New South Wales Supreme Court CITATION : Gorgas v Soon Ok Hwang (No 2) [2010] NSWSC 1406 HEARING DATE(S) : 25 November 2010 JUDGMENT DATE : 25 November 2010 JURISDICTION : Equity Division JUDGMENT OF : Palmer J EX TEMPORE JUDGMENT DATE : 25 November 2010 DECISION : Judgment for the Plaintiff for return of deposit under Contract for Sale; judgment for Defendant/Cross Claimant for outstanding rent. CATCHWORDS : LANDLORD AND TENANT – Whether rent recoverable under tenancy agreement – no question of principle. CATEGORY : Consequential orders CASES CITED : Gorgas v Soon Ok Hwang [2010] NSWSC 1121 PARTIES : George Gorgas (Plaintiff/Cross Defendant) Soon Ok Hwang (Defendant/Cross Claimant) FILE NUMBER(S) : SC 2009/290465 COUNSEL : M. Southwick (Plaintiff/Cross Defendant) A.L. Hill (Defendant/Cross Claimant) SOLICITORS : G. Mavrakis (Plaintiff/Cross Defendant) Taylor & Scott(Defendant/Cross Claimant) 2009/290465 Gorgas v Soon Ok Hwang (No 2) JUDGMENT – Ex tempore 25 November , 2010 1 I delivered a judgment in this matter on 15 June 2010: [2010] NSWSC 1121. I found that the Contract for Sale between the parties had been abandoned by both of them. Mr A.L. Hill of Counsel, who appears for the vendor, Ms Hwang, now accepts that the deposit paid by the purchaser, Mr Gorgas, under the contract is refundable to him. 2 The question which has been argued this morning is whether Mr Gorgas is liable on the Cross Claim for rent unpaid in respect of his occupation of the premises and, if so, what is the amount for which judgment should be entered. The relevant facts are set out in my previous judgments and I will not repeat them here. 3 Mr M. Southwick of Counsel, who appears for Mr Gorgas, submits that as from 8 May 2008 onwards there was no agreement at all between the parties for the payment of rent for Mr Gorgas' occupation of the premises. 4 On 8 May 2008 the parties came before the Consumer Trader and Tenancy Tribunal, Ms Hwang having sought an order for the payment of outstanding rent in respect of the premises. The parties reached an agreement which was embodied in consent orders. 5 I accept that, because the property was then subject to a Contract for Sale between the parties, the Tribunal did not have jurisdiction to make orders, even by consent. 6 However, it is beyond doubt that the parties agreed upon terms as to the continued occupation of the premises by Mr Gorgas and that it was their intention that the terms of the Residential Tenancy Agreement which had been in force continue to govern the occupation by Mr Gorgas, subject to the variations embodied in the terms which they agreed and which then became consent orders. 7 Those terms provided, insofar as is now relevant, that Mr Gorgas was to continue to pay rent from 8 May 2008 onwards at the rate of $980 per fortnight. After the arrears of rent was made up, he was to continue to pay rent in accordance with the Residential Tenancy Agreement. In my view, the agreement which the parties reached on 8 May was a continuation of the tenancy, which had been in existence prior to execution of the Contract of Sale by the parties, but upon varied terms. 8 The reference to the rent continuing in accordance with the Residential Tenancy Agreement was a recognition that Mr Gorgas' continued occupation of the premises was pursuant to the Residential Tenancy Agreement and not pursuant to clause 18 of the Contract for Sale. It follows, therefore, in my view, that the agreement which the parties reached on 8 May 2008 was not an agreement for the purposes of clause 18 of the Contract for Sale. That clause, therefore, has no application to the occupation of the subject premises by Mr Gorgas. 9 Mr Southwick agrees that Mr Gorgas ceased paying rent on 10 June 2008 and continued in occupation until 2009. Mr Southwick says that the continued occupation of the premises by Mr Gorgas was pursuant to a giving and taking of possession pursuant to clause 18, and that there has been no agreement in writing evidencing return of possession as from the termination of the Tenancy Agreement on 10 June 2008. It follows, he submits, that Mr Gorgas' occupation of the unit was rent-free as from 10 June onwards. 10 For the reasons I have given, I do not accept that contention. In my opinion, clause 18 of the Contract for Sale has never had application to the occupation of the premises by Mr Gorgas. 11 What has happened, therefore, is that Mr Gorgas has remained in occupation since 10 June, being then liable to pay for rent in accordance with the Tenancy Agreement at the rate of $980 per fortnight. So long as neither party terminated that tenancy, the rent was subject to increase in accordance with the terms of the Residential Tenancy Agreement which had been recognised by the parties as continuing to apply, subject to the terms agreed on 8 May. It follows, therefore, that the increase of rent was within the terms of the agreement, as varied by the parties on 8 May. 12 Mr Southwick submits that there ought to be, nevertheless, an abatement in the rent payable pursuant to the continuing Residential Tenancy Agreement by reason of the fact that water damage to the property remained unrepaired for some time. Mr Gorgas pleaded in a Defence to Ms Hwang's Cross Claim for rent that there should be an abatement of rent but he adduced no evidence at all to support that claim. I cannot, therefore, make a finding that there should be any abatement of rent. 13 The parties have agreed to calculate the amounts owing in respect of return of the deposit to Mr Gorgas, interest thereon and rent outstanding to Ms Hwang and interest thereon. I will make final orders disposing of the matter when those calculations are agreed. – oOo – 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.