Redmond v Wilvelle Pty Ltd [2009] NSWADT 45

CITATION: Redmond v Wilvelle Pty Ltd [2009] NSWADT 45

DIVISION: Retail Leases Division

APPLICANT Deborah Justine Redmond PARTIES: RESPONDENT Wilvelle Pty Ltd

FILE NUMBER: 085151

HEARING DATES: 11 February 2009

DATE OF DECISION: 2 March 2009

BEFORE: Rickards K - Judicial Member

LEGISLATION CITED : Retail Leases Act 1994

APPLICANT In person REPRESENTATION: RESPONDENT No appearance

ORDERS: 1. The Application is dismissed 2. Any application for costs in these proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party must file and serve submissions in reply within a further 28 days. Unless reasons are advanced for a hearing to be conducted, the issue of costs is to be resolved "on the papers" pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.

REASONS FOR DECISION BACKGROUND 1 The Applicant Tenant has filed an application seeking payment of money by the Respondent Landlord in respect of cleaning expenses incurred. 2 Both parties have largely represented themselves in these proceedings, and this has been a significant factor in the manner and timing by which relevant evidence has ultimately been received by the Tribunal to assist in its determination. 3 These proceedings were listed for hearing at Wyong on 11 February 2009. The Applicant attended with her mother, but the Respondent did not appear. I caused the name of the Respondent and its director to be called outside the hearing room on a number of occasions with no response. In the circumstances, I proceeded to hear this matter upon an ex-parte basis. It subsequently transpired that the Respondent had telephoned the tribunal registry late on the preceding afternoon to advise that there would be no attendance and some written submissions were also sent to the Tribunal by facsimile transmission. 4 During the course of the hearing on 11 February 2009, the Applicant produced her contract for purchase of the subject retail shop business, some photographs of the shop premises and equipment, the Licence Agreement which she entered into with the Respondent in respect of the shop premises, and the Lease agreement which was subsequently entered into between the parties. All of this material was admitted into evidence and I indicated that, in order to properly consider the material produced and particularly given the self-representation of the Applicant and the non appearance of the Respondent, I would reserve my decision. I did not become aware of any further submissions filed on behalf of the Respondent until the following day, and I have not taken those submissions into account in this decision. FACTS 5 In about early October 2006 the Applicant agreed to purchase the goodwill and equipment comprising a take away food business known as "Munchies on the Go" from a Mr. Michael Lapa. The business had previously been conducted by Mr Lapa for a period of time at the premises at 1/152 The Entrance Road, Erina ("the shop"). 6 At the time of negotiating to sell the business to the Applicant, Mr Lapa had an existing lease agreement with the Respondent. 7 The Applicant signed a contract for purchase of the business on 12 October 2006 with completion to take place 14 days thereafter. She then paid a deposit of $4,200.00 to Mr Lapa's solicitor. At about the same time, the Applicant also entered into a licence agreement with the Respondent which permitted her to enter possession of the shop from 13 October 2006 until 31 October 2006 in consideration for payment of a licence fee of $1,873.69. 8 It appears to be common ground that both the shop and the shop equipment were in a dirty and unhygienic state at the time that the Applicant went into possession on Friday 13 October 2006. The Applicant told the Tribunal in evidence that she had expected to clean the shop and equipment over the ensuing weekend and commence trading on Monday 16 October 2006, but that she quickly realised that the shop and equipment required a lot more cleaning work than what she had originally anticipated. It subsequently transpired that the Applicant did not commence trading for a further two weeks. 9 On Tuesday 17 October 2006, the Applicant entered into a retail lease agreement with the Respondent in respect of the shop for a term of two years to commence on 1 November 2006, with a two year option. 10 The Applicant had arranged and paid for cleaning services to be carried out in respect of both the shop premises and the shop equipment. This work was carried out by two separate contractors, with the first contractor carrying out work on Saturday 14 October 2006 and Sunday 15 October 2006 and charging a total of $693.00 for these services, and the second contractor carrying out work between Monday 16 October 2006 and Saturday 27 October 2006 and charging the sum of $1,694.00. The Applicant claims the total of these two sums from the Respondent, being a total of $2,387.00. 11 The basis of the Applicant's claim is a conversation which she says took place at the shop some time during the morning of Monday 16 October 2006 with a lady by the name of "Belinda", who is said to have been the secretary or personal assistant to Mr Peter Adams in his smash repair and tow truck business which he operated a short distance away. Mr. Adams is a director of the Respondent company. 12 The Applicant said in evidence that the above conversation included an acknowledgement by Belinda that the shop was "in a disgusting state" and that "I'm going to keep his bond due to the state of the shop … it isn't fair that you have to pay these expenses …". 13 The Applicant says that the above conversation conveyed an undertaking that she would be reimbursed by the Respondent for her cleaning expenditure from the bond money which was ultimately to be forfeited by Mr Lapa. The Applicant has also supplied to the Tribunal a statutory declaration sworn on 24 November 2008 by Mr Lapa purporting to assign his interest in the bond to the Applicant. 14 The Applicant was not a party to the lease agreement between Mr Lapa and the Respondent and accordingly, as is also reflected within Division 3 of the Retail Leases Act 1994 ("the Act") relating to payment out of security bonds, cannot make a claim in respect of the security bond paid pursuant to that particlular lease agreement. This incapacity cannot be cured by the purported assignment of interest by Mr Lapa which in any event was made many months after the bond had been forfeited to the Respondent. 15 There are other reasons why the Applicant's claim must in any event fail. The Applicant cannot recover compensation from the Respondent for a pre-lease misrepresentation pursuant to section 10 of the Act unless such misrepresentation caused or contributed to the Applicant entering into the lease, which clearly did not occur in these circumstances. Beyond that, there is also real doubt as to the actual or implied authority of Belinda to bind the Respondent company. There is also no certainty as which of the claimed cleaning expenses relate to the shop premises, as opposed to the expenses for cleaning the shop equipment which clearly could not be the responsibility of the Respondent. The Applicant also incurred a significant proportion of these expenses before the subject conversation with Belinda took place, and in circumstances where the Applicant had already resolved to incur these expenses herself in order to ensure that the shop was able to comply with health regulations and to be able to commence trading as soon as was possible. ORDERS 1. The application is dismissed 2. Any application for costs in these proceedings must be filed and served, with supporting submissions, within 28 days of the date of this decision. The opposing party must file and serve submissions in reply with a further 28 days. Unless reasons are advanced for hearing to be conducted, the issue of costs will be resolved "on the papers", pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.