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  4. Truckstop Pty Ltd v Coastal Haulage Pty Ltd - [2013] QDC 149

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Truckstop Pty Ltd v Coastal Haulage Pty Ltd[2013] QDC 149

Truckstop Pty Ltd v Coastal Haulage Pty Ltd[2013] QDC 149

DISTRICT COURT OF QUEENSLAND

CITATION:

Truckstop Pty Ltd v Coastal Haulage Pty Ltd & Anor [2013] QDC 149

PARTIES:

TRUCKSTOP PTY LTD
(Plaintiff)

v

COASTAL HAULAGE PTY LTD
(First Defendant)

and

BOYCE, Anthony
(Second Defendant)

FILE NO/S:

DIS 4838/12

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

5 July 2013

DELIVERED AT:

Brisbane 

HEARING DATE:

27-31 May; 11-14 June 2013; Submissions received 14 and 26 June 2013

JUDGE:

Ryrie DCJ

ORDER:

  1. Judgment for the Plaintiff against the First Defendant in the sum of $481,678.35 inclusive of interest, being damages for breach of contract.
  2. Judgment for the Plaintiff against the First Defendant in the sum of $591.05 inclusive of interest, being damages in respect of chattels.
  3. The First Defendant to pay the Plaintiff’s costs to be assessed on a standard basis unless otherwise ordered.

CATCHWORDS:

CONTRACT – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – AGREEMENT CONTEMPLATING EXECUTION OF FORMAL DOCUMENT –Where agreement to lease signed by Second Defendant on behalf of First Defendant – Where agreement to lease also included a term that the parties would subsequently execute a formal lease containing the terms and conditions the parties had agreed upon – Where agreement to lease included the normal terms and conditions applying to leases of similar buildings – Where execution of formal lease subject to approval of the lessor and lessee and their respective legal advisors  –Whether agreement to lease constituted a binding contract

CONTRACT – BREACH OF CONTRACT – Where Defendants failed to pay rent and outgoings to Plaintiff - Whether breach of contract by First Defendant – Loss and Damage - Where Defendants allege that certain representations and undertakings were made by the Plaintiff – Whether these representations and undertakings formed oral terms under the agreement to lease

CONTRACT – BREACH OF GUARANTEE – Where agreement to lease contained the term ‘Personal Directors guarantee is to be provided by the lessee’ – Where Second Defendant did not sign the formal lease containing a guarantee – Whether Second Defendant is estopped from denying that a guarantee was entered into –Whether breach of guarantee under the agreement to lease and the contemplated lease by Second Defendant – Loss and Damage

AUSTRALIAN CONSUMER LAW – MISLEADING AND DECEPTIVE CONDUCT– Whether alleged representations were made by First Defendant within the meaning of s 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) – Whether First Defendant made representations as to future matters under s 4 of the Competition and Consumer Act 2010 (Cth) when the agreement to lease was entered into – Whether Damages and/or compensation under ss 82 and 87 of the Competition and Consumer Act 2010 (Cth) should be awarded to the Plaintiff - Whether Second Defendant was knowingly concerned in and a party to any contravention under s 75B of the Competition and Consumer Act 2010 (Cth) 

AUSTRALIAN CONSUMER LAW –MISLEADING AND DECEPTIVE CONDUCT - FALSE OR MISLEADING REPRESENTATIONS ABOUT SERVICES – Whether representations and undertakings were made by the Plaintiff to the Defendants prior to entering into the agreement to lease – Whether these representations are in contravention of s 4 and ss 18 and 29 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) – Whether these representations induced the Defendants into entering into the agreement to lease – Whether the Defendant has suffered loss and damage as a consequence - Whether any offset should be made against any award of damages if made in the Plaintiffs favour

CHATTELS – DETINUE – CONVERSION – LOSS AND DAMAGE - Where Defendants removed Plaintiffs property from leased premises - Value of chattels - Cost of replacement

Australian Consumer Law 2010 (Cth) ss 18, 29

Competition and Consumer Act 2010 (Cth) ss 4, 75B, 82, 87

Property Law Act 1974 (Qld) s 56

Trade Practices Act 1972 (Cth) ss 51A, 52

Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168, distinguished

Chan v Cresdon Pty Ltd (1989) 168 CLR 242, applied

Cummings v Rundle (1993) 113 ALR 285, applied

Futureronics International Pty Ltd v Gadzhis (1992) 2 VR 217, considered

Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72, applied

Mermaids Café & Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271, applied

Coles Supermarkets Australia v FKP Ltd (2008) FCA 1915, considered

Sykes v Reserve Bank of Australia (1998) 158 FLR 710, applied

Yorke & Anor v Lucas (1985) 158 CLR 661, applied

COUNSEL:

S J Gerber (for the Plaintiff)

L Hagen (for the Plaintiff)

First Defendant appeared on own behalf

Second Defendant appeared on own behalf

SOLICITORS:

Thompson McNichol Lawyers (for the Plaintiff)

First Defendant appeared on own behalf

Second Defendant appeared on own behalf

Introduction

  1. [1]
    The Plaintiff (‘Truckstop’) and the First Defendant (‘Coastal’) were parties to an agreement to lease executed in April 2011 (Ex 1). Truckstop agreed to lease certain premises described as units 1 and 2, 44a Shettleston St Rocklea, to Coastal for a term of 5 years commencing 1st May 2011, the proposed use being office, warehouse and truck wash. In that agreement, the term “personal directors’ guarantee is to be provided by the lessee” was included. It also included a term that the parties would subsequently execute a formal lease containing not only the terms and conditions the parties had just agreed upon, but would also include “the normal terms and conditions applying to leases of similar buildings in the Brisbane area and subject to the approval of the lessor and lessee and their respective legal advisors”. One of the directors, the Second Defendant, (‘Mr Boyce’), signed the agreement to lease on behalf of Coastal.
  1. [2]
    No formal lease however was ever subsequently executed even though a draft formal lease had been sent to the Defendants’ solicitors for that purpose. On the 28th October 2011, after having taking up occupation at the said premises from 1st May 2011, Coastal vacated the premises upon it receiving a notice of determination of lease (Ex 27).

The Pleadings

  1. [3]
    Truckstop commenced proceedings claiming a sum of $436,058.30, being loss and damage suffered as a result of an alleged breach of contract and guarantee, against Coastal and Mr Boyce respectively. It also seeks an amount of $2103.61 for damages to chattels, and a further claim for damages against Coastal and Mr Boyce respectively for alleged breaches of the Australian Consumer Law (Cth) 2010, in the sum of $529,916.48.
  1. [4]
    The defence filed in these proceedings reveals that the Defendants denied that any such indebtedness is owed to Truckstop for alleged breach of contract and guarantee. In short, the Defendants say that there was never any concluded agreement at all between the parties. The Defendants raise two grounds. The first is because the formal lease containing ‘personal directors’ guarantees was never subsequently executed, nor did it have the necessary approval of the lessee (Coastal) and its respective legal advisor as required under a specific clause contained in the agreement to lease. (“Ground 1”).
  1. [5]
    The second ground is that prior to, and subsequent to, the execution of the agreement for lease, Mr Wilkinson (the sole director of Truckstop) made certain representations and gave certain undertakings in relation to the terms and conditions of Coastal’s occupation of the premises which the Defendants say, in turn, became oral terms to the agreement to lease. The Defendants say that because those undertakings and representations were never fulfilled during its occupation of the premises, Coastal therefore had no obligation to pay rent or outgoings in respect of the said premises during its occupation or to execute the formal lease. In other words, no concluded agreement was ever reached between the parties. (“Ground 2”).
  1. [6]
    Although the Defendants abandoned the counterclaim which was made initially by them, they nevertheless still seek to offset any loss or damage which they say were suffered as a consequence of Truckstop’s failure to honour those oral undertakings and representations in the order of $264,900.00.
  1. [7]
    The Defendants also make a claim for damages and/or compensation pursuant to the Australian Consumer Law 2010 (Cth) for alleged breaches of ss 18 and 29 by the Plaintiff during its dealings with the Defendants for the same amount.

The Plaintiff’s case, against, the First Defendant (Coastal) for alleged breach of contract in respect of the executed agreement to lease (ex 1) and the formal lease not executed (ex 2)

  1. [8]
    Did the agreement to lease dated 8th April 2011 constitute an immediately binding agreement as between the Plaintiff and the First Defendant or was there in fact no concluded bargain at all?
  1. [9]
    The Plaintiff submits that the agreement to lease executed by the parties in April 2011 had the effect of immediately binding both parties to the performance of the terms and conditions contained within, and as such it is therefore entitled to its claim against the First Defendant for damages for breach of contract. If the Plaintiff’s submission is accepted, it follows that the First Defendant will be liable for damages.
  1. [10]
    The First Defendant, on the other hand, submits that the agreement to lease was not binding at all as it did not reflect any concluded bargain between the parties in that the agreement was only to be given effect upon the parties executing a formal lease and guarantee (paragraphs 6 and 7 defence) or alternatively, that the agreement was only to be given effect upon the undertakings and representations given or made by Mr Wilkinson (set out in paragraph 11 of the defence) prior to and subsequent to execution of the agreement to lease being fulfilled.
  1. [11]
    The leading case in respect of this issue is Masters v Cameron (1954) 91 CLR 353.  As Justice Chesterman in Mermaids Café & Bar Pty Ltd [2010] QCA 271 at paragraph [12] helpfully sets out, the relevant principles to be considered are:

“Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.”

  1. [12]
    As Justice Chesterman observed in Mermaids at para [13], in order to determine which class a particular agreement may be placed, it is essential to look to the intention of the parties as explained by McHugh JA in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd. (1986) 40 NSWLR 631 at 634:

“However, the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances: Godecke v Kirwan (1973) 129 CLR 629 at 638; Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 332-334, 337. If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction.”

  1. [13]
    Counsel for the Plaintiff also referred to certain case authority in its submissions (Ex 40 paragraphs 44, 45 and 46)) which in effect restates these principles.
  1. [14]
    In order to determine the relevant issues, I intend to deal with ‘Ground 2’ raised by the Defendants first. A detailed analysis of the evidence available for consideration is required, which shall also incorporate the findings which I have made.

Did the alleged representations made or the alleged undertakings given by Mr Wilkinson constitute oral terms which formed part of any agreement to lease entered into between the parties? (‘Ground 2’)

Mr Wilkinson’s evidence (a brief overview)

  1. [15]
    Mr Wilkinson, as sole director of Truckstop, was the only witness called in the Plaintiff’s case. His evidence in effect was that he had entered into negotiations with Mr Boyce in respect of the said premises at units 1 and 2 at 44a Shettleston St Rocklea prior to the execution of the agreement to lease in April 2011. The effect of his evidence was that the terms and conditions agreed upon during those various discussions was then reduced to those contained in the agreement to lease, which was to take effect immediately upon Coastal going into occupation of the premises from the 1st May 2011. Mr Wilkinson explained that during those earlier discussions, Coastal had a ‘wish list’ of items that it wanted and that is why Clause 2 (“lessor’s works/improvements”) was included in the Agreement to Lease document in order to cover those items such as a loading dock pit, elevation of the floor to allow for cold room expansion and an internal mechanical service pit.
  1. [16]
    Mr Wilkinson gave evidence that shortly after Coastal taking up occupation on 1May 2011, it was agreed that an amount of $10,000 would be paid to Coastal to clean up the premises because of the condition which it had been left in by the former tenant. Mr Wilkinson gave evidence that this amount was to be separate to the $120,000 allocated in Clause 2. Mr Wilkinson said that once Coastal took up occupation, he immediately started arranging work on the loading dock to be carried out, which included submitting plans to Mr Boyce at the end of May for his approval. He said Mr Boyce finally gave his approval to those plans at a meeting on 14th June 2011. Work was then started on the dock which he said then took about a month to finish.  Mr Wilkinson also gave evidence that sometime in June 2011  he was contacted by Margaret Boyd, on behalf of Coastal, who asked for $40 000 to be allocated (out of $120,000 amount set out in Clause 2) so that Coastal could purchase some truck washing equipment and associated plumbing. He stated that he had agreed to that and subsequently made two payments of $20,000 to Coastal Haulage for that purpose (see Ex 20). He gave evidence that he had also installed new floor grates after Mr Boyce had failed to retrieve the existing grates that had been thrown in a bin by the prior tenant and taken away by a disposal carrier. Mr Wilkinson gave evidence that the elevation of the concrete floor did not take place because Mr Boyce had told him not to, and therefore he did not proceed with it. He also said that the internal mechanical pit was not installed because by that stage Coastal had not been paying any monies towards rent and the like and so he had advised Mr Boyce that no further work would be done or any further monies would be paid out of the allocated $120,000 until outstanding payments were received. 
  1. [17]
    Mr Wilkinson gave evidence that there had been no other discussions between himself and Mr Boyce regarding the terms or conditions of the agreement to lease other than what was raised by him initially as an agenda at the 14th June 2011 meeting  (see ex 5). Mr Wilkinson said that although he had repeatedly asked Mr Boyce when the formal lease would be returned, those requests were ignored. Mr Wilkinson gave evidence (T1-58) that Mr Boyce had made excuses as to why the formal lease was not being returned or why rent was not being paid. Those excuses included Mr Boyce’s solicitor having had a heart attack in respect to the former and in respect to the latter and that he was waiting for a large payment to come in from one of his jobs in order that he could then pay Truckstop any outstanding rent. Mr Wilkinson gave evidence that a rental payment including electricity was in fact received from Coastal on the 15th August 2011 for $11608 or so.
  1. [18]
    Mr Wilkinson gave evidence that approximately 3 months or so after Coastal had taken up occupation, he advised Coastal that he would not be proceeding with any further property improvements (pursuant to Clause 2) until the formal lease was ‘sorted out and the rents’. He gave evidence that outgoings and rental payments due and owing during Coastal’s occupation were still outstanding. Mr Wilkinson gave evidence regarding the condition the property after Coastal vacated the premises and the monies which were expended in cleaning up those premises, the cost for rectification work relating to damage that had occurred during Coastal’s occupation of it and the reinstatement costs associated with walls and fencing which had either been taken down or removed during Coastal’s occupation. Documentation was tendered to support all of claims, which were marked as exhibits.
  1. [19]
    Mr Wilkinson gave evidence that he would never have let Coastal occupy the premises from the 1st May 2011 had he known that it or Mr Boyce did not intend to fulfil their obligations under the agreement to lease  (T2-18). The general tenor of Mr Wilkinson’s evidence was that he had always understood that the agreement to lease which was executed by the parties in April 2011 was to be immediately binding upon the parties. He understood that no further terms or conditions were ever intended to be incorporated into the agreement to lease or into any contemplated formal lease to be executed other than those which had already been agreed upon.
  1. [20]
    Mr Boyce cross-examined Mr Wilkinson extensively. A substantial part of that cross-examination focused on the documentation which was tendered in support of the Plaintiff’s claim for loss and damage, particularly regarding the actual quantum that was being sought. In order that this judgment may be more readily understood, I shall deal with each matter separately incorporating under each heading, the relevant evidence and/or documentation, and my findings.

Truckwashing Equipment

  1. [21]
    In the defence filed (para 11(a)(i) and (ii) of the defence), the Defendants say that Mr Wilkinson made certain representations prior to the execution of the agreement to lease in respect of certain truck washing equipment being left at the premises for the use of Coastal and the monetary returns it could expect from conducting a truckwashing business.
  1. [22]
    Mr Boyce gave evidence that approximately 2 weeks before signing the agreement to lease, he had told Mr Wilkinson that he was intending to go straight into truckwashing from the 1st May 2011 at unit 1. He gave evidence that he had understood at that meeting, between himself, Mr Wilkinson and Scott Campbell (who was present and worked for Mr Boyce) that Mr Wilkinson had indicated that certain truck washing equipment would be left at the premises for Coastal’s use. That equipment included gurneys, wash-lines and mobile scaffolding used to stand on to manually wash the trucks. Mr Boyce gave evidence that on the day before he took occupation of the premises, namely the 30th April 2011, he told Ross (Mr Wilkinson) by telephone that no equipment had been left on site by Big Boys (the previous tenant) as they had agreed, and that he said to Mr Wilkinson that the place was a mess and ‘how was he suppose to start truck washing the next day’ as planned. He said Mr Wilkinson actually came down the next day and agreed that the place was a mess. Mr Boyce said that Mr Wilkinson agreed to offer a sum of money to cover any clean up costs of the premises because of the state it had been left in by the previous tenant but that no figure was ever nominated by Mr Wilkinson and certainly not $10,000 as stated by Mr Wilkinson.  Mr Wilkinson’s evidence on this point was that he had offered to pay up to $10,000 to Coastal for any associated clean up costs which was always going to be paid to it separate to their agreement which they had reached in respect of Clause 2.  
  1. [23]
    Mr Wilkinson did not accept however that there had ever been any agreement to the effect that the truck washing equipment of the former lessee’s truck washing business would remain in the premises for the use of Coastal upon it taking up its occupation from the 1st May 2011. Indeed, Mr Wilkinson gave evidence that he always understood that the former tenant was always going to take its own equipment away when it left the premises.  That evidence is supported by Mr Campbell who agreed in his evidence that he also understood that Big Boys was always going to take certain equipment with it when it left (such as taking its mixing equipment and the hydraulic lifters used for undercarriage washes). He also said that he understood that all of the truck washing equipment in the premises belonged to the former tenant and not Truckstop.
  1. [24]
    Having regard to the evidence available for consideration on this issue, I accept Mr Wilkinson’s evidence when he says there was no specific agreement between the parties prior to the execution of the agreement to lease that certain truck washing equipment such as gurneys, scaffolding and the like would remain on site for Coastal’s use from the 1st May 2011. I find that had this been likely, then this would have been included as a specific term or condition in the agreement to lease particularly in circumstances where Mr Wilkinson had no ownership of that property at all at that point. Indeed, the evidence available on this issue for consideration supports a conclusion that no such agreement was made. Ex 3 confirms that shortly after the agreement to lease was executed by Coastal, the area formerly used for the underbody truck washes by the former tenant was going to be utilised by Coastal to create a new fridge area in the same location. That exhibit also confirms that Truckstop was only indicating at that stage that it may be making an offer to the former tenant for the concrete floor topping, triple interceptor pit and associated plumbing works and not in respect of any other truck washing equipment (emphasis added).
  1. [25]
    The evidence by Mr Scott Campbell on this issue does little to assist the Defendants. Mr Campbell said that he had believed from the discussions between Mr Boyce and Mr Wilkinson during which he was present, that it was understood there would be a ‘walk in walk out’ arrangement regarding the truck washing premises (unit 1). He understood this to mean that Coastal would be ready to start a fully operational business on the Monday, the former tenant having only left on the Friday.             
  1. [26]
    That evidence in my mind when taken in context with his other evidence regarding what equipment he understood was always going to be removed by the former tenant such as mixing equipment and the like, especially when viewed against the evidence he gave regarding Coastal still sourcing product for its truck wash business (sponges, scourers, detergents etc) on the day it took up occupation indicates Coastal was never going to be in a position to start a ‘fully operational truck washing business’ on the Monday as Mr Boyce or Mr Campbell suggested.
  1. [27]
    Indeed Mr Campbell’s evidence was that those premises were in a state of disrepair even when he saw it in February/March 2011, that customers had been dropping off even at that stage and the place had needed repairing in any event, all of which was well prior to Coastal’s occupation of it. Mr Campbell also gave evidence that during those earlier discussions in February/March 2011, Mr Boyce, Mr Wilkinson and himself had walked around unit 1 and 2 and noted that the building was already in a state of disrepair in some areas and the discussions between them all included what ‘we’d have to do to get the business and the premises to a suitable standard for use to move in to conduct both sides of the business out of that’ (T8-54).
  1. [28]
    I also find that the other specific requirements for the purpose of Coastal’s business to be conducted at the subject premises (units 1 and 2), such as the elevation of the concrete floor to allow for cold room expansion and the internal mechanical pit confirms in my mind that the truckwashing area situated in unit 1 was never going to be able to be fully utilised for that purpose from the 1st May 2011. Mr Boyce even gave evidence himself that the existing cold room was always intended to be expanded over the existing underbody (truck) wash area that the former tenant had utilised in its business and that the internal mechanical pit was going to be situated right beside it under the concrete floor which was then going to be closed off from the rest of the truck wash area of the premises. Those factors alone support a conclusion that unit 1 was never going to be in a position to start a fully operational truck washing business as suggested on day one of its occupation. Each of those improvements to which I just referred were also included as work/improvements which Truckstop was prepared to undertake under Clause 2 of the agreement to lease. That evidence also further supports the conclusion that the truck washing business to be conducted in unit 1 by Coastal was never going to be fully operational from 1st May 2011 as suggested by Mr Boyce or by Mr Campbell.
  1. [29]
    The evidence to which I have just referred also is consistent with the evidence of Mr Wilkinson, which I have no reason to reject, regarding the payment of $40,000 which he made to Coastal at its request in June 2011 in order that Coastal could then purchase its own truck washing equipment for its business, which was then allocated out of Clause 2 monies. See also ex 6 which also supports a conclusion that there had not been any earlier agreement in respect to any truck washing equipment being was to be left behind at the premises for Coastal’s use upon it taking up occupation from 1st May 2011. I find that ex 6 supports a conclusion that had such an agreement been made prior to the execution of the agreement to lease between the parties as regarding the equipment as suggested, then Coastal would never have subsequently agreed to $40,000 being taken out of the agreed Clause 2 allocated monies ($120,000). If indeed the truck washing equipment was to be part of a bargain agreed upon prior to execution of the agreement to lease, I find I am unable to accept that Coastal would have then asked for $40,000 to be allocated out of the $120,000 subsequently, which is what ex 6 shows did in fact happen.
  1. [30]
    Mr Boyce raised an issue during the course of the hearing regarding ex 6 in that the messages were not received or sent by him personally but rather by Margaret Boyd. I find that the weight of the evidence available supports a conclusion that Margaret Boyd was just as involved in Coastal’s business as he was, not only when Coastal was a former tenant at Shettleton St (Lot 2) but also when Coastal occupied units 1 and 2 (Lot 1). This finding is supported by the evidence given by Mr Wilkinson regarding various meetings that Margaret attended relating to Coastal business and Mr Campbell who also referred to Margaret as playing an active role in Coastal’s business, for example, when OH & S attended at the site. The email addresses also nominated by Coastal for its contact also included Margaret Boyd’s email. As such, I find that the messages sent by Margaret Boyd, the subject of ex 6, were done so on behalf of Coastal and that she in fact had authority to do so when she requested the sum of $40,000 and agreed to that sum being taken out of the $120,000 allocated in Clause 2. I also find that ex 20 further supports the conclusion that I have just made, that those monies were in fact requested in order to purchase trucking washing equipment. I also find that those monies were not therefore paid to reimburse Coastal for any damage to the premises or replacement of equipment not left behind by the former tenant (paragraph 11(d)(i) of the defence).
  1. [31]
    Mr Boyce gave evidence at the hearing that he was only actually able to start operating his truck washing business in unit 1 around mid August 2011 because of various difficulties he encountered in that area of the premises. For example, rusty columns had to be fixed, no channel floor grates and the like, matters which I shall address shortly. The evidence available shows however that truck washing commenced much earlier than Mr Boyce suggested (see ex 36). That exhibit shows that truck washing did in fact commence in June 2011. Mr Boyce suggested in respect to that exhibit that the truck washing invoice was only for a ‘trial run’. I cannot accept that submission. The exhibit shows that several trucks were washed. That evidence also does little to assist either his or Mr Campbell’s suggestion that the business would have been up and running and ready to start from the 1st May 2011 as a ‘fully operational business’. Ex 39 confirms that the business was operating well before mid August 2011. The start of that business’s operation is also consistent with the leeway period (of about 6 weeks) given to Coastal by Mr Wilkinson in order to assist it with its move and transition from Lot 1 to Lot 2 at Shettleston St, where it had only conducted a transhipping business at that stage. Mr Wilkinson gave evidence that he had allowed Coastal continued use of Lot 1, where they were in already conducting that business, in addition to leasing units 1 and 2 situated on Lot 2 to them.
  1. [32]
    There was no evidence given at hearing that Mr Wilkinson ever told Coastal or Mr Boyce that Coastal could expect to receive a benefit of truck undercarriage washes at the rate alleged (paragraph 11(a) (ii) of the defence). Indeed, Mr Boyce and Mr Campbell’s evidence on this issue was that the hydraulic lifters, used for undercarriage or underbody washes, were never going to be used by them as the area in which these were situated was always going to be covered over during the proposed expansion by Coastal of the existing cold rooms. Mr Campbell also confirmed in his evidence that he always understood that the former tenant was taking that lifting equipment with them in any event.
  1. [33]
    This evidence therefore does not support the assertion made regarding any representation made by Mr Wilkinson in this regard.

Floor Grates

  1. [34]
    In the defence filed, the Defendants say that the premises were not fit for their purpose (truck washing business). Whilst floor grates were not specifically referred to in the pleadings, the Defendants argued that as a consequence of the floor grates having being removed by the former tenant in that area, the premises were not fit for the purpose for which they were leased. This in turn prevented Coastal from being able to operate a truck washing business in that location.
  1. [35]
    The evidence relating to this issue was much the same from the all of the witnesses at the hearing. The floor grates in the truck wash premises (unit 1) had been removed and placed into an industrial bin by the former tenant. Mr Wilkinson gave evidence that he had asked Mr Boyce to retrieve them from the bin and place them back into position on the relevant flooring. Mr Boyce gave evidence that the grates were not in their proper position when he first took up occupation at the premises. Mr Campbell also said the grates were missing and had been put into the bin outside by the former tenant upon them vacating the premises.
  1. [36]
    Mr Wilkinson gave evidence that the grates in question could have been put back into position by Mr Boyce but he failed to retrieve them in time from the bin, before it was taken away. I find on this issue that there was no obligation upon Mr Boyce or anyone else employed by Coastal to retrieve these grates which had been thrown into the bin by the former tenant. While it may have been helpful had he done so in order to save time and costs in having to organise replacements, the fact that he did not do so at Truckstop’s request, does not mean that he should have to pay for any replacement of them.
  1. [37]
    I do not find that these missing grates however made those premises unfit for their purpose simply because those grates were not in place. Mr Campbell gave evidence that there were various things that had to be done to the premises before Coastal could even be in a position to start operating a business out of that area and that work was being carried out for that purpose during the first several weeks in occupation. That evidence is consistent with the evidence which Mr Campbell also gave regarding the general cleaning up that needed to be done and the ‘alterations to walls, gates and fences’ that were discussed during the meeting and inspection in February/March 2011. This included what internal walls would need to be removed and the like (T8-54) and what needed to be done by Coastal in order that Coastal could get the business and the premises up to a standard to enable it to be able to conduct both sides of the business out of those premises (truck washing and transhipping). The evidence to which I have just referred is also consistent with Clause 2 of the agreement to lease and the half rent period which was allowed under that agreement, which in my mind, allowed for certain improvements agreed upon under the agreement to lease, to subsequently take place in both units 1 and 2.
  1. [38]
    Mr Campbell gave evidence that he did recall Occupational Health and Safety Officers attending at the site a couple of weeks after Coastal first took up occupation and being advised (not directly) that the site had to be made inaccessible to the public while the floors and other areas of the premises were being worked on (T8-62). I find that this evidence merely confirms Mr Campbell’s other evidence, that the Defendants already knew prior to occupation that the premises were in need of some repair, that certain alterations and improvements were to be carried out once Coastal took possession of the premises from the 1st May 2011, including such matters which had already been discussed during the February/March 2011 inspection and therefore known to the Defendants prior to it taking up occupation, in order to make the premises suitable for business in order that it could commence business in truck washing and transhipping. Ex 5 also shows that the replacement grates which were subsequently organised were put in place prior to the first truck wash which took place in June 2011.

Loading Dock Pit

  1. [39]
    In the defence filed, it is asserted that Mr Wilkinson represented that Truckstop would construct a loading dock pit that was fit for its purpose but failed to do so (paragraph 11 (a)(iii) and paragraph 13(e) of the defence).
  1. [40]
    Mr Wilkinson gave evidence that Truckstop did in fact construct an operational loading dock pit as required under Clause 2 of the agreement to lease (paragraph 11(a)(iii) of the defence). The defence filed in these proceedings refers to the loading dock pit being provided for at ‘no cost’ however that assertion was withdrawn during the hearing by Mr Boyce once it was pointed out to him.
  1. [41]
    On this issue, Mr Boyce gave evidence that in his opinion, the loading pit was not constructed at a proper angle and that that made the loading dock pit useless. That in turn prevented Coastal from being able to use it and conduct its transhipping business (at unit 2). Mr Campbell gave evidence that he had raised this with Truckstop during the early stages of construction but was advised that because Mr Boyce had approved the plans for it, no variation would be made to it at that stage. That evidence is in fact not inconsistent to any great degree with Mr Wilkinson’s evidence on this issue. Mr Wilkinson gave evidence that he was also told some time after construction had started on the pit in accordance with the plans (ex 31) which had been approved by Mr Boyce at the 14th June 2011 meeting, that there may have been a problem with the trailers ‘loading legs’ and the pit itself being incompatible, and he therefore immediately went to the site to investigate and found that there was no problem at all with it. Mr Wilkinson gave evidence that the loading dock pit was constructed in accordance with that plan.
  1. [42]
    Mr Boyce however gave evidence denying that he had ever ‘signed off’ on the plans for the loading dock pit at the 14th June 2011 meeting and that Mr Wilkinson had used the wrong type of trailer when testing the ‘loading legs’ in relation to the pit. Mr Boyce gave evidence that the loading dock pit was not constructed properly and therefore the premises were therefore unfit for the purpose for which he had leased them, namely as it related to his transhipping business.
  1. [43]
    Mr Campbell gave evidence that no ‘stop work’ orders were ever issued by Coastal to Truckstop during the construction of the loading dock pit at any stage, notwithstanding that he personally appeared to have always maintained that he thought the loading dock pit was never going to work. Ex 10 also confirms that Mr Wilkinson was willing in any event to alter the loading dock pit even after it had been completed but not until the rent amounts and the (formal) lease was sorted out.
  1. [44]
    Having regard to the evidence available on this issue, I find that the loading dock pit was constructed in accordance with the plans which were submitted to Mr Boyce for his approval at the 14th June 2011 meeting. I have no reason to reject Mr Wilkinson’s evidence when he said that Coastal gave its approval at that meeting. Ex 3 confirms that Mr Wilkinson had earlier requested that Coastal provide it with the basic specifications for the loading docks – depth and exact location, any specification required for self levelling devices which are to be supplied and fitted by Coastal. Ex 22 confirms that construction commenced on the loading dock pit shortly after the meeting of the 14th June 2011 had taken place. I also accept Mr Wilkinson’s evidence, which was not challenged, that he had attended another site with Mr Boyce and Margaret Boyd in February 2011, where Mr Boyce showed him the kind of thing he wanted in respect to a loading dock. Mr Wilkinson then instructed the engaged engineers to draw up plans and construct a loading dock of the type which had been pointed out to him by Mr Boyce.
  1. [45]
    I therefore cannot accept the Defendants’ assertion that Truckstop failed to build a loading dock pit that was ‘serviceable’ by Coastal (paragraph 13(e) of the defence). If any difficulties arose in respect of it, then having regard to the evidence available from Mr Wilkinson, which I accept, I find that these only arose because of Mr Boyce’s failure to ensure that the plans for it were in fact correct. I also find that Mr Boyce’s evidence regarding his desire to stay on at the premises, even after notice to terminate the lease had been received, is inconsistent with his submission that the locking dock pit that was constructed by Truckstop was never able to be used at all in his transhipping business.

Elevation of Concrete Floor

  1. [46]
    In the defence filed, at paragraphs 11(a)(iv) and 13(c), it is asserted that Mr Wilkinson represented that Truckstop would elevate the concrete floor but failed to do so.
  1. [47]
    Mr Wilkinson gave evidence that he was always prepared to elevate the floor as agreed under Clause 2 of the agreement to lease. He gave evidence that he had not done so because Mr Boyce had in fact advised him that Coastal no longer wished to proceed with the expansion. I have no reason to reject Mr Wilkinson’s evidence on this issue. It is clear from the evidence he gave that he was prepared to hold up his end of the bargain as it related to the matters under Clause 2. This is evidenced by the fact that he did in fact construct the loading dock pit as required, he accepted a request to provide $40,000 towards the subsequent purchase of equipment and plumbing by Coastal for truckwashing equipment and he continued to work towards getting all of the Clause 2 improvements done up until it became obvious to him that Coastal was not holding up its end of the bargain (by its failure to pay rent/outgoings on time). Indeed, Mr Boyce gave evidence himself that the cold room expansion quotes which he had received were terribly expensive, in the order of $75000 and as such he wanted to get other quotes before going ahead with it. That evidence is consistent with Mr Wilkinson’s evidence on this issue that he did not elevate the concrete floor as required under Clause 2 because he had been advised that Mr Boyce no longer wanted to proceed with the cold room expansion.
  1. [48]
    I accept Mr Wilkinson’s evidence when he says that the reason he did not commence work on the floor was because of the instructions which he had received from Mr Boyce in that regard.

Internal Mechanical Service Pit

  1. [49]
    In the defence filed (paragraph 11 (a) (iv) and paragraph 13(d)), the Defendants assert that Mr Wilkinson represented that Truckstop would construct an internal mechanical service pit but failed to do so.
  1. [50]
    Mr Wilkinson gave evidence that the internal mechanical service pit provided for in Clause 2 was not completed because of the failure by Coastal to pay its rent and its failure to return the formal lease. I have no reason to reject Mr Wilkinson when he said that he would have fulfilled his end of the bargain in this regard had Coastal held up its end of the bargain and paid rent/outgoings and returned the formal lease (of which a draft was initially provided for perusal). I find that any failure by Truckstop regarding not installing the internal mechanical service pit as provided for by Clause 2 only came about because Coastal had not at that stage paid any rent under the agreement to lease and Truckstop was not prepared to make further improvements to the premises until that was honoured.

Further Refurbishment Works by Truckstop

  1. [51]
    This assertion is contained in paragraph 11(a)(vi) of the defence. During the course of the hearing however, Mr Boyce properly conceded that it contained a typographical error and that the amount of $100,000 should read $120,000 as agreed under Clause 2 of the agreement to lease.
  1. [52]
    Both Mr Wilkinson and Mr Boyce agreed during their evidence that the $120,000 sum referred to in Clause 2 was to be a separate amount from any money which Mr Wilkinson was prepared to pay to Coastal additionally to clean up the premises because of the state the prior tenant had left them in (see ex 4 photos).
  1. [53]
    The other evidence which I accept, which is relevant to any issue of works reasonably necessary to refurbish the premises to operational requirements of the Defendants referred to in this pleading, include the evidence which I have no reason to reject, is that given by Mr Wilkinson regarding the engagement of various appropriately qualified contractors or his offsider Carl Wilton attending to jobs as they arose such as fixing columns, leaking water pipes and electrical matters and the like.

Rusty Columns

  1. [54]
    While not specifically pleaded in the defence, the question of rusty columns at the entrance ways of the premises became an issue during the course of the hearing. The Defendants assert in the pleadings that the premises were not in a fit or proper state to be occupied by the Defendants (paragraph 17 (b) of the defence) and as a consequence, certain rusty columns were raised during the course of the evidence as impeding Coastal’s ability to conduct its truck washing business. The evidence from Mr Wilkinson on this issue was that he had engaged a builder to look at the columns about the 3rd or 4th May 2011 regarding what repair work was required. He gave evidence that about a few weeks after that, a Workplace Health and Safety Officer attended at the site and raised a couple of matters including the columns in question (T3-52). Mr Wilkinson gave evidence that he advised her that he had already had someone look at them and that the repairs would be proceeding shortly in respect of them.
  1. [55]
    In respect of any ‘rusty columns’ issue (ex 4 photo 7), I find that their state, as evidenced by the photo tendered in evidence, does not support the Defendants’ submission that they somehow prevented the entry or exit of trucks into Unit 1 of the leased premises as submitted. All witness agreed during the course of their evidence that certain columns needed fixing. I accept however Mr Wilkinson’s evidence when he said that the prior tenant of that area had in fact, only 24 hours before he had taken ex 4 photo 7, been using that area for its truck washing business successfully and without impediment. This is notwithstanding that one or several of the columns near one of the exit doors were rusty. All witnesses gave evidence that some of these columns were indeed rusty, a fact I find would not have been unexpected in premises where truck washing was being conducted as a business on a regular basis.
  1. [56]
    I am unable to accept the Defendants’ submission however that these columns were so rusty that they somehow ‘structurally compromised’ the premises in any way and therefore prevented trucks from being driven in or out of unit 1 in order to wash them. Indeed, ex 5 confirms that the columns could be repaired by simple plating, painting and welding and the unchallenged evidence by Mr Wilkinson was that they in fact were repaired that way. In any event, there was no evidence provided to support a conclusion that the rusty columns did structurally compromise the premises in the way suggested. Mr Boyce also pointed out the filter system situated on one of the columns (Ex 4, photo 7) had been compromised. Mr Boyce stated that the filter system shown in that photograph had to be removed in order for the columns to be fixed and that had impacted upon his ability to carry out his truck washing business (T3-50). While I accept that the filter system may well have had to be removed in order to fix the column in question, I am unable to conclude that this fact had any impact upon Coastal’s truck washing business. The evidence available on this point supports a conclusion that the columns in question were fixed well prior to the first truck wash taking place in any event. Ex 20 shows that a quote for the set up of the truck wash business was only obtained on the 13th June 2011 which is consistent with its request for Truckstop to provide money to assist with the purchase of such equipment (ex 6). The evidence to which I have just referred and the findings I have already made in respect of Truck washing Equipment as it relates to Coastal being in a position to start a fully operational business in this area supports a conclusion that the columns in question would not have played any significant role.

Alleged undertakings made by Mr Wilkinson regarding reimbursement to Coastal  for the cost of replacing plant and equipment that had been removed or damaged by the prior tenant and payment of staff wages (paragraph 11(d) (i) and (ii) of the Defence)

  1. [57]
    Mr Wilkinson gave evidence that over the first couple of weeks of Coastal Haulage’s occupation he had agreed to pay the Defendants up to $10,000 in order to cover their costs relating to any cleaning up or property improvements that they were required to do after the prior tenant had vacated. Mr Boyce agreed as such in his evidence, although said that there had been no monetary figure agreed upon.
  1. [58]
    I find that the evidence available on this issue supports a conclusion that any such amount to be paid was to be calculated separately from that which had been agreed under clause 2 of the agreement to lease between the parties and was only up to an amount of $10,000. I am unable to accept Mr Boyce’s evidence that Mr Wilkinson had given him an undertaking to reimburse the Defendants for payment of staff wages relating to the cleaning up which they had carried out when they first took up occupation. Ex 10 confirms that there was never an agreement to cover such payments. I also find that when Mr Boyce was invited by Mr Wilkinson to get back to him after he had reviewed the invoices which Coastal had initially submitted for payment (Ex 25) he did not do so, a fact even Mr Boyce agreed during the course of his evidence. Mr Boyce said that the reason he had not done so was because he considered them fair.
  1. [59]
    Ex 25 also shows that some of the items claimed by Mr Boyce were expended prior to Coastal’s occupation, such as a blower vac and other items (Ex 25, page 124). Items also claimed included safety signage and equipment directly related to Coastal business (Ex 25, page 126). A significant portion of the claim made by Mr Boyce in that exhibit included staff wages (Ex 25, Inv 60). Mr Boyce gave no evidence regarding what work the staff actually carried out. As such, I am unable to quantify what amount could be attributable to the work performed by coastal staff as it relates to any ‘separate’ agreement he had with Mr Wilkinson in this regard.
  1. [60]
    Notwithstanding this fact, I find that Mr Wilkinson did not agree to cover staff wages as tendered. Ex 10 also supports a conclusion that Mr Wilkinson was only ever happy to agree upon a sum up to $10,000 for cleaning costs and property improvements directly associated with the prior tenant having left the premises in a state of disrepair and lack of cleanliness. That is evidenced by page 2 of the document. It is also clear from that document that at no stage did Mr Wilkinson agree that any part of the monies allocated under Clause 2 in the agreement to lease would ever cover staff wages generally. I find the evidence supports such a conclusion.
  1. [61]
    There was no evidence available to support a conclusion that Mr Wilkinson represented that Truckstop would reimburse the Defendants for the cost of replacing the plant and equipment that had been removed or damaged by the former tenant of unit 1 (truck washing area).
  1. [62]
    A discussion of the relevant evidence and the findings which I have made has already been discussed under the heading Truck washing Equipment which is also on point.

Various Occupational Health and Safety Issues (‘OH & S’)

  1. [63]
    In respect to paragraph 11(a)(vii), (viii), paragraph (13) (f) and paragraph 14(f) of the defence, the Defendants assert that Truckstop failed to provide premises (including the cold room freezer area) that were fit for their purpose and/or contravened workplace health and safety requirements. Mr Boyce gave evidence regarding various OH & S matters of concern which included pigeons being able to access the cold room area, the cold rooms themselves being dirty, doors not working properly in the cold room itself and around the premises themselves, shrink wrap around cold room doors, damage to the panels themselves, various electrical concerns including but not limited to exposed wiring and no proper emergency lighting in the coldroom, unusable toilets, exploding water pipes and the like on the premises which he said made the premises both unfit for their purpose and which also contravened health and safety requirements.
  1. [64]
    Mr Boyce gave evidence that he had at various times raised these issues with Mr Wilkinson and/or Carl Wilton. He said that he had contacted Mr Wilkinson after OH & S had attended at the site and met with Coastal on the 8th May 2011. Included in the list he was given from them, Mr Boyce recalls OH & S raised undesignated fire exits as an issue. He referred to ex 32 which he submitted showed that Mr Wilkinson knew that this was a problem in the premises. I cannot accept that submission. That exhibit shows that in August 2011 Mr Wilkinson was simply advised by a representative on behalf of Coastal that certain fire extinguishers and fire hose reels were located at designated positions. Mr Boyce conceded during his evidence that he had not sent Mr Wilkinson any prior emails regarding this issue.
  1. [65]
    Mr Campbell also gave evidence relating to some of these OH & S issues. In particular, he said that he had been ‘zapped’ when he first had entered the premises by an exposed wire situated near the wash room facilities downstairs. He also commented on the male toilet downstairs having a wet floor all the time due to a leaky valve and that the cold rooms needed some ‘work’ which had included removing debris such as pallets etc. He commented that his overall impression of the premises, particularly unit 1, was dirty with oil sludge that had been left behind after the previous tenant had vacated, particularly in certain areas. He acknowledged however, several times during his evidence, that the truck industry was a dirty business and that it was not unexpected that premises like unit 1 might well be dirty in some parts of it particularly where the undercarriage washing had been taking place. He did not specifically recall any exposed wiring or safety tags on any wiring other than the wire to which he referred when he got ‘zapped’.
  1. [66]
    There was extensive cross-examination of Mr Wilkinson on the various OH & S issues raised during the course of evidence. I shall deal with each in turn.

Fridge Freezer

  1. [67]
    Mr Wilkinson denied that the fridge freezer provided in unit 2 for Coastal’s use at the commencement of the lease was not fit for its purpose or was not operational. On this issue, there was no evidence that the fridge freezer provided was not operational or fit for its purpose. While it is accepted that the fridge freezer needed some work as described by Mr Campbell and that it may have been dirty on its exterior walls, Mr Campbell did not recall it being dirty from flood water on its interior, nor did he give evidence that the fridge freezer did not in fact work. Nor do the pleadings make that assertion. Para 13 (f) of the defence asserts that the fridge/freezer area was not in good working order because it had certain defects, none of which however included any suggestion that it was not operating and keeping produce stored in it cool or frozen.
  1. [68]
    Indeed, the evidence available shows that the fridge freezer was clearly operational, even from the first day of occupation, because electricity was being charged for it during the month of May 2011 which the Defendant subsequently tendered payment for in August 2011.
  1. [69]
    There was also evidence given by Mr Boyce and Mr Campbell to the effect that the lighting in one of the freezers was not operational. Mr Campbell said that Cosmos (electricians) had come out and fixed all the electricals but that the light in one particular freezer remained a problem for some weeks. Mr Campbell however did not regard that there was any other real problems with the lighting generally and it was only in the cold room (or freezer) area when the lighting would sometimes just drop out.
  1. [70]
    Notwithstanding this evidence, it is difficult to accept the submission made by the Defendants that the fridge/freezer provided to them was not in good working order as required under the agreement to lease or that it was not fit for its purpose.
  1. [71]
    I am unable therefore to accept the submission made by the Defendants on this issue.

Pigeons and other bird wildlife

  1. [72]
    During cross-examination, it was suggested to Mr Wilkinson that the cold room and the cold room area was accessible to bird life (pigeons and the like) which Mr Wilkinson strongly disagreed with. While Mr Wilkinson was willing to accept that a photo shown to him may have suggested light coming in over one of the roller doors to the area, he said that he believed that it may have had mesh wiring in it, therefore he didn’t believe any bird life would be able to access that area as suggested. During cross-examination of Mr Boyce however, Mr Boyce agreed that the various roller doors around the premises were regularly left up during the day and that birdlife could easily have gotten into the premises during that time.
  1. [73]
    This evidence became somewhat academic, as there was no evidence lead by the Defendants to support a conclusion that pigeons or any other birdlife were causing any problem in that area. No photos were tendered or evidence provided which support a conclusion that this was an occupational health and safety issue which needed attention or indeed made the premises unfit for their purpose.
  1. [74]
    According to Mr Boyce, most of the matters put by him during cross-examination regarding alleged workplace health and safety breaches were apparently brought to the attention of Mr Wilkinson by Coastal or Mr Boyce at various times, a fact which Mr Wilkinson denies. There was no evidence lead by the Defendants to show that the matters which Mr Boyce raised during the course of his evidence with respect to OH & S matters were ever put in writing or emailed to Mr Wilkinson. The only e‑mail (ARB 29) available on this issue confirms that contact was made with Mr Wilkinson in October 2011 by OH & S, which he addressed.
  1. [75]
    The other evidence available on this issue was that Mr Wilkinson recalled that an officer from Workplace Health and Safety attending the premises on one occasion sometime around the end of May 2011 and pointed out a few things that needed attention, which he believed had all been attended to. He stated that no formal list was ever given to him by that officer after that visit or that he was formally breached. Mr Wilkinson recalled that whenever there was an occasion where an issue was raised with him through his staff or by a Coastal representative such as leaking pipes, or an electrical issue or the like, he would proceed to engage a contractor to check the problem straight away and address it if required. I accept that evidence. The evidence which Mr Wilkinson gave on this point is consistent with Mr Wilkinson actioning contractors to address any problem when it was raised for his attention. On the occasions which he did not do so, there is evidence available to support a conclusion that it was only because it was never raised with him (see Ex 29). That exhibit also confirms that when Mr Wilkinson was contacted again by Workplace Health and Safety in October 2011, he was of the view that all matters had been attended to but that he was prepared to send Cosmos (electricians) out again to check on a switchboard cover they had previously installed. That in my mind confirms that Mr Wilkinson had in fact sent a qualified electrician out regarding any issues that may have been raised during the officer from Workplace Health and Safety’s visit around the end of May 2011. That exhibit also notes that the racks within the cold room (paragraph 13 and 14 (f) (iii) of the defence respectively were never raised as a safety issue either by Coastal or by the officer who had attended at the end of May 2011 notwithstanding that Mr Boyce suggested that the racking provided for in the coldroom by Truckstop had been unsuitable and not fit for its purpose.

Electrical Issues

  1. [76]
    Mr Boyce also put to Mr Wilkinson the issue regarding ‘exposed wires’ that were present in the premises. The evidence on this point from Mr Wilkinson was that if there ever was an issue raised regarding electrical matters, he would always send a qualified contractor out to the premises. His evidence was that after he had been advised that someone (presumably this was Mr Campbell) had been electrocuted on site several weeks after Coastal had been in occupation, he sent out an electrician immediately. He received advice from the electrician that the only ‘exposed wire’ at the site was as a result of Coastal having pulled down a wall during its occupation which had then exposed the offending wire. Mr Campbell’s evidence was that he thought the relevant wall was still there but was uncertain because the photo which he was using to assist him during his evidence didn’t show it. Nevertheless, Mr Wilkinson gave evidence, and I have no reason not to accept it, that as soon as he was told there was a problem he immediately engaged a qualified electrician to attend for that purpose who subsequently reported to him that there were no other problems that needed addressing.. I find that the only exposed wiring on site was that to which Mr Campbell described in his evidence. Had it been otherwise, Mr Campbell, who had already been ‘zapped’ would have remembered other such wiring. He did not. While I accept that Cosmos attended to some other electrical work regarding 3 phase power outlets and lighting issues in the coldroom as described, I am unable to accept that these issues prevented the Defendants from having the use of the premises or made the premises unfit for their purpose during that time.
  1. [77]
    Mr Wilkinson’s evidence, which I have no reason not to accept, regarding the OH & S visit on site at the end of May 2011, confirms that any issues raised at that time were addressed. This included any electrical issues such as a meter board cover (see ARB Ex 29). I also find that any issues that were raised by the relevant departmental officer on that day were not to any degree of significance as Truckstop was not formally issued any contravention or breach notice in respect of the premises.

Downstairs toilets

  1. [78]
    Both Mr Boyce and Mr Campbell gave evidence that the men’s downstairs toilets had ‘issues’. Mr Boyce gave evidence that there was water leaking from above that prevented a person from being able to even sit on one of the toilets. He argued that because of that issue, staff couldn’t even go to the toilet and therefore the premises were not fit for their purpose. Mr Campbell gave evidence in respect of the toilet block that there was water on the floor from a leaking water valve that was running down the wall and leaking onto the floor. Mr Campbell also gave evidence however that there were toilets upstairs that were utilised by staff (both male and female) contrary to Mr Boyce, who gave evidence that only females used that particular toilet.
  1. [79]
    I find that Ex 38 confirms that the downstairs male toilet block was being cleaned during May and thereafter during Coastal’s occupation of the premises. That document in mind supports a conclusion that the toilets were more than capable of being used and were fit for their purpose notwithstanding that it may have been wet on the floor area.

Plaintiff’s Claim for outstanding rents and outgoings

Rent and outgoings

  1. [80]
    It is not disputed by the Defendants that no rent or outgoings were ever paid during their occupation of the premises except for one rental/electricity payment for the month of May 2011 being tendered in August that year. The invoices and documentation provided by Mr Wilkinson in this regard support the claims made. I find that the agreement to lease was an immediately binding agreement between the parties and as such, the First Defendant is liable for this claim. I cannot accept Mr Boyce’s evidence when he stated that Mr Wilkinson had given him a 6 week respite or reprieve rent period. The evidence available for consideration on this issue, which I accept, is that Coastal was allowed to stay in its original location on Lot 1 in order to make the transition over to units 1 and 2 easier for them. I do not accept Mr Boyce when he says that because he was allowed to stay in his former location on lot 1 during that period, it entitled Coastal not to have to pay rent for the premises units 1 and 2 on Lot 2. That evidence is also at odds with Mr Campbell’s evidence that he understood that Coastal was going to be running a fully operational truck washing business out of unit 1 from Monday 1st May 2011.

Overcharging of Electricity

  1. [81]
    There was evidence given at the hearing by Mr Boyce that one of the meter boxes servicing the premises was also ‘servicing’ other areas of the premises which the Defendant had no use and as such, he was being charged for electricity he was not even using. Mr Boyce put to Mr Wilkinson that he was therefore incorrectly charging the Defendant for electrical use.
  1. [82]
    Mr Wilkinson gave evidence, which I have no reason to reject, that discussions had previously transpired relating to electricity being separated between Units 1 and 2 (the areas which Coastal were leasing) but that it hadn’t been done. He gave evidence however that the fridge area which Coastal was sharing with another tenant, did not affect Coastal insofar as any electricity charges because there was a separate meter for the fridge area that Coastal was actually leasing. He therefore rejected the Defendant’s assertion that it was being charged for some other tenant’s fridge/cold room electricity. That evidence is supported by Ex 5, page 2, Item 10, and Ex 13 as it relates to Coastal’s fridge electricity being charged separately.
  1. [83]
    There is also evidence in any event that payment for the fridge electricity charged during the first month of occupation (Ex 13, p 77) was tendered in August 2011 by the Defendants. This payment supports a conclusion that the Defendant was satisfied with the account which had been tendered and that no overcharging had been made.

Water Charges, Sewerage Charges

  1. [84]
    Water Charges were also raised in cross-examination. In particular, it was asserted by the Defendants that Coastal should not have to pay for sewerage charges because it was not specifically referred to in the agreement to lease. There was also an additional suggestion that Coastal was being charged for someone else’s use of the toilets available at the premises.
  1. [85]
    I cannot accept those submissions. The clause described as ‘outgoings’ in the agreement to lease is sufficiently clear in my mind to include sewerage charges. The Defendant does not deny in any event that it had access to several toilets blocks for its use in the area which it was occupying.

Fences, walls and general cleaning up costs claim by Plaintiff

Walls

  1. [86]
    Mr Boyce extensively cross-examined Mr Wilkinson, using the various photos which had been tendered, regarding certain walls, fences and the like which Mr Wilkinson said had either been removed or pulled down during Coastal’s occupation. A claim has been made for this rectification work (Ex 18). I have no reason to reject Mr Wilkinson’s evidence when he said that certain walls had been removed during Coastal Haulage’s occupation which needed to be reinstated or regarding his evidence with respect to the damage which he observed after Coastal had left the premises. The evidence of Mr Campbell, to which I have already referred in these reasons, confirms Mr Wilkinson’s evidence in this regard. For example, Mr Campbell confirmed that it was always understood that alterations would be made by Coastal once it took up occupation which would include removal of certain walls in the premises. Mr Campbell gave evidence that the front office section near the front door was removed during Coastal’s occupation.
  1. [87]
    Mr Wilkinson gave evidence that regarding some of the internal walls that had been pulled down during Coastal’s occupation, that while he did not consent to Coastal doing so, he conceded he never told Coastal to reinstate them either. His evidence on this issue was that he was happy to live with it, because ‘what was done was done’. A claim for reinstatement is made nevertheless.
  1. [88]
    I have no reason to reject Mr Wilkinson’s evidence regarding walls that had been removed during Coastal’s occupation. His reference to the photos which were taken on the first day of its occupation and after Coastal had left (Ex 4, photo 31 and Ex 15, photos 12 and 13 respectively) support a conclusion that also certain walls had been removed

Fences

  1. [89]
    The collective evidence available on this issue was difficult to reconcile.
  1. [90]
    Mr Wilkinson gave evidence that certain fences (in front of Unit 2) had been removed by Coastal during its occupation and that he had not given his consent for Coastal to do so. Mr Wilkinson gave evidence (T1-4) that two reasonably short fences which had divided the two properties had been removed. That fencing was subject to a claim by him for reinstatement costs not yet incurred (Items 1 and 2 in Ex 18). Mr Wilkinson was unclear in his evidence what condition these fences were in when he had visited the site on 1st May 2011 to take his photographs (Ex 4, in particular photo 25) or even beforehand. He conceded under cross-examination that a portion of the fences depicted in that photograph appeared to be still standing (T5-61) but said that even if they were, he believed they were subsequently taken down by Coastal in any event.
  1. [91]
    He could not recall with any clarity at what time it could be said that he had seen all of the fences in that area actually in place prior to his visit to the site on the 1st May 2011. Indeed, he had very little recollection at all on this issue. (T5-61). There was unchallenged evidence to the effect the fencing which existed in situ in that area as at the 1st May 2011, was subsequently taken down and placed into an area called Truckstop’s toolshed, situated near Hawkins’ transport. The photographs taken on the 1st November 2011 (Ex 15) by Mr Wilkinson do not show this particular area.
  1. [92]
    Mr Boyce gave evidence that some fencing in that area had in fact been removed by Coastal after it took up its occupation (T6-24). He said that he had advised Mr Wilkinson verbally even prior to taking up occupation that certain fences located in that area would need to be removed by Coastal in order to make access easier into Unit 2. He said that Mr Wilkinson had been amenable to that suggestion. Mr Boyce also gave evidence that he had in fact assisted Carl Wilton in removing some of the fencing situated in front of Unit 2 because they was in a damaged state and that that fencing was then put into the toolshed area for storage.
  1. [93]
    Mr Campbell also gave evidence on this issue. (T8-68) He said that the fences located out the front of Unit 2 were, in his opinion, in a damaged state and the gates attached to it couldn’t even be closed anymore. He stated in evidence that his memory was that only some fencing in that area was still intact but had been damaged because (Big Fresh) trucks had obviously backed into it on occasion in the past. Mr Campbell gave evidence consistent with that of Mr Boyce, which was that the reason the fences were removed by Coastal from that area was to enable easier access into Unit 2 by trucks attending on site and because they were damaged.
  1. [94]
    Mr Boyce also contended on this issue that the fencing placed in the toolshed area could well have been used to reinstate the fencing.
  1. [95]
    Having regard to the state of the evidence on this issue which was not entirely clear even after having regard to Ex 4, photo 25, I find that there was only partial fencing in place in the relevant area when Coastal took up its occupation, a fact even Mr Wilkinson was willing to concede. Ex 4, photo 25 supports such a conclusion. I also find that the fencing depicted in that photograph was in fact removed by Coastal in order to make access into unit 2 more accessible for any trucks which were attending that site and also because some of the fencing was damaged. I see no reason not to accept the evidence given by Mr Boyce and Mr Campbell regarding the state of disrepair. I find that I am unable to reconcile Mr Wilkinson’s evidence regarding his reinstatement claim for ‘two reasonable short fences’ when having regard to Items 1 and 2 of Ex 18. Those items suggest that there is more than just ‘two reasonable short fences’ being claimed. I also find that the evidence on this issue was not sufficiently clear enough to identify which fences are the subject of that claim, particularly having regard to Mr Wilkinson’s own limited recollection regarding the state of the fencing in that area, what fencing was actually there at the time Coastal took up its occupation and how much of that fencing which was formerly in that area was in fact removed by Coastal after it took up its occupation.
  1. [96]
    As such, I am unable to be satisfied to the requisite standard that this claim is supported by the evidence available for consideration.

Cleaning Costs

  1. [97]
    Ex 19 supports the evidence which Mr Wilkinson gave regarding the costs associated with cleaning after Coastal vacated the premises. I have no reason not to accept that those costs were necessary. The photos taken after Coastal vacated the premises support such a finding (Ex 4, photo 4 and Ex 15, photos 38 and 39 as it relates to tyres left on site; Ex 15 photo 12 and 16 as it relates to the state of flooring and Ex 15, photo 7 as it relates to oily sludge).

The words contained in the agreement to lease under ‘Lease Documents (“subject to the approval of the lessor and lessee and their respective legal advisors”) (‘Ground 1’).

  1. [98]
    The Defendants say that the inclusion of the abovementioned clause in the agreement to lease executed meant that their agreement was only to be given legal effect upon the parties executing the formal lease (and guarantee referred therein).
  1. [99]
    I am unable to accept that submission.
  1. [100]
    The evidence available to which I have already referred does not support such a conclusion nor does a careful reading of the document itself. The clause “subject to the approval of the lessor and lessee and their respective legal advisers” is sufficiently clear in my mind when read in its context to mean as relating to ‘all the normal terms and conditions applying to leases of similar buildings in the Brisbane area” which were to be incorporated in the formal lease in addition to the terms and conditions which the parties had already agreed upon under the agreement to lease already executed by them.

Findings of credit with respect to witnesses

Mr Wilkinson

  1. [101]
    Having observed Mr Wilkinson under cross-examination for several days, I found him to be both an honest and reliable witness. He was willing to make concessions, was happy to concede when he couldn’t remember things and my impression overall of him was that of a person who was telling the truth and who was making no attempts at all at embellishing his evidence. He made no attempt to suggest that the condition of the premises upon Coastal Haulage’s vacation of it was worse than what it was. Indeed, he considered it to be in a reasonable state and made no attempt, for example, to suggest something more.

Mr Campbell

  1. [102]
    Having observed Mr Campbell I find that he did his best to recall what he could, bearing in mind the time that had past. Overall, I found Mr Campbell to be a witness who was simply doing his best to assist Mr Boyce in respect of the many points which had been raised by Mr Boyce for consideration during the hearing.

Mr Boyce

  1. [103]
    Having observed Mr Boyce over the course of many days, I found him to be a witness who was not necessarily entirely convincing, especially under cross‑examination. The evidence which he gave under cross-examination, I find, was not at times completely forthright, such as not knowing how to use email or in respect to what role Margaret Boyd had played in Coastal matters. His evidence that he could only start washing trucks from mid August 2011and that it was only a ‘trial run’ for example was not borne out by the available evidence. He also suggested that the Margaret Boyd email, nominated in the past as a Coastal contact, was not the same one on the agreement to lease and therefore it had no relevance. The fact that the email nominated on that document relates to a personal email of his suggests that he was more than familiar with email, a fact he denied, so his evidence to that effect was not entirely correct. Mr Boyce was also reluctant when it came to the employees listed on the cleaning duties of the downstairs toilets (see Ex 38), a fact that did little to assist him. For example, he suggested that he didn’t know if they were employees or not simply because he didn’t recognise their signatures. Mr Boyce was also reluctant to acknowledge that the payment tendered by him in August 2011 related to rent/electricity owing by Coastal for May 2011, a fact which did little to advance his argument that he only ever believed that he didn’t have to start paying rent until then because ‘Ross had given Coastal a 6 week rental reprieve period’.
  1. [104]
    While I found Mr Boyce to be both amicable and pleasant during the hearing, I was nevertheless unable to find him to be an entirely convincing witness overall.

Conclusion

  1. [105]
    Having regard to the evidence and the findings which I have already made in respect to any alleged representations said to have been made and the alleged undertakings said to have been given by Mr Wilkinson and the findings which I have made on credit, I am satisfied that the agreement to lease entered into between the Plaintiff and the First Defendant dated 8th April 2011 was intended to be an immediately binding agreement.
  1. [106]
    The terms and conditions contained in that agreement to lease are sufficiently precise in my mind to support such a conclusion. The evidence shows that the surrounding intention of the parties was that the agreement to lease was to take effect immediately upon Coastal taking up occupation at the premises. This is evidenced by the clause relating to deposit, which was immediately payable to the lessor upon the lessee entering into possession of the premises.
  1. [107]
    The Defendants submit that the agreement to lease contemplated that ‘certain actions’ (under Clause 2) had to be completed before any formal lease could be executed by the parties.
  1. [108]
    I cannot accept that submission.
  1. [109]
    Clause 2 of the agreement to lease is sufficiently precise in my mind in its language even notwithstanding the inclusion of the words “balance of monies to be spent as mutually agreed”. The clause is not made uncertain simply because the parties agreed that any monies left over from the allocated $120,000, after certain items were to be constructed as referred to specifically in that clause, could be spend as mutually agreed between the parties during the period of Coastal’s occupancy. That clause merely provided in my mind a mechanism for choices that could be made regarding the manner in which that money could be ultimately spent during the course of the occupation, which does not make the term either uncertain or incomplete.
  1. [110]
    The document also refers to the terms and conditions contained within as being what was agreed between the parties (in this regard, see deposit clause). By signing that agreement in those terms, Coastal in my mind accepted that the agreement would be immediately binding upon it once it took up occupation of the premises. The fact that the Defendant did sign and did in fact take up occupation on the commencement date proposed in the agreement to lease is evidence in my mind of an intention on the First Defendant’s part to in fact be bound by the agreement after that time. Had that agreement been dependant upon certain conditions being fulfilled prior to both parties being bound, then I do not think that the First Defendant as lessee would have went into occupation until those matters were in fact completed (such as Clause 2 specific items) to its satisfaction or that it would have signed the agreement to lease when it was presented to it at the time it was.
  1. [111]
    The First Defendant, having entered into occupation on the date agreed, also did things that were consistent with a conclusion that it intended to be immediately bound by the agreement to lease. For example, it starting cleaning up the site in preparation for its own occupation, submitted various invoices to Truckstop for payment regarding items arising under Clause 2, gave approval to the loading dock plans so that work could commence on it and it even paid rent and electricity. The payment of rent/electricity by the Defendant shows in my mind that the Defendant did intend for the agreement to lease to take effect, as it is difficult to accept that a lessee would pay rent if it did not think the agreement was to take effect immediately or that it was dependent upon certain conditions being fulfilled by a lessor before that obligation arose or that a further formal lease document was to be executed prior to any such obligation arising (emphasis added). The Defendant also, by its own request during June 2011, asked that monies be allocated by the lessor ($40,000) in order that it could then use that money towards purchasing truck washing equipment and associated plumbing out of the allocated Clause 2 monies. That request is consistent in my mind with Clause 2 of the Agreement to Lease which provides for money to be allocated as mutually agreed during the course of the occupation. That evidence is inconsistent with the Defendant’s submission that the Defendant only ever intended to be bound by the agreement to lease terms and conditions only after a formal lease had been executed.
  1. [112]
    Accordingly, for the reasons just stated, I find that the agreement to lease dated 8th April 2011 was an immediately binding agreement as between the Plaintiff (Truckstop) and the First Defendant (Coastal). I find that it was intended to be given immediate effect and that the agreement was not so uncertain and/or incomplete in its language or that it was dependent upon any of the terms and conditions contained within to be completed prior to it having legal effect. I am also satisfied that there were no further ‘oral terms and conditions’ which were to be incorporated as part of any agreement to lease between the parties. I have already made my findings in this regard. I find that any discussions which transpired between the parties prior to the agreement being executed or even subsequently, such as the 14th June 2011 meeting agenda, merely lends support to the conclusion that those discussions were simply part of the ongoing business discussions. These discussions would normally be expected to take place between the parties in relation to Clause 2 or were simply normal discussions regarding other obligations that arose which were incumbent upon any lessor of premises to address in any event, such as fixing leaking pipes, getting an electrician in to check power points and the like.
  1. [113]
    By refusing to comply with the terms and conditions of the agreement to lease and the obligations which arose under that document, I find that Coastal (First Defendant) has breached its relevant terms and conditions and is therefore liable to Truckstop (Plaintiff) for damages for breach of contract.
  1. [114]
    I am also satisfied that the clause: ‘lease documents’ also anticipated the incorporation of the normal terms and conditions which applied to leases of similar buildings into the agreement to lease. Accordingly, upon the termination of the lease, Coastal was therefore required to give back the premises in good repair and working order having regard to their condition at the commencement date of occupation, remove all its property from the premises, repair any damage caused by removal of its property from the premises, leave the premises clean and free of any rubbish and return all keys in respect of those premises. Having failed to meet these obligations, Coastal is therefore also liable for reasonable costs associated with its failure to do so.
  1. [115]
    I calculate the following damages (with reference to Ex 41, helpfully provided for the court’s assistance).
  1. (a)
    Outstanding rental and outgoings (1 May 2011 to 28 October 2011) plus interest $111,617.57
  1. (b)
    Lost rent (1 November 2011 to 31 March 2012 with new lease commencing on 1 April 2012) plus interest $108,002.01
  1. (c)
    Ongoing loss and damage (1 April 2012 to expiration of new lease on 31 March 2015) plus interest $184,682.16
  1. (d)
    Costs of lease preparation and releasing property plus interest $ 24,960.05
  1. (e)
    Reinstatement, Repair and Cleaning Costs plus interest $ 52,416.56

TOTAL $481,678.35

The Plaintiff’s case against the Second Defendant (Mr Boyce) in respect of the agreement to lease and the formal lease not executed (more specifically the director’s guarantee)

  1. [116]
    The Plaintiff submits that the Second Defendant Mr Boyce is estopped from denying that a guarantee was entered into or that he guaranteed the First Defendant’s performance under the agreement to lease and the contemplated lease.
  1. [117]
    I am unable to accept that submission.
  1. [118]
    The leading case in respect of this issue is Chan & Anor v Cresdon Proprietary Limited (1989) 168 CLR 242. That case is authority for the proposition that where a guarantee is given under a particular document, the relevant guarantor’s obligations shall only arise under that specific document and not under any other document, such as an agreement to lease, the case at point here (emphasis added).
  1. [119]
    If one carefully looks at the agreement to lease entered into between the Plaintiff and the First Defendant, it contemplates that ‘personal directors guarantee is to be provided by lessee’ (see Clause “Director’s Guarantee”). The contemplated lease and its schedule (Appendix Two titled ‘Guarantee’, in Schedule of Lease) (Ex 2) however, shows that what the Second Defendant (Mr Boyce) was to have guaranteed under that document, had he signed it, was the ‘obligations (of Coastal) contained or implied in this lease’ (emphasis added). That is to say, those obligations arose only under that instrument in its character as a lease which the court stated in Chan at p 256 does not extend to include any prior agreement to lease, such as is the case here.
  1. [120]
    The Plaintiff was invited to tender further submissions on this issue (Ex 42). The Plaintiff submits at paragraph 10 that the Defendants acknowledged the contemplated lease by issuing proceedings in the Supreme Court to uphold the lease by seeking relief against forfeiture (Ex 33). That submission however overlooks the fact that those proceedings were only brought on behalf of the First Defendant.
  1. [121]
    The Plaintiff also submits that the authority of Chan is distinguishable. In this regard, reliance was placed on the decision of Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168. In that case, Edelman J properly distinguished Chan in circumstances where a director of a lessee company had in fact signed (emphasis added) a lease containing a guarantee, purportedly signed as a ‘director’ only. That case is immediately distinguishable from this case as the director in Alonso had in fact signed the relevant document, an element which is absent here. As noted in the submissions made, s 56 of the Property Law Act 1974 (Qld) requires that guarantees are to be in writing. No such written guarantee was given here.
  1. [122]
    The Plaintiff also submits that the present guarantee contained in the contemplated lease (Ex 2) is similar to the guarantee in Alonso in that the relevant clause contained in Appendix Two of that document expressly operates where there has been an equitable lease created pursuant to the terms of the agreement to lease (as is the case here under the first class of Masters v Cameron). That submission however in my mind overlooks two important factors: the first is that the Second Defendant did not ever sign the document which actually contained that clause (unlike in Alonso) and secondly, the only parties to the agreement to lease were the Plaintiff and the First Defendant. Accordingly I am unable to accept the submission which has been made which is that the lease containing the said guarantee, never signed, is enforceable against the Second Defendant simply because there was a binding agreement to lease as between the Plaintiff and the First Defendant.
  1. [123]
    It follows that I find the Plaintiff cannot succeed in its claim against the Second Defendant in respect of any obligations which are said to have arose in respect of any guarantee under the lease that was to be executed by Mr Boyce or another personal director of Coastal. The agreement to lease which in fact was executed by Mr Boyce on behalf of Coastal only contemplated that personal directors guarantee were to be provided by the lessee in respect of the subsequent lease that was to be executed, but was not.

Truckstop’s claim against Coastal for removal of chattels from the premises (tables, chairs and kitchen unit)

  1. [124]
    The Plaintiff makes a claim in the sum of $2103.61 for the table, chairs and kitchen unit which it says Coastal removed from the premises when it vacated. Mr Wilkinson gave evidence that these items had been removed from the premises. While I accept those items may well have been removed by Coastal when it left the premises, supported by the fact that those items turned up under Margaret Boyd’s house, I am unable to quantify with any certainty the true replacement value of those items as it relates to the table and chairs. The documentation which has been provided to assist me in this regard was not accompanied by any photographs of these items either before they left the site or indeed even after they were collected from under Margaret Boyd’s house subsequently. The limited evidence available on this issue was that those items (table and chairs) were on site originally and used in a different location (Pearson Transport) but were then made available for use by Coastal during their occupation. I do not accept Mr Boyce when he says that he understood that those items were actually given to him to keep. Notwithstanding that fact however, without knowing what condition those items were in during Coastal’s occupation and even at the time they were removed, it is difficult to quantify with any accuracy the value of these items even taking into account the documentation tendered to support the claim made for these items. As such, I am unable to be satisfied to the requisite standard that an award for the replacement costs sought for these items is appropriate.
  1. [125]
    The kitchen unit is however in a different category. Ex 16 confirms that a kitchen unit was purchased on the 29th March 2011. Mr Wilkinson gave evidence that this kitchen was then installed on site by Truckstop which Coastal had use of during its occupation. Mr Wilkinson also gave evidence that the unit was then found under Margaret Boyd’s home when it was collected. While no photographs of that unit were tendered regarding the state in was in at that time, I am satisfied that the date of its purchase and the installation of it just prior to Coastal’s occupation supports a conclusion that a claim for this item’s replacement is appropriate.
  1. [126]
    I calculate the following damages:

Value of kitchen unit replacement plus interest $591.05

Truckstop’s CCA damages/compensation claim made against Coastal and Mr Boyce respectively

  1. [127]
    In Ex 40 at p 15, Truckstop outlines its submissions in respect of these claims.
  1. [128]
    In short, Truckstop argues that at the time Coastal executed the agreement to lease, it made certain representations that were false [sic], misleading and deceptive within the meaning of s 18 of the Australian Consumer Law 2010 (Cth) (“ACL”)[1] (formerly s 52 Trade Practices Act 1974 (Cth) (“TPA”)). In addition, Truckstop also relies on s 4 of the ACL (formerly s 51A TPA) and argues that at the time the agreement to lease was executed, Coastal made representations as to future matters when it had no reasonable grounds for doing so and that Mr Boyce was knowingly concerned in and a party to that contravention by Coastal (s 75B ACL): Yorke & Anor v Lucas (1985) 158 CLR 661.

The relevant law

  1. [129]
    Section 18 of the ACL provides that a person must not, in trade or commence, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
  1. [130]
    Section 4(1) provides that for the purposes of the ACL, where a person makes a representation with respect to any future matter (including the doing of, or the refusal to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (Competition and Consumer Law: Thomson Reuters [160.370]). Section 4 is therefore relevant insofar as s 18, which deals with ‘misleading’ behaviour as an ingredient of liability.
  1. [131]
    The representations which Truckstop says were made by Coastal that were misleading and deceptive included its promise to lease the property for a term of 5 years, to pay rent and certain outgoings during that period and that it would enter into a formal lease subsequently to that effect which would include personal directors guarantees to the Plaintiff. Truckstop argues that because those promises were never fulfilled by Coastal and because Coastal did not have any reasonable grounds for making those representations at the time it did, then those representations were false, misleading and deceptive within the meaning of s 18. Truckstop argues that Mr Boyce was knowingly complicit in that conduct (s 75B ACL).
  1. [132]
    In the submissions made on behalf of the Plaintiff, reliance is placed on Coles Supermarkets Australia v FKP Limited (2008) FCA 1915 which in particular referred to Futuretronics International Pty Ltd v Gadzhis (1992) 2 VR 217 and the helpful discussion regarding contractual promises and the former s 51A TPA.
  1. [133]
    The Plaintiff argues that by its very nature, the agreement to lease executed by Coastal therefore created an enforceable contract under the first class of Masters v Cameron which constituted a representation by it that it would enter into a formal lease and that its directors would sign a personal guarantee to the Plaintiff under that document.
  1. [134]
    The Plaintiff submit that unless Coastal adduces evidence that it did not have reasonable grounds for making the alleged representations then it is taken not to have had reasonable grounds (s 4 ACL). The same submission is made in respect of Mr Boyce who signed the agreement to lease on behalf of Coastal.
  1. [135]
    As explained in Futuretronics, not every contractual promise of itself carries with it any representation as to fact or conduct actionable by reason of s 51A TPA. As Gordon J stated in Coles Supermarkets Australia:

“an express contractual promise or representation will constitute an actionable implied representation under s 52 TPA only if the party making the promise or representation had no intention or capability or carrying it out at the time it was made (i.e. the promisor had no reasonable grounds for making the promise). The questions which then arise are (1) what is the contractual promise in this case and (2) did the respondent have the intention and ability to carry it out at the time it was made?”

  1. [136]
    In determining whether a person had reasonable grounds, the matter is to be judged as at the date of the promise or representation: Sykes v Reserve Bank of Australia (1998) 158 FLR 710. Evidence of later events that may throw light on the overall probability that the representations were reasonable is also relevant:  Cummings v Rundle (1993) 113 ALR 285, but it remains vital to guard against hindsight illusion.
  1. [137]
    Bearing these relevant considerations in mind, I find that Coastal and Mr Boyce were not in breach of the relevant legislation as alleged.
  1. [138]
    In coming to that determination, I have had regard to the following evidence.
  • Coastal had been a former tenant of Truckstop at the same site in Lot 1 during August 2010 to April 2011. It had been paying rent $9000 per month plus GST for approximately 1000-1100 sq metres. Mr Wilkinson gave evidence that it had paid rent promptly and had operated with no problem. (T1-34). There was no evidence therefore to support a conclusion that at the time Coastal entered into the agreement to lease it did not have the capability to meet its obligations. Indeed, the unchallenged evidence of Mr Boyce was that he was running a financially successful transhipping business at that location prior to moving to units 1 and 2.
  • Coastal took up occupation in Lot 2 (units 1 and 2) for an area of 1600 sq metres from the 1st May 2011. Mr Wilkinson had initially approached Coastal through his agent regarding whether it was interested in leasing the whole area (units 1 and 2). After several initial meetings and with a ‘wish list’ prepared, both parties proceeded to execute the agreement to lease incorporating those relevant discussions.
  • Coastal immediately went into occupation on the date of commencement of the agreement to lease and started to prepare the premises for business by putting up signage and the like, consistent with those discussions.
  • Coastal also commenced moving its business from its former location. It had been agreed by Truckstop that they could do a transitional move from one Lot to another during the initial stages of the occupation period over a six week period.
  • Significantly, there was a delay subsequently that was not attributable to either Truckstop or Coastal regarding that smooth transition insofar as the former tenant had left the premises in a state that neither the Plaintiff or the First Defendant or Mr Boyce had foreseen or could have even reasonably anticipated. That required extensive cleaning up of the premises to be done, a fact even acknowledged by Mr Wilkinson.
  • Coastal commenced that cleaning up, submitted invoices (at 14th June 2011 meeting re Ex 25 in respect of it) and continued to liaise with Truckstop during its occupation regarding the improvements which were to be carried out under Clause 2 of the agreement to lease (such as signing off on loading dock plans, obtaining its own quotes for cold room expansion and the like).
  • It was also acknowledged by Truckstop that there had also been some delay in Coastal getting the truck washing business up and running and that illness had also contributed to that fact (Ex 9). Truck washing equipment was purchased by Coastal in June 2011 in order to facilitate that side of the business which Truckstop was happy to finance under Clause 2. That truck washing business actually commenced operation in unit 1 around end of June 2011 consistent with Coastal’s intention to continue in occupation. Indeed, Mr Boyce gave evidence that he had always intended and in fact had wanted to stay on in the premises as the business was just starting to operate well (in reference to the new truck washing business).
  • Payment of rent/electricity for the month of May 2011 due and owing was also tendered by the Defendants in August 2011.
  • Accordingly, there is insufficient evidence to support a conclusion that either Coastal or Mr Boyce personally would not or did not ever intend to fulfil their respective obligations at the time the agreement to lease was signed (emphasis added).
  • There was also insufficient evidence to support a finding that at the time Mr Boyce signed the agreement to lease on behalf of Coastal, that Mr Boyce never intended to sign the personal directors’ guarantee contained in the formal lease that was to be executed subsequently or that he knew or had reason to suspect at that time, that Coastal could not, would not or did not ever intend to fulfil its obligations to pay rent and outgoings. While there was some evidence to show that there had been a delay in returning the draft formal lease which had been sent by Truckstop, that delay is readily explicable by the heart attack suffered by the defendants’ solicitor at the time (not challenged), the reliance by Mr Boyce on a big cheque coming in on another job to allow him to pay outstanding rent/outgoings in respect of units 1 and 2 (not challenged) and the delay that was not attributable to either party regarding the necessary clean up that was required to be undertaken as a result of the former tenant’s disregard, a fact acknowledged by Truckstop.
  • There was evidence to support a conclusion however that both Coastal and Mr Boyce were venturing into a new business (truck washing) in addition to the one which it was already successfully operating at Shettleston St (transhipping) and even though both businesses took a while before they got going in that  location, that evidence does not support a conclusion that either Defendant intended at the time the agreement to lease was executed, to never honour the obligations arising under it or did not have the capability of doing so at that time.
  1. [139]
    Accordingly, the Plaintiff’s claim against the First and Second Defendants must fail.

Defendants’ claim for loss and damages suffered as a result of the Plaintiff’s breach of contract (or negligent misstatement) or for alleged breaches of ss 18 and 29 of the ACL) to be ‘offset’ against any award made in the Plaintiff’s favour

  1. [140]
    Having regard to the findings which I have already made in respect of any alleged undertakings or representations said to have been given or made by Mr Wilkinson and the abandonment of any counterclaim made by the Defendants at the commencement of the hearing of this matter, it follows that these claims must fail.

Orders:

  1. Judgment for the Plaintiff against the First Defendant in the sum of $481,678.35 inclusive of interest, being damages for breach of contract.
  1. Judgment for the Plaintiff against the First Defendant in the sum of $591.05 inclusive of interest, being damages in respect of chattels.
  1. The First Defendant to pay the Plaintiff’s costs, to be assessed on a standard basis unless otherwise ordered.

Footnotes

[1]Australian Consumer Law is defined in s 4 of the Competition and Consumer Act 2010 (Cth) (“CCA”) to mean Schedule 2 as applied under Subdivision A of Division 2 of Part XI.

Close

Editorial Notes

  • Published Case Name:

    Truckstop Pty Ltd v Coastal Haulage Pty Ltd & Anor

  • Shortened Case Name:

    Truckstop Pty Ltd v Coastal Haulage Pty Ltd

  • MNC:

    [2013] QDC 149

  • Court:

    QDC

  • Judge(s):

    Ryrie DCJ

  • Date:

    05 Jul 2013

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309
1 citation
Jump To
Cite 1 - (1985) 2 NSWLR 309
Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168
2 citations
Jump To
Cite 1 - [2012] WASC 168
Cite 2 - [2012] WASC 168
Chan v Cresdon Pty Ltd (1989) 168 CLR 242
2 citations
Jump To
Cite 1 - (1989) 168 CLR 242
Cite 2 - (1989) 168 CLR 242
Coles Supermarkets Australia Pty Ltd v FKP Ltd (2008) FCA 1915
2 citations
Jump To
Cite 1 - (2008) FCA 1915
Cite 2 - (2008) FCA 1915
Cummings v Lewis (1993) 113 ALR 285
2 citations
Jump To
Cite 1 - (1993) 113 ALR 285
Cite 2 - (1993) 113 ALR 285
Futuretronics International Pty. Ltd. v Gudhis (1992) 2 VR 217
2 citations
Jump To
Cite 1 - (1992) 2 VR 217
Cite 2 - (1992) 2 VR 217
G R Securities v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSW LR 631
1 citation
Jump To
Cite 1 - (1986) 40 NSW LR 631
Godecke v Kirwan (1973) 129 CLR 629
1 citation
Jump To
Cite 1 - (1973) 129 CLR 629
Masters v Cameron [1954] HCA 72
1 citation
Jump To
Cite 1 - [1954] HCA 72
Masters v Cameron (1954) 91 C.L.R 353
2 citations
Jump To
Cite 1 - (1954) 91 C.L.R 353
Cite 2 - (1954) 91 C.L.R 353
Mermaids Cafe & Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271
3 citations
Jump To
Cite 1 - [2010] QCA 271
Cite 2 - [2010] QCA 271
Cite 3 - [2010] QCA 271
Sykes v Reserve Bank of Australia (1998) 158 FLR 710
2 citations
Jump To
Cite 1 - (1998) 158 FLR 710
Cite 2 - (1998) 158 FLR 710
Yorke v Lucas (1985) 158 CLR 661
2 citations
Jump To
Cite 1 - (1985) 158 CLR 661
Cite 2 - (1985) 158 CLR 661

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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