Altan Mehmet trading as Altan Fashions v Nikitas Kesidis & Anor [2009] NSWSC 1087

New South Wales Supreme Court

CITATION : Altan Mehmet trading as Altan Fashions v Nikitas Kesidis & Anor [2009] NSWSC 1087

HEARING DATE(S) : 6/10/09

JUDGMENT DATE : 13 October 2009

JUDGMENT OF : Patten AJ at 1

DECISION : See paragraph 28

Local Court Act 2007; LEGISLATION CITED : Supreme Court Act 1970; Uniform Civil Procedure Rules

CATEGORY : Separate question

Larratt v Bankers and Traders' Insurance (1941) 41 SR 215; CASES CITED : United Australia Ltd v Barclays Bank Ltd [1941] AC 1; The Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 59 ALJR 373; Tramways Advertising Pty Ltd v Luna Park (NSW) Pty Ltd 38 SR 632; Sargent v ASL Developments Ltd [1974] 131 CLR 634

Altan Mehmet - Plaintiff PARTIES : Nikitas Kesidis - First Defendant Panagiota Kesidis - Second Defendant

FILE NUMBER(S) : SC 13154 of 2009

COUNSEL : Mr R Nair - Plaintiff Ms S Hill - Defendants

SOLICITORS : Burn & Company Lawyers - Plaintiff Peter M Wayne & Associates - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Patten AJ

13 October 2009

No:13154 of 2009 Altan Mehmet t/as Altan Fashions v Nikitas Kesidis & Anor

JUDGMENT 1 This is an appeal from a judgment in the Local Court given by Bradd LCM at Sydney on 27 May 2009. The Plaintiff (Mr Mehmet) who was the defendant in the Local court was ordered to pay the plaintiffs in the Local Court (Mr and Mrs Kesidis) the sum of $19,847.40 and interest in respect of rent and incidental sums payable under a lease, but Mr Mehmet, in turn, was awarded $14,100 damages for breach by Mr and Mrs Kesidis of the covenant for quiet enjoyment contained in the lease. 2 The lease in question was a lease registered under the Real Property Act of premises described as "folio 12/628740, part being factory premises known as 99-101 Lakemba Street Lakemba" for a term of 3 years which commenced on 1 November 1998 and terminated on 31 October 2001. 3 Mr Mehmet does not now seem to challenge the magistrate's finding as to the quantum of the sum payable to Mr and Mrs Kesidis, rather his challenge is to the magistrate's findings upon the cross-claim. The appeal is brought as of right on a question of law under s39 of the Local Court Act. The grounds of appeal, as stated in the Summons, were: "1. The learned magistrate erred in law in that the learned magistrate failed to take into account relevant evidence. Particulars: i) The plaintiff (the defendant and cross claimant in the Local Court matter) gave evidence he had in his possession, at the time of the Local Court hearing, invoices for only part of the rental he had to pay to lease additional space, these invoices amounting to $14,100. ii) The plaintiff (the defendant and cross claimant in the Local Court matter) also gave unchallenged evidence that in addition to the rental of $14,100 for which he had, at the time, invoices, he had also paid further rental to lease additional space, this further amount being in excess of $20,000. iii) The learned magistrate failed to take into account this additional amount in excess of $20,000. 2. The learned magistrate erred in law in that the learned magistrate misconstrued and misapplied the law. Particulars i) The learned magistrate found that the breach of the lease by the plaintiffs in the Local Court was "a substantial breach (paragraphs 25 – 26 of his Honour's judgment. ii) The plaintiff (the defendant and cross claimant in the Local Court matter) gave evidence that prior to entering into the lease he had specifically told the plaintiffs (in the Local Court) that he needed at least 600 square metres of space, and that he was told by the plaintiffs that the premises comprised 600 square metres. iii) The learned magistrate erred in not finding that the breach of the lease (which his Honour found) was breach of an essential term and/or a breach so serious that it went to the root of the lease and/or a sufficiently serious breach of a contractual obligation that made the performance a totally different performance of the lease than that intended (and contracted for) by the parties. 4 It is convenient to deal first with ground 2 above, which seems to me to be based upon a fundamental misunderstanding of the law. Mr Mehmet claimed that he made known to Mr and Mrs Kesidis that he required about 600 square metres of space. It may be assumed that the premises described in the lease approximated that area but Mr Mehmet asserted that he was deprived throughout the term of the lease of the use of about 50 square metres because that area held machinery and property belonging to a previous tenant which Mr and Mrs Kesidis required to remain in situ while they sought a buyer, a circumstance which never eventuated. 5 The magistrate found that this constituted a "substantial" breach of the covenant by the lessor for quiet enjoyment and awarded compensatory damages of $14,100 upon the cross claim. What Mr Mehmet asserted before the magistrate and before me was that the unavailability for his use of about 50 square metres of the leased premises constituted such a fundamental breach of the lease that it amounted to a repudiation by Mr and Mrs Kesidis entitling him to damages for loss of his bargain. The magistrate rejected this contention. 6 The problem for Mr Mehmet is that he waited about 8 years to make this assertion, long after the lease had expired and long after he had commenced to hold over as a monthly tenant. In the meantime, he had remained in occupation of the premises, paid the rent and accepted the lessors promises that the machinery and other property left behind by the previous tenant would be sold and as a result cleared away.