Pocket Pizza v Melani; Melani v Pocket Pizza [2021] NSWCATCD 107

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pocket Pizza v Melani; Melani v Pocket Pizza [2021] NSWCATCD 107 Hearing dates: 22 and 23 March 2021 Date of orders: 12 August 2021 Decision date: 12 August 2021 Jurisdiction: Consumer and Commercial Division Before: S Thode, Senior Member Decision: 1. In COM 20/28270 the Respondents are to pay to the Applicant the sum of $122,488 by 10 September 2021. 2. Application COM 20/39312 is dismissed. 3. Order the Respondents to pay the Applicant's costs as agreed or assessed on a party and party basis. Catchwords: RETAIL LEASES – Mitigation of loss Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Retail Leases Act 1994 (NSW) Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: COM 20/39312 Pocket Pizza (Applicant) Annamaria Melani (Respondent)

COM 20/28270 Annamaria Melani (Cross Applicant) Pocket Pizza Pty Ltd (Cross Respondent) Dylan Eisenhut (Second Respondent) Ben Pichon (Third Respondent) Representation: Solicitors: Kells Lawyers (Applicant) Nicoll Legal (Respondent) File Number(s): COM 20/39312; COM 20/28270 Publication restriction: Nil

reasons for decisioN 1. The parties entered into a retail lease on 16 March 2025, in respect of commercial premises on The Corso, at Manly, New South Wales. The lease was for an initial term of three years commencing on 25 February 2015 and expiring on 24 February 2020. At the commencement date of the lease Pocket Pizza Pty Ltd (the lessee) provided a bank guarantee representing three months' rent plus GST ($22,425) to be held as security against the lessee's performance of the lease. 2. The lessor pleads a breach of contract. It is pleaded that in breach of its essential obligation under the lease, the lessee failed to pay rent and outgoings for the period commencing 25 January 2019 to 24 February 2019 and 25 February 2019 to 24 March 2019. 3. In addition it is pleaded the lessee abandoned the premises because it removed from the premises various fixtures and fittings and was observed by the lessor to have commenced trading from other premises at XX Pittwater Road, Manly. The lease permitted the lessor to terminate the lease without prior notice, however a notice was issued regardless, and on 5 March 2019 the lessor took possession of the premises. 4. Following the termination of the lease the lessor claims expenses for reinstatement of the premises to a condition in which it could be relet. It was pleaded that the lessor has mitigated her losses as far as possible by re-letting the premises to an alternative tenant. The rent is higher as the premises were re-let in a different market to what was in existence at the commencement of the lease with the lessee. The lessor commenced proceedings in the District Court of New South Wales on 19 December 2019 damages for rent and outgoings, costs, filing fees and interest in the sum of $133,844.02. 5. The proceedings were transferred to the Tribunal on or about 25 June 2020. 6. The lessee filed its cross-claim in the District Court of New South Wales. Those proceedings were transferred also. Regardless, the lessee filed a separate retail lease application in the Consumer and Commercial Division of the Tribunal dated 9 September 2020 and is proceeding on that application. 7. In the section entitled " reasons for asking for orders", the lessee states the following: The applicant relies on the attached statement of cross-claim filed with the District Court on 10 July 2020 which was filed pursuant to the orders of the District Court as part of the transfer of the proceedings. The quantum of the claim in the statement of cross-claim are set out below: false ceiling claim $15,592.31; liquor licence delay claim $8862.07 loss of fixtures and fittings $105,700; expenses incurred with Silver Chef $14,618.04, Total $144,772.42. 1. In the attached statement of claim, the lessee pleads that the lessor represented to the lessee that it was permitted to install a false ceiling in the premises in circumstances when the lessor knew or ought to have known that the representation was untrue because the ceiling in question was common property and as such did not form part of the leased premises and was owned and controlled by the owners corporation as common property. The false ceiling therefore had to be removed by the lessor after commencement of the lease (the false ceiling claim). 2. It is further pleaded that it was a term of the lease that the lessor would not unreasonably delay her consent for the lessee to obtain its liquor licence for the premises as part of the lessee agreeing to enter into the lease. It is alleged that the lessor neglected to provide her consent causing the lessee to suffer loss and damage in the sum of approximately $33,000 is quantified in the affidavit of Dylan Eisenhut (the liquor licence claim). 3. The lessee alleges that it was prevented from removing its property at the termination of the lease and that it was wrongfully prevented from collecting its fixtures and fittings causing the lessee to suffer loss and damage in the sum of $105,700 as particularised on page 43 of the retail leases application (the fixtures and fittings claim). 4. By reason of the fact that it was prevented from removing goods from the premises, the lessee was prevented from accessing the premises from 5 March 2019 to retrieve goods it had on finance from 'Silver Chef' and suffered loss and damage in the sum of $14,618.04 (the Silver Chef claim). 5. Lastly, the lessee claims that the lessor was not entitled to take possession of the premises and terminate the lease in accordance with clause 15.1 of the lease. Around the time of executing the lease the lessee provided the lessor with a bank guarantee the equivalent of 3 months' rent. The lessor called on the bank guarantee in March 2019 as part of taking possession of the premises and after wrongfully terminating the lease, and the lessee seeks the repayment of the bank guarantee (the bank guarantee claim).