Zucchiatti v Simkin Holdings Pty Ltd
[2002] NSWADT 142
•08/16/2002
CITATION: Zucchiatti -v- Simkin Holdings Pty Ltd [2002] NSWADT 142 DIVISION: Retail Leases Division PARTIES: APPLICANT
Joseph Egidio Zucchiatti
RESPONDENT
Simkin Holdings Pty LtdFILE NUMBER: 025018 HEARING DATES: 15/05/02 SUBMISSIONS CLOSED: 05/15/2002 DATE OF DECISION:
08/16/2002BEFORE: Montgomery S - Judicial Member APPLICATION: Claim for relief from payment of money MATTER FOR DECISION: Principal matter LEGISLATION CITED: Retail Leases Act 1994 CASES CITED: REPRESENTATION: APPLICANT
In person
RESPONDENT
R Simkin, agentORDERS: 1. In full and final satisfaction of all issues in dispute in application No. 025018 I order that Simkin Holdings Pty Limited is to pay to Joseph Egidio Zucchiatti the amount of $828.82.; 2. The amount referred to in Order 1 is to be paid by 13 September 2002.
1 This is an application brought by Joseph Egidio Zucchiatti (“the Applicant”) in relation to a shop known as known as Unit 7, 211 Ben Boyd Road, Neutral Bay, being part of the land contained in Folio Identifier 7/SP22291 (“the Premises”). The registered proprietor of the Premises is Simkin Holdings Pty Limited formerly known as Robert J Simkin (Holdings) Pty Limited (“the Respondent”).
2 The application was filed in the Tribunal on 13 February 2002. The Applicant sought orders in the following terms:
3 A certificate that mediation has failed issued by the Registrar, Retail Tenancy Disputes on 4 February 2002 was annexed to the application. The grounds given for the orders sought were:
“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. Amount claimed $6101.00.”
4 The Respondent lodged a cross-claim seeking orders in the following terms:
“The landlord has been unreasonable and has not acted in accordance with the Lease agreement. He has unfairly cashed in a bank guarantee. Respondent would not attend our proposed mediation.”
5 The matter came before me for hearing on 15 May 2002. The Applicant appeared on his own behalf and Mr Robert Simkin appeared on behalf of the Respondent.
“The Respondent seeks to cross claim against the Applicant for an order that the Applicant pay the Respondent the sum of $4,024.76 comprising:
(i) the difference between the cost of making good in the sum of $6,722.18 and the amount of the bank guarantee in the sum of $6,101.00 being $621.18;
(ii) the sum of $3,403.58 comprising 1 month's rent for the Premises, the tenant having failed to give any written notice or adequate notice of his intention to vacate the Premises during the holding over period.”
Background to the Application
6 A Lease was entered between the Applicant and the Respondent in relation to the Premises. That Lease (“the Lease”) was stated to commence on 1 July 1996 and terminate on 30 June 2001. The Lease contained an option to renew. It is not disputed that the Applicant was invited to exercise the option or that in about May 2001 he advised the Respondent that he proposed to do so. Nor is it disputed that the Applicant later decided not to renew the option. There is some disagreement about when the Applicant advised the Respondent that he did not propose to exercise the option.
7 It appears that there was a good working relationship between the parties from the commencement of the Lease until the dispute arose after the Applicant vacated the Premises. The dispute relates to whether the Applicant gave sufficient notice of his intention to vacate the Premises, the extent of the Applicant's obligations to reinstate the Premises, whether the Respondent acted reasonably and in accordance with the Lease with respect to the reinstatement Premises, and whether the Applicant is liable for the costs claimed by the Respondent in relation to the reinstatement of the Premises or for rent for the period following vacation of the Premises.
8 It is common ground that the relationship between the parties is governed by the terms of the Lease. The Lease is also governed by the Retail Leases Act 1994 (“the Act”). Clause 23.10 of the Lease makes specific provision for the application of the Act.
Relevant Provisions of the Lease
9 Clause 14 of the Lease sets out the Applicant's obligations in relation to the maintenance of the Premises. The relevant provisions contained in that clause are:
10 Item 14 of the Reference Schedule of the Lease sets out the Applicant's obligations in relation to redecoration of the Premises. That Item provides:
“Repair, replace and redecorate
14.4 The Lessee must:
(a) keep the Premises and the Lessee’s property in good repair excluding fair wear and tear; and
(b) promptly replace worn or damaged items in the Premises (including, but not limited to, plate glass, Lessee’s property (other than stock) and those floor coverings and furnishings which are part of the Lessor’s property) and signs with items of similar quality; and
(c) redecorate the Premises and the Lessee’s property in accordance with item 14”
11 Clause 17 of the Lease sets out the parties' rights and obligations in relation to the expiry or termination of the Lease, vacation of the Premises and the removal of property from the Premises. The relevant provisions contained in that clause are:
“ Item 14 Redecoration requirements and dates
(Clause 14) Repaint and/or repaper with good quality materials and to a good standard the inside of the Premises during the last 6 months of the term and of each renewal or extension of the term of this Lease.”
12 Clause 18 of the Lease sets out the parties' rights and obligations under the Lease during a holding over period following expiry of the Lease. The relevant provisions contained in that clause are:
“17 EXPIRY OR TERMINATION
Lessee to vacate
17.6 The Lessee must vacate the Premises on the earlier of the Terminating Date and the date this Lease is terminated and, subject to clause 17.7, leave them in a condition satisfactory to the Lessor acting reasonably and having regard to the Lessee’s obligations under this Lease.
Removal of Lessee's Property
17.7 On expiry or termination of this Lease, the Lessee must remove the shopfront (if it was installed by the Lessee or at its expense), and any other Lessee's Property from the Centre, and promptly make good any damage caused by that removal.
If:
then, when the Lessee receives that compensation, title to those items will vest in the Lessor, and the Lessee must leave those items in place when this Lease expires or is terminated.
(a) the cost of removal and making good is more than the value of what is being removed; and
(b) the Lessor asks the Lessee not to remove the shopfront or other Lessee's Property; and
(c) the Lessee and Lessor to agree on the compensation the Lessor is to pay for leaving in place the items the Lessor specifies,
17.8 Subject to clauses 17.7 and 17.9, the Lessee must remove the Lessee's Property from the Premises during the 7 days immediately before the day the Premises must be vacated.
Lessee's Property not removed
17.9 If the Lessor terminates this Lease by re-entry, the Lessee must give the Lessor a notice within 7 days after termination that it will remove the Lessee's Property which it may or must remove from the Premises.
17.10 Within 7 business days after the Lessee gives its notice, the Lessor must give the Lessee a notice, stating when and how the Lessee's Property is to be removed from the Premises and by whom.
17.11 The Lessor may treat the Lessee's Property as abandoned and deal with it in any way it sees fit, at the Lessee's expense, if the Lessee does not:
17.12 The Lessee's Property is at the Lessee's risk at all times.
(a) give its notice on time; or
(b) remove the Lessee's Property in accordance with this clause l7 or a notice given under it.
17.13 On the day the lessee must vacate the Premises, the lessee must give the lessor the keys, access cards and similar devices to the Centre and the Premises held by the Lessee, the Lessee's Employees and Agents and any other person they have given them to.”
13 Clause 24 of the Lease sets out the parties' rights and obligations under the Lease with respect to the bank guarantee. The relevant provisions contained in the clause are:
“18 HOLDING OVER
18.1 If the Lessee continues to occupy the Premises after the Termination Date with the Lessor's approval, it does so under a monthly tenancy:
18.2 Subject to clause 18.1, the monthly tenancy is on the same terms as this Lease except for those changes which:
(a) which either party may terminate on 1 month's notice ending on any day; and
(b) at a rent which is one twelfth of the Rent.
(a) are necessary to make this Lease appropriate for a monthly tenancy (but any bond or bank guarantee required under this Lease may not be reduced); or
(b) the Lessor requires as a condition of giving its approval to tho holding over.”
Relevant legislation
“24 BANK GUARANTEE
24.1 If there is a number in Item 16, then this clause 24 applies.
24.2 On or before the Commencing Date, the Lessee must deliver the Bank Guarantee to the Lessor.
24.3 If the Lessee does not comply with any of its obligations under this Lease (including any extension or holding over), whether this Lease is registered or not, then the Lessor may call on the Bank Guarantee without notice to the Lessee.
24.4 If the Lessor calls on the Bank Guarantee or the Rent is increased, then no later than 7 days after the Lessor gives the Lessee a notice asking for it, the Lessee must deliver to the Lessor a replacement or additional Bank guarantee so that the amount guaranteed is the amount in item 16.
24.5 The Lessee's obligations under this clause 24 are essential terms of this Lease.”
14 As noted above, the Lease is governed by the Act. Section 68 of the Act provides:
15 As noted above, a certificate that mediation has failed to resolve the dispute was issued by the Registrar, Retail tenancy Disputes. I was satisfied that a retail tenancy dispute exists and that mediation was unlikely to resolve the dispute. I was therefore prepared to hear the matter. Pursuant to Part 3 of the Act, the Tribunal has powers to make orders in relation to a retail tenancy claim. The Tribunal’s order making powers are set out in section 72 of the Act. The provisions relevant to these proceedings are:
“68 Disputes and other matters must be submitted to mediation before proceedings can be taken
A retail tenancy dispute … may not be the subject of proceedings before any court unless and until the Registrar has certified in writing that mediation under this Part has failed to resolve the dispute or matter or the court is otherwise satisfied that mediation under this Part is unlikely to resolve the dispute or matter.”
The Applicant’s Case
“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, …”
16 The Applicant appeared and gave evidence on his own behalf. He also provided a written chronology of events and a bundle of correspondence between the parties. A photograph of the Premises indicates a "For Lease" sign on the front of the Premises offering the opportunity for both a Lease of the Premises and the purchase of a fully equipped hair studio on a walk in/walk out basis. The Applicant stated that the sign was erected in August or September 2001.
17 The Applicant's evidence is that he had occupied the Premises for five years. Prior to vacating the Premises, the Applicant had always dealt with Mr Simkin on behalf of the Respondent. In early June 2001 he contacted Mr Simkin and advised that he did not want to renew the Lease. He told Mr Simkin that he would be leaving the Premises and the two agreed that he would remain on a monthly tenancy until he vacated.
18 In August 2001 the Applicant phoned Mr Simkin and advised him that he was relocating and that he would be vacated the Premises in six to eight weeks. The Applicant wanted to sell the fixtures in the Premises as part of an ongoing business. They agreed that it would save time and money for both parties to leave the Premises as a salon. L J Hooker (Commercial) Neutral Bay (“L J Hooker”) was to act as agent for both parties; to try and find a purchaser for the salon on behalf of the Applicant and to try and find a tenant on behalf of the Respondent. It was also agreed that if the business was sold the Applicant would be compensated for all fixtures that had been left in the Premises. If no new purchaser/tenant was found, the Respondent was to inform the Applicant and he would be required to remove his fixtures.
19 Mr Mark Smith of LJ Hooker became involved and attempted to find a suitable purchaser/tenant. The Applicant met with Mr Smith and Mr Simkin in August 2001. Mr Smith inspected the salon at this meeting and noted that it was in very good condition and he agreed that the best option was to attempt to locate a new tenant/buyer.
20 In September 2001 the Applicant informed Mr Simkin that he would be vacating the premise on 14 October 2001. He had previously advised Mr Smith that he was leaving on October 14 2001 when Mr Smith had attended the shop in the company of a possible interested buyer and tenant. Mr Simkin told the Applicant that he was meeting with Mr Smith at the Premises on 17 October 2001. The Applicant agreed to attend at that time to hand over the keys and the outstanding rent. He attended the Premises on 17 October 2001 but did not stay for the meeting.
21 On 17 October 2001 the advertising sign, which had been organized by the Respondent and LJ Hooker, was still on the front window of the Premises. At that time the Applicant believed that Mr Smith was still actively seeking a tenant/buyer for the business in its then current state.
22 On 23 October 2001 the Applicant received a phone call from Mr Simkin. Mr Simkin advised the Applicant that he had already commenced removing fixtures and had begun refurbishment. He advised that the Applicant was responsible for some items. The Applicant told Mr Simkin that he would like time to remove them.
23 On the same day the Applicant spoke by phoned to Mr Mike Abbott, an employee of the Respondent who was removing the fixtures and overseeing the refurbishment. Mr Abbott advised him that the work had started on 22 October 2001 and that he had removed most of the fixtures. The Applicant told Mr Abbott that he could collect his items. He asked Mr Abbott what he would do with the Applicant’s property if they were not removed and was told that Mr Abbott would throw them away. The Applicant stated that if he had been given sufficient notice, he could have undertaken much of the work associated with removal of the fixtures himself.
24 Also on 23 October 2001 Mr Simkin wrote to the Applicant in the following terms:
25 The Applicant denied any obligation to remove floor tiles, the hot water system or the kitchen area. He stated that the hot water system was already there when the he took over the Premises.
“Further to our recent discussions I confirm that you have now officially vacated the above Premises effective from Sunday 14 October 2001.
As advised to you today I confirm that you have certain responsibilities and obligations under the terms of your Lease with regard to making good the existing Premises. Some of those items include, but are not limited to -
Also under the terms of your Lease it is your responsibility to repaint and redecorate the Premises including removal of the floor tiles, removal of your external signage and making good the kitchen area due to the large hot water system etc. etc.
The removal of the oversized hot water system.
The removal of your partitions and counters.
The removal and termination of the water services to your hairdressing seating and basins.
The removal of your mirrors, television, stereo, etc. etc.
Most of the matters relating to the above are contained and set out on pages 12 and 16 of the memorandum of your Lease.
The reason for writing to you is to confirm our verbal agreement today that I have organised the remedial work by tradespeople who we have used for many years and who offer high quality service at reasonable prices.
As also discussed I confirm there are some minor works being undertaken which are my responsibility with the major part of the works being at your cost.
I also want to confirm with you that our agreement is that when all the above works have been completed, you and I are to sit down and go through the invoices and assess the work completed as to what is your responsibility and which part of the work is my responsibility.”
26 The Applicant submitted that paragraph 17.8 of the Lease requires the Applicant to remove his property prior to vacating. But this is subject to any agreement pursuant to paragraph 17.7. The Applicant asserted that in August 2001 the parties had reached an agreement about leaving the fixtures on the basis that it was best for both parties if a tenant could be found for the Premises as they were. There was an agreement in place and nothing to suggest that circumstances had changed to vary the agreement.
27 The Applicant also submitted that Paragraph 17.10 of the Lease requires that within seven days of the Applicant giving notice, the Respondent is to give the Applicant notice of how to remove the property.
28 Paragraph 17.11 of the Lease deals with abandoned property. The Applicant stated that he was not given notice is required by paragraph 17.10. Therefore paragraph 17.11 cannot apply. The Applicant alleged that he was not given either written or verbal notice.
29 There was no communication between the parties from 27 October 2001 to 6 December 2001. On 6 December 2001 Mr Simkin phoned the Applicant regarding the invoices for the making good of the Premises. Following their conversation Mr Simkin wrote to the Applicant enclosing the invoices. Mr Simkin's letter stated:
30 The Applicant replied by letter dated 12 December 2001 in the following terms:
“Further to our correspondence dated 23 October 2001 and our subsequent telephone discussions, please find listed below, details of costs associated with the making good of the above Premises (copy invoices attached) -
As you are aware we are holding a bank guarantee for $6101.00.
1. M Abbott labour to clean up $1050.00
2. Z Jelic & Associates – painting $1300.00
3. T Redmond – electrical $ 737.39
4. Evans Plumbing Services $1265.00
5. Watts Waste Removal $ 169.79
6. Valley View Glass Service $ 200.00
7. Reino Shop & Office Fitting $2000.00
TOTAL $6722.18
Would you please advise how you want to settle the above amount of $6722.18, i.e. do you want us to cash in the bank guarantee and you give us a cheque for the difference of $621.18, or do you want to pay us the total of the above and we will then return the bank guarantee to you?”
“Further to your letter dated 6 December 2001, please be advised that I left the Premises in very good condition with everything in working order and in the same condition in which I commenced my lease over five years ago.
Subsequent to our meeting end of August 2001, with the Managing Agent, LJ Hooker it was agreed the shop would remain as a salon and that the property was being advertised for lease as such. On handing over all keys to the Premises on Wednesday, 10 October 2001, I was not informed that this decision had changed. It was only after you had commenced renovating that I was informed the shop was no longer remaining as a salon and therefore not given the opportunity to remove the remainder of my shop fittings.
31 The Applicant disputes the labour costs related to making good of the Premises. In particular he disputed the costs associated with waste removal, glass removal, and the new kitchen sink. He asserted that a lot of the plumbing costs related to replacing the hot water system and water to the new kitchen. He claimed that these are not his responsibility. The invoice from Evans Plumbing Services merely provides for a lump sum amount. It is not possible to identify the cost of particular items or the labour component from this invoice. The estimated labour component is $400. The Applicant asserted that he could have done some of the removal work himself. Therefore the labour component would not have been necessary. He could also have done the painting himself if he had been given sufficient notice.
We dispute all items associated with the costs with making good of the above premises, as our cost would have been minimal to remove the remainder of the fittings. We believe it is outrageous to be asked to pay for a total refit of your premises for re-leasing and that any other modifications is your business and at your cost.
I will not be sending any money in your favour.”
32 The Applicant stated that he believes he is responsible for approximately $1500 of the amount claimed. This is the cost of waste removal, glass removal and some plumbing costs. The amount of $6,101 was paid under the bank guarantee. He claims that therefore he is entitled to refund of an amount of $4,601.
33 The Applicant referred to Paragraph 24 of the Lease. This provides that the Respondent is only entitled to call on the bank guarantee if the Applicant didn't comply with the Lease. The Applicant asserted that he had not breached the Lease. The Respondent cashed the bank guarantee on 14 December 2001. The Applicant sought the return of the bank guarantee.
34 The Applicant stated that he approached Mr Smith for a statement in relation to these proceedings but that the Mr Smith was in an awkward position because of the amount of work which he does for the Respondent. He challenged the statement that Mr Smith provided and asserted that some statements made by him are incorrect. The Applicant denied saying the words attributed to him by Mr Smith. He had previously advised Mr Smith that he was leaving on 14 October 2001.
The Respondent's Case
35 Mr Simkin appeared on behalf of the Respondent. Mr Simkin also provided written submissions, a chronology and a written statement outlining his evidence. Written statements were also provided by Mr Michael Abbott and Mr Mark Smith. A bundle of correspondence between the parties in relation to the issues which are in dispute was also put in evidence. The Respondent also relied on copies of invoices relating to work undertaken in making good the Premises. These invoices were provided by Z. Jelic & Associates for painting; T. Redmond, for electrical work; Evans Plumbing Services in relation to plumbing work; Watts Waste in relation to waste removal; Valley View Glass Service Pty Ltd in relation to the removal of mirrors; and Reino Shop and Office Fitting Pty Ltd in relation to the supply and installation of the sink unit. A handwritten notation headed "Mike's hours spent at 7\211 Ben Boyd" indicates the total of $1,050 for labour at the Premises between 22 October and 1 November 2001.
36 Mr Simkin stated that the Applicant telephoned him on or about 11 October 2001 and advise him that he was to move out on or about 14 October. Mr Simkin said that a conversation took place to the effect of:
37 On 17 October 2001, Mr Simkin met with the Applicant and Mark Smith and Burt Jordan from L J Hooker. At the meeting the Applicant gave Mr Simkin a cheque for the sum of $1,600.00 in payment of rent to 14 October 2001. There was a discussion concerning the reletting of the Premises. Mr Smith said that he had had some discussions with a hairdresser who may be considering the Premises. He had not made up his mind and Mr Smith was not sure whether he would proceed. The Applicant agreed to leave the bank guarantee in place to secure the costs of making good if the prospective tenant did not proceed. There was verbal consent to do the work as soon as possible.
“I said words to the effect of:
He said words to the effect of:
"What is going to happen with the fit out?"
I said words to the effect of:
"I have had some discussions with the agent, I am still trying to find a purchaser."
He said words to the effect of:
"We should have a meeting with the agent. Is 17 October convenient?"
"Yes it is."
38 In a statement dated 15 April 2002 Mr Smith confirmed the Applicant's agreement to leave the bank guarantee in place to secure the costs of making good.
39 On or about 23 October 2001 Mr Smith informed Mr Simkin that he had not been able to secure the prospective tenant. Mr Simkin had responded that he wanted to make good the Premises as soon as possible. On the same day Mr Simkin telephoned the Applicant and said words to the effect of:
40 Mr Simkin's evidence is that the Applicant agreed with his proposition and that he would wait to hear from Mr Simkin. On the same day Mr Simkin wrote to the Applicant. The copy of the relevant parts of Mr Simkin's letter are set out above.
"The prospective tenant has fallen through. We need to be able to relet the Premises. I will arrange for remedial work to be undertaken for the best price. I am also going to have some minor works undertaken as my responsibility but the major works will be at your cost. When all the works have been completed we can sit down and go through the invoices and assess what is to be paid by each of us."
41 Mr Simkin subsequently arranged to obtain quotes from several contractors for the carrying out of the making good. He utilised the services of labourers, painters, plumbing and electrical contractors, glaziers and kitchen fit out contractors with whom he had previously had dealings on other premises because he considered that they provided a good and efficient service for reasonable costs.
42 In a statement dated 15 April 2002 Mr Abbott confirmed that Mr Simkin had instructed him to remove the various fixtures from the Premises. He attended to the removal of those items and then attempted to telephone the Applicant on at least two occasions. He finally reached the Applicant and had a conversation regarding some of the Applicant's property. Mr Abbott stated that he asked the Applicant when he could come to collect the items and that the Applicant had said that he didn't really want the items and requested that Mr Abbott dispose of them.
43 Mr Simkin stated that between 23 October 2001 and 6 December 2001 he telephoned the Applicant on a number of occasions and left messages for him to return the call but the Applicant did not do so. On 6 December 2001, Mr Simkin spoke to the Applicant and informed him that the making good had been completed, and invited the Applicant to discuss the invoices. The Applicant asked Mr Simkin to send the invoices to him. Mr Simkin forwarded the invoices to the Applicant on the same day.
44 Mr Simkin stated that in addition to the works described in those invoices he also undertook the supply and installation of new carpet and general cleaning. He has made no claim against the Applicant for those matters as they fall outside the Applicant's obligation under the Lease to make good the Premises.
45 Mr Simkin submitted that Clause 18.1(a) of the Lease required that the Applicant to give one month's notice prior to termination. Clause 22.1(a) of the Lease required that a Notice of Termination under the Lease be in writing. If the Applicant vacated with no written notice then he would be liable to the Respondent for one month's rental for the notice period.
46 Mr Simkin further submitted that clause 17.7 of the Lease provides that upon expiry or termination of the Lease the Applicant was obliged to remove the shop front (if appropriate) and his other property, if any, and promptly make good any damage caused by that removal. The Applicant purchased the previous business in the Premises. The hot water system and other fixtures were purchased from the previous business owner and was therefore the Applicant's property. Mr Simkin alleged that in breach of clause 17.7, the Applicant failed to remove his property and failed to make good the Premises upon termination. He asserted that as a consequence the Applicant is liable for the costs of making good and removal of the Applicant's property.
47 Mr Simkin also alleged that the Applicant undertook to pay the costs of making good and the removal of the Applicant's property. As indicated above, the Respondent provided invoices in relation to those costs.
48 The invoice from Evans Plumbing Services dated 13 November 2001 provides:
49 The invoice from Watts Waste dated 31 October 2001 refers to a special clearance undertaken on 25 October 2001 at a cost of $169.79.
“RE: WORK COMMENCED 22 - 23/10/01 & 1/11/01.
SHOP 7 GROSVENOR STREET, NEUTRAL BAY.
*strip put hot & cold water pipes to hair dressing chairs.
*strip out & cap off sewer to same fittings.
*strip out & disconnect hot water service.
* Strip out sink & cupboards.
* Alter hot & cold water pipes for new sink.
* To complete connections of sink, hot water service etc.
Labour & materials $1,150.00
GST: $115.00
Total Inc. GST: $1,265.00
Total Amount Due: $1.265.00”
50 The invoice from Valley View Glass Service Pty Ltd dated 24 October 2001 claims for the removal of mirrors from the wall at a cost of $200.
51 The invoice from Reino Shop and Office Fitting Pty Ltd dated 31 October 2001 refers to the supply and installation of a sink unit at a cost of $2000.
52 The invoice from T Redmond dated 13 November 2001 claims an amount of $400 plus GST for “Disconnect & make safe, circuits to counter & hairdressing benches. Replace duct lid damaged by tiled floor” and a further $270.35 plus GST for materials giving a total invoice amount of $737 39.
53 The invoice from Z. Jelic & Associates dated 25 November 2001 claims an amount of $1,300.00 for repainting of all previously painted surfaces.
54 As indicated above, the Respondent seeks an order that the Applicant is liable for the total amount of those invoices; that is, $6,722.18. The Respondent has already been paid the bank guarantee amount of $6,101.00. The Respondent therefore seeks an amount of $621.18 which is the difference between the cost of making good and the amount of the bank guarantee. The Respondent also seeks the sum of $3,403.58 as unpaid rent for the Premises because the Applicant failed to give the required notice of his intention to vacate the Premises.
The Respondent also sought payment in relation to work undertaken by Mr Abbott. This claim is set out in a tax invoice from Mr Simkin to the Applicant dated 6 December 2001. That document is consistent with the handwritten notation referred to above, and provides as follows:
“Monday 22/10/10 - 8 hours
Tuesday 23/10/01 - 6 hours
Wednesday 24/10/01 - 4.5 hours
Thursday 25/10/01 - 2 hours
Monday 29/10/01 - 3 hours
Tuesday 30/l 0/01 - 3 hours
Thursday 01/11/01 - 3.5 hours
Total 30 hours @ $35 per hour including GST $1050.00
10% GST included in total amounts to $95.45"
Findings
55 On the evidence before me I am satisfied that it is probable that the Applicant informed the Respondent of his intention to leave the Premises in August 2001 and that he indicated at that time that he would be leaving in six to eight weeks. I am also satisfied that it is probable that the Applicant informed Mr Smith of L J Hooker and the Respondent of the actual date of his intended vacation of the Premises at least one month prior to the actual vacation.
56 During this tenancy, very few of the dealings between the parties had been in writing as required by the Lease. In my view this was by mutual agreement. In my opinion, in the circumstances of this case, the fact that the Applicant did not give written notice of his intention to vacate the Premises on 14 October 2001 is not fatal to his defence of the Respondent’s claim for unpaid rent. In my opinion it is sufficient that the Respondent had actual notice of the Applicant’s intention. I am satisfied that the Respondent had that actual notice. It follows that the Respondent’s claim in relation to unpaid rent must fail.
57 The evidence shows that there was an agreement between the parties that the Premises should be left as a salon and that an effort would be made to find a new tenant and purchaser for the Applicant's business. Consequently, any obligation on the part of the Applicant to remove fixtures would not come into effect until the attempts to find a new tenant/purchaser had failed. I do not accept that paragraph 17.7 of the Lease is applicable to the circumstances of this matter as it was never the intention of the parties that the title to the Applicant's fittings would pass to the Respondent.
58 Paragraphs 17.9 and 17.10 of the Lease do not apply as the Respondent did not terminate the Lease by re-entry. In my view the Lease was varied by the agreement to leave the Premises as a salon and attempt to find a new buyer/tenant. An implied term of that agreement was that after the attempts to locate a new buyer/tenant had been exhausted the Respondent would give the Applicant reasonable notice that he was required to remove his property and make good the Premises.
59 I am satisfied that the Lease placed an obligation on the Applicant to remove the shopfront and any other property belonging to the Applicant. I am satisfied that the Applicant purchased some fixtures from the previous lessee and that it is probable that the Applicant was aware or should have been aware that the fixtures relating to the hairdressing salon would need to be removed when the Lease came to an end. I am also satisfied that the Applicant agreed that he would pay the costs of removal of his property and making good the Premises.
60 Notwithstanding that view, as a consequence of the agreement between the parties that the premises should be left as a salon until efforts to find a new tenant/purchaser had been exhausted, the Applicant's obligation to remove the fixtures could not come into effect until that agreement was ended
61 In my view, the Respondent had an obligation to give the Applicant reasonable notice that he was required to remove his property and make good the Premises. I am not satisfied that the Respondent gave the Applicant reasonable notice of that requirement or a reasonable opportunity for the Applicant to minimise his liability. It is clear from the invoice provided by Evans Plumbing Services that plumbing work on the Premises was commenced on 22 October 2001. The Applicant’s uncontradicted evidence is that he was advised by Mr Abbott that he had commenced removing the fixtures on 22 October 2001. This is inconsistent with that Mr Simkin's evidence is that on 23 October 2001 he advised the Applicant that he would “arrange for remedial work to be undertaken for the best price.” It is also inconsistent with Mr Simkin's evidence that he “subsequently arranged to obtain quotes from several contractors for the carrying out of the making good” at least with respect to the plumbing work. Clearly, Mr Simkin had already given Mr Abbott instructions to undertake removal of the fixtures and he had already contracted with Evans Plumbing Services to undertake plumbing work at the Premises.
62 On his own evidence, Mr Simkin is a man of considerable commercial experience. In my opinion, the Applicant's liability is limited as a consequence of the Respondent’s failure to give him sufficient notice of the requirement to remove his property and make good the Premises. The Applicant's liability is limited to the costs he would have incurred had he been given the reasonable opportunity to arrange for the work himself.
63 I accept the Applicant's evidence that he could have undertaken the labouring work which was performed by Mr Abbott. I also accept that the Applicant could have undertaken much of the labouring work which was undertaken by Evans Plumbing Services. I accept the estimate that the labour component of the amount charged by Evans Plumbing Services is $400. It follows in my view that the Applicant is not liable to the Respondent for $1,450.00 of the amount claimed in relation to removing the Applicant's fixtures and making good the Premises. In my opinion, the Applicant is liable for all other expenses incurred by the Respondent in removing the Applicant's fixtures and making good the premises. I have no evidence to suggest that the amounts charged are unreasonable.
64 I note that the Respondent claimed an amount of $6,722.18 for removing the Applicant's fixtures and making good the premises. In my opinion the Respondent is entitled to an amount of $5,272.18. That is, $6,722.18 less $1,450.00. The Respondent has already claimed the amount of the bank guarantee in the sum of $6,101.00. It follows that the Respondent is liable to repay to the Applicant an amount of $828.82.
Order
1. In full and final satisfaction of all issues in dispute in application No. 025018 I order that Simkin Holdings Pty Limited is to pay to Joseph Egidio Zucchiatti the amount of $828.82.
2. The amount referred to in Order 1 is to be paid by 13 September 2002.
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