Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Smith v Lambert [2021] NSWCATAP 16 Hearing dates: 21 January 2021 Date of orders: 1 February 2021 Decision date: 01 February 2021 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President The Hon D Cowdroy AO, QC, Principal Member Decision: (1) The time for lodgement of the appeal is extended. (2) Appeal upheld (3) In addition to the orders made at first instance, the Respondent is to pay to the Appellant immediately, the sum of $3461.60 Catchwords: RETAIL LEASE-agreement to vary, repudiation, question of law. Legislation Cited: Civil & Administrative Tribunal Rules 2014 Civil & Administrative Tribunal Act 2013 Cases Cited: Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 Texts Cited: None cited Category: Principal judgment Parties: Darcy Peter Smith (Appellant) Steven Lambert (Respondent) Representation: Solicitors: Appellant (Self-Represented) Respondent (Self-Represented) File Number(s): AP 20/44124 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil & Administrative Tribunal Jurisdiction: Consumer & Commercial Division Citation: Not applicable Date of Decision: 17 September 2020 Before: K Ross (Senior Member) File Number(s): COM 20/21286 REASONS FOR DECISION Background 1. This appeal concerns a dispute between the lessor (the Appellant) and the lessee (the Respondent) of a retail lease. The decision under appeal (the Decision) was published on 17 September 2020 and concerned a claim by the Appellant for orders for rent and compensation at the end of the lease. The Appellant was partly successful but appeals the dismissal of two aspects of his claim. The first concerned a claim for rent and outgoings from 6 January 2020 to 21 January 2020 totalling $1,411.60. The second concerns a claim for compensation of $2050 for the cost of painting the underside of the awning and fascia of the premises, the subject of the lease. 2. The appeal was lodged on 19 October 2020 and no issue has been raised by the Respondent to the fact that the appeal was filed out of time. The appeal should have been filed within 28 days of 17 September 2020, namely by 15 October 2020 (see Civil & Administrative Tribunal Rules 2014 (the Rules) r 25(4)(c). 3. Under s 41 of the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act) the Tribunal may extend time for the lodgement of an appeal or initiating process. In Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 the Appeal Panel dealt with the matters to be considered when determining whether time should be extended. These matters included the length of the delay, the reason for the delay, the Appellant's prospects of success and the extent of any prejudice suffered by the Respondent. In this case we were not provided with any material indicating prejudice suffered by the Respondent and the length of the delay is very short. Further, for the reasons that follow, we are of the opinion that an injustice has occurred and, in all of the circumstances, we are of the view that time should be extended. The Decision 1. The Decision (so far as is relevant to the appeal) may be summarised as follows: 1. The Appellant sought payment of rent and outgoings from the Respondent from 6 to 21 January 2020, as well as compensation in the sum of $2,050 for the cost to paint the underside of the awning and fascia bargeboard. 2. On 6 December 2019 the Respondent gave the Appellant notice of his intention to vacate one month later, namely on 6 January 2020. On that day he returned keys to the Appellant but retained one key. 3. The parties came to an agreement (contained in correspondence referred to below) that the Respondent would leave items in the premises to facilitate a sale of the Respondent's business. The Respondent sold the business and settled that sale on 8 January 2020. The sale did not include an assignment of the lease. 4. The Respondent advised the Appellant by letter dated 10 January 2020 that he had by that day removed stock, plant and equipment from the premises. 5. The Appellant conducted an inspection of the premises and the Respondent returned to address some of the Appellant's claims. As stated above, the final key was returned to the Appellant on 21 January. 6. By email dated 3 January 2020, the Respondent made an offer to the Appellant to leave stock and fittings in the premises to facilitate the sale of the business on the basis that no rent was payable. By letter dated 6 January, the Appellant accepted the terms of the Respondent's letter. The Tribunal found that it was a condition of the agreement that the Respondent's goods could remain at the premises until 21 January 2020, and no rent will be payable after 6 January 2020. The claim for rent and outgoings was therefore dismissed. 7. The Respondent had painted the underside of the awning and the fascia due to its poor condition earlier in the term of the lease. The Tribunal found that the lessee had breached the terms of the lease, but because the paintwork was in poor condition at the commencement of the tenancy the Appellant had suffered no loss. The claim for compensation was therefore dismissed. Notice of Appeal 1. As indicated above, the Appellant appeals the dismissal of the rental claim and the claim for compensation for painting the awning. The Appellant seeks an order that the Respondent pay $3,461.60 being the total of the two claims which had been dismissed. 2. The Notice of Appeal does not identify any question of law raised by the Appellant but does submit that the Decision was not fair and equitable and was against the weight of evidence. 3. As we are of the opinion that the effect of the points raised in the Notice of Appeal, and by the Appellant at the hearing of the appeal, is that questions of law are raised. It is not necessary therefore to summarise the basis for the Appellant's view that the Decision was not fair and equitable or was against the weight of evidence. Appeals lie as of right on a question of law and with leave on other grounds: see s 80 and cl12 Sch 4 of the NCAT Act. Reply 1. The Respondent has filed a Reply in which the Respondent submits that the appeal should be dismissed. Submissions 1. The Appellant submitted that the parties had an agreement recorded in the correspondence of 3rd and 6th January, and that the Respondent had breached the agreement between them by selling the Respondent's business himself with the result that rent was payable until 21st January. The Respondent submitted that the agreement did not preclude him selling his business. With respect to the claim for painting the awning the Appellant submitted that the Tribunal had erred in not taking account of the loss suffered by the Appellant in not having an awning of a similar appearance to the neighbouring shops (also owned by the Appellant). The Respondent submitted that the Tribunal had not erred. Consideration 1. By email dated 3 January 2020, the Respondent wrote to the Appellant. In that email, the Respondent noted that the lease required him to vacate the premises on 6 January. He went on to acknowledge that the Appellant had taken the initiative of trying to sell the Respondent's retail business as a going concern and that "consequently, it is unlikely that I will actually vacate the premises on 6 January 2020, as keeping the assets on the premises will assist any sale". The Respondent went on to say that he was not prepared to incur any financial liability such as rent after 6 January. He requested the Appellant to provide a document stating that he had complied with the lease terms, particularly regarding vacating the premises by 6 January, such that he would be able to claim the bond in full and that he would incur no rent after 6 January. 2. By letter dated 6 January 2020, the Appellant wrote to the Respondent in which the Appellant acknowledged that the Respondent was going to vacate on 6 January and that the Respondent had "adhered to this notification and handed the key back on 6 January 2020". That letter also recorded that the Appellant would take the opportunity to sell the Respondent's business on behalf of the Respondent and that the Respondent would leave leftover stock, fixtures and fittings in the premises to help with the sale for a period of two weeks (until 20 January 2020). The letter further said that if the business is not sold, the Respondent will remove all fixtures and fittings etc on 21 January. Finally, the letter stated that after the sale and cleaning of the premises, the Appellant will agree to the release of the bond in full. That letter was signed by the Respondent to record his agreement. 3. On the following day (7 January 2020) the Respondent sold the business himself The Appellant did not find new lessees for the premises until February. 4. On 10 January 2020, the Respondent wrote to the Appellant advising that he (the Respondent) had "emptied the property today and that it has been left cleaned and left neat and tidy". That letter stated that the Respondent still had possession of one key for the premises. 5. The Decision was based upon the finding that the Respondent's email of 3 January constituted an offer to enter into an agreement with the Appellant and that the Appellant's letter of 6 January constituted acceptance of that offer. Accordingly, the Tribunal found that rent was not payable after 6 January 2020. 6. However, in our view, neither party followed the terms of that agreement. The Respondent repudiated the agreement and the Appellant was deprived of the opportunity of trying to sell the business. We draw this conclusion from the fact that the Respondent sold the goodwill the following day (7 January 2020), and thereby ignored the purpose of the Appellant's agreement to allow stock, fixtures and fittings to remain in the premises after 6 January, that purpose being "to assist any sale" (the Respondent's language from the letter of 3 January 2020) or to "help with the sale for a period of two weeks" (the Appellant's language contained in the letter of 6 January 2020). 7. The Respondent, having sold his business on the 7 January nevertheless continued to remain in possession until at least 10 January (his concession made at the appeal hearing)) and until 21 January 2020 (the Appellant's contention). The Respondent's letter of 10th January confirmed that he had had access to the premises that day for the purpose of "emptying the property" and that he had left some items which he had installed there as they were "improvements". The Decision recorded that the Respondent returned after 10th January to 'address some of the lessor's concerns' (par 3(6)) 8. In our view although there was an agreement between the parties constituted by the letters dated 3 and 6 January 2020 that agreement was immediately ignored. As we have stated above the Appellant was deprived of the opportunity to try and sell the business. The Respondent's conduct was a repudiation of that agreement. The Appellant threatened legal action and as a result of the repudiation the parties were bound by their respective obligations and rights under the terms of the lease. By retaining a key the Respondent had, in our view, indicated an intention to retain some rights to access the premises until 21 January 2020. In the circumstances, the Appellant is entitled to rent claimed but not paid for the period from 6 to 21 January. 9. In circumstances where the agreement identified by the Tribunal in the Decision was repudiated by the Respondent the finding that there was an enforceable agreement between the parties relieving the Respondent from the obligation to pay rent after 6 January was a finding made in error and it raises a question of law. 10. Accordingly, the Appellant's claim for rent is upheld. 11. With respect to the claim for compensation for the cost of painting the awning (including the fascia), the Decision contained the finding that the Respondent had breached the terms of the lease. There was no cross-appeal by the Respondent disputing that finding. The Tribunal found that the lessor had suffered no loss upon the basis that the paintwork was in poor condition at the commencement of the tenancy and due for painting by the end. However, the Appellant submitted that the Tribunal had overlooked an important factual matter. These premises are in a row of shop premises also owned by the Appellant and that the other awnings were all of a consistent and uniform appearance. The awning painted by the Respondent was the exception. The Appellant submitted that he was entitled to incur such expense as was necessary to make this awning uniform or consistent with the appearance of the other awnings. The Tribunal noted that the quotation submitted by the Appellant involved paintwork that would "still not match the age and marked painted surfaces of the adjoining premises". However, in our view, the Appellant was entitled to such compensation as was reasonably necessary to achieve uniformity of appearance and the best evidence available in that regard was the quotation supplied. Accordingly, we are of the opinion that the analysis by the Tribunal in respect of the landlord's claim for compensation was in error. 12. Accordingly, we make the following orders: 1. The time for lodgement of the appeal is extended. 2. Appeal upheld. 3. In addition to the orders made at first instance, the Respondent is to pay to the Appellant immediately, the sum of $3461.60 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 February 2021