Simonek Pty Ltd v Moon [2008] NSWADT 45

CITATION: Simonek Pty Ltd v Moon [2008] NSWADT 45

DIVISION: Retail Leases Division

APPLICANT Simonek Pty Ltd PARTIES: RESPONDENT Hee Kyung Moon

FILE NUMBER: 075188

HEARING DATES: 24 January 2008

SUBMISSIONS CLOSED: 24 January 2008

DATE OF DECISION: 6 February 2008

BEFORE: Fox R - Judicial Member

CATCHWORDS: Claim for payment of money - Claim for relief against forfeiture - Claim for surrender of possession of premises

MATTER FOR DECISION: Preliminary matter

LEGISLATION CITED : Retail Leases Act 1994 Duties Act 1997

CASES CITED: Cobar Corp v Attorney Generals (1919) 9CLR378

APPLICANT A Stack, solicitor REPRESENTATION: RESPONDENT In person

ORDERS: 1. Application for surrender of possession, payment of rent arrears and interest adjourned to 21 February 2008 at 10am for short further hearing. 2. Respondent has leave to make application for relief against forfeiture on 21 February 2008, but only if substantial payment of rental arrears has been made.

REASONS FOR DECISION 1 This application was listed for short hearing on 24 January 2008 in order to resolve a very unusual circumstance. The Respondent is the Lessee of shop premises in Parramatta from which she conducts a gift shop. She is of Korean background and is said to speak little English. She is represented at the Tribunal by her husband Mr Shin Whan Han, who is also of Korean background who, from my personal observations, is a person of excitable disposition. He is also not very fluent in the English language. Previously he appeared alone, but on 24 January 2008 he asked for leave to have a young friend, Mr James Shin interpret for him. In the interest of expedition, I gave leave for that informal interpretation. 2 It is clear that the Lessee has not paid any rent since early 2007, but continues to occupy the premises and trade from them. 3 Mr Han has filed paperwork with the Tribunal, which includes a list of his grievances with the process of the letting. The documents do not, as I understand it, state any grievances about the premises, or their condition. His objection appears to be that several various similar short form lease documents were prepared by the Applicant Landlord's real estate agent, and submitted for signature. At least 2 appear to have been signed, the latter having been dated 26 October 2006, being the date upon which Ms Moon signed document, and that date was later altered to show 30 October 2006. 4 The Lease in question established a right of occupation from 1 December 2006 onward, and gave a right of access from 31 October 2006 onward, and as I understand the evidence, the Respondents took occupation pursuant to that on 3 November 2006. The lease provided for a rental holiday between 1 December 2006 and 1 January 2007. 5 It appears that the Respondent Lessee paid 2 months rent in January 2007 and February 2007 and that the Respondent had previously paid a bond of $9,056.67, being the equivalent of 2 months rent including GST. Monthly rent was $4,290.00 plus GST. In establishing this indication of the facts I relied both on the Affidavit of Michael Laing, the agent, dated 24 December 2007, and the documents, which were filed in the Respondent's name on 21 January 2008. These satisfy me that the Respondent has only paid rent to 1 March 2007 and that none has been paid since, even though the Respondent has continued to occupy and trade from the premises. 6 In October the agent had also asked for $572.85 as stamp duty, and that appears to have been paid into the agent's trust account. 7 The Respondent has, as far as I am able to work it out, taken this position because: "I paid the rent for three month, no receipt was received and on February, the landlord's agent informed me to pay by direct deposit to their bank account instead of check. I thought something unusual, so agent asked for the receipt and told them I will pay next month's rent only if I receive the receipt and the only method that I will use for paying rent is through the check." 8 Further, the Respondent claims that the Lease has been fraudulently altered by the change of date, and that the commitment is not binding because the Lease was not stamped until some time in November of last year. 9 I cannot see the relevance of the change of date, although my observations might be different if the Applicant had vacated the premises because of a failure to serve a Disclosure Statement within a relevant time period. There is a Disclosure Statement in evidence, and it bears the Respondent's signature, and is dated, apparently by her "18 October 2006". 10 The Respondent appears to have misunderstood the effect of failure to pay stamp duty in this jurisdiction. It is trite law that the validity of a stamp able document is not in any way affected by the absence of such stamping, although an unstamped document may not be received in evidence – see section 304 of the Duties Act 1997 and the commentary in Hill, Duties Legislation, Lawbook Company at 755: "The principal sanction for non-payment of stamp duty has always been the inadmissibility in evidence of the unstamped instrument; the Cobar Corp Ltd v Attorney Generals NSW (1919) 9 CLR 378". 11 I had before me evidence to establish that the duty has been paid (albeit late) and so there is no impediment at all to my relying on the document. 12 The documents before me also establish that the Applicant has supplied the Respondent Lessee with both hand written copies of receipts for the rent, and print outs generated by its accounting system by way of duplicates of the rent receipts. 13 I cannot conceive of any reason to justify the Respondent's failure to pay the rent. 14 The Respondent claims some kind of fraudulent behaviour and has made several complaints to the police. The police have apparently investigated and resolved to take no action. 15 Mr Stack, on behalf of the Applicant, claimed the rent to 4 July 2007 in the sum of $21,450.00 inclusive of GST, and claimed occupation fee from that day onward at the same daily rate, the distinction being based on correspondence of 27 June 2007 requiring vacation of the premises within 7 days, and terminating as from 4 July 2007. 16 That letter seems to me to be sufficient to terminate the tenancy, although I note that there could well be some confusion about the arrears. The amount claimed for the months of March, April, May and June including GST, is a total of $17,160.00, to which is added an amount of $4,290.00, being the amount, which represents the rent-free holiday. 17 No matter what may be the Respondent's view of the matter, the Disclosure Statement bears the Respondent's signature and the date "18 October 2006", and the various versions of the Special Conditions for the Lease, one of which bears the Respondent's signature and appears to have been dated by her "20 October 2006" all bear the words: "A rent free period of (1) month will apply for November 2006 the granting of the rent free period is dependant on the Lessee fulfilling her obligations throughout the 3 year Lease term. If the Lessee defaults on her commitments under the Lease, she will be responsible for the payment of the one months rent free provided by the Lessor: 18 To take the matter further, the Retail Lease which was first dated 26 October 2006 and later altered to read 30 October 2006 also bears the signature of the Respondent, contains the same provision referring to a rent free period, and bears a section 16(3) Certificate over the signature of Keith Kwon, solicitor of Suite 4, 58 The Boulevard, Strathfield, which is dated 30 October 2006. 19 All of that satisfies me that the Respondent had full notice of the revocable nature of the rent-free concession given her. But nevertheless, my preliminary view of this aspect of the matter is that it falls within the well-established principle that equity will not enforce a penalty, and so it seems to me that the rent claimable for the first period of occupation is $17,160.00 and not the higher amount. 20 There appears not to be any basis upon which there could be any argument in relation to the occupation fee applicable after 4 July 2007, and that is claimed at $29,876.18 to 24 January 2008; I note the daily rate thereafter to be $141.04. 21 Part of the payment of 18 October 2006 may well have been in breach of section 14 of the Retail Leases Act1994, and the Applicant will have to clarify that. 22 At the hearing I asked Mr Han whether Ms Moon was able to pay the total of the rent outstanding, being an amount of more than $50,000.00, and he indicated not. I indicated to him that I thought she should obtain legal advice, because it seems to me that, if she is not able to either find the total of the rent claimed, or make adequate arrangements for the payment thereof, then she has absolutely no right to relief against forfeiture. 23 I am satisfied that the complaints, although ill founded, are genuinely held. That is why I have adjourned the matter to 21 February 2008 at 10am so Ms Moon can fully consider her position. 24 I strongly suggest to the Respondent that, if she wishes to continue to trade from the premises, that she make urgent arrangements for the regular payment of the due rental, and also propose a realistic program for payment of the quite substantial arrears. 25 If that is not done, I would propose, on the next occasion (21 February 2008) make an order for the payment by the Lessee of all outstanding rental as above indicated, including the forfeiture of the security bond, and including a declaration that the tenancy is at an end and that the Applicant is entitled to effect a lock out.