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  • Unreported Judgment

Transmetro Corporation Ltd v Skafola Pty Ltd

 

[2004] QSC 277

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

DELIVERED ON:

1 September 2004

DELIVERED AT:

Brisbane

HEARING DATE:

18 August 2004

JUDGE:

Chesterman J

ORDER:

Application dismissed with costs

CATCHWORDS:

CORPORATIONS – WINDING UP – WINDING UP BY COURT – GROUNDS FOR WINDING UP – STATUTORY DEMAND – where the applicant was a lessee of a number of lots in a building which operated as a motel business – where the respondents were the lot owners – when the respondents issued statutory demands to recover arrears of rent owed by the applicant to the respondents in accordance with their respective leases – where the applicant sought an order that the statutory demands be set aside pursuant to s 459G Corporations Act 2001 (Cth) – where the applicant had an offsetting claim which negated the amount of rent claimed by the respondents

Corporations Act 2001 (Cth), s 459G, s 459H(5)

Building Units and Group Titles Act 1980 (Qld), s 37

Hudson v Cripps [1896] 1 Ch 265, cited 

Robinson v Kilvert (1889) 41 Ch 88, cited

COUNSEL:

Mr J B Sweeney for the applicant

Mr P J Favell for the respondents

SOLICITORS:

Hillhouse Burrough McKeown for the applicant

Walsh Halligan Douglas for the respondents

[1] The applicant is the lessee of a number of lots in BUP 13764, a building known as the Tower Mill Motel Inn on Wickham Terrace.  The respondents are a number of owners of lots in the BUP who have leased them to the applicant to enable it to conduct a motel business by letting them out to the public as rooms.  The leases between the applicant and each of the respondents are in identical terms.

[2] On 1 July 2004 the respondents issued a statutory demand for payment of debts, being arrears of rent owed by the applicant to the respondents pursuant to their respective leases.

[3] By an application dated 23 July 2004 the applicant seeks an order that all of the respondents’ statutory demands be set aside pursuant to s 459G of the Corporations Act 2001 (Cth).  The ground is identical for each of the demands issued by each of the respondents.  It is that the applicant has an offsetting claim which equals or exceeds the amount of rent claimed, in total, by the respondents.

[4] The respondents accept that they have made some errors in calculating the amounts of rent due to some of them, and the demands are therefore inaccurate in part.  The errors are small in amount and the applicant does not seek to justify its application on the ground of the errors which have been identified.  It is not in contention that the applicant owes the respondents arrears of rent in amounts which are ascertained.

[5] The applicant claims that it has suffered substantial loss by reason of the respondents’ breaches of obligations contained in the leases.  The obligations are found in clauses 4.1 and 4.3 of the leases.  They provide:

 

‘4.1The Owner must allow the Lessee quiet possession of the Suite and the Common Property;

 

4.3The Owner must not interfere with the Lessee’s business conducted at the Motor Inn;’

[6] Section 459H(5) of the Corporations Act defines an offsetting claim to mean a genuine claim that the company has against the person making the demand, by way of counter-claim, set-off or cross-demand, even though it does not arise out of the same transaction or circumstances as the debt to which the demand relates. 

[7] The circumstances giving rise to the offsetting claim are set out in the affidavit of Mr Fawlk, the applicant’s property manager at the Tower Mill Motel.  It is, in essence, that the motel comprises of 75 suites spread over nine floors of the building.  Access is, of course, by lift which should be, if hotel guests are to not become dissatisfied, ‘quick and reliable’ giving access to their suites ‘on demand’.  To use the vulgar language of the affidavit, ‘bad lifts are a complete turn off for guests.’ 

[8] The building had two lifts, one for guests and one for goods.  By March 2002 both the lifts were inadequate.  They were almost 40 years old and could not be brought to an acceptable standard for operation.  In August 2002 the body corporate (which is not a party to the application) resolved to replace the guest lift but this did not occur until March 2004.  In the interim the old lift continued to give problems.  It malfunctioned very frequently often trapping guests for extended periods.  It was slow and could carry only a few guests at a time.  It was generally unreliable.  The consequence was that the lift was the subject of constant complaint by guests and a number of groups who had used the motel on a regular basis declined to renew their bookings.  There was a subsequent reduction in the occupancy of the motel and its profitability.

[9] The assessment of the loss presents difficulties but the amount is said to be substantial.

[10] The applicant may have a genuine claim with respect to the condition of the lifts, but it is not a claim against the respondents.  It would appear to be against the Body Corporate.  It is that body which is charged with the operation and maintenance of the lifts, (see s 37 of the Building Units and Group Titles Act 1980 (Qld)).   Clause 5.2 of the letting agreement between the applicant and the Body Corporate obliged the latter to keep and maintain the common property of the building ‘in a manner consistent with the fact that the Lots are let to members of the public.’  The failure of the lifts may be a breach of that term, but it is not a breach by the respondents, and it is not something which is within the ambit of the covenant for quiet enjoyment.

[11] By the covenant for quiet enjoyment the lessor undertakes that the tenant will be free from disturbance to its possession and enjoyment of the premises by the exercise of adverse rights over the property leased by the lessor or some person for whom he is responsible (see e.g. Hudson v Cripps [1896] 1 Ch 265 at 268;  Robinson v Kilvert (1889) 41 Ch 88 at 96-97).  The failure to maintain the lifts in good working order is not an act or omission of the respondent lessors, or anyone authorised by them or claiming title from them.  It is not, therefore, a breach of the covenant.

[12] The inadequacy of the lifts may have made access to the individual lots slow and unreliable but that was not something for which the respondents, as lessors, were responsible.  For the same reason the failure of the lift service was not an act of interference by the lessors with the applicant’s business.

[13] The applicant has accordingly failed to show it has a genuine offsetting claim against the amounts admittedly due to the respondents.  The application must be dismissed with costs.

Schedule of First Respondents

Lease No

Lot

Suite No

Respondent’s Name

Respondent’s Address

700299117

31

101

Skafola Pty Ltd

PO Box 1298, Toowong, Qld 4066

700606601

32

102

DP Faggotter

28 Corbett Aven, Dubbo, NSW 2830

700351674

33

103

NT & R Clements

9/17 Muddlestone Pl, Bruce, ACT 2617

700229914

35

105

Delta Investments Pty Ltd

213-217 Queen St, Ayr, Qld 4807

700058528

41

201

RJ Cox

PO Box 13, Crabbes Creek, NSW 2483

700326197

42

202

Delta Investments Pty Ltd

213-217 Queen St, Ayr, Qld 4807

700220236

45

205

PJ Hunter

15 Brownsmith Cres, Kambah, ACT 2902

700528276

46

206

KL Oung

PO Box R39, Rhodes, NSW 2138

700092120

50

210

Sukhvinder Singh

9 Continua Ct, Wattle Grove, NSW 2173

700058533

53

303

JL Wharton

Jeffs Go-Vita, Shop 4, Erina Mall, Erina, NSW 2250

700706404

57

307

S Singh

9 Continua Ct, Wattle Grove, NSW 2173

L975370L

61

401

Delta Investments Pty Ltd

213-217 Queen St, Ayr, Qld 4807

701093252

64

404

L Majcan

26 Stainsby Ave, Kings Langley, NSW 2147

700115383

65

405

RVP Williams (purportedly served on behalf of RV & P Williams)

31 Short St, Banksia, NSW 2216

700369973

66

406

Glenda Ruth Gilkes

8 Lemon Gums Dr, Tamworth, NSW 2340

700369938

67

407

PJ Hart

73 Weemala Rd, Chester Hill, NSW 2162

700094803

69

409

CF Chambers

61 Scott St, Shoalhaven Heads, NSW 2535

700011238

73

503

TG Lord

8/25 Temperley St, Nicholls, ACT 2913

601036186

74

504

Michael TC Lam & Jane KW Hui

Flat A, 18th Floor, Millennium Court, 11 Sands St, Westpoint, Hong Kong

700299121

77

507

RG & DF Melbourne

147 Ziegenfuzz Rd, Thornlands, Qld 4164

700058658

78

508

I & RH Townsend

PO Box 1066, Bathurst, NSW 2795

700058689

79

509

I & RH Townsend

As above

700533554

80

510

M & K Hanna

9 Bolger St, Upper Mt Gravatt, Qld 4122

L966030B

82

602

P Thompson

65A Carrington Rd, Randwick, NSW 2031

700443284

83

603

LP Flahavin

2 Daintree Dr, Wattle Grove, NSW 2173

700115395

84

604

N Saxena

9 Luckins Pl, Fadden, ACT 2904

700828218

87

607

CS & VJ Carmichael

Kungari Timor Rd, Coonabarabran, NSW 2357

700518941

88

608

Scafola Pty Ltd (purportedly served on behalf of Davy Investment Pty Ltd)

15/58 Swann Rd, Taringa, Qld 4068

700297204

91

701

MJ & IC Talbot

22 Vimy St, Rainworth, Qld 4065

700027270

93

703

BR Elms (purportedly served on behalf of Lisa Elms)

PO Box 25, Esk, Qld 4312

700058727

94

704

CT Tran & HT Vien (purportedly served on behalf of Canh Trong Tran & Huong)

82 Harcourt Rd, Darra, Qld 4076

700521170

97

707

R & G Gopalkrishnan

3 Loble Pl, Wanniassa, ACT 2903

700859501

98

708

B Allen (purportedly served on behalf of BA & BA Allen)

11 Annesley Ave, Stanwell Tops, NSW 2508

700094785

99

709

CF Chambers (purportedly served on behalf of JD Chambers)

61 Scott St, Shoalhaven Heads, NSW 2535

 

Close

Editorial Notes

  • Published Case Name:

    Transmetro Corporation Ltd v Skafola Pty Ltd & Ors

  • Shortened Case Name:

    Transmetro Corporation Ltd v Skafola Pty Ltd

  • MNC:

    [2004] QSC 277

  • Court:

    QSC

  • Judge(s):

    Chesterman J

  • Date:

    01 Sep 2004

Litigation History

No Litigation History

Appeal Status

No Status