CITATION: Katsivardas -v- Parris [2002] NSWADT 151 DIVISION: Retail Leases Division APPLICANT PARTIES: Pavlos Katsivardas t/as Pavlo's Pizzeria RESPONDENT James Parris FILE NUMBER: 025045 HEARING DATES: 12/06/02 SUBMISSIONS CLOSED: 06/12/2002 DATE OF DECISION: 08/23/2002 BEFORE: Montgomery S - Judicial Member APPLICATION: Claim for payment of money - Claim for surrender of possession of premises MATTER FOR DECISION: Principal matter LEGISLATION CITED : Conveyancing Act 1919 Retail Leases Act 1994 CASES CITED: APPLICANT REPRESENTATION: In person RESPONDENT R Coyle, solicitor ORDERS: 1. In full and final satisfaction of all issues in dispute in application No. 025018, I order that: ; (a) The Lease dated 19 December 2001 is terminated and James Parris is entitled to immediate possession of the Premises;; (b) Pavlos Katsivardas is to pay to James Parris the amount of $1485.34.; 2. The amount referred to in Order 1 is to be paid by 31 August 2002. 1 This is an application brought by Mr. Pavlos Katsivardas trading as Pavlo's Pizzeria ("the Applicant") in relation to a shop known as known as 129 Botany Street Randwick ("the Premises"). The registered proprietor of the Premises is Mr James Parris ("the Respondent"). 2 The application was filed in the Tribunal on 15 April 2002. The Applicant sought orders in the following terms: "I want to give the landlord the money he says I owe and to let me keep going with my business. Also I want the landlord to give me all my rights from the lease agreement." 3 The matter was listed for an urgent stay hearing and directions hearing on 17 April 2002. At that time the matter was referred to the Registrar, Retail Tenancy Disputes for mediation. 4 The matter came before me for hearing on 12 June 2002. The Applicant appeared on his own behalf and Ms Robyn Coyle appeared on behalf of the Respondent. BACKGROUND TO THE APPLICATION 5 A Lease was entered between the Applicant and the Respondent in relation to the Premises. That Lease dated 19 December 2001 ("the Lease") was stated to commence on 1 January 2002 and terminate on 31 December 2002. 6 It appears that there was a good working relationship between the parties from the commencement of the Lease until in February 2002 a dispute arose between the Applicant and Ms Christina Parris, the daughter of the Respondent. From that time the relationship deteriorated rapidly. By letter dated 6 April 2002, the Respondent purported to terminate the Lease. The Notice of Termination alleged numerous breaches of the Lease and was in the following terms: "Notice is hereby given to lessee Mr Pavlos Katsivardas by landlord James Parris of the above mentioned property that the lease agreement dated 19 December 2001 is now terminated. The following reasons are given for this termination- Excess Sydney Water rates period 7 Nov 01 - 7 Feb 02 is $78-43. Water usage charged $39-21. Water service = $121-96 Total owing = $161-17 The lessee advised the landlord on the 1 March 2002 that he made full payment of the total Sydney Water invoice 1 Jan 31-March 02 for $351-60 by BPAY bank receipt No 03051505 and requested reimbursement by the landlord for the Sydney Water usage charges for the period 7 Nov 01 - 27 December 2001. The landlord was advised by Sydney Water on the 21 March 2002 the invoice was unpaid, overdue and water supply would be cut off very soon. The landlord paid the invoice in full on the 22 March 2002. 2) The bond money of $3,000 was not paid on the 1 March 2002. Part payment of $750 was received on the 6 March 2002. Further payments of $750 were promised on the l3, 14 and 17 March 2002 and none received. This method of payment was never agreed to and the lessee was advised that this method was in breach of his lease agreement. 3) Clause 12(a) Installation of a antenna on the property without written consent of the landlord. 4) Clause 13. The lessee has been sleeping in a room on the premises since December 2001. 5) Point 5 Special Conditions. Workers Compensation Policy No WGB020216056 with NRMA Insurance expired on the 7 March 2002. 6) Clause 31(a) The lessee signed an agreement with prospective sub tenants on the 1st March 2002 without the written consent of the landlord. The lessee has sticky taped an paper advertisement sign on the front shop window advertising for prospective sub-tenants without the written permission of the landlord. 7) Rent for April has not been paid and is now overdue. Vacant possession is required not more than 14 (fourteen days) from the date of this letter which will be the 20 April 2002. All keys must be handed to the landlord on this day." 7 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"). Relevant Provisions of the Lease 8 The Applicant's obligations in relation to rent and outgoings are set out in paragraphs 9 to 11 of the Lease and in the Special Conditions of Lease. Those paragraphs relevant to these proceedings provide: "THE TENANT AGREES 9. To pay the rent promptly and in advance. 10. To obtain at his own expense all necessary consents that may be required from municipal or shire or other authorities to carry on the proposed business at the premises (being the use for which the premises are leased). 11. To pay all charges for gas, electricity and telephone and any excess water, garbage or sanitary charges, relating to the tenant's use of the premises." "SPECIAL CONDITIONS OF LEASE 1) The first two months of the lease being January and February 2002 are rent free. 2) The first monthly rental payment is due on the 1st March 2002 which is $1,733 plus $173.30 GST which is a total of S1,906.30. … 11) A bond of $3000 to be paid on the 1 March 2002." 9 Paragraphs 12, 13 and 14 of the Lease set out the Applicant's obligations with respect to the use and occupation of the premises. Those paragraphs provide: "12. To take care of the premises and to keep them in a clean condition, and in particular: (a) To make no alterations or additions to the premises including the erection of any sign or antenna, without the written consent of the landlord. (b) To do no decorating that involves marking, defacing or painting any part of the premises, without the written consent of the landlord. (c) To put nothing down any sink, toilet or drain likely to cause obstruction or damage. (d) To keep no animals or birds on the premises without the written consent of the landlord. (e) To ensure that rubbish is not accumulated on the premises and to cause all trade refuse to be removed regularly in a manner acceptable to the landlord. (f) To ensure that nothing is done that might prejudice any insurance which the landlord has in relation to the premises. (g) To notify the landlord promptly of any loss, damage or defect in the premises. (h) To notify the landlord promptly of any infectious disease, or the presence of rats, cockroaches or similar pests. 13. Not to sleep or permit anyone to sleep on the premises nor to hold or permit to be held any sale by auction on the premises. 14. To ensure that he, his employees, licensees and agents observe, obey and perform the Rules and Regulations forming part of this lease and such further Rules and Regulations as the landlord may from time to time make and communicate to the tenant (not being inconsistent with this lease) for the safety care and cleanliness of the premises and of the building." 10 The Applicant's obligations with respect to insurance of the Premises are contained within paragraphs 15 of the Lease and paragraph 5 of the Special Conditions of Lease. Those paragraphs provide: "15. (a) To do nothing in the building or keep anything therein that would increase the insurance premium payable by the landlord on the building except with the written consent of the landlord. (b) To do nothing which would make any insurance policy void. (c) To insure all external fixed glass and window frames for which the tenant is responsible. (d) To pay all insurance premiums increased as a result of his actions." "5) The lessee must have all the necessary insurances, including 10 million public liability and fire insurance." 11 Paragraph 30 of the Lease sets out the parties' rights and obligations with respect to the termination of the Lease. That paragraph provides: "Termination 30 (a) Where the lease has become a periodic lease from month to month, either party may terminate it by giving one months written notice. (b) The landlord shall have the right to re-enter the premises peacefully or to continue the lease as a periodic lease from week to week:- (i) Where the tenant has failed to pay rent for a period in excess of fourteen days, whether formally demanded or not, or (ii) Where the tenant has seriously or persistently breached any of the conditions of the lease. or (iii) Upon the tenant being declared bankrupt or insolvent according to the law or making any assignment for the benefit of creditors or taking the benefit of any Act now or hereafter to be in force for the relief of bankrupts or insolvents. (Section 85(1)(d) of the Conveyancing Act, 1919, as amended, is hereby varied accordingly. (c) If the landlord intends to exercise his right to re-enter, he shall serve the tenant with a written notice stating the reason and demanding immediate possession. (d) If the landlord intends to exercise his right to continue the lease as a periodic lease from week to week, he shall serve the tenant with a written notice stating the reason and informing the tenant of the variation to the lease. Upon service of the notice, the lease shall continue with all its conditions, except for the Term and Holding Over conditions, as a periodic lease from week to week which may be terminated by one week's written notice from either party. (e) The landlord shall have the right to re-enter the premises without giving notice, if he has reasonable grounds to believe that they have been abandoned. (f) The tenant shall have the right to terminate the lease if the landlord has seriously or persistently breached any of its conditions. He shall give the landlord fourteen days written notice, indicating at the same time the nature of the breach. (g) Any action by the Landlord or tenant in accordance with Conditions 30 (b), (c) (d) (e) or (f), shall not affect any claim for damages in respect of a breach of a condition of the lease. (h) The tenant may remove his fixtures and shall remove his signs provided that any damage or defacement occasioned to any part of the premises in the course of such removal shall be remedied by the tenant immediately, and at his own expense. If he fails to do so the landlord may do so at the tenants' expense. (i) Upon the termination or determination of the lease for any cause the tenant shall promptly and peacefully give vacant possession of the premises in the condition and state of repair required by Conditions 12 and 21 (a) of the lease, and at the same time hand over all keys." 12 Paragraph 31 of the Lease sets out the parties' rights and obligations with respect to the transfer of the Lease. That paragraph provides: "Parting with possession 31 (a) The tenant shall not assign or sub-let or part with possession of the premises or any part thereof except with the written consent of the landlord. (b) The landlord shall not withhold his consent unreasonably, provided that the tenant gives him fourteen days notice and the tenant pays any reasonable expenses involved in the landlord giving consent." Relevant legislation 13 As noted above, the Lease is governed by the Act. Section 68 of the Act provides: "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." " 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, …" 14 Following Mediation on 19 April 2002, an agreement was reached between the parties and the agreement was reduced to writing ("the mediation agreement"). The relevant parts of the mediation agreement provided: "1. Katsivardas agrees to pay the following monies on or before 5 PM on 3rd May 2002: (i) $161.17 being outstanding water rates (ii) $1733.00 plus GST being rental for the month April (iii) $1733.00 plus GST being rental for the month May (iv) $2250.00 being the balance of bond monies (v) $22.54 being interest on outstanding monies. 2. Katsivardas shall provide Parris with evidence of current workers compensation and public liability insurance as required under the lease, on or before 3 May 2002. 3. Katsivardas shall cease to reside in the premises from 3 May 2002. Upon vacating the premises, Katsivardas shall ensure that the antenna attached to the premises is removed in a proper and workmanlike manner. 4. Katsivardas shall not sublease the premises without the written consent of Parris. 5. In the event that Katsivardas does not comply with clauses 1, 2, 3 and 4 and 6, Parris shall become entitled to take immediate possession of the premises. 6. In the event that Katsivardas complies with the provisions of this agreement, Katsivardas shall remain in possession of the premises upon the terms contained in the lease." 15 The Recitals to the Mediation Agreement stated that: "D The parties wish to resolve all outstanding disputes. E The parties agree to the discontinuance of proceedings 025045 before the Administrative Decisions Tribunal." 16 The matter came back before the Tribunal for hearing is a consequence of the breakdown of the mediation agreement. The Respondent alleged that the Applicant had failed to comply with his obligations under the mediation agreement and therefore the Respondent was entitled to possession of the Premises and payment of the money referred to in paragraph 1 of the mediation agreement. The Applicant requested an adjournment of the proceedings so he could obtain police reports in relation to the Respondent's conduct in attempting to have him vacate the Premises and a further witness statement. The Respondent opposed that adjournment application on the basis that the Applicant had failed to comply with the direction set by the Tribunal and a further adjournment would add unnecessary expense for the Respondent. 17 The adjournment application was refused on the basis that the Applicant had had a reasonable opportunity to obtain those reports; all the Applicant's evidence in relation to the issues before the Tribunal is available; and the police reports would not add anything of substance to the evidence. 18 The Respondent's submission is that the Applicant's original application should be dismissed and the terms of the mediation agreement should be enforced. For convenience I propose to deal with the Respondent's case first. The Respondent's Case 19 Ms Coyle submitted that the Applicant has not presented anything to prove his case. She also submitted that the real issue before the Tribunal is the Applicant's breach of the mediation agreement. 20 The terms of the mediation agreement are set out above. These are not in dispute. The Respondent's evidence is that on 3 May 2002 the Applicant's solicitor attended Ms Coyle's office and handed her documents. These included a cheque and a cover note for workers compensation insurance. Ms Coyle was assured that the antenna would be removed and that public liability insurance had been paid. The Applicant sought a further fourteen days to vacate the Premises. This was not agreed. 21 It is a term of the mediation agreement that the Applicant would vacate the Premises by 3 May 2002. The Respondent's evidence is that the Applicant was still in residence in the Premises on 3 May 2002. This evidence is supported by a Police Report dated 14 May 2002 referring to a visit by police to the Premises on 3 May 2002. The Police Report relevantly provides: "On arrival it became evident that the POI had not moved any of his belongings out of the unit, with his bed, clothes and personal belongings all being inside the unit. All clothes were still hanging in the closet and the bed was made, complete with sheets and blanket. The P/R asked the POI to move immediately however he claims that he has made arrangements to have his property removed on Sunday 5.5.02." 22 The Respondent also gave evidence that the cheque for an amount of $5899.71 provided by the Applicant on 3 May 2002 was dishonoured. A letter from the Commonwealth Bank dated 9 May 2002 confirms that evidence. The Commonwealth Bank imposed a $10 dishonour fee on the Respondent's account as a consequence of the dishonoured cheque. 23 Ms Coyle submitted that the mediation agreement required that the Applicant pay the amount set out in the agreement by 3 May 2002. The mere provision of a cheque does not satisfy that obligation if the cheque is not met. As the cheque was dishonoured, the money has not been paid. 24 The mediation agreement clearly states that a breach would entitle the Respondent to immediate possession of the Premises. Ms Coyle submitted that the Applicant had signed the mediation agreement in full knowledge of the consequences of a breach of the agreement. The Respondent is therefore entitled to the benefit of that provision. The Respondent sought an order for possession of the Premises and an order that the Applicant pay to him an amount of $1485.34. The Applicant's Case 25 The Applicant appeared and gave evidence on his own behalf. His evidence is that he didn't reside on the Premises after 3 May 2002. He resided with his sister-in-law from that date. He had obtained new rental Premises to commence from 6 May 2002 and proposed to remove his possessions on 5 May 2002. 26 With respect to removal of the antenna, he had arranged with Foxtel to remove the antenna on 7 May 2002. It could not be done any earlier. 27 The Applicant gave evidence that he paid a cheque to the Respondent on 3 May 2002. He had taken a personal loan from a friend for the payment. He produced a St George Bank statement in support of that evidence. The Respondent came to the Premises on 3 May 2002 with Police. The Respondent was alleging that he had not complied with the mediation agreement. The Applicant received a phone call from the Respondent's solicitor who informed him that he would be evicted from the Premises. On 7 May 2002 the Applicant withdrew the funds from his account because he was unable to stop the cheque. 28 The Applicant asserted that all conditions of the mediation agreement were met and yet the Respondent still wanted him out of the Premises. He stated that he wanted to continue with his business, but when he was advised that he would be evicted he became depressed and he could not get a loan. He had paid $1500 for a lawyer to assisting with the mediation. He also owes money to others. He can not afford to pay the money to the Respondent and also lose his business. 29 The Applicant left the Premises on 8 May 2002 and by 9 May 2002 all signage was removed. He asserted that all conditions of the mediation agreement were met and therefore the Respondent's claim should be rejected. Findings 30 On the evidence before me I am satisfied that the mediation agreement was intended to resolve all outstanding issues between the parties and that the mediation agreement was reduced to writing signed by each party. In my view the mediation agreement is to be regarded as a variation to the Lease. The Terms of the mediation agreement are conditions of the Lease and in my opinion time is of the essence with respect to fulfilment of those conditions. 31 I am satisfied that the Applicant failed to satisfy the terms of the mediation agreement in that he had not ceased to reside on the Premises by 3 May 2002. I am also satisfied that the Applicant failed to satisfy the terms of the mediation agreement in that while he had provided the Respondent with a cheque in the amount of $5899.71 by 3 May 2002, the cheque was dishonoured. Clearly this can not be regarded as payment of the agreed amount. 32 Pursuant to paragraph 5 of the mediation agreement, it follows that the Respondent is entitled to take immediate possession of the Premises. 33 In my view, it also follows that the Respondent is entitled to recover the amount sought from the Applicant. Orders 1. In full and final satisfaction of all issues in dispute in application No. 025018 I order that: (a) The Lease dated 19 December 2001 is terminated and Mr. James Parris is entitled to immediate possession of the Premises; (b) Mr. Pavlos Katsivardas is to pay to Mr. James Parris the amount of $1485.34. 2. The amount referred to in Order 1 is to be paid by 31 August 2002. 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.