Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Horowitz v Bardot [2013] NSWADT 50 Hearing dates: On the papers Decision date: 04 March 2013 Before: Deputy President D Patten Decision: 1. Respondent to pay the applicant $51,287 inclusive of interest to date. 2. Respondent to pay applicant's costs as agreed upon or as assessed. Catchwords: Lease terminated following repudiation by lessee - Damages Legislation Cited: Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 Category: Principal judgment Parties: Alexander Horowitz (Applicant) Bessie Mahalia Bardot (Respondent) Representation: Horowitz and Bilinsky (Applicant) In person (Respondent) File Number(s): 125119 reasons for decision 1The application for original decision in this matter was filed on 28 August 2012. At a Directions Hearing before Deputy President Higgins on 11 October 2012 at which the respondent, Bessie Mahalia Bardot, participated by telephone, the matter was adjourned for further directions on 15 November 2012 and in addition, the following Orders or Directions were made: (1)On or before 26 October 2012 the respondent to file and serve a notice of NSW based representation of a solicitor or agent acting on her behalf. (2)On or before 9 November 2012 the respondent to file and serve her cross claim, if any. (3)In the event there is no compliance with order (1), the application is to be determined on the papers. 2When the matter again came before Deputy President Higgins on 15 November there was no appearance for either party. The Deputy President noted that the respondent had not complied with Orders (1) and (2) made on 11 October and that the matter would be decided on the papers in accordance with Order (3). 3Apart from participating by telephone in the Directions Hearing on 11 October, the respondent has taken no part in the proceedings. The Tribunal did however receive an email from a Mr Geoff Barker who claimed to be the respondent's "ex business partner". The document made a number of unverified statements which in the absence of verification I regard as irrelevant to the decision I am required to make. 4The claim by the applicant concerns a registered lease, AD308535Q, of premises being Shop 1, Ground Floor and Suite 1, First Floor, 99 Crown Street, East Sydney (the lease). The lease was to a company, Ratnasabapathy Pty Ltd, for a term of 5 years from 1 July 2007. The alleged liability of the respondent arises from the fact that she was named in the lease and executed it as a "Covenantor". Two Covenantors were named in the lease, the respondent and one Peter William La Forest. 5I am satisfied that the respondent has had due notice of the proceedings and that it is appropriate I determine them on the papers in accordance with s 76 of the Administrative Decisions Tribunal Act 1997 (ADT Act). 6Clause 77 of the lease provided: 77. In consideration of the Lessor at the request and by the direction of the Covenantors entering into this Lease as aforesaid and as separate several covenants, guarantees and indemnities the Covenantors:- (a) covenant and agree with the Lessor that the Covenantors will be jointly with the Lessee and severally liable to the Lessor for the due observance of all the terms covenants and conditions on the part of the Lessee contained in this Lease. (b) guarantee to the Lessor by way of continuing and irrevocable guarantee the due and punctual payment by the Lessee of the rent and every other sum payable by the Lessee under this Lease and any renewal and the due performance and observance of the terms thereof. The granting of any time concession or any indulgence to, or the making of any composition with or the waiver of any breach or default by the Lessee or the neglect or forbearance of the Lessor to enforce such terms or those of this clause or any moratorium or other period staying or suspending by statute or the order of any Court or other authority all or any of the Lessor's rights remedies or recourse will not stay suspend avoid release or discharge these guarantees and if any payment by or on behalf of the Lessee to the Lessor is avoided or set aside under any law relating to insolvency or otherwise liability under these guarantees shall include payment to the Lessor by the Covenantors of a sum equal to the amount of the payment so avoided or set aside. (c) in the event of the terms of this Lease not being enforceable by the Lessor against the Lessee for any reason, agree to indemnify the Lessor against its loss which will include all moneys which would have been payable or recoverable from the Lessee had the Lease been fully enforceable against the Lessee. (d) covenant and agree that the Covenantors obligations are enforceable against the Covenantors notwithstanding that this lease is not registered. 7The lease inter alia contained covenants for the payment of rent for re-entry on default and for the lessee upon the expiration of the term or sooner determination of the lease to yield up the premises "clean and free from rubbish and in good and substantial repair and condition. Clause 48 designated the clauses relating to payment of rent as essential terms of the lease. 8The use permitted by the lease was "as a body tanning studio and for the retail sale of gym clothing and associated lines and related office use". Body tanning studios probably fall within "Beauticians Beauty Shops and Beauty Therapists" in Schedule 1 to the Retail Leases Act 1994 (the Act) and retail of gym clothing falls within "shops selling or engaged in providing any one or more of the following goods or services in relation to any person: accessories ... clothing ... I am satisfied that the lease is a retail lease within the Act. 9Annexed to the Affidavit of Mr David Cradock sworn 19 September 2012 relied upon by the applicant is a schedule which indicates that the lessee defaulted in the payment of rent and that as a consequence the applicant re-entered into possession of the premises on or about 15 December 2009. 10The Affidavit further states that the applicant thereupon took steps to re-let the premises and did so at the same rent of $60,000 pa from 17 March 2010. In connection with the fresh lease, the applicant paid $1,100 to an agent Wiseberry Enmore. 11The applicant seeks arrears of rent up to the date of re-entry and damages for the lessee's unlawful repudiation of the contract. These are quantified as the difference between what was payable for the period up to the expiration of the lease on 30 June 2012 and the amount payable to the applicant under the new lease plus the agent's fee in respect of the new lease, namely $1,100. 12Arrears of rent amounted to $27,500 as at 15 December 2010. For the period up to 30 June 2012, the lessee should have paid rent of $150,000. Against this the respondent is entitled to credit for $135,000 rent payable under the fresh lease for the period. It is irrelevant I think that the lessee under the fresh lease may have defaulted in the payment of rent due under that lease. 13The applicant is also entitled to the letting fee of $1,100. 14Accordingly, in my assessment the applicant is entitled to an order that the respondent pay him $43,600. I will allow interest upon that sum at the rate specified in the lease viz 15% pa from 1 January 2012 to the date of this decision. I calculate such interest at $7,687. 15As to costs, I think it fair within s 88 of the Administrative Decisions Tribunal Act 1997 that the respondent pay the applicant's costs. On the evidence, the respondent's case was entirely without merit and both the applicant and the respondent were engaged in commercial activities. It was plain that the respondent benefited commercially from the lease. Orders 1. Respondent to pay the applicant $51,287 inclusive of interest to date. 2. Respondent to pay applicant's costs as agreed upon or as assessed. 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. Decision last updated: 04 March 2013