Ninyo Pty Limited v Chepurin [2016] NSWCATCD 50

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Ninyo Pty Limited v Chepurin [2016] NSWCATCD 50 Hearing dates: 5 April 2016 Decision date: 11 May 2016 Jurisdiction: Consumer and Commercial Division Before: D Bluth, Senior Member Decision: 1. The respondent is ordered to pay to the applicant the sum of $11,038.78 within 7 days of the publication of this Decision. Catchwords: Make good obligations Category: Principal judgment Parties: Ninyo Pty Ltd (applicant) Oleg Chepurin (respondent) Representation: Solicitors: Sparke Helmore (respondent) File Number(s): COM 16/06529 Publication restriction: Nil

reasons for decision 1. The applicant Ninyo Pty Ltd (formerly Chairhound Pty Ltd) is the former lessee of Shop [***], Bondi Junction (the premises) and operated a hairdressing salon from the premises. 2. Heavenly Hair and Body (Heavenly Hair) entered into a lease with Oleg Chepurin (respondent) in 2010 for a term of five years terminating on 11 September 2015 registered lease AF846079M (the Lease). 3. The respondent and Heavenly Hair had entered into an earlier lease in 2005 (the Initial Lease) and Heavenly Hair had exercised the option. The Initial Lease and the Lease were on the same terms other than the rent and the commencing and terminating dates. 4. The applicant purchased the business of Heavenly Hair and took an assignment of the Lease in around September 2015. A Deed of Consent to Assignment of Lease was entered into by Heavenly Hair as assignor, the applicant as assignee and the respondent as the lessor (Deed of Consent to Assignment of Lease). 5. Pursuant to the terms of the Lease, and in accordance with the Deed of Consent to Assignment of Lease the applicant provided to the respondent a bank guarantee for the sum of $15,070.13 for the purposes as stated in the bank guarantee for "all the assignee's obligations of the lease of Shop 4, 200 Hollywood Avenue, Bondi Junction". 6. The applicant did not exercise the option in the Lease and vacated the premises on the last day of the Lease namely September 11, 2015. The applicant made a request to the agent for release of the bank guarantee on the basis that the applicant had complied with all of its obligations under the lease. 7. On September 24, 2015 the applicant received notice that the bank guarantee was being cashed in for the full amount and accordingly lodged an application with the Small Business Commissioner. The applicant received further communication that the bank guarantee had been cashed and the works that the respondent says were required to make good were completed with the funds from the bank guarantee. 8. On 7 October 2015 the applicant received from the agent the balance of the amount of the bank guarantee namely $4,745.45. The parties went to mediation on 24 November 2015 with the NSW Small Business Commissioner. Mediation was not successful and a certificate has been provided. The applicant then filed its Application for Original Decision seeking return of the balance of the bank guarantee, interest and costs amounting to $11,038.78. 9. The parties are in dispute as to the obligations of the applicant as lessee to restore the premises upon vacating after expiry of the Lease. The respondent maintains that the applicant is required to restore the premises in accordance with the terms of the Lease and has expended monies from the bank guarantee to do so (the restoration works). 10. As it is the respondent that has activated the claim on the bank guarantee in accordance with what it says to be its rights under the Lease, the Tribunal will first look at the submissions from the respondent.