Supreme Court New South Wales Medium Neutral Citation: Smart Dollars Tamworth Pty Ltd v Corpique No. 18 Pty Ltd [2023] NSWSC 936 Hearing dates: 09 August 2023 Date of orders: 09 August 2023 Decision date: 09 August 2023 Jurisdiction: Equity - Real Property List Before: Stevenson J Decision: Vacate order 3 made on 23 July 2021; first cross-defendant permit the cross-claimant to re-enter possession of the Motel Catchwords: LEASES AND TENANCIES – default and termination – relief against forfeiture – where orders made allowing tenant to repossession on undertakings – where undertakings breached – lessor entitled to repossession Legislation Cited: Conveyancing Act 2019 (NSW) Category: Procedural rulings Parties: Smart Dollars Tamworth Pty Ltd (Plaintiff/First Cross-Defendant) Corpique No. 18 Pty Ltd (Defendant/Cross-Claimant) Bao Kun Lin (Second Cross-Defendant) Rongtao Peng (Third Cross-Defendant) Bingqin Liu (Fourth Cross-Defendant) Representation: Counsel: C D Wood SC (Plaintiff/Cross-Defendants) G Campbell (Defendant/Cross-Claimant) Solicitors: Brighton Lawyers (Plaintiff/Cross-Defendants) APJ Law (Defendant/Cross-Claimant) File Number(s): 2021/204014 ex tempore JUDGMENT (Revised) 1. The Plaintiff is the lessee of a motel in Tamworth known as the Almond Inn under a lease originally made between the Defendant and the third party that has assigned its interests to the Plaintiff. 2. On 21 March 2021, the lessor served a breach notice under s 129 of the Conveyancing Act 2019 (NSW) alleging multiple breaches of the lease. The lessor took possession of the premises on 29 June 2021. 3. The plaintiff commenced these proceedings on 16 July 2021 in effect seeking relief against forfeiture. 4. On 23 July 2021, orders were made by consent allowing the lessee to re-enter possession on the basis of a number of undertakings given to the Court, including: 1. the appointment of an independent expert to identify works needed to be performed, to determine whether such works were the responsibility of the lessee to repair, a scope of works, and to appoint a builder; 2. within two months of the appointment of a builder to complete items in the scope of works determined by the expert to be its responsibility; and 3. to pay the expert's costs. 1. The lessor alleges that there have been numerous breaches of those undertakings, including the timely appointment of the expert, the timely payment of the amount certified by the expert for past works, and the timely payment of the expert's costs. 2. More significantly perhaps is the fact that on 12 May 2023, almost two years after the proceedings had commenced, and after the lessee had been let back into possession, the Court, with the consent of both parties, made this order: "On or before 16 June 2023, the [lessee] is to engage Hascaw Pty Ltd trading as Waycott Builders (Waycott) to perform the Scope of Works determined by the Expert pursuant to the undertakings to the Court entered into by the [lessee] on 23 July 2021 (Scope of Works)". 1. The Court also noted these matters: A. The Expert has been appointed, and the parties have agreed to the appointment of, Waycott to perform the Scope of Works. B. Waycott has provided a preliminary quotation to perform the Scope of Works in the amount of $1,463,169.53. C. Waycott intends to commence performing the Scope of Works on or about 12 July 2023. 1. Nonetheless, the lessee has not engaged the nominated builder to perform the works. Such explanation as has been given to the Court for this is contained in an affidavit made by Ms Bingqin Liu, who says that she is the wife of the sole director of the lessee, and although living in Sydney, says that she overlooks the day-to-day operation of the motel business in Tamworth. 2. Her explanation for not engaging with the process to which the lessee consented on 12 May 2023 is contained in pars 7 to 10 of her affidavit, which provides: Tamworth is a small town in the north of New South Wales. The town has limited resources and trades people for construction work. Many of the tradespeople from nearby towns are not willing to travel to Tamworth. This means that residents of Tamworth wishing to get construction work done have limited options in engaging builders carrying out the works referred to in these proceedings. The quotation was first received by my solicitors on 19 June 2023. I was shocked to see that the amount quoted was $1,463,169.53 to carry out the works determined by the expert, allegedly in compliance with Undertaking 11 of Annexure A of the Orders dated 23 July 2021. The quote appears to attempt to complete a 'full fit out and renovation' of the entire motel to a brand new one, rather than attending the essentials in compliance with the lease. I am not a builder, but I have had experiences in opening retail shops with my husband in different shopping centres in different states. I have reviewed the quote, and it appears to me to be excessive. I am arranging a separate quotation on the works. There were only a few builders in Tamworth, and those were the ones who declined on the job prior to Waycott Builders accepting the work. Due to the geographical difficulty, I am having extreme difficulty in having this arranged. My daughter who normally takes care of the operation side of the business, has been overseas for the past months. I expect to be in a position to obtain a separate quotation by the end of this month. 1. I raised these matters with Mr Wood of Senior Counsel who appears for the lessee. Mr Wood took some instructions and has informed me that the figure in paragraph 8 of Ms Liu's affidavit is an error, and that she intended in fact to refer to the figure of some $2.3 million which is specified as being the contract price in a contract for preliminary works, evidently proffered to the lessee as to the basis upon which the work should be complete. 2. Whether or not that explanation is correct, the fact remains that the lessee, after considerable delay, on 12 May 2023, agreed to a detailed process to get the necessary works at the motel effected, and has not done any of the steps to which it consented at that time. 3. Against that background, on 28 July 2023, the lessor, seeks by way of Notice of Motion, interim relief to the effect of paragraphs 1 and 2 of its cross-summons, such relief being in effect to enable it to resume possession of the premises. 4. In my opinion, in the circumstances I have described, the lessor is entitled to that relief, and I make orders in accordance with pars 1 and 2 of the lessor's Statement of Cross-Claim filed on 9 May 2022. 5. I order that the Plaintiff pay the Defendant's costs of the Defendant's motion of 28 July 2023. ********** 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: 10 August 2023