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- Unreported Judgment
Strano v Williams & Williams as Trustees of J&C Williams Family Trust  QCAT 139
Scott Anthony Strano
Jason Mark Williams & Claudia Williams as Trustees
Retail shop leases matters
On the papers
Member Howard, Presiding Member
10 May 2016
RETAIL SHOP LEASES – whether lessee failed to make good
Retail Shop Lease Act 1994 (Qld)
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
- Scott Anthony Strano (‘the Lessor’) leased premises to Jason Mark Williams and Claudia Williams as Trustees of the J&C Williams Family Trust (‘the Lessee’). The lease commenced on 1 July 2011 and expired on 30 June 2014. The Lessee vacated shortly afterwards. Mr Strano says the Lessee failed to make good the premises. He claims $1613.68, including costs, for making good the premises.
- The lease included the following clause:
8.8 LESSOR’S WORKS The lessor will cause the following works to be carried out to the demised premises prior to the commencement date hereof:-
- (a)Repair/replacement of front door;
- (b)Repair/replacement of front window;
- (c)Removal of existing ceiling lighting, fans and wiring;
- (d)Patch and paint white internal ceiling;
- (e)Repair and paint front external awning;
- (f)Ensure that the power supply switchboard complies in accordance with current regulations;
- (g)Supply for installation by the lessee sixty (60) square metres of commercial standard floor tiles of a value not exceeding $30.00 per square meter, plus sufficient glue and grout for the installation thereof.
The lessor shall cause such works to be carried out in a proper and workmanlike manner.
- Shortly, after the commencement of the term, the Lessor provided tiles to the Lessee, which the Lessee then paid to have installed. The tiles replaced old carpet, which according to the Lessee was in an extremely poor state. Over the course of the lease, the Lessee also made various other improvements at its own expense as discussed later. During the course of the term, the Lessee removed a wall towards the back of the premises. Upon removal of the wall, it laid mosaic feature tiles in a contrasting, but complementary colour, where the wall had been.
- Clause 11.2 provides that at the end of the lease, (subject to some matters which are not relevant here), the Lessee may remove fixtures, fittings, floor coverings, signs and notices erected or installed by the Lessee during the term, other than those paid for, or subsidised by the Lessor, provided that removal could be effected without causing substantial damage to the premises. Further, the Lessee was required to make good any damage caused by the removal.
- Clause 11.3 provides that if the Lessee has not removed those items covered by Clause 11.2 as of right, the Lessor may require that it remove the property referred to in Clause 11.2, make good the premises, and if required to do so by the Lessor, re-alter the premises to convert them back to their original layout. If the lessee does not do so, the Lessor may, at its option, cause the fixtures, fittings, floor coverings or signs to be removed and damage to be made good. The Lessor may then recover the cost from the Lessee as a liquidated debt payable on demand.
- The Lessor also refers to Clause 13.7. It is a general provision to the effect that if the Lessee defaults on its obligations under the lease, the Lessor is at liberty to make good any such default, and any expenditure in doing so shall be payable by the Lessee on demand.
- Following the expiry of the lease, Mr Strano lodged a notice of dispute under the Retail Shop Lease Act 1994 (Qld) (‘RSL Act’). The notice of dispute claims that although the Lessee removed fixtures, fittings and signs as required by the terms of the lease, in the process of removal, the Lessee caused ‘a substantial amount of damage to the tiles’. Further, Mr Strano claims that the Lessee’s rectification works did not make good the damage, and the premises were not returned to their original state. He says that he exercised his rights to make good the damage. He now claims his expenditure ‘in accordance with the terms of the lease’ as follows:
- 24 replacement tiles $170.80
- Costs of labour and materials for works 9 September
2014 to 10 September 2014 $560.00
- Two weeks loss of rent $367.88
- QCAT application fee $295.00
- Legal costs $220.00
- In particular, the Lessor alleges that upon termination of the lease, the Lessee removed a wall that it had erected on the premises, resulting in substantial damage to the tiles. Due to the disruption caused by replacing those damaged tiles, the Lessor says that he provided the new tenant with two weeks of unpaid rent, during which the laying and setting of the replacement tiles occurred, and during which the new tenants were unable to operate their business. He says that a letter of demand was forwarded to the Lessee for the costs to make good but it was not paid.
- In respect of the internal wall, the Lessee explains that approximately 24 weeks after the lease commenced it removed an internal wall, which it had erected in the first month of the lease, and, as discussed earlier, then laid mosaic feature tiles where the wall had been, because no tiles had been laid where the wall was erected. That configuration remained in the shop for some two and a half years until the end of the term.
- The Lessor does not dispute that he visited the shop on many occasions and did not raise any concerns about the mosaic tiles. The Lessee says, and again Mr Strano does not appear to dispute this, that in the week prior to vacation of the premises and making good, he advised that he wanted the feature tiles removed and replaced with ‘entire’ tiles, even though there were no tiles in the premises at the commencement of the lease.
- The Lessee says that the inlaid tiles were not damaged tiles. Photographs provided confirm this. They were complementary and inoffensive.
- It is uncontroversial that three of the other tiles (that is, those tiles which were supplied by the Lessor and laid shortly afterwards by the Lessee in the early weeks of the lease term) have three small chips out of them. The Lessee asserts that this is fair wear and tear. This does not appear to be controversial either.
- Further, the Lessee says that the Lessor requests only the removal of some fittings but not others. The Lessee points to improvements made to the premises by it as follows:
- Removal of all old electrical wiring;
- Installation and rewiring of entire premises;
- Installation of 24 new power points;
- Installation of 13 new light fittings;
- Removal of unsafe switchboard;
- Installation of new switchboard to Australia Standard specifications;
- Installation of new sink and plumbing throughout the shop;
- Replacement of old unserviceable wall, including addition of further structural studs;
- Gyprock to 70 square metres of the new wall;
- Plastering to 140 square metres of the walls;
- Supply and installation of new front glass door to Australian Standard specifications; and
- Supply and installation of complete new shop façade.
- The Lessee argues that to return the premises to its ‘original state’ would require removing all of the tiles in the premises and replacing it with very old carpet.
- Further, the Lessee argues that it should not be responsible for Mr Strano choosing a handyman who was not available for nine days after the premises were vacated to lay tiles for him, so that he was unable to charge rent for two weeks. Finally, it says it did not receive a demand for the amount claimed, and therefore it cannot be in default of the lease. The Lessee seeks orders dismissing the claim.
- Returning the premises to their ‘original state,’ as Mr Strano suggests he wanted, would have required, it appears, not only removal of the tiles, but also various items paid for by the Lessee which remain in the premises, as listed above. Reference to it appears to arise out of Clause 11.3 (rather than out of Clause 13.7, upon which Mr Strano seems to rely).In any event, Clause 11.3 only entitles the Lessor to require that it be converted to its original layout. There is no evidence to support a finding that the original layout has altered.
- In any event, the photographs available to us suggest that the tiles which have been laid to replace the mosaic feature tiles actually detract from the aesthetics of the floor. The mosaic tiles looked better. Further, from the photographs it is apparent that the premises were made good. We find that they were made good. They were clean, tidy, recently painted and freshly presented. It is also apparent that the Lessor seeks to keep the benefit of a significant variety of the improvements made by the Lessee, while making a claim for an unnecessary and small change made to the tiles in the premises. He does not in fact seek a return to the original layout.
- The Lessor’s claim is not made in accordance with Clause 11.3. Further, given our findings, Clause 13.7 does not assist Mr Strano. We have concluded that the Lessor’s claim has no merit. It should be dismissed.
- Further, even if we were wrong and the claim for tiles and labour was made in accordance with Clause 11.3, we would not compensate the landlord for lost rent because he could have obtained a tradesperson to do the work earlier.
- Further, we consider it is not in the interests of justice, having regard to the trivial and unmeritorious nature of the claim, to award any costs to the Lessor.
- Mr Strano’s claim is dismissed, together with his application for costs.
- Published Case Name:
Strano v Williams & Williams as Trustees of J&C Williams Family Trust
- Shortened Case Name:
Strano v Williams & Williams as Trustees of J&C Williams Family Trust
 QCAT 139
Member Howard, Member Judge, Member McBride
10 Jun 2016