Starwick Pty Ltd v Harrison [2011] NSWADT 58

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Starwick Pty Ltd v Harrison [2011] NSWADT 58 Hearing dates: 3 March 2011 Decision date: 23 March 2011 Before: K Rickards, Judicial Member Decision: 1.Peter Harrison is to pay Starwick Pty Ltd the sum of $60,684.85 in respect of money owing to Starwick Pty Ltd 2.Peter Harrison is to pay the sum of $6,101.78 to Starwick Pty Ltd in respect of its costs of these proceedings. Catchwords: Jurisdiction; costs Legislation Cited: Retail Leases Act 1994 Administrative Decisions Tribunal Act 1997 Cases Cited: Prasad & Anor v Fairfield City Council (2000) NSWADT 164 Holden Tourism and Hospitality Pty Limited v Baldock (2001) NSWADT 123 Parallel Lines International Pty Limited v Video-Drama Pty Limited (2007) NSWADT 84 GPT Management Ltd and Anor v Spa Heaven Pty Ltd & Ors (2005) NSWSC 1043 Cripps and Another v G & M Dawson Pty Ltd and Another (2006) NSWCA 81 Category: Principal judgment Parties: Starwick Pty Ltd Representation: P Brown (Applicant) No appearance (Respondent) File Number(s): 105206

reasons for decision

Background 1On 17 September 2007 the Applicant ("Starwick") as lessor and the Respondent as lessee entered into a retail lease agreement in respect of premises known as unit 2, 4 Machinery Drive, South Tweed Heads. The term of the lease was for 3 years with a 3 year option. 2The premises were predominantly used by the Respondent for the sale of health food items. 3Pursuant to the terms of the lease, the Respondent was required to pay rent of $43,200 per annum, payable by monthly instalments of $3,600 plus GST for the first year of the term, together with CPI increases for the following years. The Respondent was also required by the terms of the lease to meet payment of other service outgoings including excess water and garbage charges. 4At the time of entering into the lease, the parties also entered into a loan agreement whereby Starwick lent the sum of $20,000 to the Respondent to assist the Respondent to purchase fittings and equipment for the conduct of the business at the premises. 5The loan was repayable by monthly payments of $1,666.66 in arrears and bore interest at 6% per annum, but the loan agreement provided that no interest would be payable if repayments were made on time. The Respondent has conceded that no repayments of this loan were ever made. 6The Respondent first failed to pay rent which was due on 17 April 2009 in the sum of $4,144.44 inclusive of GST. The Respondent thereafter paid no further rent for the ensuing 12 months to March 2010. The Respondent also failed to pay service outgoings in respect of the premises for the period February 2008 to December 2010. 7The term of the lease expired on 16 September 2010, but the Respondent stayed on in occupation of the premises until 2 December 2010 when he advised Starwick's Director Mr Phippard that he was immediately vacating the premises. 8It soon emerged that the Respondent had, some days earlier, purported to sell the business which was being conducted at the premises together with all stock, equipment, plant and fittings to a Mr Ben Schindler. It was the apparent understanding of Mr Schindler that he had entered into a binding agreement for the purchase of the business and, after the Respondent had left the premises, he appeared to operate the business and also change the locks at the premises. 9After being made aware that the locks had been changed, Starwick then arranged for the locks to be changed again and asserted its rights to possession of the premises and its contents. 10Mr Schindler engaged a firm of solicitors who threatened Starwick with injunctive proceedings. In turn, Starwick instructed its solicitor to commence the present proceedings in this Tribunal and to also seek urgent interim orders for declarations that it was entitled to possession of the premises and to the stock, plant, fittings and equipment. 11The hearing of the application for urgent interim orders took place by telephone before Judicial Member Montgomery on 13 January 2011. The Respondent was represented during this hearing by an agent Mr John Burkhardt who also appeared in the interests of Mr Schindler. 12The Respondent by this time had filed an affidavit which was sworn on 23 December 2010 in which he did not seriously contest Starwick's claim for unpaid rent and outgoings. Within this affidavit, the Respondent also admitted that the loan from Starwick remained unpaid. 13Orders were subsequently made by Judicial Member Montgomery on 13 January 2011 declaring that the Respondent had repudiated the lease, that Starwick was entitled to immediate possession of the premises and also was entitled to all stock, plant and equipment remaining on the premises. 14By an agreement dated 1 February 2011 Starwick sold the plant, equipment and fixtures at the premises for the sum of $25,000 and entered into a new lease of the premises with the same party who had purchased those items. 15The original Application was then listed for hearing at Tweed Heads on 3 March 2011. On 8 February 2011, notices were sent to Starwick and also to the Respondent, at both his post office box and his street address, advising of the hearing date as well as the directions made for provision of evidence. The notice sent to the post office box of the Respondent was later returned as "unclaimed". The Registry subsequently left a message for the Respondent's nominated representative Mr Burkhardt in relation to the hearing, but no response was received from Mr Burkhardt. 16Starwick appeared at the hearing, but the Respondent did not. I was satisfied that the Respondent had had ample notice of the hearing and had been given a reasonable opportunity to respond to the Application and to appear at the hearing. The hearing accordingly proceeded upon an ex-parte basis.