Wyles v Health Pathways Pty. Ltd.
[2010] QDC 398
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- Unreported Judgment
- Wyles v Health Pathways Pty. Ltd.[2010] QDC 398
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Wyles v Health Pathways Pty. Ltd.[2010] QDC 398
Wyles v Health Pathways Pty. Ltd.[2010] QDC 398
DISTRICT COURT OF QUEENSLAND
CITATION: | Wyles & Anor v Health Pathways P/L [2010] QDC 398 |
PARTIES: | GWENDA MAY WYLES and JAMES FRANCIS WYLES (Plaintiffs) And HEALTH PATHWAYS PTY LTD ACN 101 359 835 (Defendant) |
FILE NO/S: | D66/08 |
DIVISION: | Civil Jurisdiction |
PROCEEDING: | Hearing |
ORIGINATING COURT: | District Court, Maroochydore |
DELIVERED ON: | 26 October 2010 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | 11 October 2010 |
JUDGE: | Robertson DCJ |
ORDER: | Judgment for the plaintiffs for $9703.91 |
CATCHWORDS: | LEASES, CONTRACT – Defendant leased premises from plaintiffs which did not include a lot plan or real property description, where defendant abandoned premises alleging breaches by the plaintiffs for not including a garage space in leased premises – DAMAGES – whether plaintiffs are entitled to damages including a rent free period offered to new tenant. Legislation Fair Trading Act 1989 (Qld) Cases Cited Commonwealth v Amann Aviation Pty Ltd [1992] 174 CLR 64 Lumbers v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27 Pohlmann v Harrison and Anor [1993] QCA 1. Povey & Matthews Pty Ltd v Paul [1987] 162 CLR 221 |
COUNSEL: | Mr S.M Gerber for the plaintiffs Mr D. Topp for the defendant |
SOLICITORS: | Chris Suttons Law for the plaintiffs Greenhalgh Pickard Solicitors for the defendant |
- [1]In 2002 Mr and Mrs Wyles (the plaintiffs) owned unit 11/100 Burnett Street, Buderim described as Lot 11 on BUP103680 which included a 76m2 office space with balcony and two garage spaces of 18m2 each. They engaged Mr Trevor Hicks of Trevor Hicks Realty in Buderim to lease the premises and Mr Hicks caused an advertisement to be placed in the Buderim Chronicle which described the premises as “70m2 + Balcony + storage”. David Taylor, a director of Health Pathways Pty Ltd (the defendant) responded, either to the advertisement or to a notice in the window of the agency and, in due course applied to lease “Suite 11/100 Burnett Street”. A “Commercial Tenancy Agreement” was prepared by one of Mr Hicks’ staff between the plaintiffs and the defendant which commenced on 8 August 2002. The “premises” were described in the lease as “11/100 Burnett Street Buderim 4556”.
- [2]Prior to the lease being signed, Mr Hicks had shown Mr Taylor and another director of the defendant Lucille Humphries the premises to be leased. It is common ground that Mr Hicks showed Mr Taylor and Ms Humphries the office space and balcony and only one garage.
- [3]Mr Hicks was aware at this time that the plaintiffs had already leased the second garage to another entity. Mr Taylor says that he viewed the premises twice and it was on the second occasion when Ms Humphries was present that he was first shown the garage area. He says he noticed that there were two garages marked “11” and he asked Mr Hicks why there were two. He says Mr Hicks responded “that has nothing to do with you”. Mr Hicks has no recollection of saying this and doubts he would have spoken in this way to a prospective tenant. Ms Humphries, who was present according to Mr Taylor, is no longer a director of the defendant however she is available and lives in Tewantin. She was not called by the defendant. Mr Gerber therefore submits that I can infer that her evidence would not have assisted the defendant on this point of dispute. I comfortably draw that inference. By reference to the pleadings and in particular paragraph 3(a) of the defendants’ Amended Defence and Counter Claim filed 24 June 2010, in conjunction with paragraph 4a(i) of the plaintiff’s Reply and Answer filed 28 March 2008, I am satisfied that the defendant knew at all times prior to the signing of the lease that it was leasing one garage only. Mr Hicks was an impressive witness who made fair concessions when cross-examined particularly about the effect of the passage of so much time on his memory. Mr Taylor on the other hand was an unimpressive witness. I agree with Mr Gerber that in cross-examination Mr Taylor was evasive, resorting often to long winded, circuitous answers which in many respects were unresponsive. This was particularly noticeable when Mr Gerber attempted to have him accept that he well knew at all times that what the defendant was leasing involved one garage only.
- [4]The first lease ran its course without any problems. There was much cross-examination of Mr Hicks about GST and increases in the rent over that time (despite the lease not providing for annual rent reviews) which seemed to go nowhere. Mr Hicks’ firm did send some invoices with GST included however the plaintiffs were not required to be registered for GST. The defendant, in any event, is not out of pocket because it claimed any GST paid as an input credit. During the currency of the first lease Ms Humphries did complain to Mr Hicks about increased Body Corporate fees due to the upgrading of air conditioning and the locks by the Body Corporate and this was resolved. Her letter to the Community Titles Manager dated 28 January 2004 shows that she (and therefore the defendant) was commercially alert to its rights and obligations under the lease.
- [5]On 9 August 2005 the defendant signed a new lease of the premises essentially in the same terms as the first lease except the rent which had increased. As in the first lease the defendant agreed to pay 100 per cent of outgoings as defined in clause 4.2 of the lease.
- [6]A number of things occurred in 2006 which has led to this protracted, costly and unfortunate dispute.
- [7]At some time prior to 18 April 2006 Ms Humphries came into Mr Hicks’ office and said words to the effect that “Health Pathways has purchased another office in the building next door. We are going to vacate and move into the new office”. On 18 April 2006 by letter from the defendant to Trevor Hicks Realty the defendant stated:
“Further to our conversation, I hereby state in writing our intentions to vacate the premises located at 11/100 Burnett Street Buderim.
We understand there to be costs related to this decision and await your instructions re same.
It is with great regret that we make these arrangements and we would be very grateful if you could pass these sentiments to Mr and Mrs Wyles who we have considered to be excellent landlords.
Yours faithfully
Lucy Humphries”.
- [8]At the time the letter was written the defendant had indeed purchased alternative commercial premises at 102 Burnett Street Buderim which the defendant has occupied since 2007.
- [9]By letter dated 21 April 2006 Trevor Hicks Realty responded to the defendant stating inter alia:
“Please be advised that according to your lease agreement, you will be obligated to pay the rent monthly in advance until another tenant is secured. Also, you will be required to pay one month’s rent plus GST as the re-letting fee and any costs that would normally be incurred by the lessor such as advertising if required and agreed to by both parties”.
At some time after this and prior to June/July 2006 Ms Humphries verbally advised Mr Hicks that the defendant had decided to stay.
- [10]Ms Humphries of course was not called by the defendant to explain the defendant’s position from her perspective. Mr Taylor gave evidence about this issue and said that at this time they considered terminating the lease but made other decisions. He said they thought about terminating but changed their minds. I have to say I found his evidence in this respect unconvincing.
- [11]He says that in July 2006, due to a contact from another tenant a query arose in his mind about the Body Corporate outgoings. He says it was then that he discovered for the first time that Lot 11 included two garages.
- [12]By letter dated 10 August 2006 the defendant wrote to Trevor Hicks Realty raising an allegation that the defendant had wrongly been charged outgoings calculated in respect of the second garage. Mrs Wyles said in evidence that the first time she became aware of this allegation was when she received this letter in October 2006.
- [13]In response, by an undated letter that was sent without instructions from the plaintiffs and which appears to have been received in August 2006, Trevor Hicks Realty wrote to the defendant setting out a calculation of rates and Body Corporate fees for an ‘adjustment of one garage space of approximately 17m2 for the period from 1 August 2002’. That calculation came to $2121.93. Mr Hicks says in his affidavit that he responded in this way because he accepted there was a certain logic to the proposition put by Health Pathways. He did not consult a lawyer and made this offer without instructions from the plaintiffs. The plaintiffs now are bound by that concession but are not bound by any misinterpretation of the proper meaning and construction of the lease agreement by Mr Hicks.
- [14]On 7 September 2006 the defendant wrote to Trevor Hicks Realty paying the amount claimed in the undated letter but without accepting the figures prepared by Mr Hicks. In that letter the defendant stated:
“We would consider that we are currently without a lease. Our decision regarding our lease would be determined by resolution of our current situation. We respectfully request all figures regarding the calculations of correction of payments for Suite 11/100 Burnett Street Buderim for our accounting purposes”.
- [15]This letter was signed on behalf of the defendant by Ms Humphries.
- [16]On 8 September 2006 Mr Hicks replied in these terms.
“Thank you for your letter dated 7 September 2006.
Why would you consider you’re without a lease?
I will furnish the figures in a legible manner as soon as possible”.
The defendant responded on 25 September 2006 in a letter which Mr Gerber justifiably describes as confusing. On this occasion the letter is signed by Mr Taylor, Ms Humphries and presumably Mr Jefferson the other director of the defendant at that time.
- [17]The letter states inter alia:
“As to the matter of the current lease context, it is apparent that the Agent/Owners have been in breach of two successive leases. There are no exclusion clauses that would indicate the lease costs cover anything other than the complete premises of Unit 11. This means that the second garage has been and continues to be under Health Pathways ‘jurisdiction’…
We request prompt action on this matter. If there is no mutually accepted resolution by 31 October 2006 then Health Pathways will deem it necessary to pursue legal action. As we are of the opinion that there is a large outstanding refund due, we will not pay any further monies until this matter is resolved”.
- [18]By letter dated 13 November 2006 the defendant wrote directly to the plaintiffs suggesting that they meet to resolve the matter and importantly stating:
“Before we signed the agreement dated 1 August 2002, Trevor Hicks Realty informed us that despite being granted two garages as recorded on the BUP, we would have use of only one garage as you would be keeping the second garage for your own use”.
This letter is signed by Lucy Humphries. The statement of fact contained in the letter quoted above is not true even on the defendant’s case.
- [19]Lawyers became involved on both sides and ultimately the defendant vacated on 24 December 2006 and moved to its new premises next door.
- [20]I am quite satisfied that before the dispute arose about outgoings the defendant had decided to move. When cross-examined about this issue Mr Taylor again was most unimpressive. He says now that the reason they moved was because of the resignation of another “clinician” Mr Jefferson (also a director of the defendant) in November 2006 such that the new premises with only one consulting room, as opposed to two in the leased premises was more suitable to their business requirement. Again the defendant’s case is considerably weakened by its failure to call Miss Humphries. I draw the inference that her evidence about the reasons for moving would not have assisted the defendant. I reject Mr Taylor’s evidence in this regard.
- [21]It follows that the defendant was not entitled to abandon the lease as it did on 24 December 2006 and by doing so has repudiated the lease and the plaintiffs have established its claim for damages for breach of the lease agreement. On all the evidence I am satisfied the defendant got exactly what it contracted to get in both the first and second leases which was a lease of the premises excluding the second garage.
The Counterclaim
- [22]The reason this small claim is in this Court is because the defendant alleges that the plaintiffs have by their conduct (in reality the conduct of their agent Mr Hicks) breached s 40A(1)(b)(ii), (iii), (iv), (v) and (vi) of the Fair Trading Act 1989 (Qld) (the FTA). The defendant convinced a Magistrate that the Magistrate’s Court did not have jurisdiction to make an order to pursuant to s 100(7)(b) of that Act which it seeks in paragraph 25(a) of the amended defence and counterclaim. I am not favoured with his Honour’s reasons, so I cannot comment as to the correctness of his ruling which, in any event, was not challenged by the plaintiffs.
- [23]Given my conclusion about credibility the counterclaim must fail. At the very last possible moment in the trial, that is after Mr Gerber’s address, Mr Topp sought to amend his client’s pleading to allege that it was Mr Hicks’ statement “that has nothing to do with you” that constitutes “a false or misleading representation” pursuant to s 40A(1)(b) of the FTA. I have already found that is more probable than not that Mr Hicks did not use such words, but even if he did in my view such a comment would not come even close to a false or misleading representation such as to constitute a breach of s 40A(1)(b) of the FTA. If he said it, it was in fact true. The defendant got exactly what it bargained for; that is a lease of the premises without the second garage. Mr Hicks was criticised for not including a copy of the building unit plan in the lease but the defendant itself obviously did not independently search the title. If it had it would have realised that there was a second garage space included in the lot description. The counterclaim must fail.
Damages
- [24]It is common ground that Mr Hicks re-leased the premises to another tenant and that lease commenced on 19 March 2007.
- [25]There was a two month rent free period so payment of rent commenced on 19 May 2007. Mr Topp submits that the plaintiff should not be entitled to two months’ rent for this period. He relies upon a statement in Commonwealth v Amann Aviation Pty Ltd (1992) 174 CLR 64 at para 28 of the joint judgment of Mason CJ and Dawson J. I think Mr Topp has misconceived the application of the principle there stated. If his client had not repudiated the lease, the plaintiffs would have received rent for that period and would not be placed in any superior position to that which they would have been in had the defendants not repudiated the lease by an award of damages to include rental for that period.
- [26]There was a dispute about the unpaid Body Corporate fees. The claim in paragraph 15(ii) of the statement of claim is for “Body Corporate fees levied in relation to the premises … for the period 25 December 2006 to 30 April 2007”; an amount of $2,699.20. Mr Topp argues by reference to the Body Corporate notice covering that period that this amount excessive. Through Mrs Wyles he tendered the actual notice for the period 1 November 2006 to 30 April 2007; that is a six month period which was for $2,699.20. She was cross-examined about this. She denied that there was any mistake. I accept her evidence. The defendant did not pay that levy as it was obliged to do under the lease. Paragraph 15(ii) has adopted the same dates as are set out in (i). However the point Mrs Wyles was making is that although the defendant paid rent up to 24 December 2006 it never paid the Body Corporate fees which covered that whole period.
- [27]Mr Gerber did not dispute Mr Topp’s calculations in relation to rates and he conceded that the claim for unpaid duty should be reduced to $192.50.
- [28]The plaintiff’s damages are therefore as pleaded in paragraph 15 of the statement of claim except for the amounts claimed in (iv) and (vi) which should be respectively $400.08 and $192.50. The plaintiffs are entitled to judgment on their claim in the sum of $9,703.91. The counterclaim is dismissed.
- [29]To the extent that it is necessary I reject Mr Topp’s submissions on law based on the concept of “unjust enrichment”. It would follow in any event that a claim based on an unjust enrichment would fail as a result of my conclusions as to the proper construction of the lease agreement. In this case the parties’ rights and obligations are defined by the terms of the lease agreement. It is not a situation where there was an oral contract between the parties and the necessary elements of a claim for unjust enrichment arise: Povey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256 to 227 and Lumbers v W Cook Builders Pty Ltd (in liquidation) 2008 [HCA 27] and see also the joint judgment of the president, White J (as her Honour then was) in Pohlmann v Harrison and Anor [1993] QCA 1.
- [30]I will hear the parties in relation to costs.