do not propose to repeat the various comments on the issue here. Suffice to say that all the circumstances of the prosecution of the matter should be considered in determining whether special circumstances exist for the purposes of section 88 of the ADT Act.
45 In this case the Respondent seeks the whole of its legal costs in relation to the matter. I note that the Applicant has agreed to pay the Respondent reasonable costs.
46 I have considered Mr Monzo’s submissions and I agree that the circumstances of this matter are such that they constitute "special circumstances” for the purposes of section 88 of the ADT Act. The circumstances that I consider warrant this conclusion include the Applicant’s failure to prepare his application adequately, resulting in unnecessary adjournments; the Applicant’s failure to provided the Respondent with a copy of letter dated 15 June 2003 prior to the commencement of the hearing, which removed the possibility of settlement without the need for the matter to proceed; and the Applicant’s failure to accept the Respondent’s offer of 4 June 2004.
47 I agree with the Respondent’s contention that the circumstances of this case warrant interference with the position that each party should bear it's own costs. In my view, the Applicant should pay the Respondent’s costs of 7 May 2004, and 17 May 2004 on an indemnity basis. The Applicant should pay the Respondent’s costs of the remainder of the proceedings, including the costs of 27 August 2004, to be assessed on party/party basis as set out in Division 6 of Part 11 of the Legal Profession Act 1987.
48 With two exceptions I am in general agreement with the Respondent as to the issue of restitution and damages. The first of those exceptions is in relation to the changing of locks. In my view the Respondent should not be entitled to recover both the full cost of changing the locks on 15 May 2004 to prevent the Applicant from trespassing the premises and again on 21 May 2004. There is a degree of duplication in this process and the Respondent could have mitigated its loss by adopting a more substantial approach on the first occasion. There is no breakdown of the charges for either date but it is apparent that on 21 May 2004 three padlocks were removed and a service call/labour cost incurred at a total of $360. Presumably the Respondent was entitled to retain the padlocks that were removed. I estimate that 50% of this amount would have been unnecessary had a more prudent approach been taken. I would therefore reduce the amount that the Respondent is entitled to recover for this item by $183. With this exception, I consider that the Respondent is entitled to recover the amounts it has expended in relation to securing the property and allowing the Applicant access after 3 May 2004.
49 The second exception relates to the rent for the period after 4 May 2004. The Respondent has characterised this item as damages rather than as rent under the lease. In this regard subclause 12.4 of the lease is relevant. That subclause provides:
- “12.4 If the landlord allows the tenant to continue to occupy the property after the end of the lease period (other than under a new lease) then-
12.4.1 the tenant becomes a monthly tenant and must go on paying the same rent and other money in the same way that the tenant had to do under this lease just before the lease period ended (apportioned and payable monthly);
12.4.2 the monthly tenancy will be on the same terms as this lease, except for-
- clause 4;
clauses 5.4 to 5.21 inclusive;
clause 6.2 unless consent has previously been given; and
clause 8 except for the provisions relating to rental suspension;
12.4.4 anything that the tenant must do by the end of this lease must be done by the end of the monthly tenancy.”
50 The evidence is that the Respondent served a notice on the Applicant requiring him to vacate the premises by 30 April 2004. On or about 3 May 2004, the Respondent exercised its right to take possession of the premises. In my view, the lease was at an end at that time. The Applicant returned to the premises following an order of the Tribunal. On 9 June 2004 I ordered that the Applicant was entitled to remain on the premises under the terms of the lease ie as a monthly tenant. Pursuant to subclause 12.4 of the lease, the Applicant remained thereafter on those same terms. Accordingly, it is my view that rent payable by the Applicant from 9 June 2004 up until 13 August 2004 was at the rate payable under the lease ie $59,550.80 per annum. Any losses incurred by the Respondent for the period about 3 May 2004 to 9 June 2004 and for the period after 13 August 2004 must be proven. In my view it does not follow that the Respondent is entitled to recover rent at the rate originally proposed to and rejected by the Applicant ie $110,000 per annum plus GST.
51 The evidence is that the premises have been relet at an annual rental of $90,000 plus GST. In my opinion this is a reasonable basis for the assessment of the Respondent’s loss for the period 3 May 2004 to 9 June 2004 and for the period after 13 August 2004.
52 Accordingly, it is my view that for the period 9 June 2004 to 13 August 2004 the Applicant should pay a daily rate of $163.15. For this period of 65 days the total is $10,604.75. Of this amount the Applicant has paid $9,041.32 leaving arrears of $1,563.43 for that period.
53 For the period 3 May 2004 to 9 June 2004 the Applicant should pay the Respondent damages at the rate of $90,000 per annum plus GST. This is a period of 37 days at a daily rate of $246.58 giving a total of $9,123.46 plus GST ie $10,035.80
54 For the period after 13 August 2004 the Applicant should pay the Respondent damages at the rate of $90,000 per annum plus GST. This is a period of 23 days at a daily rate of $246.58 giving a total of $5671.23 plus GST. Of this amount the Applicant has paid $1,068.60 leaving arrears of $4602.63 plus GST of $460.26 ie $5,062.89.
55 Accordingly, I calculate the amounts to which the Respondent is entitled as follows:
- Lock out expenses $93.50
Change lock as the result of trespass $561.00
Security expenses as the result of trespass $3,092.38
Security enhancement lock $183.00
Access to Surveyor requested by the Respondent $60.50
Damages (3/5/04 to 9/6/04) $10,035.80
Loss of rent (9/6/04 to 13/8/04 5/9/04) $1,563.43
Damages (13/8/04 to 5/9/04) $5,062.80
Loss of one month rent $8,250.00
Total Damages $28902.41
56 Section 72A of the Retail Leases Act 1994 provides that this Tribunal may order interest on the whole or part of any amount ordered to be paid for the whole or any part of the period between when the cause of action arose and when the order takes effect. The rate of interest is not to exceed the applicable interest rate payable on a judgment debt of the District Court. In the circumstances, I am satisfied that an order for the payment of interest is justified. Interest should be paid at the applicable District Court rate of 9% as follows:
- (i) on the amount of $14026.18 from 9 June 2004 to 31 August 2004 ie daily interest of $3.46 for a period of 65 days totalling $224.80; and
(ii) on the amount of $14,876.23 from 13 August 2004 to 31 August 2004 ie daily interest of $3.67 for a period of 18 days totalling $66.03.
57 I calculate this amount to be $290.83. Accordingly the total amount payable by the Applicant by way of restitution and damages is $29,193.24.
Orders
- 1. The Applicant is to pay the Respondent’s costs in relation to the hearings on 7 May 2004 and 17 May 2004 on an indemnity basis.
2. The Applicant is to pay the Respondent’s costs in relation to the remainder of the proceedings, including the costs of 27 August 2004, to be assessed on party/party basis as set out in Division 6 of Part 11 of the Legal Profession Act 1987.
3. The Applicant is to pay the Respondent the sum of $29,193.24 by way of restitution and damages. This amount is to be paid by 30 September 2004.
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